Mechanisms of Global Trade Governance: The ‘Double Standard’ on Standards in the WTO

Abstract

The rapid growth of global trade has increased the need for more specified regulation of products and production processes. The World Trade Organization (WTO) has been coming under pressure to reconcile the requirements of free trade with requests for guarding certain health, environmental or labour standards as well as intellectual property rights, which carry both the promise of legitimate demands and the risk of non-tariff protectionism. In this chapter, we investigate the WTO’s role at this intersection of trade and non-trade concerns. We understand global trade governance as the process by which different public and private actors from the local to the global level govern international trade in a cooperative mode.¹ Contrary to a common misunderstanding, the WTO itself does not set international standards and therefore has to find other ways to ‘govern’ trade-related regulation. The impact of standards on global trade is widespread - one estimate claims that up to 80 per cent of trade is affected by standards or associated technical regulations (OECD 1998: 4, 10). Nevertheless, ‘the literature on standard setting generally lacks a sustained theoretical argument to explain or assess institutional standards arrangements past or present’, and in contrast to some economic and legal studies, ‘work on standards by political scientists practically does not exist’ (Mattli 2001: 331f.).²