Policy Implications Roundtable

Report on the Asia Pacific Dispute Resolution

Coordinating Performance in International Trade and Human Rights

Policy Implications Roundtable

Asia Pacific Foundation of Canada, Vancouver

October 26, 2017

The Asia Pacific Dispute Resolution (APDR) Project held a policy roundtable at the Asia Pacific Foundation of Canada (APFC) on October 26, 2017. The APFC has been an important policy partner of the APDR Project helping facilitate dissemination of the research results to policy communities in Canada and beyond.

Since 2009, the APDR project has focused on the dilemma of coordinating performance of international standards on trade and human rights in the Asia-Pacific region, with particular attention to Canada, China, India, Indonesia, and Japan. Supported by the Social Sciences and Humanities Research Council (SSHRC) of Canada under its Major Collaborative Research Initiative (MCRI) program, the APDR project is based at the Peter A. Allard School of Law and the Institution of Asian Research of the University of British Columbia (UBC), and involves a collaborative network of colleagues from UBC and from partner institutions in Canada, Australia, China, India, Indonesia, Israel, and Japan. The key question of the project concerns the integration of trade/business policies and programs with human rights goals and practices.

The APDR/MCRI Policy Roundtable was based on the project’s work on six edited volumes presenting research findings on trade policy and human rights with particular attention to their relevance for Canadian foreign policy priorities. In their presentations, members of the research team addressed policy implications from the research as presented in the six edited volumes. The keynote speaker for this event was Mr. Jonathan Fried, former Ambassador and Permanent Representative of Canada to the World Trade Organization (WTO) and currently Coordinator of International Economic Relations for Global Affairs Canada. See agenda here.

Dr. Pitman B. Potter, Principle Investigator of the APDR project, opened the event by welcoming the attendees and expressing his heartfelt appreciation and gratitude to all the Project Co-Investigators, Collaborators, Institutional Partners Organizations, the International Advisory Board Members, Members of the Executive Committee, the Peter A. Allard School of Law, the Institute of Asian Research, Research and Graduate Academic Assistants, Collaborating Organizations, Research Personnel and the Project Manager for their contributions, collaboration, dedication, and hard work throughout the years that have made this project such a great success. Dr. Potter highlighted the importance of the collaboration with the Asia-Pacific Foundation of Canada to disseminate the developments and the research results of the APDR project. This collaboration has been strengthened with the participation of Mr. Joseph Caron and Mr. Jack Austin as members of the APDR International Advisory Board. Both, Mr. Caron and Mr. Austin, have had a key role in the APFC and in improving relationships between Canada and Asia; their experience has enriched the development of the work done at the APDR project.

Welcome remarks by Dr. Eva Busza

Dr. Busza started her remarks highlighting that this Policy Roundtable builds on a multi-year corpus of policy research conducted by Dr. Potter and his team in the Asia Pacific Dispute Resolution Program. She recognized the hard work done to make possible the six thematic volumes on the coordination of human rights and trade presented on this day. Dr. Busza referred to the honour the Foundation had in hosting one of three consultation workshops done in April 2016 in Vancouver, Ottawa, and Toronto. Participants in those workshops heard summaries of the six volumes, provided feedback, and discussed policy proposals for integrating trade performance and human rights. This series of workshops yielded a number of recommendations for policy initiatives to strengthen the coordination of human rights and trade, such as, the clarification of human rights standards, highlighting the need to emphasize Social Cultural and Economic Rights along with Civil and Political Rights, and the integration of Human Rights provisions and regulations into trade and investment agreements.

In his collaboration with the APF Canada, Dr. Potter chaired the 2013 APF Canada’s National Conversation on Asia Task Force. Dr. Busza drew attention to how the recommendations from the APDR consultation workshops from 2016 resonated with those of the APF Canada Task Force 2013 report  on “Advancing Canada’s Engagement with Asia on Human Rights.” In particular, they echo the Task Force’s recommendation that “Canada should incorporate human rights protection within its trade and prosperity agenda” and recommendations calling for greater public awareness of the different kinds of internationally protected human rights. APF Canada’s report argued that Canada must both support human rights protection in Asia while pursuing robust trade relationships with Asian economies. For Dr. Busza, integrating human rights protections into trade performance will be a crucial task for Canadian policy as it strives to meet these dual objectives.

While the discussion during this Policy Implications Roundtable was focused on the work recently completed by the APDR project and its application to contemporary policy, Dr. Busza took this opportunity to look further into the future and start to seed some ideas that might spark avenues for further research. She brought attention to being at the brink of a “fourth industrial revolution” characterized by a range of new technologies that are fusing the physical, digital, and biological worlds. Some of the features of this fourth industrial revolution are digitization, deep learning, artificial intelligence, the internet of things, the data explosion, and automation. Just as the developments of the fourth industrial revolution will radically redefine our present economy, it will also open new questions about how that economy interacts with human rights and how trade between nations is to be regulated. Details on these ideas can be found in her full speech here.

Trade and Local Human Rights Policy

Dr. Ljiljana Biukovic started the presentations of the editing volumes by introducing “Local Engagement with International Economic Law and Human Rights” which explores both theoretical and practical aspects of balancing international trade law and human rights standards in the local context. It analyzes the performance of international rules by different states and societies by focusing primarily on the local efforts of interpretation and implementation of international rules. The broad research question that provided the common thread of the book project asks how to ensure a greater understanding of international trade rules across different communities and how to better coordinate performance of trade treaties and local human rights practices? Eleven scholars contributing to the book provided different answers based on a range of important socio-legal considerations.

One possible answer offered in this volume is to constitutionalize the international trade regime in a way that it recognizes the protection of human rights as one of its normative underpinnings. There is another avenue of coordination stemming from the multilateral level, but providing for a less top-down coordination than the idea of the constitutionalization of the WTO, which involves giving primacy to international law while emphasizing the importance of a proper allocation of powers to various level of governance.

All contributors acknowledged the capacity of trade rules to have a significant impact on state performance of and compliance with human rights. Some contributors analyzed international trade and investment treaties to test the premises that international instruments are good mechanisms to protect human rights. Furthermore, the contributors investigated what human rights should be protected and how could they be protected by the application of international trade law. Thus, the second proposal focuses on the possibility of using trade and investment agreements to protect human rights by imposing it as a conditionality to market access. The third answer to their question is to focus on institution building in local communities. The capacity to establish monitoring institutions, transparency mechanisms, the possibility for civil society to be involved in the process of decision making on the implementation of trade rules and to be consulted, is important for the coordinated performance of trade law and human rights and for building a better understanding of international rules by local actors.

In closing, the contributors argue that the coordinated performance of international trade and human rights standards requires consideration of different local perspectives in the process of the negotiation and performance of trade treaties; the identification of the ways in which trade agreements impact local practice and institutions involved in enforcement of trade agreements; and determination of the modes of monitoring and evaluating local performance of international trade and human rights standards. Therefore, it is important to build a basic understanding of international benchmarks at the local level and to consider regulatory cooperation mechanisms as a nexus of trade rules and human rights standards and as a forum of articulated interaction of non-local and local. Dr. Biukovic’s full report can be accessed here.

 Trade Policy and Labour Rights

Dr. Daniel Drache, on the subject of the volume on trade policy and labour, presented about “Labour Rights Post NAFTA and the Miserable State of Policy Linkages.” In his presentation, Dr. Drache explained that the economic model that labour embraced anticipated higher wages and strong unions. However, one of the first drawbacks of NAFTA, according to Dr. Drache, is that the right of association to establish a union has reached historic lows. The second drawback is reflected in the fact that collective bargaining has covered fewer workers than ever. Additionally, Dr. Drache presented figures from the Centre for International Governance Innovation showing that wages have gone lower post-NAFTA, and the wage gap between productivity growth is larger than ever as wages have stagnated and unions have retreated to the margins.

Trade Policy and Health Rights

On the matter of trade policy and health, Dr. Ilan Vertinsky presented some selective highlights from the volume “Health and Safety in Asia in Global Setting”. The volume deals with two areas:  access to health care and medicines, and public health and safety. Both areas are impacted by developments in global governance that have created obligations under international human rights law. In some instances, the right to health (and safety) has created competing state obligations. In all economies, the state decides on budgets and policies and on how to spend these budgets. Countries vary in their ability to pay, but more importantly in their commitment to pay for healthcare. Since policy issues vary among countries, Dr. Vertinsky presented policy problems of advanced and developing countries. In advanced countries, there is an ongoing issue on whether to permit mixed billing of regulated services and unregulated services. There are problems of affordability that are resolved by adopting caps on expenses individuals must pay for regulated services. Affordability of medicines is determined by their pricing and by regulatory decisions of what is covered and the shares that patients pay for them. All these issues are subject to intense pressures from various interest groups including advocated for patients, physicians, and pharmaceutical companies. Outcomes depend on political will and the talent of the governments to manage the decisions and implementation processes.

For developing countries, poverty is a key issue; any price charged for medicines or health care may exclude large segments of the population from access to healthcare medicines. Developing countries face a policy dilemma: which comes first, health or economic progress? Experiences in India suggest that health first is best. In the matters of international trade and health, intellectual property rights related to medicines lead to higher prices and monopoly profits and thus reduce affordability of medicines. The WTO Doha Declaration on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and Health, allows for compulsory licensing of medicines and other measures to support public health. Unfortunately, countries often yield to pressures from both domestic and international interest groups and do not make extensive use of their rights to ensure lower cost of medicines. Finally, Dr. Vertinsky explained that certain requirements imposed by the Technical Barriers to Trade Agreement and the WTO Agreement on the Application of Sanitary and Phytosanitary Measures prevent certain actions of countries to protect their environments and human and animal health.

Trade Policy and the Right to Development

Regarding the volume on trade policy and development, Dr. Moshe Hirsch presented policy implications using India’s human rights approach to economic development as an example. India has undertaken a human rights-based approach to economic development which creates individual rights to vital services like food, employment, and education. India’s exceptional policies represent a model for other states. India has a strong civil society, active judiciary, and free press that pressure the government to enact statutes. However, with weak domestic institutions, India faces implementation problems since the enactment of statutes does not guarantee effective implementation. Dr. Hirsch presented six policy recommendations that emerged from the research to strengthen implementation:

• First, the point of departure for a dialogue should be common values and objectives that recognize India’s leading role regarding the human-rights-based approach to economic development.
• Second, in order to emphasize the need for effective implementation, local legislation (not external human rights norms) should be emphasized in light of India’s existing legislative infrastructure.
• Third, supporting and empowering local actors in India, including governmental and non-governmental bodies, engaging them in implementing human rights legislation.
• Fourth, the creation of joint consultative networks composed of Canadian and Indian public officials, including judges, NGOs, and journalists actively involved.
• Fifth, collecting and disseminating information on the challenges faced by governmental and non-governmental bodies aimed at promoting the human rights approach to economic development; including exchanging information between Canada and India.
• Finally, the sixth recommendation is to initiate joint training programs aimed at strengthening domestic institutions active in this sphere, including institutions dealing with fighting corruptive practices.

Trade Policy and Poverty/Inequality

Dr. Rick Barichello presented implications for Canadian foreign policy as they emerged from the volume on trade policy and poverty/income inequality. This volume examines the relationship between globalization, mainly trade liberalization, and poverty and income inequality. With empirical work made in Indonesia, the key result is that poverty tends to be reduced through increased trade, or trade helps raise incomes of low income persons. However, some exceptions were found in case studies on coffee eco-certification and visual disabilities, which show that results can be uneven and is something to which policy makers must be sensitive. Several papers in the volume indicate an ambiguous relationship between trade liberalization and inequality. Increased trade in some cases reduced inequality and in other cases it increased inequality. In general, increased trade helps raise low incomes, but it also increases incomes at the top. Adding to these mixed results, increases in foreign direct investment in Indonesia, often associated with reduced trade barriers, was found to lower inequality. While the results are not surprising, Dr. Barichello explained they have strong empirical support and are consistent with other research. The Indonesian experience with trade liberalization is consistent with experiences in other developing countries. Therefore, the implications of these results for Canadian Foreign Policy include that Canada should:

• support trade liberalization especially with respect to developing countries;
• oppose trade restrictions in trade negotiations;
• teach by example like in the cases of supply managed agricultural sectors such as dairy and poultry;
• and insofar as possible, Canada should be sensitive to negative consequences of trade liberalization and assist trade partners in attenuating them.

Additionally, Dr. Barichello presented three domestic policy lessons on the special cases where some firms are hurt by freer trade:

• take seriously the need to provide adjustment assistance/support to those firms or to individuals that lose jobs;
• evaluate the effects of lower trade barriers specifically on poor populations or regions, which would help in targeting public assistance on those persons or regions; and
• increase the competitiveness of those sectors that are uncompetitive and at risk of being hurt.

Enacting policies and programs to enhance firms and industries’ ability to compete internationally is a form of risk prevention or ex ante preparation for freer trade that can take many forms.

Trade Policy and Government Accountability

Dr. Sarah Biddulph took her turn to introduce the volume on trade policy and government accountability, she presented some background and explained their approach to the question of good governance in this volume. Programs and provisions to realize good governance can be seen in many multilateral and bilateral arrangements of sovereign states. At the international level, good governance provisions look two ways. First, they address the internal aspect of good governance, defining the ways in which international institutions perform their basic tasks and how they interact with their membership. Second, they look externally, where international institutions set standards of governance for local decision makers in member states. In both contexts, good governance is designed to legitimize decision-making of institutions, safeguard participation by member states and their publics in institutional decision making, and ensure public accountability of governments for decisions related to the distribution of wealth and use of public resources. Nation states also engage with good governance. First as a necessary condition for engagement with international agencies. But just as importantly, they embrace, to different extents and in different ways, principles, and techniques of good governance to build the legitimacy of their own domestic regulatory regimes.

This volume examines the international and national dimensions of the principles and techniques of good governance. The first dimension of the book is to engage in a top-down analysis by examining the ways in which international institutions and corporations operate. Are their own decision-making processes accountable and transparent? The ways in which principles of good governance and transparency are given form within international institutions themselves is seen as key to improving the quality of engagement with member states and ultimately contributing to the legitimacy of their decision-making. The second dimension of the book is to explore the bottom-up dimension of good governance. They examine the ways good governance principles are given practical effect, with a focus on the Chinese domestic regulatory environment. They also consider the ways in which Chinese interpretations and adaptations of the principles of good governance impact back on the international sphere.

In adopting an approach to a study of good governance that acknowledges the changing interpretations of its core components, we have sought to be sensitive to the ways in which concepts change and how different actors may use the same words but not mean the same things. Engaging with the mutability of concepts and values also raised the prospect that dominant understandings of the core concepts and even the centrality of good governance may also be contested. Boaventura De Sousa Santos reminds us that the ideas we currently view as global were once local. That is, not only are global ideas—neo-liberalism, small government, good governance—imposed on the local, but these ideas that we now understand to be global were drawn, and reified from, the level of local. This process is not static. Whilst we have not seen a Beijing Consensus replace the Washington Consensus (indeed some argue that the Beijing Consensus, in fact, reflects the values of the Washington Consensus), that does not preclude a new set of values being established as the global hegemon in the future. Whether we welcome this prospect or not, it is a possibility that we must face in a clear-eyed manner. Full report can be accessed here.

 KEYNOTE ADDRESS – MR. JONATHAN FRIED

We had the honor of having former Ambassador and Permanent Representative to the WTO and current Coordinator of International Economic Relations for Global Affairs Canada, Mr. Jonathan Fried, as the keynote speaker for the event. Mr. Fried has been serving on the International Advisory Board of the APDR project since 2009. He took this opportunity to pause and reflect on the evolution of the international trade and investment agenda during the life of the APDR project, and he pointed at the priorities of Canada’s “progressive” trade agenda highlighting some concrete developments in the relations between Canada and Asia. Mr. Fried commented that there is broad consensus internationally that sustainable development is unachievable without economic growth; more accurately, sustainability encompasses economic, environmental, and social dimensions. To this end, trade is a key means as an enabler and catalyst. However, trade alone is not a complete recipe; in order to create jobs, it is necessary to establish a comprehensive approach to good governance, structural reforms, and a transparent and predictable regulatory environment, alongside investments in education, job training, and adjustment assistance. Through the years it has been established that the quality of growth is important. Mr. Fried highlighted that the APDR Project has contributed more profoundly to our understanding of policy linkages, and suggested that more work needs to be done since the kinds of special rules or recognition of the special and differential needs of developing countries remain a major issue.

Canada champions a “progressive” trade agenda to better ensure benefit for all. Mr. Fried highlighted five major elements of this agenda.

1. Canada aims to find ways to ensure that trade rules and frameworks promote and facilitate broader participation in business, with the attendant wealth benefits that ensue;
2. Canada’s progressive trade agenda seeks to address gender discrimination;
3. As reflected in the CETA, this agenda seeks to enshrine the “right to regulate” – the right of governments to act in achieving legitimate public policy objectives in specific areas;
4. Canada’s progressive trade agenda means looking at linkages between trade and domestic policy objectives to support middle-class job creation; and
5. A global progressive approach to trade demands greater attention to coordination and coherence between international institutions and forums who share ownership of the agenda and demands building understanding and broadening consensus internationally.

Finally, Mr. Fried pointed out some concrete developments in the relationships with Canada´s Pacific partners.

• As an active participant in Trans-Pacific Partnership (TPP) negotiations, Canada is now actively participating in the ongoing TPP-11 discussions aimed at determining options for a potential agreement.
• Canada and China have completed exploratory talks on a possible free trade agreement.
• Canada and ASEAN jointly announced in September 2017, the launch of exploratory discussions on a potential Canada-ASEAN Free Trade Agreement.

Canada’s engagement with this region is more comprehensive than only trade and economic relations. Canada participates in the Council for Security Cooperation in Asia Pacific. In terms of human rights and sustainable development, Canada recognizes and is taking into account the diversity of circumstances in the Asian countries. With China, Canada is committed to constructive exchanges on human rights as a core component of their engagement. Recognizing some common threads in the region, Mr. Fried commented that in the pursuit of these trade and investment initiatives, the government agencies greatly benefit from the analysis and insights provided by initiatives like the APDR Project. Since all governments share a commitment to increasing prosperity, of creating jobs and growth for their citizens, Canada’s trade agenda is enduring and the work of the APDR Project provides important guidance moving forward. Mr. Fried’s full keynote address can be accessed here.

The Policy Implications Roundtable resulted in an event that highlighted the relevance of the work done in the APDR project for advancing the coordination of trade and human rights. The policy recommendations presented and reflected on during the presentations offered concrete guidance that aims at strengthening the relationships between Canada and the Asia-Pacific Region while emphasizing the leading and supportive role that Canada can play in promoting such coordinated compliance. With clear consideration of local conditions and the constant impact of international frameworks, the six edited volumes presented at this event contribute to enhancing international collaborations.

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