Sustainable Development Concept in the WTO Jurisprudence: Contradictions and Connivance

The Marrakesh Agreement establishing the WTO (henceforth the WTO Agreement) is primarily a trade agreement, negotiated with the objective of promotion and progressive liberalisation of international trade. The WTO preamble recognises that the relations between member states in the field of trade and economic development should be conducted with a view to “raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services.” In this endeavour, it is acknowledged that states should allow for the “optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.” Beyond such an acknowledgement in the Preamble, the WTO and its covered agreements have largely ignored sustainable development as a binding obligation on the member states. It was perceived that such binding commitments were unnecessary as the WTO’s focus is trade governance. Besides, the developing countries were genuinely concerned that any substantive obligation on sustainable development, specifically in the context of environment and labour standards, shall have an adverse impact on their competitiveness vis-à-vis developed countries goods and services. More importantly, the prospective sustainable development measures may have a strong likelihood of being misused as a protectionist tool for trade gains by advanced economies that have already attained higher standard production and process methods and livelihood standards. These concerns and oppositions have left the “sustainability” objective in the WTO much to be desired. This chapter is an attempt to understand the interlinkages and conflicts in the context of the legal foundation of “sustainable development” in the WTO architecture, an organisation created to administer trade rules. The chapter shall look specifically at the approach taken by the WTO panel and the Appellate Body in interpreting and developing the concept. Special attention shall be given to the concerns of developing countries that have all along opposed inclusion of the sustainability concept without elaborate negotiation and consensus.