global governance and inter alia cooperation between internatiional econmic law

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Journal of World Trade 36(3): 501515, 2002.

2002 Kluwer Law International. Printed in The Netherlands.

Global Governance and Inter-Agency Co-operationin International Economic Law

Christian TIETJE*

I. INTRODUCTION

International economic law is traditionally seen as the law governing the

economic relations between states and private entities. International economicorganizations such as the World Trade Organization (WTO), as part of the

international institutional framework, are thus usually characterized as a means to

facilitate the implementation, administration and operation, and further the

objectives1 of international economic treaties that are concluded between states. It is

in line with this concept of international economic law and the international legal

systems in general, that dates back to the time of the establishment of the first

international economic organizations,2 that the Agreement Establishing the WTO

describes its scope as to provide the common institutional framework for the conduct

of trade relations among its Members in matters related to the agreements and

associated legal instruments included in the Annexes to this Agreement.3 This state-

centred approach towards international economic relations leaves almost no space for

an in-depth analysis of inter-agency relations in the international legal order. Eventhough almost all agreements establishing the most important international economic

organizations refer to the need to co-operate with other international organizations,4

international institutional co-operation was for a long time not at the centre of the

interest of international legal scholars. It was only recently that co-operation between

1 * Prof. Dr Christian Tietje, LL.M. (Michigan), is Professor of Public Law, European Community Law andInternational Economic Law and Director of the Institute for Economic Law at the Faculty of Law, Martin-Luther-University Halle-Wittenberg. Correspondence address: Juristische Fakultt der Martin-Luther-UniversittHalle-Wittenberg, Universittsplatz 5, 06108 Halle (Saale), Germany; telephone: +493455523180; fax: +49

34527201; e-mail: [email protected]; homepage: .1 Article III:1 Agreement Establishing the WTO.2 For an assessment of the development of international organizations that were concerned with economic

issues in a broader sense in the nineteenth century, see Pitmann B. Potter, Dveloppement de lorganisationinternationale, 18151914, 64 Recueil des Cours (RdC), 71155 (1938 II).

3 Article II:1 WTO Agreement.4 See, e.g., Article 12 Convention on the Organisation for Economic Co-operation and Development,

88 UNTS 179; Article 35 Convention Establishing the Multilateral Investment Guarantee Agency, 1508 UNTS1508 99; Article X Articles of Agreement of the International Monetary Fund, 2 UNTS 39; Article V (8) Articlesof Agreement of the International Bank for Reconstruction and Development, 2 UNTS 39, 134 and 606 UNTS295; Article IV (7) Articles of Agreement of the International Finance Corporation, 264 UNTS 117, 439 UNTS318 and 439 UNTS 1229; Article VI (7) Articles of Agreement of the International Development Association,439 UNTS 249.


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502 JOURNALOFWORLDTRADE

the WTO and other international economic organizations has gained some interest as

an important aspect of governance in the international economic system.5

This article will take a closer look at the overall importance of inter-agency

co-operation in international economic law. However, to a degree, the article differs from

other contributions on this topic, since it will not only focus on a specific area of

institutional co-operation, such as that between the WTO and World Intellectual

Property Organization (WIPO),6 but will propose a more general explanation of the

importance of international institutional co-operation in the current international

economic legal system. It will demonstrate that inter-agency co-operation is a central

element in global economic governance and that the legal approach towards this

phenomenon has to be different than that taken since the United Nations and the BrettonWoods institutions were established. In fact, one must agree with the Administrative

Committee on Co-ordination of the Economic and Social Council of the United

Nations, which stressed in its annual overview report for 1999 that [a] new phase in

inter-agency co-operation, spurred by the imperatives of globalization, is now emerging.7

In the first part of this article, an introduction will be given on the concept of

global governance as being part of the legal structure of the international system and

thus also of international economic law. Part two of the contribution will give an

overview of inter-agency co-operation among international economic organizations.

In the final part, the legal implications of inter-agency co-operation, in an international

system of global governance, will be analysed.

II. GLOBAL GOVERNANCEAND INTERNATIONAL INTER-AGENCY CO-OPERATION

The concept of global governance is closely related to globalization. Even though

the term globalization is currently used in order to describe a wide area of social,

economic, cultural and other developments in national societies and in the

international community, it also has a core legal impact. Globalization, as a legal term,

refers to legal and de facto denationalization. It can thus be defined as the process of

denationalization of markets, laws and politics in the sense of interlacing peoples and

individuals for the sake of the common good.8 This reference of globalization to

5 Frederick M. Abbott, Distributed Governance at the WTO-WIPO: An Evolving Model for Open-Architecture

Integrated Governance, 3 J Intl Economic L (2000), 6381; see also Marco C.E.J. Bronckers, More Power to theWTO?, 4 J Intl Economic L 41 (2001), 49 et seq.; see also the Ministerial Declaration adopted on 14 November2001, WTO Doc. WT/MIN(01)/DEC/1 of 20 November 2001, para. 5: We are aware that the challengesMembers face in a rapidly changing international environment cannot be addressed through measures taken in thetrade field alone. We shall continue to work with the Bretton Woods institutions for greater coherence in globaleconomic policy-making.

6 See Abbott, as note 5 above.7 Annual overview report of the Administrative Committee on Co-ordination for 1999, UN Doc. E/2000/53 of

17 May 2000, at 3.8 Jost Delbrck, Globalization of Law, Politics, and MarketsImplications for Domestic LawA European

Perspective, 1 Indiana J of Global Legal Studies 9 (1993), 10 et seq.; see also Alfred C. Amann, The Globalizing State:A Future-Oriented Perspective on the Public/Private Distinction, Federalism, and Democracy, 31 Vanderbilt J ofTransnational L (1998), 769870.


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GLOBALGOVERNANCEANDINTER-AGENCYCO-OPERATION 503

denationalization and common (global) goods9 indicates that the process of

globalization affects the role of the state as the main actor in international relations. In

the age of globalization, international relations and especially international economic

relations are not primarily concerned any more with the co-ordination of competing

state interests, but with the conservation, distribution and protection of global public

goods. Global governance, therefore, is a legal concept that tries to identify and to

describe the process and the actors dealing with global public goods, such as global

economic welfare, human rights or the protection of the environment.10

The Commission on Global Governance has thus convincingly defined global

governance as:

the sum of the many ways individuals and institutions, public and private, manage theircommon affairs. It is a continuing process through which conflicting or diverse interests may beaccommodated and co-operative actions may be taken. It includes formal institutions andregimes empowered to enforce compliance, as well as informal arrangements that people andinstitutions either have agreed to or perceive to be in their interest.11

Following this definition, it is important to stress that global governance does not

at all refer to some kind of global government. Instead, global governance is a

multidimensional concept of networks and multilateral legal and political processes

that do not substitute the nation-state, but broaden the picture of international

relations and thus the international legal community.12 International economic

relations are central to this concept as they are a prime example of legally relevant

interrelated activities of governments, international organizations and private actors

that can no longer be explained any more simply by referring to the classic sources of

public international law in the sense of Article 38(1) of the Statute of the International

Court of Justice.13

Moreover, although global governance refers to a multitude of international

actors, international institutions play a prominent role in the process of global

governance. This is also recognized within the WTO and among its Members. Already

in 1989, the Contracting Parties of the General Agreement on Tariffs and Trade

(GATT) 1947 urged the Director-General to undertake efforts to strengthen the

relationship of GATT with other relevant organizations, in order to achieve greater

9 On global public goods, see the contributions in Inge Kaul, Isabelle Grundberg and Marc A. Stern (eds),

Global Public GoodsInternational Co-operation in the 21st Century (New York/Oxford: Oxford University Press,1999).10 See, e.g., para. 1 of the Preamble of the Agreement Establishing the WTO; on human rights and

international economic law, see Ernst-Ulrich Petersmann, Human rights and international economic law in the 21stcentury: The need to clarify their interrelationships, 4 J Intl Economic L (2001), 339.

11 Our Global Neighbourhood: The Report of the Commission on Global Governance (Oxford: Oxford UniversityPress, 1995), p. 2.

12 See, e.g., Robert O. Keohane and Joseph S. Nye, Introduction, in Joseph S. Nye and John D. Donahue(eds), Governance in a Globalizing World (Washington: Brookings Institution Press, 2000), pp. 12 et seq.; on theconcept of the international legal community, see Hermann Mosler, The International Society as a Legal Community(Alphen aan den Rijn: Sijthoff & Noordhoff, 1980).

13 On Article 38(1) ICJ Statute and its role as defining the sources of international law see, e.g., Ian Brownlie,Principles of Public International Law(5th edn, Oxford: Oxford University Press, 1998), pp. 3 et seq.


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coherence in global economic policy making.14 This call for more effective inter-

agency co-operation in international economic law was followed by the Marrakesh

Declaration on the Contribution of the World Trade Organization to Achieving

Greater Coherence in Global Economic Policymaking, that has been reaffirmed at

the fourth ministerial conference of the WTO in Doha.15 Even though these

documents do not explicitly refer to global governance, they are based on the overall

rationale of this concept. This can been seen by looking at certain communications

from WTO Members, in preparation for the 1999 ministerial conference, that

followed the Marrakesh Declaration. A detailed communication from the European

Communities, for example, on addressing the Challenges of Globalization: The

Role of the WTO in Co-operation with Other International Organizations explicitlyrefers to global economic governance and inter-agency co-operation.16 A similar

approach is followed by Canada in a communication on the WTO and

International Economic Policy Coherence.17 Moreover, on a broader scale the

United Nations Development Programme (UNDP), in its 1999 report on human

development, made it quite clear that international co-operation among and with

international organizations is central to a global governance architecture that can cope

with the challenges of globalization.18 This is in line with United Nations Resolution

49/97 on strengthening international organizations in the area of multilateral

trade.19

Overall, one aspect of the current discussion on global governance is

international institutional or inter-agency co-operation. Inter-agency co-operation is

one part in the multidimensional picture of global governance structures that

increasingly evolves because of the legal implications of globalization. This is, of

course, not only true with regard to the international legal system in general, but in

the field of international economic relations in particular. The underlying rationale for

this development will be analysed in a later part of this article. Before doing so, it is

necessary to take a look at empirical evidence on inter-agency co-operation in

international economic law.

14 Way of Achieving Greater Coherence in Global Economic Policy Making Through Strengthened GATT Relationshipswith other Relevant International Organizations; Report by the Director-General, GATT Doc. MTN.GNG/NG14/W/35, 20 September 1989.

15 The Marrakesh Declaration is reprinted in 33 ILM (1994), at 1249; for the Ministerial Declaration of theFourth Ministerial Conference of the WTO, see note 5 above.

16 WTO Doc. WT/GC/W/391, 12 November 1999; see also EC Approach to Capacity Building andCoherence in Global Economic Policy Making, Communication from the European Communities, WTO Doc.WT/GC/W/297, 5 August 1999.

17 WTO Doc. WT/GC/W/360, 12 October 1999.18 UNDP, Human Development Report 1999(New York/Oxford: Oxford University Press, 1999), pp. 97 et seq.19 United Nations General Assembly Resolution 49/97, 19 December 1994.


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III. EXAMPLESOF INTER-AGENCY CO-OPERATIONINTHE INTERNATIONAL

ECONOMIC SYSTEM

The United Nations Charter (UNC) is, in general, the starting point of any inter-

agency co-operation, especially among international economic organizations. Following

the experience of the League of Nations and specifically the proposals made in the famous

Bruce Report,20 the Economic and Social Council (ECOSOC) was set up as one of the

main organs of the United Nations.21 Beyond its general competencies in social,

economic and other areas, the ECOSOC is responsible for inter-agency co-operation

with the specialized agencies of the United Nations among each other and with the UN

itself.22

This function of the ECOSOC is mainly conducted within the AdministrativeCommittee on Coordination of the United Nations (ACC). By 1946 the ACC was

already established.23 As a strictly administrative organ with the Secretary-General of the

UN and the executive heads of the other respective organizations as members, the

Member States of the organizations represented have hardly any influence on its work.

Moreover, even though the ACC in the past was mainly concerned with administrative

issues of the work of international organizations, it has recently re-defined its own

functions. As outlined in its annual report of 1999, the ACC sees its own responsibility

and function in contributing to the strengthening of inter-agency co-operation and co-

ordination in order to cope with the challenges of globalization.24 The basic rationale for

this new phase in inter-agency co-operation25 is seen by the ACC through the process

of globalization that requires both a new and a better balance among economic, social

and environmental objectives, and mutually reinforcing initiatives and concurrentprogress on a larger number of fronts.26 The integration of the economic sphere at all

levelsglobal, regional and nationalwith the social, cultural and environmental

spheres27 is the main substantial point of this new approach of the ACC. In sum, it

becomes clear that inter-agency co-operation, especially within the international

economic system, is institutionalized within the ACC. If the ACC is able, in its future

work, to meet its own goals, inter-agency co-operation will have important inputs on the

work of international organizations dealing with economic and related issues.

20 Le dveloppment de la collaboration internationale dans le domaine conomique et social, League of NationsDocument A 23 (1939); for details see Victor-Yves Ghbali, The League of Nations and Functionalism, inVictor Yves Groom and Paul Taylor (eds), FunctionalismTheory and Practice in International Relations (London:

University of London Press, 1975), pp. 141161; Klaus Dicke, Effizienz und Effektivitt internationaler Organisation(Berlin: Ducker & Humblot, 1994), pp. 72 et seq.21 See Articles 7(1) and 61 et seq. UNC; for details on the ECOSOC, see Rainer Lagoni, ECOSOC

Economic and Social Council, in Rdiger Wolfrum (ed.), United Nations: Law, Policies and Practice, Vol. 1 (2ndedn, Munich/Dordrecht: Beck/Martinus Nijhoff, 1995), pp. 461469.

22 See Articles 62 and 63 UNC.23 ECOSOC Resolution 13 (III), 21 February 1946 and Resolution 166 (VII), 29 August 1948; for details

on the ACC, see Werner Meng, Article 60 marginal notes 13 et seq., in Bruno Simma (ed.), The Charter of theUnited Nations (Munich/Oxford: Beck/Oxford University Press, 1995); Dicke, as note 20 above, pp. 256 et seq.

24 See note 7 above.25 ACC, as note 7 above, at 3.26 Ibid.27 Ibid.


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The relationship of the WTO and the United Nations Organization (UNO) has

to be seen in light of the described importance of the ACC. After a lengthy discussion

during the preparations for establishing the WTO, Members decided not to set up the

organization as a special agency of the UN.28 Following the tradition that has been

established under the GATT 1947, the relationship of the WTO and the UNO is only

governed by an exchange of letters of the WTO Director-General and the UNO

Secretary-General.29 Although the letters only express in general terms the desire of

both organizations to keep each other informed on relevant activities within the

organizations, it is interesting to note that the WTO participates in the work of the

ACC. This clearly indicates that notwithstanding the lack of formal ties with the

World Organization, the WTO committed itself to take up an active part in the

described global governance structure of inter-agency co-operation.

Formal co-operation agreements have been concluded between the WTO, the

International Monetary Fund (IMF) and the World Bank.30 These agreements fulfil the

mandate of the aforementioned Marrakesh Declaration on Greater Coherence in

Global Economic Policymaking and they are in line with Article III:5 of the

Agreement Establishing the WTO, Article X of the IMF Agreement and Article V:8(a)

of the World Bank Agreement. Thus, after unsuccessful attempts to establish such

formal ties of co-operation already in 1948 at the time of the work on the failed

International Trade Organization (ITO) and later on in the history of the GATT

1947,31 finally a legally binding agreement exists between the worlds most important

trade and financial organizations. The underlying rationale for the necessity of such ties

of co-operation has to be seen in the fact that trade issues cannot be isolated from

financial matters and vice versa. For example, this is the case with regard to exchange

and balance-of-payments questions (see Articles XV:1 and 2 GATT).32 However,

recent decisions of the WTO Dispute Settlement Body made clear that the

co-operation agreement between the IMF and the WTO does not affect rights and

obligations of WTO Members under the WTO or the IMF Agreement.33 Instead, the

Appellate Body has determined the agreement between the WTO and the IMF as

being of a strictly administrative nature.34 This however, does not diminish the

importance of co-operation between the WTO, the IMF and the World Bank. On the

28 See Articles 57 and 63 UNC; for details, see Wolfgang Benedek, Relations of the WTO with otherInternational Organizations and NGOs, in Friedl Weiss, Erik Denters and Paul de Waart (eds), International

Economic Law with a Human Face (The Hague/Dordrecht/London: Kluwer Law International, 1998), pp. 478 etseq.; John H. Jackson, The World Trade OrganizationConstitution and Jurisprudence (London: Royal Institute ofInternational Affairs, 1998), p. 52.

29 WTO Doc. WT/GC/W/10, 3 November 1995.30 The agreements are reproduced in WTO Doc. WTO/L/195, 18 November 1996; see also Dukgeun Ahn,

Linkages between International Financial and Trade InstitutionsIMF, World Bank and WTO, 34 J.W.T. 4 (August2000), pp. 1 et seq

31 For details, see Ahn, ibid., pp. 3 et seq.32 See also Articles XXXVI:6, 7 and XXXVIII:2 GATT.33 ArgentinaCertain measures affecting imports of footwear, textiles, apparel and other itemsComplaint by the

United States, WT/DS56/AB/R, para. 72.34 This Agreement provides for specific means of administrative co-operation between the two

organizations, WT/DS56/AB/R, para. 71.


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contrary, the growing awareness of more and more intertwined trade and financial

elements makes clear that only a coherent policy of the three organizations can cope

with the challenges given.35 It is, however, interesting to note that some WTO

Members expressed serious concern with regard to the autonomous executive

structure of the co-operation between the WTO, the IMF and the World Bank. The

Director-General of the WTO was thus forced to reassure WTO Members on their

remaining sovereignty.36 This demonstrates the importance of the executive

(administrative) structure of international institutional co-operation that is also evident

with regard to the aforementioned work of the ACC.

There are, of course, other areas in which interrelated economic and related

problems force international organizations to co-operate. A key element in the currentdiscussion on the new international financial architecture is the necessity of effective

international institutional co-operation, not only between IMF and World Bank, but

also on a broader scope with, e.g., the International Labour Organization (ILO). This

is because the Poverty Reduction and Growth Facility (as an example), which was

recently established by the IMF, strongly focuses on general social aspects while

deciding on financial support of states.37 A central element of the policy of the IMF on

social policy issues is thus a close co-operation of the organization with other

international agencies such as the ILO, the United Nations Development Programme

(UNDP) and the World Health Organization (WHO).38 These activities of inter-

agency co-operation in international economic law are in line with a communiqu

issued after the annual meeting of the Bretton Woods Institutionsnow called

International Monetary and Financial Committee39that stressed the need of the IMF

and the World Bank to focus on their areas of comparative strength while developing

partnership with other international institutions.40

Other examples of international institutional co-operation can be taken from the

work of the WTO. Several WTO agreements directly affect the work of other

international organizations. For example, the General Agreement on Trade in Services

(GATS) has a direct impact on the work of the International Telecommunication

Union (ITU). In fact, due to the increasing linkage between the various aspects of

telecommunications and trade policy-making that fall within the respective mandates

of the International Telecommunication Union (ITU) and the World Trade

Organization (WTO) and based on GATS Article XXVI, both organizations

35 Ahn, as note 30 above, pp. 28 et seq.36 See Statement by the Director-General on Consultations and Coherence, WTO Doc. WT/L/194/Add. 1,

18 November 1996.37 Ludwig Gramlich, Eine neue internationale Finanzarchitektur oder: Der IMF in der Krise? , 38 Archiv fr

Vlkerrecht (2000), pp. 399 et seq., at 407 et seq. and 439 et seq.38 For details, see IMF, Social Policy Issues in IMF-Supported Programs: Follow-Up on the 1995 World Summit for

Social Development, available at (visited 28 January 2002).39 Gramlich, as note 37 above, p. 431.40 Communiqu of the International Monetary and Financial Committee of the Board of Governors of the

International Monetary Fund, 16 April 2000, available at (visited 28 January 2002).


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concluded a co-operation agreement on 20 May 2000.41 In line with other

international institutional agreements, it provides for several means of administrative

co-operation between the two organizations. A similar agreement on the basis of an

exchange of letters between its executive organs exists for the relationship of the WTO

and the International Office of Epizootics.42 It is concerned with the importance of the

International Office of Epizootics within the framework of the Agreement on Sanitary

and Phytosanitary Measures (SPS Agreement).43

Another important international institutional co-operation has been established

between the WTO and WIPO. Due to the incorporation of Conventions on

intellectual property protection administrated by WIPO in the WTO Agreement on

Trade-Related Aspects of Intellectual Property Rights (TRIPs), a close administrativeco-operation between the two organizations has been agreed upon in a co-operation

agreement of 1 January 1996.44 Moreover, in a WTO Panel proceeding of 1999, the

Panel has requested information on certain legal aspects of WIPO conventions which

have been provided for by the WIPO Secretariat.45

Furthermore, several attempts have been made to strengthen co-operation

between, on the one hand the WTO and the ILO, and on the other hand, the WTO

and the respective bodies of multilateral environmental agreements in order to prevent

possible conflicts in the problematic fields of trade and labour rights and trade and

environment. Calls for such efforts of effective institutional co-operation can be found,

for example, in the communiqu of the G-8 meeting in June 1999, where the

importance of effective co-operation between the WTO and the ILO on the social

dimension of globalization and trade liberalization has been stressed.46 Concerning

trade and environment, a similar call has been made in detail in Chapter 38 of Agenda

21 dealing with International Institutional Arrangements in the field of environment

and development.47

Another important recent example of inter-agency co-operation is known as

the Integrated Framework for Trade-Related Technical Assistance to Least-

Developed Countries. This programme is based on the Comprehensive and

Integrated WTO Plan of Action for the Least-Developed Countries which was

adopted at the ministerial conference of the WTO in 1996 in Singapore. The Plan

of Action envisaged a closer co-operation between the WTO and other

multilateral agencies assisting least-developed countries.48 According to the plan, it

41 WTO Doc. S/C/11, 21 September 2000, preamble para. 2.42 WTO Doc. G/SPS/W/61, 22 May 1996.43 For details, see Terence P. Stewart and David S. Johanson, The SPS Agreement of the World Trade

Organization and International Organizations: The Roles of the Codex Alimentarius Commission, the International PlantProtection Convention, and the International Office of Epizootics, 26 Syracuse J Intl L & Commerce (1998), pp. 2753.

44 WTO Doc. IP/C/6/Add. 1, 17 January 1996; Abbott, as note 5 above.45 United StatesSection 110(5) of US Copyright Act, WT/DS160/5, 16 April 1999, Annex 4.46 For details, see Steve Charnovitz, The International Labour Organization in its Second Century, 4 Max Planck

United Nations Yearbook (2000), pp. 160 et seq.47 Available at (visited 28 January 2002).48 WTO Doc. WT/MIN(96)/14, 7 January 1997.


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was agreed by the WTO, United Nations Conference on Trade and Development

(UNCTAD) and International Trade Commission (ITC) Secretariats, in

collaboration with the staff of the IMF, the World Bank and the UNDP, to set up

an integrated framework for the provision of trade-related technical assistance for

least-developed countries.49

Finally, an interesting example of administrative institutional co-operation

between two international organizations dealing with economic issues can be taken

from the law of the European Community. Even though, according to Article 300(1)

EC Treaty, it appears that only the Council of the European Union may conclude

binding international agreements on behalf of the EC, in 1993 the EC Commission

concluded, in the form of an exchange of letters, an executive agreement with theFood and Agricultural Organization of the United Nations (FAO).50 The agreement

concerns joint projects of the EC and the FAO and regulates questions of co-finance

and co-administration of such joint projects. Without further discussing the question of

the legality of this agreement under EC law at this point, the existence of such a

practice of executive co-operation between two organizations in an area of

overlapping interests is worth noting.51

Although many other examples could be given on international institutional

co-operation in international economic law and related areas, the evidence given

seems to be sufficient to allow some preliminary assessments to be made.

First, one may say that international organizations with assigned tasks in areas of

direct or indirect economic relevance are today related to each other within a close

network of co-operation. The underlying reason for thisthat will be discussed in

more detail in the next section of this articleis, second, diminishing jurisdictional

borders in the international institutional system. Because international economic law

affects a wide area of policy issues beyond classic trade law, more and more

organizations are concerned with economic aspects of issues that are covered by their

respective mandate. As a consequence of this, international organizations have

established several forms of administrative institutional co-operation. This approach

can be traced back to the establishment of the ACC in 1946. Third, and finally, the

analysis of international institutional co-operation has demonstrated that the form in

which this co-operation takes place has an administrative structure. The important role

played by international administration in institutional co-operation should be seen as

one aspect of an emerging international administration that is more and more

independent.

49 For details, see WTO Doc. WT/LDC/HL/1/Rev.1, 23 October 1997.50 Not published, on file with the author.51 For a more detailed discussion on this agreement, see Christian Tietje, Art. 302 marginal notes 15 et seq.,

in Eberhard Grabitz and Meinhard Hilf (eds), Das Recht der EuropischenUnion, Vol. I (Munich: Beck, 2000).


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IV. THE DUTYOF INTER-AGENCY CO-OPERATIONANDTHE LEGAL STRUCTUREOF

THE INTERNATIONAL SYSTEM

In order to evaluate the legal impact of todays inter-agency co-operation, it is

necessary to compare the system of international institutional co-operation as it was

designed by the Charter of the United Nations with the current status quo. As the

establishment of the ACC in 1946 demonstrates, inter-agency co-operation has been

part of the international legal system for many years. In fact, it was during the League

of Nations era that the idea of inter-agency co-operation as a part of the structure of

the international system, especially in the economic area, was born. Due to the

increasing activities of the League of Nations and other international organizations,mainly in the economic and social field, it became increasingly difficult to secure

coherence in international policy-making. Thus, in order to increase the effectiveness

of the work of international organizations as a whole, it was one aim of the Bruce

Report to meet the fact that the development in the nature of the work results in

a growing inter-connection between the activities of the different organizations, and

that therefore a co-ordinating direction is more and more required.52 In an effort to

realize this aim, the Bruce Report suggested setting up a new entity within the League

of Nations, to be known as the Central Committee for Economic and Social

Questions. Although this proposal was not realized within the League of Nations, it

laid the foundations for the establishment of the ECOSOC. The system that was thus

created by the Charter of the United Nations, in order to co-ordinate activities of

different international organizations, especially in the economic and social area, isknown as a system of functional deconcentration.53 It is based on the idea that instead

of having one single international organization responsible for all questions of

economic and social concern, different organizations should work in their respective

areas of special competence. The co-ordination of the work of the different

organizations was assigned to the ECOSOC and the ACC. Referring to Articles 57

and 63 of the UNC, the International Court of Justice (ICJ) has recently described this

system of deconcentration as follows:

As these provisions demonstrate, the Charter of the United Nations laid the basis of a systemdesigned to organize international co-operation in a coherent fashion by bringing the UnitedNations, invested with powers of general scope, into relationship with various autonomous andcomplementary organizations, invested with sectorial powers. The exercise of these powers by

the organizations belonging to the United Nations system is co-ordinated, notably, by therelationship agreements concluded between the United Nations and each of the specializedagencies.54

52 Bruce Report, as note 20 above, section V(b).53 For a detailed analysis, see C. Wilfred Jenks, Co-Ordination: A New Problem of International Organization, in

77 RdC, pp. 149301, at 172 et seq. (1950 II).54 ICJ, Legality of the Use by a State of Nuclear Weapons in Armed Conflict (Request of the World Health

Organization), ICJ Reports, 1996, p. 66, at para. 26.


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As can be seen by looking at the historical development and the judgment of the

ICJ, the United Nations system is based on the idea that a clear-cut distinction

between the competencies and areas of activities of different international organizations

is possible. However, the process of globalization that can be seen, particularly in the

economic area, challenges this perspective. As it is increasingly difficult to separate

trade and financial issues from other areas of social concern, such as the protection of

the environment, the protection of core human and social rights, technical aspects of

communication or sanitary and phytosanitary questions, the work of different

international organizations is increasingly overlapping. In the Marrakesh Declaration

on the Contribution of the WTO to achieving greater coherence in global economic

policy-making, ministers thus recognized that the interlinkages between the

different aspects of economic policy require that the international institutions with

responsibilities in each of these areas follow consistent and mutually supportive

policies.55 This indicates that inter-agency co-operation among organizations that are

responsible for economic and related issues is essentially a necessity because of the

overlapping areas of responsibility of the different organizations. In fact, as will be

demonstrated, public international law requires international organizations to

co-operate in areas of overlapping areas of responsibility.

In support of this argument, the first aspect that has to be taken into account, is

the recognized international legal personality of international organizations. In line

with the famous advisory opinion of the ICJ in the reparations for injury case,56 it is

widely accepted that international organizations possess international legalpersonality.57 Moreover, the ICJ held that the rights and duties of an entity such as

the Organization [the UNO] must depend upon its purpose and functions as specified

or implied in its constituent documents and developed in practice.58 Therefore, the

ICJ continued, under international law, the Organization must be deemed to have

those powers which, though not expressly provided in the Charter, are conferred upon

it by necessary implication as being essential to the performance of its duties.59 Even

though the ICJ made these statements only with respect to the United Nations, they

are today widely recognized as being valid for any international organization.60

Because of their legal personality and their powers necessary to perform their

functions and duties, international organizations are entitled to claim a protected area

of jurisdiction. Even though the concept of jurisdiction is usually referred to states

in regard to their territorial and personal jurisdiction,61 it also appliesat least in

55 33 ILM (1994), 1249.56 ICJ Reports, 1949, pp. 174 et seq.57 Brownlie, as note 13 above, at 678 et seq.58 ICJ Reports, 1949, p. 180.59 ICJ Reports, 1949, p. 182.60 Brownlie, as note 13 above, pp. 687 et seq.61 See, e.g., Bernhard H. Oxman, Jurisdiction of States, in Rudolf Bernhardt (ed.), Encyclopedia of Public

International Law, Vol. III (Amsterdam: Elsevier, 1997), p. 56: The fundamental bases for the exercise ofjurisdiction by a State are rooted in two aspects of the modern concept of the State itself: defined territory andpermanent population.


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principleto international organizations with regard to areas of competences

assigned to them in their founding treaty. An example of a case in which recognized

jurisdictional competences of an international organization became relevant is the

pipeline embargo dispute between the United States and the European Communities

in the beginning of the 1980s. In this dispute, the EC based their claims against the

US on aspects of protected jurisdiction under international law.62 A similar situation

arises in cases of extraterritorial application of anti-trust law by the EC and against the

EC.63 One may thus safely conclude that international organizations possess

jurisdiction within their competencies and that this jurisdiction is protected by

international law.

In general, the possession of jurisdiction by an international organization hasimplications for the duty to inter-agency co-operation in international economic law

and related areas. Due to the fact of overlapping areas of work conducted by different

international organizations, conflicts of jurisdiction arise. Take, for example, the work

of the WTO and of the ITU. The increasing linkage between the various aspects of

telecommunications and trade policy-making that fall within the respective mandates

of the International Telecommunication Union (ITU) and the World Trade

Organization (WTO),64 as it is stated in the agreement of co-operation between

the WTO and the ITU, in fact indicates that there is the possibility of a conflict of

jurisdiction between the two organizations. Such a situation is similar to conflicts

of jurisdictions between states based on extraterritorial measures, e.g. in the area of

anti-trust law,65 or with regard to the application of trade sanctions for environmental

purposes as in the Tuna or Shrimp cases.66 Although the legality of extraterritorial

measures is still disputed, most scholars and courts argue that at least two requirements

must be fulfilled: There must be a sufficient link to the state exercising jurisdiction, i.e.

a substantial effect within its jurisdiction, and the exercise of jurisdiction with

extraterritorial effect must comply with the rule of reason in the sense of a balancing of

interests.67 The Appellate Body in the Shrimp case has basically also applied this

62 Bruno Simma and Christoph Vedder, Artikel 281 marginal note 12, in Eberhard Grabitz and MeinhardHilf (eds), Das Recht der Europischen Union(Munich: Beck, 2000); for further details, see Pieter J. Kuyper, TheEuropean Community and the US Export Control: Comments on Comments, 27 German Yearbook of Intl L (1984),pp. 72 et seq.; Karl-Matthias Meessen, Extraterritoriality of Export Control: A German Lawyers Analysis of the PipelineCase, 27 German Yearbook of Intl L (1984), pp. 97 et seq.

63

Simma and Vedder, ibid.; Derrick Wyatt and Alan Dashwood, European Community Law(3rd edn, London:Sweet & Maxwell, 1993), pp. 384 et seq.64 Preamble para. 2 of the Agreement of Co-operation between the WTO and the ITU, WTO Doc. S/C/

11, 21 September 2000.65 Werner Meng, Extraterritorial Effects of Administrative, Judicial and Legislative Acts, in Rudolf

Bernhardt (ed.), Encylopedia of Public International Law, Vol. II (Amsterdam: Elsevier, 1995), pp. 337 et seq.66 United StatesRestrictions on Imports of Tuna (Tuna I) , Panel Report dated 16 August 1991 (not adopted),

BISD 39S/155; United StatesRestrictions on Imports of Tuna (Tuna II), Panel Report dated 16 June 1994 (notadopted), reprinted in 33 ILM (1994), 839; United StatesImport Prohibition of Certain Shrimp and Shrimp Products ,Report of the Panel dated 15 May 1998, WT/DS58/R; Report of the Appellate Body dated 12 October 1998,WT/DS58/AB/R.

67 Restatement (Third) of the Foreign Relations Law of the United States (St Paul: American Law Institute, 1987),s.403; Meng, as note 65 above, pp. 340 et seq. with further references.


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approach to the problems of extraterritorial measures, i.e. measures reaching beyond a

given jurisdiction.68

Considering that, first, international organizations possess protected jurisdiction

and, second, conflicts of jurisdiction arise due to overlapping work areas of different

organizations, especially in international economic law and related areas, it is necessary

to apply also the generally accepted standards of international law to the relationship of

international organizations. Thus, a possible conflict of jurisdiction between different

organizations has to be solved by balancing the legal interests involved. As the

Appellate Body has recognized in the Shrimp case, the duty to co-operate is one aspect

of balancing competing interests in cases of conflicts of jurisdiction involving global

public goods.69 Although the Appellate Body stipulated a duty to co-operate only withregard to environmental global public goods, the underlying rationale also applies to

other areas of global concern. In fact, the necessity to co-operate in the international

system is part of the overall shift from the law of international co-ordination to the law

of international co-operation, which was forcefully described by Wolfgang Friedmann

in 1964.70 In the same way that states are thus obliged to solve conflicts of jurisdiction

by means of co-operation, international organizations are obliged to co-operate in

areas of overlapping and conflicting jurisdiction. As it is increasingly difficult to make

clear-cut distinctions between the assigned competencies of different organizations,

especially in international economic law and related areas, inter-agency co-operation is

the only possible means to secure the effectiveness of international organizations.

Furthermore, international organizations are not only entitled to act in the most

effective way to fulfil their mandate,71 but are also obliged to do so. The purpose of the

establishment of any international organization is not only to create a new subject of

international law, but also that the organization created pursues the specific tasks

assigned to it by its members. With regard to the WTO, Art. III:1 of the Agreement

Establishing the WTO clearly states that the WTO shall facilitate the

implementation, administration and operation, and further the objectives, of this

Agreement and of the Multilateral Trade Agreements . This is certainly more than

a reference to the competencies of the WTO. It also indicates that the WTO is

obligated to fulfil its mandate in the most efficient way. Thus, whenever it is necessary

68 United StatesImport Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body dated

12 October 1998, WT/DS58/AB/R, para. 164; for details, see Patricia Isela Hansen, Transparancy, Standards ofReview, and the Use of Trade Measures to Protect the Global Environment, 39 Virginia J Intl L (1999), pp. 1038 et seq.and 1053 et seq.; Christian Tietje, Die vlkerrechtliche Kooperationspflicht im Spannungsverhltnis Welthandel/Umweltschutz und ihre Bedeutung fr die europische Umweltblume, Europarecht (2000), pp. 285296; confirmed inUnited StatesImport Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia , Reportof the Panel dated 15 June 2001, WT/DS58/RW, paras 5.43 et seq.; United StatesImport Prohibition of CertainShrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia , Report of the Appellate Body dated 22 October2001, WT/DS58/AB/RW, paras 115 et seq.

69 Appellate Body, as note 66 above, paras 166 et seq.70 Wolfgang Friedmann, The Changing Structure of International Law (London: Stevens, 1964), pp. 60 et seq.;

see also Rdiger Wolfrum, International Law of Co-operation, in Rudolf Bernhardt (ed.), Encyclopedia of PublicInternational Law, Vol. II (Amsterdam: Elsevier, 1995), pp. 1242 et seq. with further references.

71 Brownlie, as note 13 above, pp. 687 et seq.


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to co-operate with other international organizations in order to secure the effectiveness

of the work in question, an international organization such as the WTO has a legal

duty to do so.

In short, inter-agency co-operation is not only a political slogan, but also a legal

requirement in the current international legal system. Due to the increasing

phenomenon of overlapping jurisdiction of international organizations in international

economic law and related areas, inter-agency co-operation is required in order to solve

conflicts of jurisdiction and to secure the effectiveness of the work of each organization

involved. The original system of deconcentration as designed by the UN Charter is

therefore no longer capable of explaining the structure of inter-agency co-operation in

international economic law and related areas. Instead of looking at a functionalseparation of different international organizations with different and separated tasks, it

has to be recognized that the international economic system is currently a system of

interrelated jurisdictions and activities of numerous international organizations.

Consequently, not only co-ordination of the work of international organizations,72 but

also co-operation, is necessary. Once international organizations co-operate, they are

capable of identifying issues of common interest. This is the first step towards securing

the effectiveness of the work of each organization involved in the process of

globalization.

A final question remains: Does international law provide for clear and explicit

criteria that determine the process of co-operation? Following the proposed approach

that the duty to co-operate in inter-agency relations essentially derives from the

necessity of balancing interests in areas of overlapping jurisdiction, the answer seems to

be no. Whether a given duty to co-operate has been fulfilled can only be decided on a

case-by-case basis. However, the Panel and the Appellate Body in the Article 21(5)

DSU proccedings in the Shrimp case have demonstrated the legal way in which such a

case-by-case approach has to be conducted.73 Moreover, in general terms the

underlying legal obligation governing the duty to co-operate can be described in

analogy to a pactum de negotiando.74 The substantial obligation arising out of this

principle of law has been clearly articulated by the ICJ in the North Sea Continental Shelf

case. The Court held that:

the parties are under an obligation to enter into negotiations with the view of arriving at anagreement, and not merely to go through a formal process of negotiation as a sort of priorconditions for the automatic application of a certain method of delimination in the absence ofagreement; they are under an obligation so to conduct themselves that the negotiations are

72 For this original approach of the UN Charter, see the comprehensive analysis by Jenks, as note 53 above,pp. 149301.

73 United StatesImport Prohibition of Certain Shrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia ,Report of the Panel dated 15 June 2001, WT/DS58/RW, paras 5.43 et seq.; United StatesImport Prohibition ofCertain Shrimp and Shrimp Products, Recourse to Article 21.5 by Malaysia , Report of the Appellate Body dated22 October 2001, WT/DS58/AB/RW, paras 115 et seq.

74 For details, see Ulrich Beyerlin, Pactum de Contrahendo, Pactum de negotiando, in RudolfBernhardt (ed.), EPIL, Vol. III (Amsterdam: Elsevier, 1997), pp. 854 et seq.


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meaningful, which will not be the case when either of them insists upon its own positionwithout contemplating any modifications of it 75

An even more precise description of the nature of apactum de negotiando was given

by the German External Debts Arbitration Tribunal in a decision of 26 January 1972.

The Tribunal ruled as follows:

However, a pactum de negotiando is also not without legal consequences. It means that bothsides would make an effort, in good faith, to bring about a mutually satisfactory solution by wayof a compromise, even if that meant the relinquishment of strongly held positions earlier taken. An undertaking to negotiate involves an understanding to deal with the other side with aview to coming to terms To be meaningful, negotiations have to be entered into with a view

to arriving at an agreement. Though an agreement to negotiate does not necessarily implyan obligation to reach an agreement, it does imply that serious efforts towards that end will bemade.76

The main obligation arising out of a pactum de negotiando is thus to make

substantially good faith efforts on the subject concerned. This is more than an

obligation to simply negotiate, but rather it is a far-reaching obligation for international

co-operation with the aim of achieving a mutually satisfactory solution. In order to

fulfil the duty to co-operate in inter-agency relations, the respected organizations and

their organs are thus obliged to conduct legal meaningful, good faith efforts to solve

the described problems of overlapping jurisdictions.

V. CONCLUSION

Inter-agency co-operation in international economic law is a central element of

global economic governance. Co-operation of international organizations with

responsibilities in economic and related areas is more than a political call for coherence

in global economic governance. It is essentially a legal obligation arising out of the

phenomenon of overlapping jurisdiction and the duty of any international organization

to effectively pursue its assigned tasks. Global economic governance is thus not only an

issue for states and non-state actors. International organizations play a major part in this

process of governance. Therefore, calls for a more effective international inter-agency

co-operation, as made, for example, by the EC and international scholars,77 are well

founded from the perspective of public international law and international economic

law.

75 ICJ Reports, 1969, 3, p. 47.76 ILR, Vol. 47, 1974, 418, at 453 et seq.; see also Beyerlin, as note 74 above, p. 857.77 WTO Doc. WT/GC/W/391, 12 November 1999; Abbott, as note 5 above; Bronckers, as note 5 above.

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