National Constitutions, Foreign Trade Policy and European Community Law

VI. Conclusions: Need to Incorporate Liberal International Trade Rules into Domestic Laws

A. How to Constitutionalize Foreign Trade Laws?

International legal guarantees of freedoms, non-discrimination, legal certainty, transparency and use of proportionate policy instruments cannot fulfil their constitutional functions unless they are supplemented by effective enforcement mechanisms and placed into a `constitutional' system subjecting the interpretation, application and enforcement of the rules to institutional `checks and balances' so as to ensure the highest possible degree of adherence to the rules. Such a constitutional framework can hardly be made effective within worldwide international organizations which recognize the national sovereignty and diversity of member states (e.g. the sovereign right of each GATT member state to decide on its national level of tariff protection) and provide no effective sanctions against mutually agreed `rule departures' among governments (such as `VERs' or the International Textiles Agreement of 1973). For instance, the establishment of parliamentary and judicial `checks and balances' at the level of worldwide international economic organizations appears hardly feasible. As illustrated by the example of the EEC, even the existence of international parliamentary and judicial bodies is no adequate safeguard against international `protectionist collusion' among agricultural ministers at the expense of domestic citizens. The experience with the often little success of customs unions and free trade areas in Africa and Latin America confirms that international agreements as such are not yet a guarantee of effective liberalization of national trade barriers.

B. International Freedoms of Foreign Trade as Part of Domestic Law

Experience with European integration law suggests that the most effective means to constitutionalize discretionary national trade policy powers is to incorporate international prohibitions of trade barriers into domestic laws and to enable private traders, producers and consumers to enforce these rules through domestic courts. GATT prohibitions of tariffs and non-tariff trade barriers are also suitable for and capable of `direct' or `indirect' application by domestic courts and individual citizens:

a) Unlike many other international agreements (including most provisions in human rights conventions) which prescribe `minimum standards' for the conduct of government policies, international prohibitions of tariffs, non-tariff trade barriers and trade discrimination go far beyond the autonomous national guarantees of freedom of foreign trade and enlarge and protect the individual freedoms, property rights and non-discrimination of domestic citizens across national frontiers.

b) GATT explicitly provides for domestic judicial review procedures (Article X(3)) and states in several provisions that its function is to protect `traders' (Article X(1)), `domestic producers' (Article XIX(1)) and `trade under fully competitive conditions' (Article VII(2)).

c) The basic GATT prohibitions of tariffs (Article II), non-tariff trade barriers (e.g. Articles V, XI(1)) and trade discrimination (e.g. Articles I(1), III, XIII) are unconditional, sufficiently precise and not dependent upon further implementing regulations. The more than 90 dispute settlement decisions under GATT Article XXIII(2) amply confirm that these GATT rules are capable of being interpreted and applied by adjudicative bodies.⁷⁶ This is also confirmed by the judicial enforcement of the EEC Treaty prohibitions of non-tariff trade barriers and trade discrimination, which are based on the corresponding GATT prohibitions (e.g. Articles III, XI(1), XIII) but are often drafted in a less precise manner (see e.g. the vague notions of `measures having equivalent effect' in Articles 30, 34).

d) As noted above, in constitutionally limited democracies, individual rights are not `granted' by governments. In a similar way, international guarantees of freedom of transnational trade acquire their `constitutional value' not from the consent of governments but from their function to protect and extend individual rights across national frontiers. As the only legitimate function of governments consists in protecting the equal rights of their citizens, modern constitutions rightly emphasize that e.g. `the general rules of public international law ... shall directly create rights and duties for the inhabitants' (Article 25 of the German Basic Law). Also contractual international legal obligations for freedom of foreign trade should be viewed as an expression of the constitutional obligations of governments towards their own citizens and should be constitutionally presumed to be directly applicable for the benefit of the citizens.

While liberal trade within federal states and in the EC is generally viewed as a major constitutional achievement, politicians, lawyers and `practical men' often deride the goal of liberal transnational trade as `academic' and perceive international trade relations as an adversary, `power-oriented' Machiavellian arena in which the defence of the national interest requires broad discretionary trade policy powers; hence, international trade agreements should be interpreted in the narrowest possible way in order to minimize the constraints which they impose on national freedom of manoeuvre. International lawyers frequently view international agreements from a `non-individualistic' perspective as a matter for governments alone. By contrast, economists rightly emphasize that `foreign' trade policy often taxes and restricts domestic citizens in a welfare-reducing manner. The practice of successful liberalization of tariffs and non-tariff trade barriers within federal states, customs unions and free trade areas clearly proves that freedom of trade is a practical policy. And the ever closer economic, legal and political integration is a sign of how much citizens value the transnational exercise of their individual freedoms across national frontiers.

C. Constitutionalism Must Begin At Home

The `non-individualistic' perception of international legal guarantees of freedom of trade and of non-discriminatory competition is inconsistent with the value premises underlying democratic constitutionalism. If values can be derived only from the individual, individuals should be granted the widest possible freedom of choice and corresponding responsibility (e.g. the need to adjust to import competition) in order to be able to develop their personal capacities and `dignity'. Also freedom of trade constitutes an ethical and constitutional value in itself which does not depend upon economic theory. Constitutionalism requires that all forms of coercive government intervention should conform to the `rule of law' including self-imposed international legal guarantees of freedom and non-discrimination in the transnational relations of citizens.

From the perspective of constitutionally limited democracies, such as those of the major trading countries, liberalism and internationalism must therefore begin at home. Problems in the implementation of international trade rules arise mostly at the level of domestic trade law and policy-making. International legal prohibitions of mutually harmful trade restrictions and of trade discrimination are necessary not only for the external relations of states but even more so for protecting the equal liberties and property rights of domestic citizens participating in and benefiting from the international division of labour. The effectiveness of the international GATT obligations depends upon the more effective incorporation of the international rules into a domestic `trade policy constitution' so that the rules are binding and protected under domestic laws.

Such a `constitutional' approach would require a number of important policy changes. Rather than leaving the domestic implementation of liberal international trade rules to the discretion of each government, international trade agreements should regulate their `domestic law effects' in a manner enabling producers, traders and consumers to invoke and defend their `freedoms of foreign trade' against government restrictions and against non-transparent interest group politics. International trade agreements should also provide for domestic judicial review, for it is the courts which ultimately have to protect the transnational exercise of individual rights by domestic citizens. Likewise, the effectiveness of individual rights and their judicial protection depend on procedural guarantees of `due process' and `access to justice'⁷⁷ as well as on the interpretation of international and domestic foreign trade law as mutually complementary rules designed to enhance the individual rights and the welfare of domestic citizens.

76 See the contributions by Petersmann, in E.U. Petersmann, G. Jaenicke (eds), Adjudication of International Trade Disputes in International and National Economic Law (1992) 77ff., 405ff.

77 See on this point also Cassese, Clapham, Weiler, `1992 - What are our Rights?', in A. Cassese, A. Clapham, J. Weiler (eds), Human Rights and the European Community: Methods of Protection Vol. II (1991) 1, 57ff.

© 1990-2004 European Journal of International Law
All comments and suggestions should be sent to webmaster
This site is part of the Academy of European Law online, a joint partnership of the Jean Monnet Center at NYU School of Law and the Academy of European Law at the European University Institute.
This file was last modified: Monday, August 02, 1999 02:29PM