Communitizing Regulatory Problems: The Effectiveness of the Wto's Technical Barriers to Trade (TBT) Committee As a Transnational Regulatory Intermediary

This study aims to achieve two main goals.  First, it conceptualizes the WTO’s Technical Barriers to Trade (TBT) Committee as an intermediary that assists regulatory compliance by facilitating regulatory dialogue in a transnational setting, crisscrossing domestic and international regulatory jurisdictions.  Second, the study also measures the effectiveness of such a regulatory intermediary by analyzing TBT Committee data for the past two decades.

 Globalization has added a transnational layer of complication to the conventional regulatory dyad of regulator (rule-maker) and regulatee (rule-taker).  Suppose that the Australian government regulates the proper labeling of tobacco products.  Also suppose that Ukrainian cigarette exporters refuse to comply with the labeling requirement on the grounds that it violates the WTO TBT Agreement.  Here, two regulatory relationships interface with each other.  First, Ukrainian cigarette exporters (rule-takers) are supposed to abide by the tobacco labeling requirement enacted by Australia (rule-maker).  Second, Australia (rule-taker) must comply with WTO norms, such as the TBT Agreement (rule-maker).  It is under the second dimension that Ukraine, on behalf of its cigarette exporters, may question Australia’s tobacco labeling regulation.

 The conventional view of the regulatory process as a two-way game may envision two separate compliance structures, domestic and international.  Typically, both states and private businesses qua rule-takers will comply with rules if, and onlyif, behaving (compliance) is in their interest, or if violating (non-compliance) would entail certain disutilities, such as a penalty.  If we apply the conventional model to the aforementioned hypothesis, we may explain that Ukraine cigarette exporters would elect to defy the Australian labeling requirement since compliance is too costly to them and their business partner, such as Philip Morris, who built cigarette factories in Ukraine.  Likewise, in case the WTO invalidates Australia’s labeling requirement, Australia would agree to repeal the measure if a potential sanction against it is too painful to bear. 

 While the conventional view offers a simple yet powerful heuristic on compliance, that view fails to embrace more nuanced aspects of regulatory relationships.  The conventional preoccupation with law as coercion (enforcement) tends to dismiss important non-material dimensions of WTO norms, such as their rhetorical power.  In other words, the two-way game regulatory model cannot capture various discursive pathways provided by a regulatory intermediary.  A regulatory intermediary, such as the TBT Committee, interconnects the domestic and international regulatory spheres and helps build a compliance community by hosting regulatory dialogue in this transnational setting. 

 In the aforementioned hypothesis, the TBT Committee provides a forum in which Ukraine, on behalf of its domestic regulatees (cigarette exporters), may demand justifications from Australia for the latter’s labeling regulation.  Ukraine may argue that Australian labeling regulation lacks the scientific justification required under the TBT Agreement.  Note that the WTO, in and of itself, is nota World Government.  The WTO cannot simply legislate away this regulatory heterogeneity.  Instead, the peer review under a regulatory intermediary (the TBT Committee) promotes regulatory dialogue between regulators and regulatees.  Such regulatory dialogue tends to result in both countries familiarizing themselves with each other’s regulatory situation.  This mutually enhanced awareness between regulators and regulatees is a necessary, if not sufficient, condition for any successful regulatory cooperation.

 Granted, it remains an empirical, albeit often extremely complicated, question whether such a regulatory intermediary (the TBT Committee) is “effective,” i.e., whether it actually delivers any practical solution for the original regulatory dilemma.  One might attempt to assess its effectiveness through various interactions (inquiries and responses) within the TBT Committee and their consequences.  Note that those consequences do not necessarily mean any dramatic behavioral changes toward compliance.  They may also include expressions of satisfaction, explicit or implicit, from inquirers.  If the regulating country’s response indeed satisfies the original inquirer, there will be no more discussion or dispute.  In this regard, the TBT Committee is a regulatory clearinghouse that channels and manages TBT-related inquiries that are in the form of both a demand for clarification and a complaint about alleged illegality.  Unlike adjudication through the WTO tribunal, the ultimate goal of the TBT Committee is to liquidate those demands or complainants by providing a discursive forum.  In this sense, the TBT Committee may function as a dispute prevention mechanism.

 Against this background, our proposed study investigates the TBT Committee data spanning the past twenty years.  The TBT Committee data concerns 300-plus “specific trade concerns (STCs)” raised under the Committee meetings since the launch of the WTO system in 1995.  We analyze minutes of those meetings based on various types of interactions among WTO members in the TBT Committee, such as a clarification (fact-finding) request, a complaint questioning the legality of the measure in question, a response satisfying the inquiring country, and a vague response.  We then develop the following hypotheses.

1. A clarification request from a potential regulatee is more likely to produce a solution (satisfaction) than an illegality complaint.
2. The more often WTO members discuss a particular regulatory issue (STC), the less likely it is resolved.
3. The greater the number of WTO members that are involved in an STC, the less likely it is resolved.
4. The higher level of conflict an STC demonstrates, the less likely it is resolved. 

 Once we complete coding the data, we will be able to evaluate these hypotheses.  Subsequently, we will contextualize the result of such evaluation by interviewing diplomats and WTO staff who actually participated in the TBT Committee meetings.