competition and trade regulation within the wto

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Competition and Trade Regulation Within the WTO

Marcelo Berdet

07/09/07


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SUMARY

Regulation and governance are defined upon institutionalised parameters, which include

economic and extra-economic factors. A mode of regulation comp rends social processesand struggles, which define and stabilise norms of economic conduct. The emerged

Finance-Trade mode of regulation is examined here as an organisational and institutional

features of the contemporary capitalism, furthermore itself constituting principles of

political and economic action and interests within supranational bodies such as World

Trade Organisation (WTO).

Regulation is based on competitive principles, which are indeed organising principles of

economic structures, organisations and institutions of contemporary capitalism. The role of

the WTO as a conflict-resolution mechanism within the broader Finance-Trade mode of

regulation is the object of study here. The trade and competition regulation in the WTO

concerns norms and rules governing economic relations and social interactions through

trade disputes and conflicts.


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Table of Contents

Introduction Competition and trade regulation Chapter 1 The role of Competitiveness 1.1

Social Structure of Competition

1.2

Competitiveness in the global economy and WTO

Chapter 2- The Bananas and Beef Hormones Cases 2.1 The Beef Hormones Case 2.2 Dialogical Competition 2.3 Technologozation of discourses 2.4 The Bananas Case 2.5 The meaning and interpretation contentions Chapter 3- The WTO Competition and Trade Regulation 3.1 Trade Disputes within the Dispute Settlement System 3.2 The WTO Regulation 3.3 Competition, no-trade restrictions and market access contentions 3.4 Regulatory Structure Chapter 4- Interests and Strategies within the WTO 4.1 The role of the WTO within a broader mode of regulation Conclusion References Bibliography

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21 23 26 28 31

31 33 35 37 41 43

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Introduction

The logic of Fordism in the West was partially based on models of import-substitution

prevailed in developing countries. Whereas the crisis of Fordism in the 1970s afforded a

period of experimentation, the culmination of which was a flexibilization and

transnationalized model though one less stable than its predecessor. The intensive

internationalisation of markets, financial and productive networks brought competitive

constraints to centre-stage upon the majority of economic activities. As a result, new formsof economic and political regulation and governance were required, and also new (inter)

institutional and organisational relations in resolving actual problems.

Jessop (1995: 312) points out that national capitalisms have both comprised and mobilised

their socio-economic structures in the competitive international battle, in accordance with

the point of view of national competitiveness. Indeed, there has been an increasing

interdependence between national economies, leading to an unified global economy;

when demand slows down in a country, it is compensated by expanding markets in other

countries. In this context, financialization is at the same time a result and an accelerator of

the global economy model, whereby wealth is consumed and accumulated as financial

assets. According to Lipietz (2001:23) the globalization of the financial markets

intensifies financialization, because financial capital, in search for a productive base to milk

can play firms (or governments if they prefer bonds) off against another on a global scale.

Finance capital rather remains intimately tied to economic structures of production,

distribution and trade. Although trade is not necessarily organised in terms of monetaryexchange, it is organised upon reciprocal relationships and administered from the above

economic structures.

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The attraction of finance capital into national territories has occurred in order to finance

economic growth within the competitive global economy, further enhanced by fiscal and

monetary measures taken by governments. In the absence of the Fordist (demand)

regulation, finance capital realises that the overaccumulation of productive capital no

longer depends exclusively on real demand, and further that financial deregulation and

liberalisation of trade reinforce the internationalisation of markets. As a result, finance

capital and trade are focussing their efforts on global markets, which imply the arrival of

new players, new responses to new political and economic needs and renewed institutional

systems such as International Monetary Fund (IMF); World Bank and World Trade

Organization (WTO).

The political and economic symbiosis between liberalised trade and finance capital asargued by Harvey (2005: 67, 2005a: 54) and OHara (2003: 483) has been sustained upon

neo-classic economic theory, or generally neoliberal discourses, and constitutes directives

dominating national economies, further articulating commodity and non-commodity capital

relation as social practices. Capitalist relations exist in articulation with other social

relations in the extensive economic formation or productive system, which implies that

capital accumulation is never automatic, but depends on continuing prevention of the

disarticulation of such capital relational property. Thus, Finance and Trade as a mode of

regulation in terms of Regulation Theory comprehends a package of governing rules

stabilised by a network of collective bargaining between groups, or rather political agents

and their economic status. These governing rules represent statuses or functions in and

through the stable articulation between the invariant elements of capitalism and variant

elements of Finance-Trade (Jessop, 1990 and 1995).

In the Regulation Theory (Aglietta 1979; Boyer 1990; Boyer and Saillard 1994; Lipietz;

1988) the concept of regulation is understood to be economic action grounded in socially

embedded institutional rules. Jessop (1995: 309-311) infers that modes of regulation

provide powerful narratives of the contemporary world, and further discursively constitute

problems and interests. The emerging Finance-Trade mode of regulation define objects to

regulate, in and through specific practices under its hegemonic economic system, given

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attention to global financial stability and global conflict resolution extending to trade

disputes. The development of a societal (and institutional) mode of regulation seeks to

sustain the interdependence of economic structures and their recurrence, which guarantees

the stability and unity of an instituted economic process. In fact, the Finance-Trade mode of

regulation produces institutional structures with a clear function in the global economy,

and further centres interest on values, purposes and policy (OHara, 2003).

The term global economy is here understood as multiple social and economic formations

running into each other, in terms of connections between activities in global scale as a sort

of global production. Such relationships are manifested in specific configurations in

specific places, as nation-states, which remain an important unit of the global economy

(Dicken, 2005).

Both objects (financial stability and global trade conflict resolution) of the Finance-Trade

mode of regulation reflect the complexity of the real world, and the capillarity and plurality

of mediations in the global economy. For instance, in spatial terms, such regulation

involves articulation between national and international levels, which frames economic

space constituted in and through global activities. Furthermore, different institutional sites

(having an independent existence) assign and articulate in various ways the diversity and

contingency of regulatory practices.

Regulation and governance occur within parameters defined by institutionalised structural

forms, which include economic and extra-economic factors, and further collective

identities, common rules, norms, agreements, networks and procedures. Therefore, a mode

of regulation comprehends social processes and struggles, which define and stabilise

economic rationale and norms of economic conduct. The Finance-Trade mode of regulation

emerged in the seventies as political and economic practices, and was enhanced in the

eighties and acknowledged in the nineties as guiding a principle of a certain economic

thought and management around free market principles of the neo-classical economic

theory (Boyer and Hollingsworth, 1997 and Harvey, 2005).

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Money and credit have been stirring the global economy processes to action by the

demands of finance, which activate production and distribution by means of global trade. In

this context, the IMF and WTO are central to the organisational and institutional levels of

the competitive mode of regulation currently in place, in accordance with an internationally

competitive economy. A globalising capitalist economy requires multilateral structural

forms coupling and adjusting other systems with the prevailed logic of accumulation and

reproduction of the Finance-Trade mode of regulation. This continuous political and

economic process imposes a dominant principle of societalisation, in which the imperatives

of structural or systemic competition surpass economic criteria to comprise the

restructuring of organisations and institutions on competitiveness. The IMF and WTO have

taken action, organising principles and setting specific institutional objectives supported by

definite political and economic agents, which distinctive methods aim at the establishmentof self-regulating markets relying on deregulation and liberalised trade.

Competition and trade regulation

There will be particular attention in this dissertation upon the role of the WTO as conflict-

resolution device in the establishment of the Finance-Trade mode of regulation as a broader

social formation. An institutional form of conflict resolution is a necessary supporting

structure in the global economy to mediate trade disputes, which arise as competition

between capitals, and/or contentions between nation-states. Indeed, the WTO exerts a broad

regulation through the totality of its institutional arrangements, which coordinate and

regulate transactions inside and across the boundaries of economic sectors. Thus, national

and international capitals compete and play their interests and associations through the

various trade agreements, legal activities and judgments in the WTO (Coleman, 1997).

The contemporary regulation of the WTO is determined by the requirements of the modern

practices of capitalism, which combine organisational and institutional frameworks, and act

through organising and enforcing behaviour between their members. According to Jessop

(1995; 320) the social character of the WTO regulatory processes rests as functional space

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within the horizon of a social formation with the need for institutional regulation in a social

formation. Such a view is supported when WTO is considered as an action-oriented

structure, which concerns norms and rules governing economic relations as social relations

(Bourdieu, 2005: 231). Furthermore, according with Hollingsworth and Boyer (1997:2) an

embedded institutional logic is symbolically grounded, organizationally structured,

technically and materially constrained, and politically defended. Such institutional

relations within the WTO focus on the multiple networks in which members are embedded,

and further define identities, interests, capacities and practices.

Inter-organisational and inter-institutional relations within the WTO have properties which

involve both internal cohesion and sheer practicality in rendering negotiations. The

operational structures of the WTO are supposed to resolve trade disputes between nations,and indirectly reconcile conflicting interests regarding a share of the global economic

surplus. Due the high trade stakes and interests playing on the WTO, many members make

this the stage to air their own concerns about and interpretation of free and fair trade, and

ongoing negotiations help to identify conflicting interests, objectives and strategies. In this

context, members appropriate vocabularies and systems of logic for pursuing their goals in

accordance with institutional imperatives (and a broader social formation) for defining what

is valued, and designing the norms and rules by which they have to obey (Hollingsworth

and Boyer, 1997 and OHara, 2003).

The WTO comprehends the existence of heterarchic institutional frameworks, each with its

own objects and codes, which constitute the whole institutional and regulatory context

where economic activities take place. Further, competition as a premise provides the

ground rules and governance practices for the institutional regulation in the WTO, which

forms cognitive expectations in and through the trade disputes regarding specific issues and

governance. Thus, it ensures that interests and strategies play an important role in

enhancing institutional arrangements and rulings within the WTO.

Regulatory issues are key reasons for disputes between WTO member-states, which raise

related issues, such as economic power relations and the character of a politically driven

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system of negotiated agreements, in spite of presenting itself as an institution increasingly

enforcing the rules of international law applied. Furthermore, it suggests an increased

potential for struggles between domestic regulatory objectives and international

agreements. Although, this view has been countered by others (for example, Holmes et al;

2003: 2), whose consider the share trade of countries as the pretty robust indicator of

likehood disputes into the WTO.

In this dissertation the WTO and particularly the Dispute Settlement System are conceived

as persuasive political battlefields to facilitate political settlement of inter-states disputes on

trade and regulatory dispositions. In other aspects, the dissertation proposes a new analysis

and theoretical approach for the study of regulation: discourse analysis. Such an approach

considers the communicative and performative interactions that occurrs in and on theinstitutional and regulatory system of the WTO as a vital part of its structure. Discourse

analysis evokes that such interactions actually constitute the regulatory processes, and

further serve important functions and basis ordinated actions, and are important arenas of

struggle .

This approach has recently been demonstrated by Black (2002: 170), who worked on

regulatory conversations and contentions of discourse analysis, such as the meaning of

language and the coordination of social practices; the construction of identities; the

relationship of language, thought, and knowledge; the relationship of language and power,

and finally that meaning, thought, knowledge, and power are wepons to challange and

change structures.

Regulation is a developing process with its own dynamics wherein agents, interactions and

regulatory processes are framed and constrained by institutional and social forces. This

dissertation explores the Regulatory Structure competition within the WTO from the

concept of institution as a self-sustaining system of shared beliefs, rules and resources.

Hence, the Regulatory Structure is termed here as a pattern of social (and institutional of

course) interactions having a relatively stable structure, which organise and shape values

and regulate norms and conducts. Furthermore, the concept of Regulatory Structure

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comprehends networks of power organising allocative practices and authoritative practices.

Such Regulatory Structure might be understood within the broader new order of

regulatory capitalism or Finance-Trade mode of regulation, and the WTO as the

formalisation of competition and trade regulation. That said, the agents within the WTO

play endowing technologized discourses and perceptually feasible actions, which

combination of action and interaction refer to a specific payoff distribution of allocative

and authoritative practices. The institutional game is to maximize the payoff.

Therefore, the Regulatory Structure comprises political and socio-economic relationships,

and not a mere re-embedding movement within the global economy considering that

global markets have to be established and enforced by socio-economic relations and

political actions. In fact, such regulatory structure is the re-articulation of politics andeconomics, in a manner that such re-articulation has a functional interest: the functioning

of the global economy and the accordance of the other social spheres with its core

imperative of international competition.

The imperative of international competition is a constitutive element of the Finance-Trade

mode of regulation, which involves a wide and diverse range of governing institutions.

Hence the imperative of competition also is within the regulatory structure of the WTO,

which concerns national competitiveness. In the particular matter of trade, the basic

principle of competitiveness lies in the comparative advantage theory of David Ricardo

(The principles of Political Economy), which states that a country needs to specialise

production and export goods in which its comparative advantage is greatest, or comparative

disadvantage is smallest. In addition, the refining of the comparative advantage theory with

respect to international exchanges infers that part of the gains from exchange are realised

by foreigners, who attempt to capture all the gains for themselves. As a result certain

amount of resources are transferred from domestic markets (producers and consumers) to

foreign exchange opportunities, which decreases or increases wealth around the world

(Trebilcock and Howse, 2005).

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Thus, the re-articulation between politics and economics has designed and articulated

relations and practices in international trade concerning regulation and governance within

the WTO. Competition has become multidimensional and spread across national borders as

a single dominant model of economic arrangement in the increasing interconnection

between national economies. Hirst and Thompson (1997: 338) argue: Trade relation, as a

result, takes on the form of national specialization and the division of labor. The global

economy has been determined in its structure and distribution of resources within the

power relations between nations respecting their competitiveness, thus outcomes are results

of distinct and differential performances. Global economic interactions function as

opportunities or constraints to national economies.

This dissertation will examine how the institutional structures and regulatory process in theWTO operate, and what interests and strategies prevail in the light of the thesis of

international competitiveness between national economies and states in the global

economy. In order to achieve such goal the Bananas and Beef Hormones disputes in the

middle of the 1990s are used to illustrate the legal, economic, political and institutional

difficulties created by the nesting and overlapping of institutional commitments, interests

and strategies. Both disputes involved the most important trading economies, which have

the largest stakes in the international trade system. The disputes challenged the resolution

system of the WTO, as well as the effective enforcement of its rules. The WTOs own

regulatory structure (continually produced and reproduced) is seen to be stake through the

existing tension between agreements, which, on the one hand, provide precise formulations

about the purpose and meaning to facilitate implementation and adjudication of the trade

rulings; and, on the other, yield vague formulations open to wide interpretations which

enhance views and interests of what the whole system ought to be.

The political and institutional significance of bananas and beef hormones disputes exceed

their commercial value, compared with other economic sectors and even traditional

protectionist interests. Despite the impressive growth of trade between the North America

and EU, it is not the share trade that is in dispute, the real struggle concerns the Regulatory

Structure, which is the ongoing stake in the WTO. That is, the non-observance of free

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trade beliefs jeopardise the authoritative model of liberalised trade, upon which

international trade rules are based. Therefore, some of the core principles (competition, no

trade restrictions and market access) of the liberalised trade game had been threatened. The

disputes highlight the agents interests and strategies in and through the regulatory structure

of the WTO, whose aim the controlling of the own regulatory structure.

Chapter 1 shows the roles and uses of the concept and discourses of competitiveness in this

dissertation considering it as an element of regulation and serviceability of social

interactions, particularly in the global economy and institutional interactions within the

WTO. Furthermore, is discussed as competitiveness form discursive interactions integrating

and articulating practices and strategies with respect to competition and trade regulation.

Which engender and interact helping to configuration of social and institutional spaces of regulation social structure of competition and Regulatory Structure.

Chapter 2 provides both descriptive and theoretical accounts about the bananas and beef

hormones disputes within the Dispute settlement System. This chapter deals with regulation

as a communicative process, wherein obligations and agreements of the WTO are

strategically used as technologized discourse to meaning and interpretation of written trade

law in order to achieve interests and constrain behaviours through the control of allocative

and authoritative decision-making in the Regulatory Structure in the WTO.

In chapter 3 the Dispute Settlement System in the WTO is pointed out as one of the most

important structures of the WTO with respect to the multilateral trade system and current

issues. This chapter discusses the regulatory structure in the WTO as part of a broader

global regulatory networking for global economic management. Further, it exposes the idea

of the Regulatory Structure in the WTO as a space of competition, discursive practices

and strategies within the technical and political structures of the WTO.

In chapter 4 is discussed the role of the WTO as an international dispute resolution

mechanism structuring international trade, though such regulatory process is conceived as

an ongoing political-economic game wherein large economies play to sustain their political

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and economic hegemonies. Further, the Regulatory Structure in the WTO is conceived as

part of a global legal order, which comprises and defines the interests of large economies

within an entire social formation global economy or globalisation.

Chapter 1

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The role of Competitiveness

The concept of competitiveness is used in this dissertation as a theoretical andmethodological tool, which permits the examination of patterns of competition within a

given social structure. Furthermore, such an analytical tool enables us to capture the

interplay of conflicts and competition relations in a determined social structure. That is,

how a social structure of competition organises certain beliefs, agents and institutions

constantly in struggle.

To establish the theoretical and methodological development of this dissertation, there is

the need to define the perspective of competitiveness and social structure of competition;

the first is related to international trade theory (and new variants) and the Hechscher-Ohlin-

Samuelson model of free trade and growth (Dalum, 1992: 192). Competitiveness is

determined by the comparative advantage of a country, due to specialisation of economic

activities and maximisation of resources. The notion of competitiveness used here goes

beyond, while resembling a medium of interactions, which permits agents to learn about the

behaviour of interacting agents and the nature and effects of certain institutional

framework. Thus, competitiveness is integrated into the interplay of institutional agents and

cognitive rules exploring the analysis of economic formations.

The understanding of the Regulatory Structure in the WTO as a political, socio-economic

and cultural engine, which has helped to operate and regulate the global economy and

particularly reshaping trade relationships, enhances the choice of competitiveness as

methodological category. In addition, competition remains as one of the strongest

principles of the market economy, which take the form of social interaction and discursivepractice (spoken and written). In the WTO context, competition (and competitiveness) is a

discursive formation regulating dispersed subject positions into a single statement

integrated to operations and strategies, which form objects and articulated practices.

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Competitiveness therefore used as strategic discourse in political-economic interaction, and

further organises fields (politics and economics) and agent- networks serving as the

articulation between agents. Furthermore, competitiveness determines the totality of

exchange relations between competing agents, which include both direct interactions and

indirect conflicts. In other words, competitiveness is not a mechanical principle of action

and reaction; it exerts a relational function, an intelligent response to forces in the social

structure of competition. To sum up, competitiveness is a strategic and discursive resource

for political and institutional legitimisation, which enables agents to mobilise and enrol

other agents and resources to reach interests. Methodologically, the articulation between

competitiveness interactions and interests enable to query how structures change and what

interests and strategies prevail within a given state of relations of production and exchange.

1.1 Social Structure of Competition

The notion of social structure of competition, as argued by Burt (2004: 325) focuses on a

network of contacts, in other words the structure of the players network and the location

of the players contacts in the social structure of the arena provides a competitive

advantage. This idea states that an economic action is embedded in certain social

structures, and such structures play a significant role in economic behaviour. Hence, within

the theoretical account already developed competitiveness is an investment in social

relations with expected returns, and further an investment on resources embedded in a

social structure of competition accessed and mobilised in purposive actions (allocative and

authoritative). In short, the Regulatory Structure in the WTO satisfies the requirements of

one social structure of competition in the international trade system.

Within the Regulatory Structure an economic agent acts and competes within the market

economy and international trade system; each agent has contacts and social interactions,

which provide a competitive advantage in such imperfect social structure of competition.

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From Burts account (1992; 327), competitiveness interactions count, because they provide

for the agent location and position, which are defined upon the social relationships within

the social structure of competition, and may provide a competitive advantage rewarding as

opportunities. Competitiveness is a critical variable within an imperfect social structure of

competition such as the global economy; which depends on the social relations among

agents in contemporary capitalism.

The use of competitiveness in the analysis of the Regulatory Structure (as a social

structure of competition) evokes not only structural constraints and opportunities, but also

actions and choices. In this context, competitiveness means effectiveness of interactions on

networks and hierarchies, and further produces main statements and statutes of competition

policy. Thus, competitiveness aims to maximize social actions engaging interests,relationships, hierarchical structures, social networks and other agents. That is,

competitiveness is acquired through social relations to accrue to an individual or a group by

possessing a strength and durable social network within a particular social structure of

competition.

Every such structure of is formed by agents obliged to behave to others under certain

practices, and further are dependent on exchanges with the others. Such exchanges create a

correlation between the agents within a network of opportunities, which course of action is

to engage other agents towards to access other agents and resources to gain better results

(Burt, 1992).

The links between the global economy and the Regulatory Structure in the WTO to

some extent have created a governance regime in contemporary capitalism, whereby trade

regulation has operated its demands and enforce its precepts. In this context,

competitiveness is an important instructive operational logic, which constructs a new

relational and economic identity among political and economic agents established on the

doctrine of liberalised trade, deregulated markets and exporting-lead economies.

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1.2 Competitiveness in the global economy and WTO

Competitiveness beyond medium of interactions has theoretically to be understood as an

economic action, and further conceived as a multidimensional and multifunctional practice

on ongoing interests relationships into the WTO. Such a practice enhances economic

dispositions of the economic agents into the WTO, dispositions capable of generating

behaviours and even anticipations which might be termed reasonable than rational.

Furthermore, competitiveness as best practice in modern capitalism constitutes agents and

their space of action, even more is the encounter between dispositions socially constructed

in relation to the global economy and the structures of the WTO (Bourdieu, 2005).

The precepts of the Finance-Trade mode of regulation (in particular competition) created a

social structure of competition, which constructed a political, economic and historical

social formation. Accordingly, the Regulatory Structure in the WTO has not been created

just on the will of agents and institutions for specific ends trade liberalisation. The

agreements of the WTO are political creations designed to regulate propensities and

expectations, being the product of historical arrangements or, recurring situations

immediately adapted and incorporated. Within this political context the WTO with IMF and

World Bank together represent a socially constructed battlefield in which agents provided

with different resources confront each other in order to gain access to exchanges and to

perpetuate or transform the prevalent relations of force.

Forms of competition are historically modified to reproduction of capital in general,

imposing demands on social relations as a whole. The increasing internationalisation of

trade, investment, finance, (and of course money) obligated each firm, region or nation to

compete in the global arena. Such political and economic agents can no longer be protected

by oligopolistic national markets, as tended to be the case during the sixties (as argued by

Hollinsworth and Boyer, 1997:56). The agents in the WTO context, in this case state-

nations, undertake actions which depend for their ends and effectiveness, on the agents

position in the Regulatory Structure. In other words, the distribution of capital (in all

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species) depends on the active competitiveness (or effectiveness of interactions) of each

agent, that is, the position occupied in such a social structure of competition. Hence such

structure acts in behalf of the most competitive agents.

The exertion of Finance and Trade symbiosis in the global economy occurs in and

through the imperative of international competition. That said, the exertion of full

competitiveness is the premise of a global and institutional regulation, which has been

restructuring societal relationships in modern capitalism. This emerging mode of regulation

in Jessops terms concerns the constitution of identity, interests and action through

struggles around new norms of production and consumption and the associated

development of a new mode of societalization (1995; 315). Further, competitiveness is a

response, when a state-nation or economic sectors are no longer competitive in the globaleconomy. For instance, state structures have functioned toward the achievement of

international scales or standards throughout job training and supply-side intervention, and

collective stimulus to production. Purcell (2002: 292) states that state-nations have

implemented workfare policies in order to restructure national economies to promote

competitiveness and accumulation. The state structures have moved from a set of welfare-

oriented to workfare-oriented policies, which aim to meet the new economic imperative

that emphasises supply-side competition.

Most of the state-nations have developed a medium -to long-term plan to favour competing

sectors. Rather than abandon them, such sectors have been subsidised or protected counting

on their adaptation to the new competitive environment, although the distribution of

strengths, which in the end leads to competitiveness, governs the distribution of chances of

success and profits through various mechanisms. In fact, economic structures and economic

agents or, more exactly, their dispositions, are indissociable from the totality of social

constitutive of certain social order. The agents interplay on the economy of conditions of

their production and reproduction, such as global production and demand; financial stability

and conflicts trade resolution. To tackle factual and potential conflicts there is the need of a

widespread regulatory structure, which concerns political and economic power relations.

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There has been stated in this chapter the distinctive use and features of competitiveness

(medium of interactions, behaviours and institutional interplay), which engenders a network

of political and socio-economic interactions. As a result, competitiveness also comprehends

a political process whereby the relationship between politics and economics rearticulates

itself. The required economic deregulation is followed by a legal and political regulation, of

which the agreements of the WTO are the finest examples. The current international trade

regulation is based on disciplines, right instruments and technocratic direction (Brand

and Gorg, 2001).

The Regulatory Structure in WTO directly or indirectly states competitiveness as a

fundamental part of the whole of legal obligations. Hence, competitiveness is

institutionalised and manifested through the organisational and institutional structures of the WTO, which are discursive spaces within the organisation. That is, competitiveness is

taken as a discursive formation by the convergence and politically articulation of discursive

practices and identities played upon competitive interactions. Several legal obligations in

the Regulatory Structure in the WTO are based upon principles of reciprocity, non-

discrimination and equal treatment, which are designed to expand market access and

liberalise trade. In other words, the rules are designed to ensure fair competition, and

further to respect the need of a supra-state governance structure to solve potential

polarisation and general crisis.

In fact, this emerging global regulatory structure operated by WTO is committed to the

principle of progressive trade liberalisation and consequently the opening of new markets.

The glorification of the WTO as a supra-national regulatory structure has progressively

attempted to superimpose itself above national institutions of regulation, despite of several

explicit exceptions to protect domestic economies within its legal framework.

Kirkpatrick and Parker (2004:7) have demonstrated how the privatisation of water services

in developing countries, in the 1990s, served to enforcing of the Regulatory Structure of

the WTO, in particular the General Agreement on Trade in Services- GATS upon

public/domestic regulation. There was the reducing or removing of the right of national

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governments to regulate or restrict services, which occurred due to commitments made by

member-states respecting market access and equal treatment to foreign companies or

investments. That is an example of regulatory schedules acting to guarantee access to

global markets for international capital, and also establishes a global competition in terms

of the WTO regulation.

The regulatory framework within the WTO is the combination of separate agreements,

which assist the need to guarantee the continuous accumulation and investments through

the competitive trade game. Therefore, competition is mutually important for developed

countries and developing countries to gain and protect (national) markets. In the context of

the WTO, competitiveness conceived as an economic action is always oriented to member-

states behaviour, because it takes account of the behaviour of others through institutionallyconstructed meanings.

The meaning of the competitiveness exposed previously in this chapter is not of a pure and

free competition, due to its interactional character. In fact, as a socially and economically

situated action within the WTO, competitiveness is embedded in ongoing structural and

institutional interactions and interplay. In an ideal competition, there is no room for

bargaining or negotiation, and what determine the conditions in which agents come to

decide are the objective relations. Competitiveness in the Regulatory Structure of the

WTO is a complex network of technical relations and boundary-spanning exchanges in

institutionalised contexts, which develop and force political and economic agents to

incorporate new practices and procedures.

To understand the role of competitive interactions in the WTO, the institution has to be

recognised as a space, composed of different processes and levels of regulation and

disparity, a hierarchical distribution of power, which reflects the different regulatory levels,

interests and strategies. Within the WTO occurs competition between political and

economic agents interacting upon constructed structures of relations of force, aiming to

control and guide the character and operation of the whole structure of regulation.

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Thus, in the WTO, competitiveness is an institutional perspective, an imperative and

constructed practice which is product of collective beliefs, conventions and codes.

In the context of the WTO competitiveness deals with competitive pressures and reflects an

efficient form of organised and rational strategic choices dominating the global economy,

whatever cultural and institutional variations exist. According to Burt (2004: 327) says:

The rules of trade are ambiguous in the aggregate and everywhere negotiable in

particular, because the rules of the trade game vary between societal and contextual

priorities and dominant conceptions of appropriate forms of economic competition.

The regulation of the WTO exists only through the agents that are found within it and

confers a certain structure on it, which provides information about potential actions of other

agents. Competitive strategies are in the nature of the trade game in WTO, in predictability,strategic dispositions and calculation vision, and most elaborated strategies can be

implemented only within the limits and in the directions assigned to them by the

institutional and practical knowledge of constraints.

Chapter 2

The Bananas and Beef Hormones Cases

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2.1 The Beef Hormones Case

The US (on 26 th January 1996) and Canada (on 28 th June of 1996) requested consultations

with the EU regarding the prohibition of the use in livestock farming of certain hormones

and related measures, which affected the importation of Canadian and American livestock

and meat livestock. Canada and US claimed that EU measures were inconsistent with the

agreements into the WTO, in particular: Article 11 of the Agreement on the Application of

Sanitary and Phytosanitary Measures ("SPS Agreement"), Article 14 of the Agreement on

Technical Barriers to Trade ("TBT Agreement"), Article 19 of the Agreement on

Agriculture, and Article XXII of the General Agreement on Tariffs and Trade 1994

("GATT").

Canada and US structured their arguments on the combination of obligations accorded in

the WTO agreements, which located and positioned the practices and strategies of the

parties involved in this issue. The complainant parties as well as the respondent one acted

to interpret, classify and impose constraints on alternative classificatory strategies, in this

particular case of completion of the WTO obligations. Obligations and agreements

considered here as discursive formations constituted the basis of functional and

coordinative social actions in this communicative process of regulation, functional toachieve certain ends and coordinative in producing meaning and shared senses as argued

by Black (2002: 164). Here, competitiveness, apart of being one feature of neoliberal

discourse and international strategy, is the imposition of a particular and effective

interpretation on the WTO obligations throughout members-states legitimate their practices.

Thus, from the point of view of the institutional interactions on competitiveness the matter

is about a hierarchical interpretation, and making clear curbs of the WTO agreements.

Therefore, what is at issue is the proper Regulatory Structure in the WTO, which means

the wider field where subjects, objects and concepts are formed. The WTO obligations and

agreements form the basis of discursive formations constructing understanding and

definition of problems, objects and practices (Black; 2002 and Fairclough; 2006).

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The US and Canada argued that the Sanitary and Phytosanitary Agreement lay on the

principles of liberalised international trade invoked in the WTO Agreement, and that the

measures of the EU directly affected Canadian beef exports. Consequently, the measures

were violations with respect to market access and constituted unjustifiable restrictions

prejudicing international trade. Such arguing as a discursive practice was designed in

accordance with institutional strategies and objectives, a technologization of discourse

according to Fairclough (1995:72), which comprehends strategies, techniques and

procedures to render and relay authoritative and operable practices. Technologization is a

mobilised and elaborated framework on expertise discourse and policing discourse

strategically motivated toward to standardisation of discourse practices.

The EC level of protection for growth promoting hormones was significantly higher thanthe EC level of protection for antimicrobial growth promoters () resulting in adiscrimination against Canadian beef imports and a disguised restriction on international trade (WTO Panel Complaint by Canada, 1997.

Canada claimed that Canadian beef produced with growth promoting hormones was a like

product to beef produced in EU from animals whose the hormones had been administered

for therapeutic reasons, thus the like beef also contained residues of antimicrobial growth

promoters and the other veterinary drugs. Accordingly, the EU measures were violations of

the WTO obligations, which guarantee market access and treatment no less favourable

than like products of the EU origin. This is an argumentation for epistemic and normative

claims, structured from epistemic to normative arguing and the main argument is that

protectionist or restrictive measures threaten liberalised trade (Fairclough, 2006).

2.2 Dialogical Competition

At this point statements and discursive formations interact through the arguing, and

discursive objects are identified and classified by the statements themselves. The positions

start to become clear as well as the strategies chose, and mediated in the context of the

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WTO agreements, and the strategic use of rule design is deployed on skills of

argumentation and rhetoric (Black, 2002: 165). The dispute focused on the attempt to

regulate and control the trade rules and their completion, altering behaviours according to

identified purposes involving mechanisms of standard-setting, information-gathering and

behaviour-modification (Black, 2002: 170). All parties resorted to technologization of

discourse as a calculated intervention to shift meaning and interpretations.

Also the US argued that sanitary and phytosanitary measures directly or indirectly affected

international trade and nullified or impaired the benefits of the liberalised international

trade system. Further, such measures were in fact a discrimination action between members

where identical or similar conditions prevailed, being a clear violation of the Article II (3)

of the SPS Agreement, which constituted a disguised restriction on international trade andfailed to accord to imports from US the advantages, privileges or immunities granted to

other countries.

The EU claimed that the measures had not nullified or impaired the benefits accruing to

Canada and US pursuant to the WTO agreements, its argument was that such a practice (the

ban of certain hormones) was a prior policy and that the benefits were claimed by Canada

and US after the adoption of such measures.

The dispute is hence a dialogue conducted through interactions on written agreements and

obligations, where broader strategic discourses (competition and liberalised trade) are

contextualized, operationalized, and enacted. There is the discursive construction of

purpose and legitimation in relation to authoritative practices, in relation to the obligations

and agreements of the WTO. Such authoritative practices constitute in fact the

authoritativeness of the Regulatory Structure, which is legitimated throughout the

recognition of shared linguistic practices entailing and forming the basis of social actions,

in this case institutional practices in WTO (Black, 2002; Jessop, 2000 and Leeuwen, 2000).

In general the WTO panels reach agreement behind the scenes through negotiations and

manoeuvres. Their rulings are ambiguous recommendations to benefit the major bargaining

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forces. The conciliation and bargaining strategies argued by Garrett and Smith (2002:14)

rely on market power, which benefit the large economies. Hence, the Dispute Settlement

System is used as a persuasive political battlefield for the interplay of political-economic

issues, and its operation and results back and shape the regulatory structure in the WTO.

The beef hormones dispute reveals the interacting of key agents over the distribution of

allocative and authoritative decision-making.

Both parties strategically based their arguments on the interpretation, meaning and

hierarchy of the WTO agreements. The EU argued that a first violation of GATT

obligations was a precondition before the SPS Agreement could be applied, a fact that had

not occurred, which interrupted all proceedings. To strengthen its arguments, the EU

attempted to focus the dispute on the SPS Agreement, and demonstrate the legality of measures under GATT terms. In opposition, the strategy of Canada and US was to

demonstrate that the obstacles imposed by the EU measures were more trade-restrictive

than necessary and violated the most important imperatives of the WTO agreements.

The Regulatory Structure assembles practices and meanings in the WTO, which shapes its

structures and agents toward to trade and competition regulation. Thus, in the Dispute

Settlement System, the contracting parties are both regulators and regulated, whose

regulatory conversations involve a regulatory process concerning the operation of the

regulatory system as a whole (Black, 2002).

Similarly, Canada strategically focused and claimed that the SPS Agreement, GATT and

TBT Agreement were agreements of equal status under the broader WTO Agreement

(following Article II). Thus, Canada required the examination of the application of the SPS

Agreement rules on the EU measures, since they are more detailed, and then the GATT

obligations

The strategy of the EU was to use the SPS Agreement to interpret provisions of the GATT,

and adding procedural requirements by itself. The SPS Agreement was used to interpret the

Article XX (b) of GATT in a manner that the substantive provisions of the SPS Agreement

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could be judge only under the same conditions applied to the Article XX of GATT, which

states that any recourse might be made only after a violation of another provision of GATT

was first established.

Subject to the requirement that such measures are not applied in a manner which would constitutea means of arbitrary or unjustifiable discrimination between countries where the same conditionsprevail, or a disguised restriction on international trade, nothing in this Agreement shall beconstrued to prevent the adoption or enforcement by any contracting party of measures:b) necessary to protect human, animal or plant life or health; (General Exceptions, Article XX (b),GATT).

2.3 Technologization of discourses

The assemblage of agreements and obligations on argumentation occurred in order to

enhancing the technologization of discourses, and become operative to the achievement of

goals. The strategic use of technological discourses was used differently and by different

agents in the Dispute Settlement System, in accordance with the position of the agents and

institutional terms of struggle. Hence, the beef hormones dispute institutionalised and

rationalised the dispute mechanism in the WTO, the disputes came to be handled byrelationships implicated by the particular construction of trade law ((Dezalay and Garth,

1996 and Fairclough, 1995).

The argument of the EU on Article XX (b) of GATT was intended to strengthen its

standing on the specific legality of the SPS Agreement and TBT Agreement to tackle the

issue only as technical restrictions, instead of a violation of the constitutive principles of

liberalised trade and competition, which guide international trade system.

Canada argued that the SPS Agreement did not possess such substantive worth to interpret

Article XX (b) of GATT, with the addition of procedural rules. Furthermore, Canada

argued that the self-standing character of the SPS Agreement is itself equal to the status of

GATT, and stands as more than an interpretation of Article XX (b) of GATT, which itself

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constitutes a multilateral framework of sanitary and phytosanitary rules in order to

minimize SPS effects on trade. The strategy of Canada was to demonstrated how the SPS

Agreement stands independently from GATT, emphasizing that Articles 3 and 4

(Harmonization and Equivalence) had no relation to any provisions of GATT but had

rather to be understood as more than additional procedural requirements.

Canada and US argued that the banning of the importation of meat and meat products from

animals administered with growth hormones was a measure inconsistent with its agreement.

It was also claimed that the EU measures were contrary to GATT precepts regarding

treatment no less favourable and non-trade restrictions (Articles III and XI). In fact,

Canada and US argued that the prohibition import was an internal measure designed to

discriminate in favour of the EU cattle and beef products and against Canadian andAmerican cattle and beef products. The tacit question was about the interpretation of

procedures and obedience to the Regulatory Structure in the WTO. Canada also claimed

that the non-trade restrictions and non-discrimination precepts of GATT are present in

the TBT Agreement, as far as the violation of the Article 2:1 was invoked with respect to

no less favourable treatment to imported products than to domestic products.

The EU continually argued about the interpretation and meaning of the provisions, and

further about the understanding of procedures. The right of a member to establish the level

of protection within this territory was emphasized, and the EU also argued that the SPS

Agreement exempted any level of sanitary change applying before the Agreement.

Furthermore, the EU used the note to Annex 1a of the WTO Agreement to strengthen its

arguments based on the member right to protect human health according to the SPS

Agreement in derogation of GATT.

In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994and a provision of another agreement in Annex 1A to the Agreement Establishing the World TradeOrganization (referred to in the agreements in Annex 1A as the "WTO Agreement"), the provisionof the other agreement shall prevai l to the extent of the conflict ( General interpretative note toAnnex 1a: MULTILATERAL AGREEMENTS ON TRADE IN GOODS).

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The practices of the parties involved into the Dispute Settlement System regarding this case

were oriented to classify and hierarchize the obligations and agreements of the WTO; in

other words, the objects in dispute or at stake received linguistic designation; the criteria of

inclusion or exclusion and their boundaries became a theme of interest. The parties sought

to enact defining types of interactions through the WTO institutional frame, and its

discursive constraints. Obligations were strategically used as technologized discourses. The

technologization of discourse was used as a resource by key agents to embody ideology

(competition, no-trade restrictions and market access) to make them an effective

mechanism for sustaining hegemonies (Fairclough, 1995).

The discursive identification of the parties with obligations or agreements enter into

competition to describe and meaning the Regulatory Structure in the WTO by thedominance of the legitimate use of the legal framework. Which attempts were to enforce

the dominance and interpretation of certain parties (complainant or respondent) upon all

interactions between obligations and agreements. For instance, the EU attempted to

prioritise the right to health protection under the SPS Agreement above other obligations

and agreements of the WTO. Therefore, the disputes involving the EU on one side and

Canada and US on other into the Dispute Settlement System had the institutionalism of

trade at stake, and further the interpretation, meaning and nature of procedures of the WTO

agreements.

In the WTO context, competitiveness takes the form of discursive practices producing and

interpreting interests and strategies, in spoken and written interaction. Competitiveness as

practice is constructed upon the broader Finance-Trade mode of regulation, which

constitutes a kind of contemporary capitalist identity the unification of capital. The

competition-orientation structures practices, experiences and discourses, and further

constructs languages games which articulate objects and practices. Therefore, in the context

of contemporary capitalism, the WTO attempts of regulation to establish a new exporting

culture, and competitiveness is an important discursive logic constructing interactions in

and of economics (Daly, 1991and Dezalay and Bryant, 1996).

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2.4 The Bananas Case

On 5 th February of 1996, Ecuador, Guatemala, Honduras, Mexico and the United States

jointly requested consultation with the EU regarding the regime for the importation, sale

and distribution of bananas, and the EU legislation, regulations and administrative

measures, including those reflecting the provisions of the framework agreement on

bananas, which implemented, supplemented and amended that regime. The complainants

claimed that EU importing restriction measures were inconsistent with Article XXIII of the

General Agreement on Tariffs and Trade 1994 (GATT), Article 6 of the Agreement onImport Licensing Procedures (to the extent that it related to Article XXIII of GATT),

Article XXIII of the General Agreement on Trade in Services (GATS), Article 19 of the

Agreement on Agriculture (to the extent that it related to Article XXIII of GATT), and

Article 8 of the Agreement on Trade-Related Investment Measures (TRIMS, to the extent

that it related to Article XXIII of GATT).

In the bananas dispute Ecuador (cooperatively with Guatemala, Honduras, Mexico and US)argued that the EU import restriction measures produced trade distortions, which nullified

or impaired benefits granted by the WTO Agreement, and the measures impeded the

objective goals of the GATT and other agreements.

The dispute interconnected materialities of politics, economics and institutional ensembles

highlighting the constraints involved in processes that operate behind the backs of the

relevant agents (Jessop, 2004: 5). The discursive relations in this dispute occurred through

institutional orders rooted in conflicting trade conflict interests, which oriented discursive

practices and identified objects of intervention. The discursive selectivities revealed the

danger of a lack of control on regulatory processes of competition and trade, the main drive

of the large economies in this dispute (Muchlinski, 1997).

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The use of the tariff quotas structure by the EU was contested by the complainant parties,

who claimed that such a system imposed differential rates among banana exporters. The

issues concerned the differential treatment between traditional banana exporting countries

on the one hand, and non-traditional African Caribbean and Pacific (ACP) countries on the

other. According to the complainants, the application of such differential based on foreign

source constituted a direct contradiction of one of the most fundamental guarantees of the

GATT, the non-discriminatory tariff treatment stated in the Article I:1.

The contracting parties competing on the recognition of institutional boundaries involved in

the dispute deployed coordinative and discursive strategies to produce meanings and

interpretations. These communicative interactions occurred through both obligations and

agreements in the WTO and shared linguistic practices which serve to frame thought andknowledge. Meaning and interpretation were taken as being open, and as the coordinative

engine to shape agents and regulatory structure in the WTO (Black, 2002 and Jessop,

2004).

According to the complainant parties, the EU measures allocated shares to its market

among banana export countries in a manner inconsistent with Article XIII:2 of GATT,

which authorises the suspension of any concession or inappropriate adjustment. The

country-specific share considered other aspects than trade, and even failed to respect

similar or even greater historical levels of trade. In the view of the complainant parties view

the quotas favoured particular countries, who had not reached such shares of trade in the

absence of the restrictions. The quotas system (or import licensing system) was accused by

the complainant parties to confer market advantages to some foreign sources over others,

which was claimed as a clear violation of the Article I:1 of GATT.

2.5 The meaning and interpretation contentions

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Written obligations include standards, principles and values but they provide no clear

distinction between rules and discretion. Normative and coordinative claims are textually

constructed upon obligations and agreements, for instance: treatment no less favourable;

no-trade restrictions and liberalization of market access. These elements of discourses

relate with each other through the elaboration of meaning or specifying or describing

another, and further one extend the meaning to another adding new elements, and finally

one enhances the meaning of another qualifying it in vary ways (Fairclough, 1992 and

Fairclough, 2006).

The Latin countries and the US claimed that the EU regulations imposed on imports from

Latin America created unfavourable conditions of competition and discriminatory, trade-

restrictive and trade-distortive effects. The EU measures directly contradicted the GATTguarantees of tariff non-discrimination in Article I, and the treatment no less favourable

principle.

In opposition, the EU saw no discrimination or violation within the tariff quotas system,

which allocated shares of imports in the EU market in accordance with the legal

frameworks of the WTO. Furthermore, the EU argued that the tariff quotas system was

consistent with Article XIII (Non-discriminatory Administration of Quantitative

Restrictions) of GATT, due to only one specific tariff quota being considered and

particularly its administration. No allegation regarding discrimination had to be applied to

administration of two different and independent regimes, both being justified on different

bases.

The process of interpretation requires that the parties involved have an interest in the

operation of meanings as discourses and social actions, that is, the competing agents invest

because the game matters and the stakes are worth pursuing. Therefore, the interactive

relationships between discourse and argument in the Dispute Settlement System constitute

it as both; a social structure of competition and agency, and the prevailing of the

interpretative practices is one of the stakes. The regulatory structure is interpreted in

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accordance with the strategies and pre-interpretative positions of behaviours to curb

(Bourdieu and Wacquant, 1992 and Black, 2002).

Classificatory conflicts about the interpretation, meaning and hierarchical arrangement of

the obligations and agreements of the WTO were constitutive features of the banana

dispute. The Regulatory Structure comprises the articulation of politics and economics in

the WTO, and when considered as a social structure of competition, itself became an object

and simultaneously the medium of conflicts between complainant and respondent parties

involved in such trade disputes. Both parties used a relational strategy to understanding and

interpretation with respect to obligations and agreements of the WTO. In other words, the

institutional relations and competing agents on the legal framework of the WTO operate the

structuring of dominant principles and views of its Regulatory Structure.

Such play on both written obligations and discursive practices is critical to the regulatory

process, and such play further occurs thought the materiality of trade conflicts and

textuality of obligations and agreements. The bananas dispute brought uncertainty about the

precision of obligations and agreements, though precision does not mean certainty. The

regularisation of practices is the goal, and the inconsistencies and contradictions of detailed

provisions are cognitive strategies to achieve this end. The interpretation involves the

development of new cognitive frames and form of practical reasoning (Black, 2002: 180),

through the selection of particular obligations and agreements for interpreting events and

legitimising practices to formation of shared normative commitments. (Black, 2002 and

Jessop, 2004).

The arguments of the complainant parties included the operation of two discriminatory

access regimes as a violation of GATT wider obligations, and further the violation of the

Articles I and XIII (Definition of Terms and Due Restrain) of the Agreement on

Agriculture. Furthermore, the Latin countries and the US asserted the non-applicability of

the Agreement on Import Licensing Procedures with respect to tariff quotas, and the non-

applicability of the Articles III:4 and X (National Treatment on Internal Taxation and

Regulation and Publication and Administration of Trade Regulations) of GATT regarding

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borders measures. According to Guatemala and Honduras the EU ignored legal standards

by conferring trade advantages to non-traditional ACP countries over traditional banana

export countries in order to ensure interests of a satisfactory domestic marketing for

bananas.

The discursive formations of both parties sought to integrate textual and intellectual

technologies in an articulated discursive strategy to ban or bar contrary discourses and

practices. This was demonstrated by the use of contextualised obligations and agreements,

which sought to sustain or challenge events, and further interconnected a global competing

narrative resonance into the institutional dimension of the WTO. Technologization of

discourses was enhanced by the deployment of a meta narrative searching for for a

meaningful post-Fordist' macro-economic order in an increasingly integrated worldmarket (Jessop, 2004:15). The role of the Dispute Settlement System, a decision-making

structure, leads to broader configurations of the global economy and to interpretative

control of important features of competition and trade regulation. Thus, the interpretation of

obligations and agreements provides the potential for power and the enhancement of

positions, that is: control over interpretation is control over power resources. In this context,

interpretation mean meaning and application, both as authority and as a means of biding

obligations and the effectiveness of different types of agreements (Black, 2002 ;

Fairclough, 2006 and Jessop, 2004).

Chapter 3

The WTO Competition and Trade Regulation

3.1 Trade Disputes within the Dispute Settlement System

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The WTO is founded upon adherence to the imperative principles of multilateral trading

system, among them competition, no-trade restrictions and market access, which

constitute ground-rules of trade between nations. Such principles are settled in the

agreements of the WTO, negotiated and ratified by the member-states. Among the aims of

the WTO are: administering the agreements; promoting trade negotiations; handling trade

disputes and monitoring national policies. Although with regard to its actual functioning,

the WTO itself concerns the development of modern capitalism on issues of identity,

agency and strategy in accounts of discourses and narrativity (Jessop, 1995: 313).

The trade liberalisation of all assets - human, industrial, agricultural, natural, financial

implies the production of goods and services in domestic markets to compete overseas. Thisis the principle of comparative advantage whereby national economies take advantage of

their assets in order to produce most and trade best. Trade liberalisation means the

unrestricted flow of good and services in deepened competition. Nevertheless, obstacles to

imports are always present to protect domestic producers, which mean both a potential

reduction in world economic activity, and also jeopardy to competitiveness in WTO

agreements terms.

Members-states of the WTO are contracting parties under the whole of its agreements or as

called in this dissertation as Regulatory Structure in the WTO. As contracting parties, the

conjoined members have in the Dispute Settlement System a resort to strengthen and

improve the obligations of the regulatory framework of the WTO. The management of

disputes in WTO is a process where the focus is on interpreting agreements and

commitments, and ensuring the compromise of national policies within them. Hence, the

disputes in the WTO refer to broken obligations perpetrated by member-states, which

constitute violations of its trade rules.

A dispute arises when a member-state takes trade measures or actions that are considered to

break the WTO agreements, or when it fails to accomplish its legal obligations. The

Uruguay Round agreement structured a process with clearly defined stages and procedures,

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and further emphasized the function of such a dispute resolution structure to the

effectiveness of WTO. The Dispute Settlement System is the most important structure in

WTO providing security and predictability to the multilateral trading system. It serves to

preserve the rights as well as enforcing obligations to member-states under the covered

agreements, and ensures that the agreements are in accordance with international public

law.

Another shift in the Uruguay Round agreement compared to the previous General Accord

on Tariffs and Trade (GATT) procedures on trade disputes is that whereas authoritative

decisions could previously only be adopted by consensus, now such decisions are

automatically adopted unless there is a consensus to reject it. Furthermore, the settling of

disputes is performed under the responsibility of the Dispute Settlement Body (DSB),which includes all WTO members. Recommendations and rulings of the DSB are taken

upon the findings provided by appointed panels to consider each case, which comply clear

procedures. Such a change implies that the objects of WTO regulation could not exist

before the constituted imperatival and identity of trade as an element of different

articulations in different ways (Jessop, 1990: 186). The objects of regulation are known

through the processes of their regulation.

The Dispute Settlement System of the WTO is one of the cornerstones of the multilateral

trade order, due to the establishment of an integrated system permitting the WTO members

to base their claims upon any of the multilateral agreements. Such multilateral agreements

or Regulatory Structure of the WTO attempt to improve the transparency in national

policy-making. The concepts and precepts to accomplish free trade in terms of the

agreements of the WTO interact with each other to achieve coherent global economic

policy-making in accordance with trade liberalisation. In the context of the WTO, the

multilateral agreements suppose regulatory exchanges between members in order to

guarantee the expansion of trade and avoid world imbalances.

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3.2 The WTO Regulation

The bananas and beef hormones cases in the Dispute Settlement System are remarkably

useful for comprehending the current developments regarding the multilateral trade system

and international political economy. The disagreements over normative rules concerning

the covered agreements of the WTO request means of evaluating actual changes and trends

in the ongoing global economy, and particularly the international trade system. Jessop

(1995: 315) argues that in the real world there are only definite objects of regulation that

are shaped in and through definite mode of regulation, and that the ongoing competitive

struggles regarding Finance-Trade mode of regulation have changed the political and

economic structures governing modern capitalism, while remodelling such structures of

power through the redefinition of the forms and inter-relations between political and

economic agents.

The Dispute Settlement System is a new development in international economic relationsand international law, and this development has inaugurated a shift from a politically

driven system based on negotiations to one where universal rules apply. The key cases,

bananas and beef hormones between EU and North America (US and Canada) and some

Latin countries raised strong perceptions both on the intrinsic values of each case, and also

on the legitimacy and completion of the Regulatory Structure in the WTO.

A wide global market based on liberalised trade and competition is a political-economic

process, in terms of connections of activities into circuits and networks. Dicken (2007:11)

has argued that trade interdependencies are embedded into the macro-structures of the

global economy, and these macro-structures are the institutions, conventions and rules of

the capitalist market system. Hence, the authoritative dictates of the capitalist, liberalised

market system are the basis of the WTO regulation. Member-states are thus allowed to

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maintain controls to restore or develop national economies, although within a supra-

national institutional framework designed to ensure equal market access to national markets

for foreigner competitors. The action of member-states has occurred considering the

agreements of the WTO as a regulatory networking for a global economic management,

which gradually controls nationally-based economic structures.

Such regulation is not an evolutionary process, consisting in fact of complex interactions

focused toward political regulation based on the reproduction of broader capitalist relations.

The rise of neoliberalism (re) articulate economic and political structures upon a market-

oriented view and international competition (in this context the WTO) appear as a supra-

state governance structure to mitigate polarisation and general crises. Hence, the WTO

resembles the political and asymmetric distribution of opportunities in terms of resources,participation and influence manifested on unequal relations between developed and

developing countries, north and south (Purcell, 2002 and Favreau, 2000)

Since the trade rules of the WTO have become more detailed, as a result more precise and

biding, the Dispute Settlement System has transformed itself into a sophisticated legal

analysis mechanism. Increasingly, international competition is followed by the need of

regulation in and through WTO, which is characterised by the formalisation or

juridification of regulation to provide equal market access to all. The regulation of the

global economy has been structured upon principles of liberalisation and the

implementation of substantive rules, which have governed the economic structures and

grant the WTO as a contemporary and broader social structure of competition.

3.3 Competition, no-trade restrictions and market access contentions

The bananas and beef hormones disputes reveal the tensions and interactions between

deregulation and competition on the regulatory structure in the context of the WTO

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agreements. As argued by Picciotto (2002:3) liberalisation initially involved deregulation

swifty followed by reregulation by a wide variety of new regulatory processes referred to

as neoliberal on politics and economics spheres to appease special interest groups.

Furthermore, WTO disputes reveal, according to Jessop (1995; 314) constructivist

elements in discourse- analytic accounts of how organizations and other social forces

besides individuals come to develop distinctive identities, interests and strategies. Hence,

the bananas and beef hormones disputes disclose the institutional efforts and particular

member-states interests in controlling the development of the liberalised trade agenda. Both

disputes were related to alleged policies or measures restricting imports into the EU

territory, and further constituted in conflicts respecting the domestic regulatory objectives

and the suitable completion of the WTO agreements.

Both disputes involved major economic forces in the global economy providing a means

to examine how the trade liberalisation game has been based on schedules of concessions

and biddings tabled under the agreements of the WTO and respective obligations. Garrett

and Smith (2002:3) have argued that international trade game in the WTO is characterised

by three strategies: strategic restraint (or lack of it); strategic conciliation or strategic

bargaining. The ongoing use of such strategies is acknowledged, though the emphasis of

this dissertation regards the regulatory structure in the WTO as stake and discursive object

to be controlled, in a process where the regulatory propriety has been constructed and

classified upon dispersed, but connected and acclaimed, WTO obligations. Furthermore,

particular obligations of the agreements help to identify the competence of the Regulatory

Structure in the WTO, which concerns the accomplishment of liberalised trade, and

guarantees of equal competition. To apologists of liberalised trade the imperfect

competition is explicitly dealt in the agreements of the WTO, through the attainment of

trade benefits to member-states.

The WTO Agreement creates an order with reference to international commerce and

classifies legal constraints (provisions, norms, procedures) regarding the functional relation

between the institutional goals and discourses: treatment no less favourable and do not

arbitrarily or unjustifiably discriminate between members where identical or similar

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conditions prevail. For instance, the fundamental law of treatment no less favourable is

assured to every member, as a signatory contracting party under the WTO Agreement.

Such broader law appears in several Articles in the agreements of the WTO (GATT, The

Agreement on Agriculture, GATS, Agreement on Technical Barriers to Trade and The

Agreement on Trade-Related Investment Measures -TRIMs), with respect to different

markets. Furthermore, there are several excerpts in the WTO agreements referring to

lower trade barriers, such as members shall ensure that such measures are not more trade-

restrictive than required.

Organisational and institutional capacities and strategies of the agents into the WTO are a

discursively mediated form of regulation, which constitute the different objects, processes

and practices of regulation. The WTO obligations establish relationships between andwithin the organisational and institutional structures, and such relationships are drawn into

the dichotomous language of public authority versus private interests. The WTO

obligations are also recipients of embedded actions relating to practices and procedures,

which aim and form the consolidation of the Regulatory Structure in the WTO. For

instance, no-trade restrictions statements pursue a goal within the broader Regulatory

Structure, which creates a kind of order and classifies other trade objects within the

Regulatory Structure. That is, no-trade restrictions statements accorded as obligations by

the contracting parties, sought to accrue equal benefits (any advantage, favour, privilege or

immunity) in imperfect global markets (Jessop, 1995 and Picciotto, 2002).

Therefore, the constructed concept of (interactional) competitiveness used here helps to

examine the articulation between discursive formations and linguistic context within the

Regulatory Structure in the WTO. Furthermore, the concept of competitiveness orders

and coordinates the relational functions between provisions of the agreements, the

incorporation of substantive statements in active discourses: treatment no less favourable,

the liberalization of market access, no protection to domestic production and disguised

restriction on international trade.

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3.4 Regulatory Structure

Objectively, the idea of interactions upon competitiveness ascribes practices and interests to

the Regulatory Structure in the WTO, further refers to the capacity for organising and

connecting obligations that belong to a whole. Furthermore, the idea of competitiveness as

practice to prevent trade distortions is settled in agreements regulating international trade.

The interaction between competitiveness and competition provides both a dynamic and the

requirements of regulatory structure to promote global economic policy-making, which

imply a wide range of normative orders across the globe. Article IV (a) of GATS

-Increasing the Participation of Developing Countries states:

(a) the strengthening of their domestic services capacity and its efficiency andcompetitiveness, inter alia through access to technology on a commercialbasis;

Further, the competition policy of the WTO as a result of the Ministerial Conference in

Singapore (1996), is progressively reinforced to attend to the interests of globalising

business activities. Competition, trade liberalisation and competitiveness are tied in order to

promote economic efficiency, development and growth.

Therefore, the Regulatory Structure in the WTO constitutes itself a space of competition

principles and international competition, where the force of the rules are interpreted as

legally binding, as argued by Maher (2002: 114). Such a competition code is both a

discursive formation with normative perceptions and agency, and a powerful rhetorical

device. Furthermore, the Regulatory Structure in the WTO (besides IMF and World

Bank) is part of heterarchical, and specialised regulatory processes, which constitute

control and authority at all levels exploring the weakness of state institutions. Hence, the

WTO trade law is a world wide legal discourse, which ties trade law meaning with the use

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of the legal/illegal code, and where the Regulatory Structure is an organisational and

functional network (Muchlinski, 1997 and Teubner, 1997).

In the bananas and beef hormones cases, the complainant parties claimed that domestic

regulation and requirements caused prejudicial effects on international trade and

discriminated against foreign competitiveness. In other words, the quantitative restrictions

concerning banana imports imposed by EU against certain Latin Countries (Ecuador,

Guatemala, Honduras and Mexico) nullified or impaired the principles of liberalised trade

and competition. In the beef hormones dispute, Canada and the US also c

competition and trade regulation within the wto

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