Private Standards and the WTO: Reclusive No More

Abstract

Private standards are increasing in number, and they affect trade, but their status in the WTO remains problematic. Standards-takers are typically countries with little bargaining power, who cannot affect their terms of trade, and, thus, even if they possess domestic antitrust laws, will find it hard to persuade standard-setters to take account of their interests. Our concern is to bring more of these standards within the normative framework of the trade regime – that is, we worry that these private forms of social order can conflict with the fundamental norms of transparency and non-discrimination. The WTO membership has consumed itself in endless discussions regarding mundane, legalistic issues, and has not moved at all towards addressing the real concerns of developing countries. We discuss one aspect of the problem: How reclusive should the WTO allow product standards to be? We argue that the WTO should adopt a ‘Reference Paper’ that would encourage its members to apply WTO rules for adopting those standards that already come under the aegis of the WTO to private standards. In the absence of centralized enforcement, utopia in the WTO legal paradigm, transparency disciplines imposed on standard-setters is the best the WTO could offer to those who are negatively affected by private standards.

International Standardization and Trade Regulation

“…Standards can also function as strategic tools (de Vries, 2006;Delimatsis, 2015b;Larouche and van Overwalle, 2015;Chu, 2020) and competitive devices (Heires, 2008) for industrial promotion (Victor, 2000) with which actors can exploit the presence of asymmetric information and organizational differences (Delimatsis, 2015c;Mavroidis and Wolfe, 2017). Indeed, technological innovation usually precedes standardization and different previously existing standards compete for becoming the international standard to which harmonization will take place.…”

ICT Standardization as a Normative Regime

“…108 Unlike the case in the EU system, the application of referenced standards in the US is not voluntary: the requirement of "voluntary consensus" rather applies to the standards development process. 109 It should also be noted that the use of a particular standard may also be mandated by a legal contract between private or governmental parties. 110 Such practices are common in many industry sectors, including construction and energy, where firms incorporate "minimum requirements" of global standards into their codes.…”

European private food safety standards in global agri-food supply chains: a systematic review

“…Discussions about the WTO's role in regulating private food safety standards find a prominent place in literature. St. Vincent and the Grenadines' complaint to the WTO against the non-tariff trade barriers imposed by GlobalGAP (and in turn, the European Union) in 2005 is often viewed as a pivotal case when discussing the WTO's stance on private standards (Du, 2018;Hobbs, 2010;Maidana-Eletti, 2014;Mavroidis and Wolfe, 2017). The European Community argued that it could not be held liable for GlobalGAP's actions since it was not an official body of the European Community and by extension, did not fall under the WTO's jurisdiction (Du, 2018).…”

“…Therefore, if private standards do not present any objective evidence indicating that they are motivated by protectionist intentions, they do not fall under the purview of WTO law (Du, 2018). Some included studies also analysed whether private food safety standards fell under the purview of the WTO's Technical Barriers to Trade Agreement (TBT Agreement) (Bessel et al, 2006;Du, 2018;Henson, 2008;Maidana-Eletti, 2014;Mavroidis and Wolfe, 2017). Public standards concerning issues such as food labelling, packaging requirements, production and processing methods, fall under the aegis of the TBT Agreement.…”

“…Public standards concerning issues such as food labelling, packaging requirements, production and processing methods, fall under the aegis of the TBT Agreement. However, since private standards are not mandated by the State, extending the TBT Agreement's scope to them is difficult as well (Du, 2018;Hobbs, 2010;Maidana-Eletti, 2014) Mavroidis and Wolfe (2017) propose that through a 'reference paper', the WTO should engage in a plurilateral negotiation that aims to increase the transparency of private standards and encourages its members that host these private standard setting organisations to 'discipline their subjects'. The proposed paper would be a set of commitments regarding members' regulation of private standard-setting bodies in their jurisdiction (Mavroidis and Wolfe, 2017).…”