1. Introduction
International rules' ability to develop and adapt has long been praised as one of the main strengths of public international law (PIL).Footnote 1 However, the law-making process promoting such changes remains a topic of dispute. While some posit that international rules rely on formal processes granting them legitimacy and certainty,Footnote 2 others argue that informal processes are steering current law-making efforts, especially given the heterogeneity of actors and interests at the negotiating table.Footnote 3 I argue that this dichotomy misses the mark. In fact, the intersection between these two processes is what creates a fertile environment for rulemaking and rule development, what I call, the transience of (in)formality. This can be described as the dialogue between formal and informal processes in international law-making as they are not mutually exclusive but rather coexist and shape and reshape one another.
I apply this concept to the negotiations taking place at the World Trade Organization (WTO) to make sense of its decision-making system as countries keep developing new negotiating practices. This approach advances a more pragmatic narrative to explain the WTO's functioning as it highlights the living and evolving features of the WTO by foregrounding the agency of its Members in the negotiating process.Footnote 4 In this sense, the negotiating dynamics at the WTO provide evidence that international rules are the result of ‘processes of social learning and contestation’.Footnote 5 Countries are not only affected by WTO rules, but they constructFootnote 6 the meaning of those rules themselvesFootnote 7 as they interact and forge their identities.Footnote 8 This contrasts with the rigid rules-based system rationale upon which the Agreement Establishing the WTO (WTO Agreement) was concluded.Footnote 9 The argument casts light on the shortcomings of dominant trade literature centred on legal formalistic views that reduce the WTO to its rules and institutions and overlook its most important element – its membership.
WTO norms are not autonomous but exist within a context that gives them meaning.Footnote 10 Such meaning emerges largely from formal and informal interactions between Members as they negotiate in pursuit of their interests. The WTO itself ‘is a product of historical struggle and an institution of its time’.Footnote 11 Social practices play a key role in supporting and legitimizing the legality of norms.Footnote 12 To make sense of such practices, I bring to the fore the agency of WTO Members and, supplementarily, the interactions among diplomats, negotiators, capital specialists, the Secretariat staff, the WTO DG, and chairpersons, for they directly influence the negotiating dynamics.Footnote 13 Without undermining the high politics behind the WTO system or the political economy strategies supporting countries' stances, the focus on Members allows for a better understanding of how rules are shapedFootnote 14 through day-to-day interactions and exchanges in the negotiating branch of the WTO.Footnote 15 The negotiating leg is the least formal of the three WTO functions, which also comprises dispute settlement and trade policy review.Footnote 16 It aims at achieving an outcome that may take the form of different decisions, such as exemptions, amendments, and new agreements.Footnote 17 The interactions underpinning WTO negotiations range from coffee breaks and bilaterals to General Council and committee meetings, also covering informal meetings such as in the context of coalitions and small groups.
Formality and informality coexist in the WTO decision-making system. Informal processes are as relevant as formal ones in achieving negotiating outcomes, according to which all the items in the negotiating round agenda should be agreed upon by all the 164 WTO Members, and overcoming the current procedural trap resulting from the consensus and the single undertaking.Footnote 18 The Joint Initiatives (JIs) offer a good example of this intersection. The JI on Investment Facilitation for Development (IFD), in particular, shows how Members use the WTO structure and emulate the formal stages of negotiations in an informal initiative not regulated by the WTO Agreement and disputed by some countries. Whereas political science and international relations scholars have long been discussing formal and informal processes in the WTO,Footnote 19 the topic lacks further consideration by law.Footnote 20 Particularly, legal literature on the WTO's informal negotiating mechanisms is minimalFootnote 21 and the focus is on the deliberative activities of WTO committees, especially through specific trade concerns (STCs).Footnote 22 In this context, this article adds a legal lens to the examination of the WTO negotiations, including its structure, procedures, and dynamics, to understand how norms evolve and adapt.
My analysis of law as a constellation of normative behaviours that go beyond formal law-making and dispute settlement provides a comprehensive way of making sense of law-making in international institutions and the WTO in particular. The argument I develop contributes to the WTO reform debate, proposing that such reform should not be limited to a top-down approach or to formal institutional and legal changes; instead, the WTO reform is continually taking place through Members' interactions as they keep adapting the organization to new needs, interests, and contexts. This means that discussing WTO reform should include how Members engage with the existing rules and institutional arrangements. The WTO design enables its survival and relevance in a fast-paced world. Concerning the employed terminology, whilst practice refers to informality, process, procedure, and mechanism are all linked to both formal and informal negotiating instruments. Similarly, norms and rules are used interchangeably.
This paper starts by assessing how formal and informal negotiating processes coexist in the WTO and support the decision-making system. I develop the concept of transience of (in)formality to embody the intersection between formality and informality. Following this, the analysis discusses examples of the creation and improvement of negotiating mechanisms in the WTO. The article then applies the notion of transience of (in)formality to show how informal practices could propel WTO negotiations following the reform-by-doing approach. I use the JIs as a case study to explore how informal tools emerge and are construed to fit within formal rules and arrangements. The article concludes by stressing the role of informal procedures in keeping the WTO updated and relevant to address current challenges and needs.
2. Transience of (In)Formality in the WTO Negotiations
Transience of (in)formality is the fluidity between formal and informal processes in the WTO, revealing how one gives place to the other and the common space they share in the negotiations. It builds on the perception of the WTO's legal dimension as a reality constructed by Members' interactions through their practicesFootnote 23 conferring legalityFootnote 24 – and legitimacyFootnote 25 to rules. Such practices must reflect the extant needs and understandings drawing on and forming the trade knowledgeFootnote 26 shared by the WTO membership. The WTO's functioning and values revolve around this common knowledge, which endorses or transforms existing law.Footnote 27 The intersection between formal and informal negotiating processes foregrounds the dynamism of WTO rulemaking, which relies on social interactions and intersubjective communicationFootnote 28 to create and transform meanings and concepts.Footnote 29
The multilateral trading system has been ‘built on experience’Footnote 30 and is the result of a ‘process of continuous evolution’Footnote 31 that is no stranger to informal procedures. The evolution of the 1947 General Agreement on Tariffs and Trade (GATT/47) from a provisional agreement to a de facto organization reveals how informality is in the DNA of the GATT/WTO. The WTO has, to a large extent, entrenched the arrangement and practices developed over more than four decades seeking to protect both old and new rules.Footnote 32 For that, countries needed a stronger institution and a Dispute Settlement System (DSS).Footnote 33 Yet, this formalization effort does not mean the WTO is exempt from informality. In this sense, the WTO differs from other international organizations (IOs), such as the UN. In the first years following the WTO's inception, Members had to strike a balance between two different ‘diplomatic cultures’.Footnote 34 On the one hand, trade diplomats from industrialized powers were used to the highly informal GATT/47 decision-making process based on small clubs and the consensus practice. On the other hand, delegates from new WTO Members and developing countries, most of which remained passive during the GATT/47 negotiations, expected the activities of the new organization to be similar to the arrangements they were familiar with. They drew most of their experience from the UN system, where decisions were based on the work of formal drafting committees instead of informal subgroups.Footnote 35 As a result, the WTO was not a rupture with the past, i.e., the GATT/47 and its practices; rather, it was a natural evolution to adequate the rules to new actors and interests.
Article III:2 of the WTO Agreement states that the WTO should ensure a negotiating forum to advance Members' multilateral trade relations, as well as a framework to assist in the implementation of the outcomes of such negotiations. Accordingly, the WTO functioning is based on the work of committees and the General Council, underpinned by Members’ agency.Footnote 36 Article IX of the WTO Agreement provides for the rules on decision-making, centred on consensus and single undertaking. In this sense, these provisions reveal institutional and legal frameworks grounding and guiding Members' activities.Footnote 37 However, the WTO Agreement does not offer an exhaustive list of tools or negotiating arrangements.Footnote 38 Likewise, there is little regulation on the functioning of the WTO committees, which have rather evolved through Members' practices when deliberating. The room the WTO Agreement leaves for informality and for Members to develop practices is exactly what enables the organization to keep operating and evolving alongside the global economy.
Understanding the negotiations as ‘a series of nested “concentric circles”’Footnote 39 shows that, although decisions are made in formal meetings, they are not negotiated in such venues.Footnote 40 In this configuration,Footnote 41 the formal WTO meetings, as provided for by the WTO Agreement, are in the outer ring circle and would be held for the record. The large number of participants challenges the viability of these meetings as negotiating forums to reach outcomes. The next circle contains meetings with a mix of formal and informal features – they are informal plenary meetings of regular bodies, chaired by the relevant chairperson, and account largely for improving transparency. The two inner circles comprise informal meetings where most of the negotiations happen. Those are, firstly, restricted meetings, usually held outside the WTO building and with no support from the Secretariat, where the relevant chairperson meets with a number of technical experts and where a few Members are invited to discuss specific issues. Secondly, those informal meetings can also take the shape of club meetings, such as the Green Room,Footnote 42 consultations or bilateral sessions that are held in a more unofficial setting over lunch or coffee, aiming at bridging differences and gathering information.Footnote 43 The negotiations in the WTO usually move from the inner to the outer circles, when smaller groups pre-cook deals, i.e., engage in bargaining and consensus-building that will be presented for approval in the plenary.
In this scenario, formalizing practices or relying solely on authoritative interpretation and dispute settlement to determine the meaning of a ruleFootnote 44 are evidence of a futile attempt to conquer the law as if its purpose would lie in the ceaseless effort to provide certainty to an ever-evolving community.Footnote 45 Yet, if formal rules and mechanisms change through practices and are, consequently, transient, so are informal ones. Informality's contribution rests on how it enables law to be open to different contexts at different periods of time. That is why the relationship between the formal and informal dimensions of the WTO is not one of opposition, but rather of complementarity. Each dimension serves different purposes, ensuring both legal certainty and flexibility in the WTO arrangement.Footnote 46
As both dimensions are transient, informality can lead to formality, as in the case of the consensus practice in the GATT/47 resulting in the consensus rule in the WTO Agreement. Likewise, formality can give way to informality. The consensus rule, for instance, unfolded into two new practices – precluding the resort to voting and the positive consensus rule required to advance the Singapore issues: namely, trade and investment, trade and competition policy, transparency in government procurement, and trade facilitation.Footnote 47 Alternatively, informality can remain as such when Members adapt and improve an informal procedure but do not formalize it, such as the open plurilateral agreements, the first of which was concluded in 1996. Members can use informal procedures whilst benefiting from the existing formal structure for as long as they can bear the outdated system – or until they can afford the costs of introducing formal changes.Footnote 48 The sections below will discuss some of these examples in more detail.
2.1 Formal Negotiating Procedures: Consensus and the Single Undertaking
Formal norms are those emerging from the formal sources of PIL recognized by Article 38 of the Statute of the International Court of Justice, namely, treaties, customs, general principles of law, and, as auxiliary means, judicial decisions, and works of scholars. They are arguably clear and precise, aiming to ensure legal certainty and stability.Footnote 49 In the WTO, the formal arrangement gives predictability to multilateral trade relations for they ensure the existence of more static rules and consistency in their interpretation and application. These features reflect the expectations of world leaders when they first proposed the creation of the International Trade Organization (ITO) to increase trade flows and cooperation among countries, peacefully settling trade disputes.Footnote 50 That is why I refer to formal negotiating procedures in the WTO as traditional, for they reflect an orthodox rationale, based on formalist processes and instruments. Yet, this label does not imply that those rules are obsolete. The main formal negotiating rules at the WTO are the consensus and the single undertaking.
Consensus is at the core of the WTO decision-making system comprising ‘complex and relatively numerous'Footnote 51 procedures, whose general rule is set by Article IX:1 of the WTO Agreement. For the first time, a multilateral trade agreement provision expressly included the rule of consensus,Footnote 52 which is virtually the only formal rule applied in reality,Footnote 53 enshrining Members' participation and formalizing their veto right.Footnote 54 However, before that, the consensus had already replaced voting procedures as the rule of thumb in multilateral trade negotiations, reflecting the role of practices in the evolution of the multilateral trading system.Footnote 55
The Contracting Parties to the GATT/47 grew sceptical about the majority voting based on the ‘one nation, one vote’ principle provided for in Article XXV:3 since it no longer mirrored the reality of international trade relations. The increasing accession of developing countries, corresponding to most of the Contracting Parties, represented a threat in the majority voting system for the most powerful players.Footnote 56 Moreover, against the Cold War background, the US wanted to attract and retain developing nations to the GATT/47. The country found that consensus, based on the notion of sovereign equality, would be more appealing than any voting system.Footnote 57 Consensus would increase the legitimacy of the outcomes of the negotiations, as well as offer an information-gathering tool regarding the different stances of the countries involved in the discussions.Footnote 58 Consensus would be, then, a middle ground where powerful and weaker countries could meet to negotiate trade rules.
None of the GATT/47 provisions makes reference to consensus; yet it was gradually developed and defined by practice.Footnote 59 Such change reflects the GATT/47 ‘quiet mutation’.Footnote 60 Dating back to as early as 1953, the chairperson of a meeting would rather take a sense of the discussions instead of submitting the issues to voting.Footnote 61 Contracting Parties would usually negotiate the agreement before the formal meetings where it was adopted by consensus.Footnote 62 Consensus-building became, hence, key in a negotiating process pervaded by informal and dynamic interplays between countries.
In the WTO, a matter will be put to voting only when reaching a consensus is not possible, following the same GATT/47 principle of ‘one country, one vote’. In practice, because Members value the consensus rule and the subsequent veto power, they do not easily resort to voting, not even when they fail to reach a consensus, albeit the provisions in the WTO Agreement.Footnote 63 This embodies the informal rule of the consensus practice, i.e., Members' understanding that they should not resort to voting when they cannot reach a consensus, which subsection 2.2 below also discusses. The only time the membership voted on an issue was back in 1995 regarding draft decisions on the accession of Ecuador and certain waves. However, even on that occasion, when ‘the General Council held votes by postal ballot … this came only after reaching consensus on each matter’.Footnote 64 In the same year, the General Council decided to apply the consensus rule, as per Article IX:1, to ‘matters related to requests for waivers or accessions to the WTO’,Footnote 65 turning to voting only when consensus could not be reached. Besides that singular event, since 1959, all the legislative decisions in the GATT/47 and WTO systems have virtually been taken by consensus.Footnote 66
The single undertaking is a ‘natural extension’Footnote 67 of the consensus rule, stressing the Members-driven feature of the WTO by placing Members at the centre of the decision-making process and granting them ‘a voice and a veto’.Footnote 68 Moreover, the single undertaking constrains domestic decision-makers since they cannot pick and choose the rules by which they want to abide.Footnote 69 The membership shows a commitment to the WTO regulatory system as a collective endeavour rather than aggregated individual efforts,Footnote 70 accepting small losses in exchange for the benefits of being part of the multilateral trade regime.Footnote 71 In this regard, the single undertaking upholds the WTO legal framework, presenting it as a whole and cohesive system whose legitimacy lies in the membership accepting all the multilateral rules.Footnote 72 That does not entail, however, uniformity of Members' obligations. Governments make individual commitments as identified in specific schedules, and obligations also depend on the development status of Members.Footnote 73 Countries' different obligations reflect the variable geometry of the WTO framework and depart from the ‘one size fits all’ approach.Footnote 74
Consensus and the single undertaking are intertwined in the WTO negotiations, for achieving a single package depends on full consensus. These rules contribute to a coherent and consolidated arrangement, which stresses the unity of the multilateral trading system.Footnote 75 Yet, due to their degree of formality, they may be burdensome and strict, directly impacting the negotiations, especially when it comes to reaching outcomes. The combination of consensus with the single undertaking can create a ‘straitjacket’Footnote 76 by hindering the progress of the discussions. It results in a procedural trap – ‘a complex web of linkages and hierarchies’Footnote 77 involving Members in an ‘unbreakable deadlock’.Footnote 78 Such strategy would benefit those that can block the discussions and hold the system hostage.Footnote 79 During the Uruguay Round, developed countries used this to pressure other negotiating parties into accepting the inclusion of new issues such as services and intellectual property into the negotiating agenda and the final package.Footnote 80 Nowadays, larger developing Members, especially emerging economies, have learnt to employ the same technique to block negotiations that do not reflect their interests, as the events related to the Singapore issues exemplify.Footnote 81 In light of this, negotiating practices offer alternatives for Members to deliver and keep the WTO operating.
2.2 Informal Negotiating Procedures
The evolution from the GATT/47 to the WTO happened gradually and organically, preserving most of the former's negotiating process and structure. Equally natural was the development of informal procedures and tools, either not codified in the WTO Agreement or loosely so,Footnote 82 to address new needs and the complexity of the world economy. They allow the WTO to adapt within the existing legal and institutional frameworks.Footnote 83 The apparent level of formality in the protocols and traditions pervading the diplomatic world and, consequently, the WTO, may give a sense of rigidity in the WTO negotiating process and outcomes.Footnote 84 This, however, could not be further from reality.
Hinging on the aforementioned Article III:2 of the WTO Agreement, the WTO offers Members space to advance and adapt the existing negotiating procedures. In doing so, Members have created a web of informal practices – some already entrenched in the WTO negotiations – to assist them in delivering outcomes in the WTO decision-making system. Examples of such practices include coalitions, the consensus practice, informal meetings, critical mass, and most recently the JIs. These informal instruments are in line with the dynamism and pragmatism of WTO negotiations,Footnote 85 as well as the agency of Members and their willingness to benefit from the flexibilities of the WTO structure. They can also lead to greater participation without undermining the levels of commitment or legal ambition, despite impacting the uniformity of the obligations.Footnote 86
The normative framework of the multilateral trade regime is changing and our understanding of how law works therein should adapt accordingly. Formal rules and structures pervading the WTO negotiations and decision-making stemmed mostly from a time when the main goal in international trade was to secure market-access concessions through shallow integration.Footnote 87 Such rationale was relatively successful until the Uruguay Round if one considers the progress in trade liberalization.Footnote 88 However, in light of the introduction of broader interests and objectives in the WTO and the development of international trade relations, claiming for regulation in areas that were previously exclusively regulated by domestic policies, formal procedures are no longer enough or adequate. As the regime leans toward regulatory cooperation and coherence,Footnote 89 informal tools are key for they reflect a multi-layered decision-making system.Footnote 90 These tools usually allow more flexibilityFootnote 91 to ‘temper the rigid effects of single undertaking and consensus’,Footnote 92 contributing to cooperation and changing loyalties according to the interests at stake. This scenario reflects the reality of the extant consensus-building process in the WTO, which happens through different mechanisms, both formal and informal, including the work of committees, informal meetings, and critical mass; in different configurations, such as plenary meetings, subgroup coordination, and coalitions; and at different levels, encompassing ministers, officials, and experts from capitals, ambassadors, and delegates.Footnote 93
Informal law-making in the WTO facilitates both the agenda-setting and discussion processes to reach concrete outcomesFootnote 94 that Members seek to integrate into the WTO structure.Footnote 95 It stems from Members' practices in the decision-making system rather than the revision and amendment of formal legal rules.Footnote 96 This suits the perception of the WTO as a ‘plural global polity’,Footnote 97 comprising a ‘myriad of informal practices’Footnote 98 that play a key role in the negotiating process. Such negotiating practices are neither in violation of WTO rules nor fully regulated by them;Footnote 99 instead, practices expand the extant rules, redefining their meaning and scope, (re)producing norms to be applied to different situations.Footnote 100 By interpretingFootnote 101 existing norms through their interactions, WTO Members develop negotiating practices attributing social meaning and legal status to the resulting rules.Footnote 102 Perceiving norms as transient reconciles the claim for predictability and certainty in trade relations with the need for adapting the WTO to keep it relevant and address current challenges.Footnote 103 The adaptability of the law reveals its resiliency instead of its weakness.Footnote 104
Informal processes can be ‘creative solutions’Footnote 105 to overcome new challenges not foreseen at the time of the WTO's inception. When reform discussions have not resulted in any major formal changes in the WTO,Footnote 106 informal mechanisms are the ones adapting and improving the decision-making system.Footnote 107 They could offer fresh insights, if not an answer, when ‘traditional structures of formal law-making … become shackles’.Footnote 108 In this regard, reform talks benefit from a shift in perspective by recognizing the value of informal mechanisms upholding trade discussions, information exchange, and learning processes.Footnote 109 Members are continuously adapting the institution and its rules in an enduring ‘reform-by-doing’ effort.Footnote 110 Drawing on the WTO community and its social context,Footnote 111 Members have recurrently endorsed the need for open, transparent, and inclusive participation. Only actions supporting such values will be repeated as patterns and become practices. Eventually, informal procedures serve as the glue keeping the WTO's rigid legal principles together, i.e., formal sovereignty, consensus, single undertaking, and its member-driven nature.Footnote 112
Informal small meetings and subgroups, for instance, help promote trade governance and cooperation in WTO negotiations by accommodating different geometries, circumstances, and needs.Footnote 113 The issues discussed influence the regularity of the meetings, the expertise of the participants, and the nature of the interactions.Footnote 114 These meetings are diverse and take place in different venues, even over coffee at the atrium in the WTO building – in many aspects the centre of the organization. If these mechanisms are open and inclusive, they provide a venue where participants can defend their instances and gather information about the negotiations. Transparency allows Members to understand the negotiating dynamics and the WTO functioning.Footnote 115 Indeed, emerging powers harnessed such informal meetings and subgroup coordination to increase their relevance in the decision-making process.Footnote 116 Having subgroups in WTO negotiations does not mean that an exclusive club comprising homogeneous countries would take the decisions, or that information would be monopolized by the members of those groups. Instead, a legitimate club model approach should comprise representative groups that could draft proposals to be presented in the plenary.Footnote 117 It should be a procedural tool to ‘streamline and shape decisions’Footnote 118 in the WTO. Even if not all Members participate in informal processes, they must have access to the outcomes of the discussions.Footnote 119
In this context, coalitions have become an essential part of the WTO negotiations to overcome the complexities of the discussions, promote shared interests, and engage the participants in cooperation. Their configuration and composition are dynamic depending on the circumstances and interests at stake.Footnote 120 Their lifespan also varies, as they can be short-lived depending on the issue pushed forward or survive a longer period if supporting a broader interest.Footnote 121 Coalitions emerge, evolve, and fade away as the negotiating context changes.Footnote 122 Any attempt to regulate or formalize them would do little to improve the WTO decision-making system.Footnote 123
The most emblematic coalition to date, the trade G20, is an informal and spontaneous negotiating instrument that contributed to ending the GATT/47 way of negotiating.Footnote 124 It represents a broad and diversified articulation of WTO developing MembersFootnote 125 whose primary purpose is to protect the development commitments made on the Doha agenda.Footnote 126 The G20 is the outcome of a long learning process by developing Members – its spontaneous creation notwithstanding. Whilst the WTO was a negotiated transition resulting from natural evolution, largely institutionalizing trade relations at the height of neoliberalism,Footnote 127 the G20 was a rupture – a ‘tectonic shift’Footnote 128 – resulting from Members' practices. As the most successful developing countries coalition, the G20 revealed that constant cooperation and articulation among Members are essential to improve the existing invisible weighting in the WTO decision-making process.Footnote 129
Critical mass is another informal negotiating mechanism Members use to reach substantive rules in the absence of consensus. Through a critical mass, WTO Members put into effect the outcomes of a given negotiation with the possibility of more Members joining later. Critical mass means the adherence of the major players accounting for around 90% of the global market in the relevant sector.Footnote 130 However, Members should also assess the inclusiveness and legitimacy of such an approach. Otherwise, this model could favour larger economies, which, similarly to a UN Security Council dynamic, could articulate agreements among themselves and frustrate outside initiatives.Footnote 131 In this regard, setting the requirements to achieve a critical mass should be made on a case-by-case basis, considering the interest of smaller economies. These countries may not have a large global market share of a given sector, but their gross domestic product (GDP) may rely heavily on that same sector.Footnote 132
Critical mass eases the bargaining process in the WTO, especially in services and tariff liberalization negotiations.Footnote 133 It stems from a practice not regulated by the WTO Agreement, building on the plurilateral alternative without falling within the consensus requirement of Article X:9 of the WTO Agreement. Consequently, it does not add agreements to Annex 4 of the WTO Agreement. The rules resulting from a critical mass initiative constitute rather ‘open plurilaterals’Footnote 134 or ‘unconditional plurilaterals’,Footnote 135 as opposed to Annex 4 ‘exclusive plurilaterals’.Footnote 136 Because of their open and unconditional nature, any advantage granted by such agreements must be extended to all WTO Members, following the MFN principle, regardless of whether they are contracting parties. Hence, the outcomes of critical mass efforts may benefit all WTO Members.Footnote 137 There is no need to secure the approval of Members outside the initiative, which means that they cannot use consensus to hold the negotiations hostage.Footnote 138 The new commitments should not violate existing WTO rights and obligations, including the MFN principle. To avoid placing an additional burden on the Secretariat and the WTO budget, Members participating in open plurilaterals would have to cover such additional costs.Footnote 139 Likewise, to prevent the fragmentation of the multilateral trading system and the increase of free riders,Footnote 140 open plurilaterals should be additional area-specific agreements built on a common regulatory base adjusted to Members' needs.Footnote 141 Moreover, the WTO DSS could review the legality of such agreements.
The obligations resulting from open plurilaterals are usually implemented by hooking them to the existing Members' schedules of commitments. Members can do it by adding an entry into their relevant schedules referring to rules covered by an initially non-binding document, ‘committing themselves to observe the rules set out in that document’.Footnote 142 Those rules would then receive legal effect as per the modification of schedules approach.Footnote 143 Only the group of Members referring to the rules would be bound by them, whereas the MFN principle would apply to any advantage granted thereof.Footnote 144 That was the rationale behind the implementation of the Reference Paper on basic telecommunications establishing the regulatory principles on the subject. A subgroup of countries negotiated the document that was later ‘inscribed, sometimes with variations, in the schedules of commitments of over 90 WTO Members (counting EU member states individually)’.Footnote 145 Similarly, Members participating in the Information Technology Agreement (ITA) negotiations implemented the results of this effort through certification of their individual tariff schedules regarding the relevant goods.Footnote 146 The ITA currently comprises 82 participants that represent about 97% of the trade in IT products.Footnote 147 More recently, the reference paper on SDR (Services Domestic Regulation)Footnote 148 was accepted by 70 Members that are incorporating the agreed commitments into their services schedule.Footnote 149 The new obligations address one of the most pressing issues for international businesses, i.e., the need for improving the regulatory environment for services suppliers entering foreign markets. Since they benefit all trade partners of the relevant Member, challenging the modification of schedules seems a fruitless endeavour.Footnote 150 These examples show how informal processes may yield outcomes that can be transplanted into the formal WTO structure.
3. Reforming-by-Doing
The intersection between formal and informal mechanisms reveals that Members are reforming the WTO through their agency. WTO Members are practical actors, less interested in philosophical debates over meanings and sources than in finding solutions to overcome challenges. Discussions over technical legal issues usually take place to legitimize Members' efforts, making them compatible with the WTO governance. Negotiating practices do not fragment or undermine a rules-based multilateral trading system as some argue.Footnote 151 The WTO is a living institution, and its legal regime is ever-evolving. Members attribute legal meaning to norms in line with social, economic, and geopolitical contexts. To think otherwise, that WTO norms should be static to achieve fixed goals reflecting the global economy and power distribution in 1995, reveals a paradox: by advocating the strict observance of the formal WTO framework to promote development and fairer rules, some countries and authors contribute to maintaining a flawed and unfair system.
Recent discussions on WTO reformFootnote 152 have focused on the ‘reform-by-doing’ approach. This highlights the need for ‘improving the daily functioning of WTO bodies’.Footnote 153 The goal is to facilitate the participation of Members in different WTO bodies, including negotiating groups, without modifying the balance of rights and obligations.Footnote 154 Such an ‘experimental reform’Footnote 155 does not require a top-down one-off formal revision but happens rather through time as WTO Members develop and test different alternatives to meet needs as they arise. I explore below one particular tool – the JIs – and how they are reshaping the WTO negotiations and triggering its reform.
3.1 The Role of the JIs in the WTO Negotiations
The need for negotiating alternatives became more evident with the Doha deadlock and the challenges in delivering trade issues on a forum comprising 164 Members that relies on consensus and the single undertaking principle. In this sense, the hurdles in concluding negotiations through formal means also unveil challenges in reconciling multiple interests and perspectives. Considering the WTO's flexible geometry, the JIs offer those Members willing to advance trade issues an opportunity to further their commitments, complementing and reinforcing the multilateral trade rules.Footnote 156 The first JIs – SDR, IFD, E-commerce, and Micro Small and Medium Enterprises (MSMEs) – emerged during the 2017 Ministerial in Buenos Aires.Footnote 157
The JIs embody the fluidity between formality and informality in the WTO since negotiations draw largely on practices, yet participating Members strive to place JIs within the WTO formal framework. Their novelty is two-folded – JIs are a creative approach to negotiations, and they offer a fresh perspective on topics previously discussed in the WTO, such as investment, e-commerce, and the environment. Each JI comprises a like-minded group of WTO Members that launch informal discussions upheld by a critical mass aiming at agreeing on new rules. The desired outcome is a multilateral one. The Joint Statement has virtually become the mandate for the JIs, encompassing the purpose and goals of each initiative. Instead of coming from the formal WTO structure, such as the General Council or a ministerial conference, the decision to start discussions on the JIs comes from a group of Members that co-sponsor a ministerial statement in that direction.Footnote 158 The political will of at least a relevant subgroup of Members is essential to provide momentum and expertise to the discussions and yield concrete outcomes.Footnote 159
As the JIs are a new effort, Members also needed new terms to define, and consequently categorize, what they are doing. In this regard, the expression structured discussions conveys both the novelty of the initiative and its procedures and the level of formality translated into the structure the Joint Statement created. It refers to the first stage of the initiative, which was less than negotiations but more than the informal dialogue that took place before the issuing of the Joint Statement.Footnote 160 This was a political response rather than a technically legal one, given the sensitive climate in the WTO.Footnote 161 This arrangement includes a chairperson – also called a coordinator – an agenda, a docket number for written submissions, and scheduled meetings.Footnote 162 The structured discussions phase is a good example of how countries try to legitimize their actions in the WTO, aligning formal and informal instruments, traditional and innovative approaches, to uphold their efforts in the WTO decision-making system and gather support from other Members.
Take the JI on IFD as an example. After the submission of the first proposal on investment facilitation by Russia in March 2017, and in the months leading to MC11, the WTO Members supporting the discussions started their outreach efforts. The goal was to persuade as many Members as possible to adhere to the future Joint Statement. However, the challenges of the new endeavour were evident early on. For instance, countries did not know where to submit statements on investment facilitation, e.g., the General Council or the Council for Trade in Services, and, consequently, under which dock number to circulate the documents.Footnote 163 The launch of structured discussions in March 2018 was a way to address this issue.Footnote 164 The first step was to identify the main elements the future negotiations – and a future Investment Facilitation for Development Agreement (IFDA) – should comprise. By November 2018, Members had raised a thorough checklist of issues used as the starting point for the next steps. During the first half of 2019, Members focused on sharing their experiences and voicing their concerns and interests. By resorting to text-based examples to develop the previously identified issues, Members started outlining the multilateral investment facilitation framework. In July 2019, the chairman circulated a working document on IFD gathering Members' written contributions to assist the participants in recognizing areas of convergence. The co-sponsors considered each provision of the working document and concluded the first read at the end of 2019. The goal was to make the text consistent with the WTO legal framework and eliminate brackets to find greater convergence in the language.
Moving on to negotiations in the WTO arguably ‘implies that a commitment has been made to establish new rules or agreements’.Footnote 165 In light of this, launching negotiations on a new topic usually warrants the consensus of the membership over a negotiating mandate.Footnote 166 However, such consensus would only be needed for negotiating processes that create rights and obligations for the entire membership.Footnote 167 Whereas there are no legal constraints for open plurilateral negotiations in the WTO, a legitimacy limit remains – the need for achieving a critical mass.Footnote 168 Returning to the example of the JI on IFD, negotiations became a viable option once Members reached an overwhelming critical mass, with more than 100 co-sponsors, and a streamlined working document.Footnote 169 Accordingly, negotiations were quietly launched on 25 September 2020,Footnote 170 shifting the focus to an informal consolidated text prepared by the chairman of the initiative, the Chilean Ambassador Mathias Francke. Based on this streamlined text, participants conducted more focused consultations with the capitals and advanced specific outreach efforts towards developing Members and LDCs. Participating Members then agreed on a document entitled Easter Text,Footnote 171 which encompassed the proposals and contributions discussed at plenary meetings. It combined the two working documents previously produced during the discussions to help Members in shaping the framework for a future agreement. This led to the conclusion of textual negotiations in July 2023. Members are now working in Geneva toward incorporating the IFDA into the WTO rulebook since an outcome at MC13, when the IFDA was made available to the public, was not possible.Footnote 172
The JIs may raise some concerns given the parallels that may be drawn with the Tokyo codes.Footnote 173 This shows the multilateral trading system's pendular motion – from a largely informal, fragmented, and loose structure to a formal and highly institutionalized framework, and now back to the centre as Members try to find a balance between formal and informal venues.Footnote 174 Therefore, the multilateral trading system has not gone back to square one or retroceded to the Tokyo times. Despite the similarities between the geopolitical moments, in the 1970s and nowadays – they are marked by attempts to recover from global economic crises (the oil crisis and the financial and pandemic crises respectively), polarization, new trade needs and the pursuit of novel ways to address them, and disagreement among countries about the best way forward – the arrangements are different. The Tokyo codes belong to a context where there was no institutional umbrella since the GATT was a provisional agreement. Conversely, the WTO has a legal and institutional framework that Members need to consider.Footnote 175 Yet, countries can learn lessons from previous experiences, such as the value of having greater flexibility.Footnote 176 The main differences between the two moments are the level of engagement of developing countries in the JIs, and the fact that these initiatives, if implemented as open plurilaterals, add new obligations to the co-sponsors while extending the benefits to all Members according to the MFN principle. Moreover, the JIs are based on transparency and openness to the WTO membership. In this regard, all Members have timely access to the documents and are welcome to participate in the meetings and join the initiatives.Footnote 177
The JIs show deference to the formal rule of consensus, which applies to the approval of both multilateral agreements and Annex 4 plurilateral agreements in the WTO. It also complies with the informal rule of not resorting to vote. For the JIs, violating any of those rules would lead to several legal issues and weaken the legitimacy of the initiatives. Instead, the co-sponsors of the JIs are ‘using the WTO existing rules to try to figure out a solution’.Footnote 178 Such a solution could be not only a temporary one but an alternative to achieve broader cooperation, which requires well and carefully crafted techniques and procedures.Footnote 179 The main issue remains on how to place the new obligations within the WTO structure. The solution for this does not need to be perfect but rather feasible;Footnote 180 it warrants the creativity and flexibility of the WTO Members while abiding by the existing WTO rules – formal and informal. Such a solution will also be the outcome of not only legal considerations but also political inputs.Footnote 181 As mentioned, one option is hooking the obligations to the existing schedules of commitments through the certification mechanism as countries are doing for SDR. For IFD, co-sponsors are seeking consensus to add the IFDA to Annex 4 of the WTO Agreement.Footnote 182 Many of the provisions in the IFDA cannot be operationalized simply by inserting them into goods and services schedules. Making the IFDA an Annex 4 plurilateral enables the co-sponsors to fully implement their obligations.
Past failures in the WTO decision-making system have been productiveFootnote 183 for they highlight spaces and tools, and the need to resort to them, to advance new initiatives and deliver on trade negotiations. In this scenario, the JIs innovate on how Members negotiate and are evidence of ‘a new way of thinking’.Footnote 184 The JIs also reveal the pragmatic feature of the WTO decision-making system, where the membership seeks solutions to address challenges as they arise, seizing the opportunities the negotiations create. Regardless of the JIs substantive outcome, they have been successful in advancing the discussions on the WTO negotiating mechanisms, revealing the need – and the possibility – to combine formal and informal procedures. Above all, the JIs shed light on how informal practices can be an ally, and not an obstacle, to improve legal and institutional frameworks. The interconnection between formal and informal processes may offer the needed answer to address two of the main challenges in the WTO decision-making system, namely, i) to ensure the relevance of the multilateral trading rules and the WTO's timely response in a fast-paced and ever-changing global economy; and ii) to reach those goals in a system based on the consensus among 164 Members.Footnote 185 The WTO future would be less about moving away from the past than learning from it and using the existing and possible instruments to achieve negotiating outcomes.
3.2 A Way Ahead for the WTO Negotiations
Despite the criticism and challenges faced by the consensus rule,Footnote 186 most of the membership do not endorse abandoning it to ensure an effective and inclusive decision-making system.Footnote 187 On the contrary, such a move would compromise the space for the different WTO Members to express their interests and needs by creating winners and losers, which are more evident in voting methods.Footnote 188 Indeed, as cumbersome as a consensus decision-making system might be, it supports the multilateral trading system by adding to its input legitimacy.Footnote 189 Limiting the WTO political element would impair the participation of Members and could spill over to other WTO activities. There would be increased pressure to weaken the DSS and the trade policy review mechanism (TPRM), creating an ‘efficiency without loyalty’Footnote 190 kind of situation. Likewise, WTO Members are the main source of support to maintain the single undertaking and the current trade round format because they want to advance their agendas and ensure they have enough support to table proposals whilst avoiding free riders.Footnote 191 Moreover, Members want to integrate their topics of interest into the WTO framework to make them enforceable under the DSS. The single undertaking becomes a political tool to negotiate new trade rules. In this capacity, the single undertaking promotes a linkage approachFootnote 192 to negotiations to reach package dealsFootnote 193 according to the understanding that more items on the negotiating agenda may result in better and more balanced trade-offs.Footnote 194 Yet, it unveils the shortcomings of the WTO decision-making system over the past couple of decades.Footnote 195 The single undertaking could drive countries to focus on parts of the negotiating package with which they are not pleased instead of those issues on which they would like to agree, halting the discussions.Footnote 196
Starting in 2011 during MC8, Members recognized ‘the need to more fully explore different negotiating approaches while respecting the principles of transparency and inclusiveness’Footnote 197 to deliver the DDA. In the following years, Members agreed on the Trade Facilitation Agreement (TFA) outside the single undertaking and disagreed on reaffirming the Doha mandate. The frustration with the Doha Round became more evident in 2015 through paragraph 34 of the Nairobi Ministerial Declaration.Footnote 198 Members agreed to the possibility of identifying and discussing new issues for negotiations if they were willing to do so. Such a stance meant that WTO Members could start addressing topics outside the DDA and its single undertaking or the WTO built-in agenda, no longer fully accepting the negotiating methodology established by the Doha Round.Footnote 199 This further shows the interest of some of the WTO Members in holding continuous negotiations in the daily work of the WTO instead of the simultaneous negotiating process of interdependent topics in a trade round.Footnote 200
Seeking negotiating alternatives in the WTO can steer important changes. For instance, despite the difficulties in identifying the requirements of a critical mass, a broader membership supporting the endeavour is a central factor.Footnote 201 This explains the constant outreach efforts of the JIs participants in gathering support from a larger share of the WTO membership, if not to multilateralize the initiative, at least to legitimize it as an open plurilateral. The outreach work reveals the need for increasing communication among capitals, bringing not only ambassadors but also ministers to the table. A closer connection to domestic governments helps understand the different needs and concerns of countries. As argued by a Member's delegate, in Geneva the discussions and positions are sometimes political, whereas in the capitals there usually is more space for dialogue and acceptance of an initiative that could improve the quality of imported FDIsFootnote 202 or the regulation on e-commerce. When the main obstacles to advancing negotiations are political rather than technical, ministers are better equipped to address them and find convergence.Footnote 203 Ministerial conferences are only ‘the tip of an iceberg of diplomatic activity in and out of Geneva, and that is what needs reviving’.Footnote 204 Accordingly, the routine negotiating process in the WTO needs to be able to overcome political divergences and take a pragmatic turn, addressing the needs of governments and domestic societies.
Informal meetings of trade ministers – the mini-ministerialsFootnote 205 are a good alternative to enhance the bond between multilateral decision-making and domestic interests. They are unofficial meetings, not formally part of the WTO structure, comprising a representative group of Members offering leadership to the WTO. The aim is not to make decisions but rather to take stock of the negotiations and work out the technicalities to facilitate concessions to achieve consensus in the ministerial. Mini-ministerials are, hence, an informal policy forum to discuss systemic issues. In an attempt to make these meetings more transparent, African ministers started to be invited to mini-ministerials.Footnote 206 Indeed, the participation of smaller countries that are leaders of coalitions or chair WTO committees is essential to ensure that all WTO Members will be briefed about the discussions and outcomes of mini-ministerials.Footnote 207 In the long term, reforms could improve the system by making the ministerial meetings annual, so that ministers could be informed of the newest developments and decide on more routine matters, having a condensed agenda.Footnote 208 Regardless of the mechanism, ministers need to be involved in formal and informal multilateral trade discussions because they bring the negotiations in Geneva closer to the debates and interests of the domestic constituency.Footnote 209
Some of the long-standing challenges in the WTO decision-making system concern finding alternatives to overcome the distance between international bodies and domestic realities, and the lack of accountability and challenging instruments.Footnote 210 There lies the importance of a bottom-up approach. For instance, it was only during the TFA negotiations that Members established a mechanism to allow for ‘Geneva-based negotiators to visit their major ports or capitals along with international experts to familiarize themselves with their countries' trade facilitation needs and priorities. That gave them a better idea of the cost implications of the proposed measures’.Footnote 211 Because most of the current discussions in the WTO involve behind the border measures, the negotiating process must connect delegates, government officials, domestic regulators, civil society, and the private sector if Members are to address domestic needs and interests. JIs contribute to enhancing the input of civil society and business in the WTO decision-making system, which has long been debated.Footnote 212 For instance, the participants in the Trade and Environmental Sustainability Structured Discussions (TESSD) and the Informal Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (IDP) invite different stakeholders to their meetings to inform the discussions with their expertise.Footnote 213 Such participation is only possible because these initiatives are not ‘formally part of the WTO’.Footnote 214 Likewise, thematic sessions in WTO committees are informal meetings including different stakeholders that foster experience sharing to assess the challenges and opportunities in WTO negotiations and implementation of rules.Footnote 215
The JIs also show the importance of strengthening the role played by the WTO Secretariat and the relevant chairperson in the negotiations.Footnote 216 A few Members questioned the involvement of the Secretariat with the JIs since the topics are not covered by any of the WTO formal bodies.Footnote 217 The Secretariat can only act at a specific request of the JIs co-sponsors, helping in their activities in the WTO. The language of the documents circulated by the Secretariat stresses that it is answering a demand from a Member.Footnote 218 For instance, the Secretariat provides invaluable assistance in preparing documents and conducting research for substantial negotiations by doing the heavy lifting work of compiling examples. The Secretariat also provides opinions to address technical questions raised by Members during the discussions.Footnote 219 Likewise, the chairperson of each JI is central in ensuring swift progress and a constructive approach in the negotiations. Despite the political struggles in the past few years regarding the procedures to choose chairpersons, especially given the lack of clear requirements,Footnote 220 the JI on IFD has benefited greatly from its chairpersons. They have actively facilitated the dialogue between the co-sponsors to bridge differences and reach compromises, preparing working documents to signal areas of convergence and disagreement. They also have produced and circulated summaries of the meetings to provide a record of some of the issues discussed by Members. Such documents have assisted delegations in reporting the debates and conducting negotiations with their capitals.Footnote 221 Moreover, the chairpersons lead confessionals with the co-sponsors, holding informal meetings with a few Members at a time to facilitate convergence and assess the negotiating climate in moving forward.
4. Conclusion
Through the concept of transience of (in)formality, I argue that formal and informal negotiating processes coexist in the WTO. The evolution of the multilateral trading system is evidence of such intersection. Formality and informality are complementary rather than contradictory. They are both manifestations of Members' interactions in the WTO. Members resort to a combination of tools to shape practices to advance their needs and reflect new configurations of the global economic governance. Accordingly, practices may offer a different lens to understanding the WTO negotiations and Members' role therein. Informal procedures include small group meetings, coalitions, JIs, and critical mass creating open plurilaterals.
Drawing on the JIs, the research findings reveal that informality is key in promoting needed changes and maintaining WTO's relevance. JIs align with the ‘reform-by-doing’ approach that highlights a bottom-up process grounded on Members' agency. In this sense, the JIs contribute to the WTO reform by not only attempting to update the WTO rules to meet current challenges but also offering a new way to do so within the WTO's regulatory and institutional frameworks. Claims may arise that the argument advanced undermines the legal certainty and predictability of WTO law or is incompatible with multilateralism and the rule of law. However, far from diminishing the role played by law in trade governance, the purpose is to show that law in the WTO is more nuanced and dynamic than concerns over stability and order may first suggest.
Acknowledgements
This research has passed Ethical Clearance at King's College London, which requires to include the Research Ethics no. LRM-18/19-7632 in any materials associated with this research. The research is part of the doctoral degree funded by the Brazilian Ministry of Education (CAPES). I am indebted to Prof Federico Ortino, Prof Celine Tan, Prof Andrew Johnston, Prof James Harrison, Dr Laura Mai, Dr Myriam Gicquello, Dr Clara Lopez Rodriguez, and Dr Gail Lythgoe and all the participants of the 2023 SIEL Conference and the 2022 WILNET Emerging Voices Workshop for their feedback on different versions of this paper.
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