The ITO Charter Model for “Sustainable Developmentâ€: A framework for a self-evolving transnational economic order by “middle powersâ€

Kazumochi Kometani

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper proposes an alternative framework for the international economy, based on the concern that superpowers such as the United States and the EU have increasingly adopted so-called production process and method (PPM) measures, which restrict or deny benefits to imports or other economic activities in their territory because of environmental protection, labor protection, and other non-product-related aspects of production or other economic activities in any foreign jurisdiction. While these measures may contribute to improvement in the level of environmental protection, and so on, which is necessary to achieve “sustainable development,†they would generate inefficiency by forcing middle or small countries to adopt standards designed by superpowers for their own economies. Furthermore, middle or small countries see no merit in allowing PPM measures because their economic power is insufficient to effectuate their own PPM measures, unlike superpowers. This article analyzes the ITO Charter, which was negotiated and agreed upon as the predecessor to the GATT but did not come into force, and finds that it was intended to establish a framework whereunder each Member undertakes the primary responsibility for labor protection, economic development, and other matters within its own territory, and other Members and the ITO and other international organizations assist Members’ efforts. Accordingly, the Charter contemplates that any complaint about other Members’ domestic policies be exclusively addressed by a political organ of the ITO, which represents all Members, thus enabling the ITO to use it for rulemaking as well, while prohibiting any PPM measures taken as unilateral countermeasures. This framework should be considered as “the ITO Charter model†for the international economic order for the †sustainable development†by “middle powers.â€

Pages: 28 pages
Date: 2024-02
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