Ed Barton, LLM, CPA, CFA

Development of International Economic Law

Introduction

The history of International Economic Law is the history of Economic Development itself.  Over the last 100 years, elements have moved from tariff and trade issues through nationalization and sustainability as values, complexities, and technology have evolved. Initially, nations looked at the full development of their own economies.  During the colonial period, the ability to leverage (or exploit for economic gain) the colonial economies and the ability to control these elements became central to international economic law.  During decolonization, the challenge was a dynamic and sometimes military tension between formerly colonial holdings and the former colonizing powers over the control of natural resources and the economy.  As we move through the early parts of the 21st Century, issues have moved from colonial control to environmental exploitation, income inequality, development, and free trade.

Sustainable Economic Development – Emergence

Because of the economic focus of control of economic resources post-colonialization, few elements of international economic law dealt with sustainable development.  In 1962, the UN General Assembly adopted a UNESCO resolution calling on nations to pass domestic laws protecting native flora and fauna (Resolution 1831(XVII)). However, little else was done.  The focus was on the sovereign’s ability to exploit freely and control their own resources following their own development policies.

Economic control became a key element of many human rights-based resolutions and legislation as well.  In several treaties and resolutions:

  • 1966 International Covenant on Civil and Political Rights
  • 1966 International Covenant on Economic, Social and Cultural Rights
  • 1974 New International Economic Order
  • 1974 Charter of Economic Rights and Duties of States
  • 1981 African Charter on Human and People’s Rights

it was recognized that economic and human rights elements were inexorably intertwined, and sustainable development was a component of both.

Traditionally, sustainable development was not addressed at all in international economic law.  The idea that sustainability belonged within the economic law elements emerged during this period as development impacts took their toll on the economy.  The UN Charter’s goals to achieve higher standards of living for all peoples of the world and address problems of an economic character provided the locus of influence to begin integrating sustainability into the economic discussions.

Initially, the UN provided limited technical assistance in people and technology from 1945 to the mid-1950s.  As nations began to exercise their economic sovereignty from the mid-1950s through the mid-1970s, the international community began to develop more robust methods for assistance, including organizations such as UNCTAD (the United Nations Conference on Trade and Development) and looking to add reforms and increased responsibility to organizations such as the Bretton Woods organizations to assist developing nations.  There was a strong desire to add a development mission into the GATT framework as well.

New International Economic Order

The 1960s saw the bulk of decolonization take place, along with the heating up of the Cold War – including the Cuban Missile Crisis, conflict in Southeast Asia, continued tensions in Korea, and many regional conflicts in Central and South America, Asia, the Middle East, and Africa.

As many of these emerging nations entered the world economy, there was a call for increased economic equity. The Bretton Woods organizations were increasingly seen as outmoded for the economic order that was emerging post-colonialization. The “hooks” of the prior colonial powers to hang into the colonial economies created tensions around eliminating concessions and nationalization of resources.

The pressure was initially placed on the community of nations to prevent the technologically advanced nations from staking claims in unexploited areas. In 1967, the Treaty on Outer Space sought to prevent unilateral claims on outer space resources, and the 1970 Declaration of the Common Heritage of Mankind sought to achieve the same goals with the deep seabed.

As the number of developing countries began to outnumber the developed countries in the UN General Assembly in the 1960s and 1970s, and the General Assembly avoided Security Council vetoes, emerging nations began pushing harder for comprehensive reforms in these areas.  The developing countries were not satisfied with limited reforms of existing structures, such as GATT reform.  Rather, they called for redistribution of wealth and a “fairer,” not necessarily “free” international economic system. While many developed countries maintained a progressive, human rights-oriented values system, the radical positions of the developing nations met resistance with the call for redistributive economic measures.

The resulting majority of emerging countries in the General Assembly, coupled with their calls for aggressive economic reform with a socialist bent, bright forth a high number of resolutions in the UN calling for a restructured world economy.  These actions came to be represented by the concept of a New International Economic Order (NIEO).

Resurgence of Capitalism

As the NIEO began to pick up steam in the 1970s, a counterrevolution began to foment in the West.  The early 1980s saw the election of conservative politicians and increasing privatization and liberalization of the economy, smaller government, less regulation, and increased globalization. Emerging economies, such as India, China, and several African and South American nations, began to abandon socialist approaches and move towards a more capitalist economic system.  This caused a disintegration of the bloc that represented the emerging nations in the 1970s and a collapse in the call for the NIEO.

At the same time, the USSR and Eastern Europe began to collapse economically.  Their inability to prop up and assist developing countries economically and the end of the Cold War and removal of the geopolitical drive for influence in that conflict left many emerging nations needing to adapt to a “victory” of capitalism.

The resultant emergence of corporate power started with the 1993 Uruguay round, which replaced the GATT with the WTO.  This unbridled success of the corporate economy was met by many academics, liberals students, anarchists, and others in the late 1990s, including the abandonment of the 1999 WTO conference in Seattle.

These protests, as well as a decade of reflection, led to a moderation of the WTO’s approach to markets during the Doha round in 2001.

A Balanced Approach for the 21st Century

The wild swings of the 1960s and 1970s towards socialism, followed by the hard reversal in the 1990s towards capitalism, swung the pendulum back to the middle in the 21st Century.  Some elements from the NIEO reemerged, such as trade preferences for emerging nations, relaxation of Intellectual Property enforcement, and elimination of quotas and tariffs for imports from emerging nations.  Balanced against these elements were the desire for open trade and borders, reduced regulation, protection of property rights, liberalization of agricultural trade, and balancing development and trade with environmental concerns.

 

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