Towards an Equitable Integration of Monetary and Financial Matters, Trade and Sustainable Development
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Description
In Section III of the Millennium Declaration entitled ‘Development and Poverty Reduction’ United Nations (UN) member states committed themselves ‘to create an environment—at the national and global levels alike—which is conducive to development and to the elimination of poverty’. This depends on ‘good governance within each country’ and on ‘good governance at the international level, and on transparency in the financial, monetary and trading systems’. Hence, they ‘are committed to an open, equitable, rule-based, predictable and non-discriminatory multi- lateral trading and financial system’. In 2002 the Monterrey Consensus also reaffirmed the UN members’ commitment to trade liberalisation, but noted that developing countries need ‘appropriate institutions and policies’ to benefit fully from trade. The concept of equity in international trade and financial rules and institutions has not been explicitly defined and is the subject of debate and speculation among philosophers and political theorists. At the same time a notion of equity has played an important role in the settlement of disputes in public international law, especially with regard to allocation of natural resources. Thomas Cottier suggests, ‘Achieving broad goals of global welfare and equity is not a matter of international charity, but of common and shared interests in the light of the “ticking time bombs” of excessive population, mass migration, poverty and destitution facing many parts of the globe.’ Economists are often sceptical as to whether the trade and financial systems should be understood at all in terms of justice rather than as instruments of economic policy coordination. Nevertheless, it will be observed that the actual rules often do depend, explicitly or implicitly, on a concept of fairness. For instance, one of the rules that will be discussed in this chapter, contained in Article IV of the International Monetary Fund (IMF) Articles of Agreement, required that IMF Members do not ‘manipulate exchange rates or the international monetary system in order to prevent effective balance of payments (BOP) adjustment or to gain an unfair competitive advantage over other members’ (emphasis added). In the trading system, the WTO rules on subsidies, including fiscal measures such as tax incentives, suppose a conception of fair competition; as the WTO Appellate Body (AB) noted in one case, there are situations where market based benchmarks for fairness will be inapplicable given the pervasive interconnection of public policies and market structures. The concept of equity is then inescapable in the interpretation and application of the law of international trade and financial systems. The question is whether there are legal and policy sources that allow us to give a definite meaning to this concept as we apply it to particular rules and disputes in the trade and financial systems. Such sources are more various and more instructive than one might have originally imagined. This approach, pursued in this chapter, can usefully be compared to that of Thomas Pogge, who seeks to judge (and condemn) the existing system of rules in international economic law against an abstract conception of global justice, emphasising the priority of eliminating poverty and, therefore, a counterfactual of an ideal system of international economic law that would adequately reflect that principle. Rather, this chapter begins without assuming the manifest injustice of the existing norms of international economic law, and assumes instead that we can help achieve more equitable outcomes through appreciating better the elements of equity implicit or sometimes explicit in those rules, and interpreting and applying them together with or in light of other norms of international law, such as those entrenched in the UN human rights covenants, for example. The approach of beginning with the possible concrete applications of concepts of equity to specific disputes or challenges and problems in international economic law, and with the jurisprudential acquis, rather than with philosophical dogma and abstraction, is in many ways akin to that of Cottier. The aim is not radical critique with a view to comprehensive reconstruction, but a careful consideration of how relevant conceptions of equity have been sidelined or distorted in the way the existing rules have been applied and interpreted within and across international economic and other regimes under conditions of fragmentation. The end point might well be characterised as realistic utopia or more perfect expression or elaboration of the ideals of equity already reflected in a range of positive international legal norms, through the interpretative transcendence of ‘self-contained regimes’.
Source Publication
The Rule of Law in Monetary Affairs: World Trade Forum
Source Editors/Authors
Thomas Cottier, Rosa M. Lastra, Christian Tietje, Lucía Satragno
Publication Date
2014
Recommended Citation
Howse, Robert L., "Towards an Equitable Integration of Monetary and Financial Matters, Trade and Sustainable Development" (2014). Faculty Chapters. 846.
https://gretchen.law.nyu.edu/fac-chapt/846
