This report was tabled 25 June, 2002. We present limited excerpts from a 37-page text. The headings in bold are provided to assist the reader.

Human Rights and Trade: the Legal basis

The legal basis for adopting human rights approaches to trade liberalization is clear. All WTO members have undertaken obligations under human rights law. All 144 members of the WTO have ratified at least one human rights instrument, 112 have ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR) and all but one have ratified the Convention on the Rights of the Child. Further, those areas of human rights law recognized as customary international law take on universal application, which means that trade rules should be interpreted as consistent with those norms and standards whatever the treaty commitments of States in trade matters. In other words, whatever the human rights treaty obligations undertaken by particular States, WTO members have concurrent human rights obligations under international law and should therefore promote and protect human rights during the negotiation and implementation of international rules on trade liberalization.

A human rights approach sets as entitlements the basic needs necessary to lead a life in dignity and ensures their protection in the processes of economic liberalization. Article 1 of the Universal Declaration of Human Rights states that “all human beings are born free and equal in dignity and rights” the protection of which, through the rule of law, is necessary if recourse to rebellion is to be avoided. The Universal Declaration establishes the civil, cultural, economic, political and social needs necessary to human dignity and transforms these needs into legal entitlements or rights to be protected, including, by extension, in the processes of trade liberalization. The legal imperative of respecting human rights means that States are accountable for ensuring that these entitlements cannot be reduced to mere privileges or luxuries or left subject to the whim of markets. The content of these basic entitlements have since been elaborated at the national, regional and international level. Of particular relevance to international trade are the Limburg Principles on the Implementation of the International Covenant on Economic, Social and Cultural Rights, the Maastricht Guidelines on Violations of Economic, Social and Cultural Rights and the general comments of the Committee on Economic, Social and Cultural Rights (CESCR) on health, education, food and housing, all of which have added considerable clarity to these entitlements and the obligations on States to protect them.


From the Executive Summary

After setting an outline for GATS, the report examines the obligations of States to promote and protect the human rights most directly affected by the liberalization of trade in services, specifically the right to health (including the right to drinking water), the right to education and the right to development.

The liberalization of trade in services can impact on these rights in various ways, depending on a range of issues, not least the type of services being supplied, the mode of service delivery, the development level of the country and its internal infrastructure, the regulatory environment and the level of existing services prior to liberalization. One issue of particular relevance is the effect of increased foreign direct investment (FDI), in particular from the private sector, and its effect on the enjoyment of human rights. While FDI can upgrade national infrastructures, introduce new technology and provide employment opportunities, FDI can also have undesired effects where there is insufficient regulation to protect human rights. In particular, as with any national privatization scenario, increased foreign private investment can lead to:

(a) The establishment of a two-tiered service supply with a corporate segment focused on the healthy and wealthy and an underfinanced public sector focusing on the poor and sick;

(b) Brain drain, with better trained medical practitioners and educators being drawn towards the private sector by higher pay scales and better infrastructures;

(c) An overemphasis on commercial objectives at the expense of social objectives which might be more focused on the provision of quality health, water and education services for those that cannot afford them at commercial rates;

(d) An increasingly large and powerful private sector that can threaten the role of the Government as the primary duty bearer for human rights by subverting regulatory systems through political pressure or the co-opting of regulators.

The report notes that, to the extent that these phenomena can be linked to the liberalization of trade in services, regulators need to be conscious of ensuring that liberalization policies take into account State responsibilities to respect, protect and fulfil human rights. Human rights law does not place obligations on States to be the sole provider of essential services; however, States must guarantee the availability, accessibility, acceptability and adaptability of essential services including their supply, especially to the poor, vulnerable and marginalized.

…it is important to understand the interaction between the rules and disciplines in GATS and the norms and standards of human rights law. In particular:

(a) GATS is broad in scope. The High Commissioner encourages interpretations of the scope of GATS to ensure that under GATS obligations do not constrain Governments in taking action topromote and protect human rights;

(b) Many government regulations are measures that can come within the scope of GATS. While GATS acknowledges Governments’ right to regulate in its preamble, the question remains as to the extent to which GATS can affect government regulations that might have an impact on trade - including government regulations relevant to the promotion and protection of human rights. Consequently, judgements on or “tests” of the trade-restrictiveness of government domestic regulation under GATS should take into account States’ obligations under human rights law;

(c) Both GATS and human rights law include the principle of non-discrimination; however, there are distinctions in the application of the principle. The High Commissioner highlights the need to ensure that the application of trade law takes into account the human rights principle of non-discrimination, including by safeguarding the need to use mechanisms such as “cross-subsidization” to ensure that the poor, vulnerable and marginalized do not suffer discrimination in accessing services in liberalized markets;

(d) GATS includes general exceptions to protect public morals as well as human, animal and plant life and the protection of certain aspects of individual privacy. These could be seen as being linked to the need to promote and protect human rights in the liberalization process;

(e) GATS seeks the liberalization of trade in services through the progressive opening up of States’ services markets. However, there is at times a need for States to have some flexibility to modify and withdraw country-specific commitments to liberalize trade in services, taking into account the need for States to meet their human rights obligations;

(f) Country-specific commitments to liberalize service sectors under GATS could have both positive and negative effects on the enjoyment of human rights. Consequently, WTO members should be encouraged to undertake assessments of the impact of the implementation of GATS on the enjoyment of human rights as part of the ongoing negotiations concerning GATS. Assessments should concern both past experience and potential effects of future liberalization commitments;

(g) Developed countries, in accordance with their responsibilities to cooperate internationally to promote human rights, should share both financial and technical expertise to support developing countries to undertake assessments.

Finally, the High Commissioner identifies a list of areas requiring further action to promote human rights approaches to the liberalization of trade in services, including the following:

(a) Ensuring equal access for basic services - the High Commissioner encourages States to take action to ensure universal supply of essential services, including through the use of affirmative action to ensure provision of services to the poor, isolated and marginalized, taking into account national circumstances and capacities;

(b) Ensuring Governments’ right and duty to regulate - the High Commissioner encourages interpretations of GATS provisions that acknowledge the need for countries to retain the flexibility to use development tools, such as “cross-subsidization” or the regulation of corporate governance, in response to national development needs;

(c) Encouraging interpretations of GATS that are compatible with human rights - the High Commissioner reminds WTO members of their concurrent obligations under human rights law and encourages the development of rules or “tests” that acknowledge and protect States’ duties concerning human rights when determining or assessing whether a measure is trade- restrictive;

(d) Undertaking human rights assessments of trade policies - the High Commissioner highlights the voluntary nature of commitments to liberalize trade in services and stresses the need to make commitments on the basis of sound empirical evidence…

The full text (E/CN.4/Sub.2/2002/9) and other relevant documents are available on line at the UN Commission web site.