Journal of International Economic Law (2001) 275296

Oxford University Press

- :

Kenneth W. Abbott*

During the 1990s, the OECD and numerous other international organizations adopted conventions and other instruments designed to control bribery
and corruption in international business. The WTO, however, took no such
action, and a related initiative on transparency in government procurement
has not yet produced any results. This article examines what one can learn
about rule-making in the WTO from its failure to act in this case. Much of
the explanation for the inaction lay outside the organization, in the political
incentives facing major actors. Yet structural characteristics of the WTO, its
approach to legalization, and its negotiating processes also played signicant
roles. These factors should be addressed if the organization is to deal effectively with the controversial issues now on its agenda.

Bribery and corruption became international issues in the mid-1970s, as a

result of the scandals involving payoffs to foreign government ofcials by
Lockheed and other US companies. In response to those scandals, Congress
enacted the Foreign Corrupt Practices Act (FCPA) in 1977, making it a criminal offense to bribe foreign government ofcials in order to obtain business,
* Elizabeth Froehling Horner Professor of Law and Commerce, Northwestern University School of
Law, 357 East Chicago Ave, Chicago, IL 60611, USA. Email: k-abbott@northwestern.edu
This article grows out of a larger research project on the politics of international legal action to
combat bribery and corruption, focusing especially on the 1997 OECD Convention, that I am conducting jointly with Professor Duncan Snidal of the University of Chicago. Professor Snidal participated in the interviews and much of the other research that underlies this article and has been instrumental in shaping the ideas and arguments set out here. Whatever value the article may have is due
in large part to his contributions. Errors or other deciencies are my responsibility alone.
A version of this article was presented at the Conference on the Political Economy of International
Trade Law held in honor of Professor Robert Hudec on the occasion of his retirement from the
University of Minnesota Law School, 1516 September 2000. A revised version of that presentation,
co-authored with Duncan Snidal, will appear in an edited volume tentatively entitled The Political
Economy of International Trade Law: Essays in Honor of Robert E. Hudec, Daniel L. M. Kennedy and
James D. Southwick (eds), forthcoming 2001. Thanks to Amy Porges, Gregory Shaffer, and other
participants in that conference for valuable comments, and to Professor Hudec for his kind permission to publish this version of my conference paper.

Electronic copy available at: http://ssrn.com/abstract=1402964

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Kenneth W. Abbott

and imposing related accounting requirements on many US rms.1 US business and government ofcials, fearing the enactment would create a competitive disadvantage in markets affected by corruption, immediately began to
press for parallel legislation abroad, both bilaterally and in international
forums including the UN and the OECD. For more than a decade and a half,
however, they achieved little success.
The situation changed markedly in 1993. Over the next ve years, the
world witnessed a remarkable owering of international rule-making aimed
at bribery and corruption, especially in the context of transnational economic
activity.2
The OECD, whose member countries are home to a large proportion
of the worlds exporters and foreign investors, took the most important
actions. Under pressure from the US, the OECD Council issued three
major recommendations aimed at transnational bribery in 1994, 1996,
and 1997.3 Then, in December 1997, the members of the OECD (as
well as ve non-member countries) signed a legally binding Convention
requiring the governments of ratifying states to introduce and support
domestic legislation making foreign bribery in pursuit of business a
crime, and to provide international legal assistance to prosecutions.
The Convention has since entered into force.4
The European Union adopted treaties prohibiting bribery of EU ofcials and government ofcials of other Member States, rst in situations

Pub L. No 95213, 91 Stat. 1494, codied as amended in scattered sections of 15 U.S.C. 78. For
a summary of the background, provisions and application of the Act, see C. F. Corr and J. Lawler,
Damned If You Do, Damned If You Dont? The OECD Convention and the Globalization of
Anti-Bribery Measures, 32 Vand J Transnatl L 1249 (1999), at 125595. The Act has been criticized both by business representatives and by scholars. See, e.g., S. R. Salbu, Bribery in the Global
Market: A Critical Analysis of the Foreign Corrupt Practices Act, 54 Wash & Lee L Rev 229 (1997).

The US Department of Commerce maintains on its website an extensive summary of actions against
bribery and corruption taken by agencies of the US government and by international organizations.
See Ofce of the Chief Counsel for International Commerce, The Anti-Corruption Review,
www.ita.doc.gov/legal/master.html (hereinafter Anti-Corruption Review), visited 3 February 2001.

The most recent recommendation supersedes the 1994 instrument. It provides the framework for
implementing the actions of the OECD on transnational bribery and corruption and for further
negotiations in this eld. It also urges the prompt implementation of the 1996 recommendation,
which addresses tax deductions for foreign bribes. See Revised Recommendation of the Council on
Combating Bribery in International Business Transactions, OECD/C(97)123/FINAL (23 May
1997)), 36 ILM 1016 (1997).

Convention on Combating Bribery of Foreign Public Ofcials in International Business Transactions

(hereinafter OECD Convention), OECD/DAFFE/IME/BR(97)16/FINAL (18 December 1997), 37
ILM 1. The OECD Convention entered into force on 15 February 1999, after ve of the ten member
nations with the largest export shares had deposited their instruments of ratication. The Convention
has been signed by all 29 member states of the OECD and by ve non-members: Argentina, Brazil,
Bulgaria, Chile and the Slovak Republic. As of January 2001, 29 of the 34 signatories had ratied
the OECD Convention. See Anti-Corruption Review, above n 2, at Section IV:OECD. For an
analysis of the provisions and implementation of the Convention, see Corr and Lawler, above n 1,
at 12951323.

Electronic copy available at: http://ssrn.com/abstract=1402964

Rule-making in the WTO

277

where the nancial interests of the EU are at stake5 and later in additional contexts.6
The OAS adopted a far-reaching convention that even addresses
domestic corruption and private-to-private bribery.7
The Council of Europe adopted a similarly broad treaty primarily
aimed at creating a common body of anti-corruption law for Eastern
Europe.8
9
10
The IMF, World Bank and other international nancial institutions
adopted policies and programs designed to combat corruption, both in
their own programs and within borrower nations.

The General Assembly adopted a series of resolutions supporting the

ght against transnational corruption.11

Convention on the Protection of the European Communities Financial Interests, adopted by the
Council on 26 July 1995, OJ No C916, 27 November 1995, and the First Protocol to the Convention, adopted by the Council on 27 September 1996, OJ No C313, 23 October 1996, which would
make active or passive corruption involving either an EU ofcial or an ofcial of a member state a
criminal offense in every member state if the corruption would affect the nancial interests of the
EU. Neither the Convention nor the Protocol has been ratied by a sufcient number of member
states to enter into force. See Anti-Corruption Review, above n 2, at Section III: European Union.

Convention on the Fight Against Corruption Involving Ofcials of the European Communities or
Ofcials of the Member States of the European Union, adopted by the Council on 26 May 1997,
OJ No C195, 25 June 1997. This treaty has also not yet received sufcient ratications to enter into
force. However, the OECD Convention applies to many of the situations covered by this agreement,
and the EU has formally supported adherence to the OECD instrument.

Inter-American Convention Against Corruption, OEA/Ser.K/XXXIV.1, CICOR/doc.14/96 rev. 2

(29 March 1996), 35 ILM 724. The OAS Convention entered into force 6 March 1997. As of
February 2001, the Convention has been signed by 26 and ratied by 20 of the 35 members of the
OAS.

Council of Europe Criminal Law Convention, opened for signature 27 January 1999. Among other
things, the Convention calls on parties to criminalize the paying of bribes to domestic, foreign and
international ofcials as well as to private parties in commercial transactions. As of February 2001,
only eight countries had ratied the Convention. See http://conventions.coe.int/treaty/EN/cadreprincipal.htm, visited 3 February 2001.

In 1997 the IMF Executive Board adopted guidelines outlining an increased role for the organization
in addressing governance problems in borrower countries including policies and administrative
systems that encourage corruption and rent seeking when those problems threaten macroeconomic
stability and growth. See IMF News Brief No 97/15, 4 August 1997, http://www.imf.org/external/
np/sec/nb/1997/nb9715.htm, visited 3 February 2001.

10

In 1997, the Bank adopted a comprehensive policy for addressing corruption as an international
development issue. The policy calls for policing fraud and corruption in Bank-nanced projects,
providing assistance in combating corruption to borrower governments that request it, and taking
corruption into account in other Bank programs. See World Bank, Helping Countries Combat
Corruption, The Role of the World Bank (1997), www1.worldbank.org/publicsector/anticorrupt,
visited 25 October 2000; Anti-Corruption Review, above n 2, at Section VI: World Bank.

11

United Nations Declaration Against Corruption and Bribery in International Commercial Transactions, G.A. Res. 51/191, UN GAOR, 51st Sess, Agenda Item 12, Annex, UN Doc A/RES/51/191
(1996); International Cooperation Against Corruption and Bribery in International Commercial
Transactions, G.A. Res. 52/87, UN GAOR, 52d Sess, 70th Meeting, Agenda Item 103, UN
Doc A/RES/52/87 (1997); Action Against Corruption and Bribery in International Commercial

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Kenneth W. Abbott

Biennial International Anti-Corruption Conferences began to draw

large numbers of interested persons from international organizations,
national governments, and civil society groups, led by the nongovernmental organization Transparency International (TI).12
The rapid and widespread adoption of anti-bribery and anti-corruption principles by this diverse set of institutions can aptly be described as a norm
cascade.13
Yet one international organization is conspicuously absent from the list.
The WTO has taken no action explicitly aimed at bribery and corruption,
even though the organization came into being, set its early institutional
agenda and began planning what was expected to be a major round of multilateral trade negotiations at the height of the anti-corruption movement.14
The only initiative that has come close is the Working Group on Transparency in Government Procurement (TGP) set up after the 1996 Singapore
Ministerial.15 But while transparency rules would undoubtedly have a positive
impact on corruption in this important sector, the TGP Working Group has
almost completely avoided frank discussions of bribery and corruption, and
it failed to produce any concrete results by the time of the Seattle Ministerial
in November 1999. Since that debacle, discussions of TGP like many other
ongoing negotiations in the WTO have been in limbo.
Most scholarship on international trade law examines GATT or WTO
Transactions, G.A. Res. 53/176, UN GAOR, 53d Sess, 91st Meeting, Agenda Item 92, UN Doc A/
RES/53/176 (1998).
12

For information on recent conferences, see www.transparency.org/iacc/index.html, visited 25

October 2000.

13

The term norm cascade refers to a process of broad and rapid international acceptance of new
norms. For an analysis of the phenomenon from the perspective of political science, see M. Finnemore and K. Sikkink, International Norm Dynamics and Political Change, 52 Intl Org 887917
(1998).

14

The WTO website notes that the trade law system encourages good government, by restricting
quotas and other measures that provide opportunities for corruption and by requiring transparency.
See WTO Secretariat, 10 Benets of the WTO Trading System, http://www.wto.org/english/
thewto e/whatis e/10ben e/10b10 e.htm, visited 25 October 2000. A recent study by the OECD
Trade Committee conrms that many WTO principles and rules may have benecial incidental
impacts on corruption. Potential Anti-Corruption Effects of WTO Disciplines, TD/TC(2000)3/
REV3, 28 June 2000. Yet this study also notes that no WTO agreement specically addresses bribery
or corruption, and that most WTO rules were drafted without specic consideration of these issues,
making it difcult to apply them by interpretation. Given both these facts, the study concludes
that it would be extremely difcult to bring a legal proceeding in the WTO based on bribery or
corruption.

15

At the Singapore meeting, WTO trade ministers agreed to establish a working group to study transparency in government procurement, taking into account national policies, and on the basis of
this study to develop elements for inclusion in an appropriate agreement. Singapore Ministerial
Declaration, WT/MIN(96)/DEC, 18 December 1996, para 21. The Working Group on Transparency in Government Procurement began meeting in May 1997. It has submitted three annual reports
to the WTO General Council: WT/WGTGP/1, 19 November 1997; WT/WGTGP/2, 17 November
1998; and WT/WGTGP/3, 12 October 1999. All three reports are available at http://www.wto.org/
english/tratop e/gproc e/gptran e.htm, visited 25 October 2000.

Rule-making in the WTO

279

agreements, dispute settlement panel or Appellate Body decisions, or other

manifestations of political and institutional success in addressing particular
issues.16 That approach is reasonable enough, but it risks a form of selection
bias: looking only at instances of successful action may produce a skewed
picture of the system. This article, in contrast, asks what insights into the
WTO as a legal and political institution and especially into its rule-making
processes can be extracted from the organizations failure to act on bribery
and corruption at a time when most other international institutions were
jumping (with varying degrees of enthusiasm and effectiveness) on the anticorruption bandwagon. My concern here is not whether the WTO should
address these issues,17 but rather why it has not done so.
To focus the inquiry, I will draw specic comparisons between the political
and institutional processes at work in the consideration of corruption and
TGP at the WTO and those that produced the OECD Convention. This
analysis is based largely on over 30 interviews that Professor Duncan Snidal
of the University of Chicago and I conducted in 19992000 with a range of
participants in both processes, as part of a larger research project on the
dynamics of international legalization.18 (A list of relevant interviews is
attached to this article as Annex I. I have refrained from citing particular
individuals in support of specic statements because many of the persons
interviewed requested this degree of condentiality.)
I will also briey compare the quite different political processes that produced the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS. The politics of this rule-making exercise have been
analyzed by Susan Sell.19 The comparison with TRIPS is especially relevant
because intellectual property, like bribery and corruption, falls outside the
traditional subject matter of international trade law, providing ammunition
for opponents of action by trade institutions. The very different treatment of
16

By using the term success I do not mean to imply that every GATT/WTO agreement or decision
necessarily embodies wise or benecial policies, or that every such action is effective in modifying
undesirable behavior by states or private actors. I merely mean that such actions are the result of
political and institutional strategies and processes that have successfully overcome the many impediments to collective action at the international level.

17

A number of scholarly articles address the normative question whether any legal action against
bribery and corruption, and specically action by the WTO, is appropriate. See, e.g., S. R. Salbu,
Extraterritorial Restriction of Bribery: A Premature Evocation of the Normative Global Village, 24
Yale J Intl L 22356 (1999); P. M. Nichols, Regulating Transnational Bribery in Times of Globalization and Fragmentation, ibid at 257; P. M. Nichols, Outlawing Transnational Bribery Through
the World Trade Organization, 28 Law & Poly Intl Bus 30581 (1997).

18

For an early version of our analysis of the OECD process, see K. W. Abbott and D. Snidal, Values
and Interests in the Legalization of the OECD Anti-Bribery Convention (paper presented at the
Program on International Politics, Economics and Security, University of Chicago, February 2000,
on le with the authors).

19

See S. K. Sell, Multinational Corporations as Agents of Change: The Globalization of Intellectual

Property Rights in A. C. Cutler, V. Hauer and A. Porter, eds., Private Authority and International
Affairs (Albany: State University of New York Press 1999) 169197.

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Kenneth W. Abbott

the two sets of issues in GATT and the WTO suggests that the character
of the issue under consideration is far from determinative of the results of
trade-related rule-making. I will conclude with some broader thoughts about
the WTO as a legal institution based on the limited but suggestive evidence
of the corruption case.
I.

A. The OECD process

The US initiated serious negotiations on bribery and corruption in the OECD
soon after the Clinton Administration took ofce in 1993. Congress had mandated renewed resort to the OECD in 1988, but efforts there had faltered in
the face of European resistance. With a new administration in place, US business renewed its demands for forceful negotiations with its major competitors
in the OECD. At the same time, the founders of TI (which was just being
organized) argued the importance of multilateral anti-corruption rules for
global development, the spread of democracy, and political stability. This
appealing combination of material interests and broader, even altruistic
values manifested in support from both business rms and civil society
groups led the US Department of State to adopt the issue as a high priority.
When the State Department rst raised the issue at the OECD in Paris it
received a hostile reaction from European governments, largely reecting the
views of European business. Over the next year, ofcials at the State Department developed a complex strategy to overcome this resistance. Because of
the political difculties, these ofcials adopted a gradualist approach to negotiations in the OECD. While a legally binding treaty was their ultimate objective, they accepted the need to begin with some form of soft law such as
an OECD recommendation and work up to a harder legal instrument over
time.20 The Department hoped that a combination of ongoing dialogue, political pressure, and technical work inside the organization might slowly overcome European resistance.
High-level ofcials from several US government departments notably
Secretaries of State Christopher and Albright, Commerce Secretary Brown,
and Treasury Secretary Rubin maintained diplomatic pressure on governments in Europe and Japan through private conversations and public remarks
in numerous forums. This multifaceted diplomatic offensive was possible
because of the unusual unity of the US government on the corruption issue;
the interested departments coordinated their efforts through an inter-agency
committee chaired by the State Department (and including the United States
Trade Representative, hereinafter USTR). As corruption scandals broke
across Europe, representatives of the State Department skilfully utilized the
20

For a recent discussion of soft and hard legalization as political strategies, see K. W. Abbott and D.
Snidal, Hard and Soft Law in International Governance, 54 Intl Org 421 (2000).

Rule-making in the WTO

281

press and other avenues of public diplomacy there, fomenting domestic political pressures in European countries around the moral aspects of corruption.
These outside political strategies allowed discussions inside the OECD
(centered in a Working Group on Bribery and Corruption made up of
national government experts) to focus on the technical legal aspects of issues
like criminalization, tax policy, and legal assistance: delegates were clearly
aware of the moral appeal of the issue and the political dangers this posed.
In 1994, just as the WTO was being formed, the US realized the rst,
limited fruits of its strategy: an OECD Recommendation calling on member
governments to take effective measures against transnational bribery.21
Though vague and not legally binding, this document gave the issue new
status within the organization and raised the institutional standing of the
Working Group. Together, the Secretariat and the chair of the Working
Group organized a symposium on corruption, where they formed an informal
network of public and private organizations (not including the WTO) to reinforce the soft law process. In 1996, the year of the rst WTO Ministerial in
Singapore, the OECD approved a second Recommendation calling on
Member States to deny tax deductions for foreign bribes.22
By 1997, governments in Europe and Japan were demanding that any further OECD action be in the form of a treaty, so that exporters in all member
countries would be subjected to the same level of legal restrictions at the same
time. The US, however, feared that this demand was merely a delaying tactic.
In May 1997, the two sides reached a compromise, contained in a third, more
elaborate Recommendation: they would attempt to negotiate a treaty by the
end of the year; but even if these discussions failed they would attempt to
implement domestic bans on foreign bribery during 1998 pursuant to the
terms of the Recommendation.23 Technical discussions in the Working Group
had already produced agreement on key legal elements that should be
included in national criminal legislation, whether adopted pursuant to a treaty
or a recommendation; these were annexed to the May 1997 Recommendation. With this template in hand, there was little to impede negotiations at
the political level, and the OECD Convention was completed and signed
within little more than six months, in December 1997.
B. Moving forces: the demand for action in the WTO and OECD
The complexities of organizing the WTO and the heavy early workload of
the organization would have complicated any effort to address bribery and
21

Recommendation of the Council on Bribery in International Business Transactions, 27 May 1994,

OECD Doc No C(94)75/Final, 33 ILM 1389 (1994).

22

Recommendation of the Council on the Tax Deductibility of Bribes to Foreign Public Ofcials, 11
April 1996, OECD Doc No C(96)271/Final, 35 ILM 1311 (1996).

23

See Revised Recommendation of the Council on Combating Bribery in International Business

Transactions, above n 3, at Section III.

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Kenneth W. Abbott

corruption during the 1990s. There was, however, a signicant window of

opportunity lasting several years after the formation of the WTO. Bribery and
corruption had high political salience around the world throughout that
period, due to a string of highly publicized scandals and the efforts of US
business and TI. OECD action was by no means assured until the end of
1997, and was in any case limited to transnational bribery. Action in other
fora was not yet far advanced. Why were bribery and corruption not given a
more prominent place on the WTO agenda?
One signicant problem was political rather than institutional: the lack of
a true demandeur, an inuential private or public actor (or group of actors)
willing to initiate and wage a sustained campaign for new international rules.
Some of the actors involved in the debate over bribery and corruption preferred action in a different forum; others preferred no action at all. But action
in the WTO was not a high priority for any of them. In marked contrast,
powerful and aggressive demandeurs backed both the OECD Convention
and TRIPS. Indeed, a major lesson of these three cases is that the success
or failure of international rule-making depends crucially on the power and
commitment of the public and private actors supporting the proposed action,
whatever its substantive merits. This is consistent with a modied realist view
of international cooperation: realist in its emphasis on the power of the relevant actors, modied in its recognition that private individuals, rms and
organizations, rather than states, may be the most inuential actors, and that
some of those actors may be motivated by normative values rather than selfinterest.24
In the OECD case, US business rms and associations and government
agencies representing their interests pressed relentlessly for international
controls to level the playing eld, from the enactment of the FCPA in 1977
until the entry into force of the OECD Convention in 1998. These actors
received support (though generally for different reasons) from civil society
organizations like TI; the voice of civil society proved especially valuable in
European domestic politics. In the TRIPS case,25 high-level business leaders
from the US, Europe, and Japan created a transnational alliance that was able
rst to frame the protection of intellectual property rights as a trade issue,
then to persuade the Quad governments jointly to demand action on the issue
in the WTO rather than the World Intellectual Property Organization. During
WTO negotiations, this private alliance provided government negotiators
with valuable information and expertise on the highly technical subject
matter, even drafting a joint proposal that the nal intergovernmental agreement tracked closely. Although many developing countries resisted the
24

For an application of state-centric realist approaches to rule-making in the WTO and other economic
organizations, see R. H. Steinberg, Trade-Environment Negotiations in the EU, NAFTA, and
WTO: Regional Trajectories of Rule Development, 91 Am J Intl L 231 (1997).

25

See Sell, above n 19.

Rule-making in the WTO

283

TRIPS initiative, the Quad governments prevailed through a combination of

promises and threats.
A variety of political incentives prevented the emergence of equivalent support for WTO rules on bribery and corruption. Consider rst what is known
as the supply side of the corruption issue, active bribery. USTR ofcials
recognized the trade implications of transnational bribery and spoke in favor
of WTO action during the run-up to Singapore.26 They did not, however,
pursue the kinds of sustained political strategies that brought Europe and
Japan to the table in the OECD. In this they were largely mirroring the priorities of the private sector. US business had dened its goal on bribery and
corruption as multilateralizing the FCPA among its leading competitors in
Europe and Japan. It therefore focused its energies on the OECD, and the
US government followed suit. Bureaucratic considerations were also relevant.
The State Department chairs the US delegation to OECD, while the USTR
controls WTO affairs. Not surprisingly the two agencies engaged in some
conict over turf. The State Department also found the blustery public style
of the USTR whatever its value in trade negotiations less than helpful to
the gradualist strategy being pursued in the OECD. Since State was already
deeply engaged in the OECD negotiations (and since these reected business
priorities), it prevailed in this bureaucratic conict. Once the OECD Convention was signed, exporters outside the organization did not pose a sufcient
threat to justify further costly political activity.
Business organizations and governments in other OECD countries did not
press for WTO action on transnational bribery either. That they failed to do
so before the OECD Convention was signed is not surprising: at that point
European business organizations and governments were resisting any international action outside the EU. That they still failed to support action after the
Convention was signed is more surprising; after all, at that point OECD
export interests were in the same position vis-a`-vis the rest of the world as
the US had been originally vis-a`-vis Europe and Japan. The explanation,
though, is probably the same as for the US: extending the rules of the
Convention to smaller non-OECD competitors was not a sufciently high
priority.
Finally, exporters and governments outside the OECD provided no support at all for WTO action, even though they might well have beneted from
rules that would credibly protect them from paying costly bribes. Before the
OECD Convention, this can be attributed in large part to the severe collective
action problems facing rms, business organizations, and even governments
in diverse, far-ung nations. Once the Convention came into force, of course,

26

See, e.g., J. Zaracostas, Trade Superpowers Debate Top Issues for WTO Summit, J Comm (14
December 1995), at 3A (quoting deputy US Trade Representative Jeff Lang); US Pushes WTO on
Bribery, Labor Standards Issues, J Comm (19 March 1996) (quoting Andrew Stoler, deputy of US
mission to WTO).

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Kenneth W. Abbott

it created strong additional incentives for free-riding by non-participating

states.
Consider next the demand side of the issue, solicitation of bribes and
other forms of corruption. Politically, these issues are analogous to intellectual
property rights: Northern business rms and governments are the natural
demandeurs, while the burden of making costly changes tends to fall mainly
on the South and on transitional economies. Yet unlike the TRIPS negotiations, where business leaders from the Quad countries joined together in a
powerful alliance to demand WTO rules, none of the relevant actors devoted
serious resources to obtaining action on demand-side corruption in the WTO.
Transnational business groups like the OECD Business and Industry
Advisory Committee and the International Chamber of Commerce did
attempt throughout the OECD process to persuade negotiators there to consider the issue of solicitation or extortion27 of bribes.28 But this unity did not
carry over to the WTO. US business remained focused on multilateralizing
rules against transnational bribery; it demonstrated relatively little interest in
rules on corruption or solicitation. European business expressed somewhat
greater concern, but it too devoted most of its attention to the OECD negotiations. These remained intense until late in 1997, whereas in the WTO it had
become clear by 1996 that discussions would be limited to TGP. European
efforts to place solicitation and corruption on the OECD agenda might also
have been, at least in part, a bargaining tactic designed to complicate and
slow negotiations on transnational bribery. Whatever the case, the signing of
the OECD Convention relieved much of the pressure for action on the
demand side by providing OECD-based rms with a credible defense against
solicitation.
On the other side of the coin, it might seem that Southern and transitional
governments would have every incentive to support measures designed to
constrain domestic corruption, independent of external pressures. While
national governments can in principle adopt anti-corruption measures unilaterally,29 honest or reformist governments facing opposition from corrupt
ofcials or rms might welcome international rules and the support of
27

This characterization appears in the title of International Chamber of Commerce, Rules of Conduct
to Combat Extortion and Bribery in International Business Transactions (1996). See http://
www.iccwbo.org/home/statements rules/rules/1999/briberydoc99.asp (visited 2 February 2001).
The original version of these rules was adopted in 1977. See Extortion and Bribery in Business
Transactions, Report Adopted by the 131st Session of the Council of the International Chamber of
Commerce, 29 November 1977, 17 ILM 417 (1978).

28

See, e.g., OECD Business and Industry Advisory Committee, Assistance Against Solicitation of
Bribes: A Possible Answer to the Problem of Extortion in International Business Transactions
(1998).

29

Measures to combat transnational bribery, in contrast, must typically be adopted by governments in

a coordinated fashion, since unilateral measures would create competitive disadvantages for
exporting rms and thus generate strong political resistance. The US did adopt the FCPA unilaterally, but no other government followed suit until coordinated action was possible through the OECD.

Rule-making in the WTO

285

international institutions to reinforce domestic initiatives, divert resentment

to international bodies, and bind their successors in ofce. It is at least in
part this calculus that led reformist Latin American governments to support
corruption negotiations in the OAS and to some extent even in the WTO.30
Different incentives prevail, of course, where policy-making ofcials are
corrupt. For example, one of the leading voices against WTO action on corruption at the time of the Singapore Ministerial was President Suharto of
Indonesia.31 Yet as this is written, Suharto himself and members of his family
are embroiled in criminal proceedings on charges of massive corruption.
Even absent high-level corruption, however, developing countries may have
signicant incentives to resist international involvement.32 The fundamental
problem is what Snidal and I have called sovereignty costs: governments
systematically resist international actions that limit their autonomy unless the
perceived benets clearly outweigh the costs.33 Seeing threats to autonomy as
costs points up that their magnitude (and their relation to potential benets)
can vary signicantly depending on the nature of the issue, the characteristics
of particular states, and the political setting. International action on corruption threatens sovereignty costs that are signicant, if uncertain, because it
would further the extension of international rules and institutions behind the
border into the internal operations of national governments. Governments
that are politically unstable or insecure, as in many developing countries,
would view these costs as especially high. When more threatening behind-theborder measures like international labor standards are under active consideration, moreover as they have been in the WTO since 1996 the perceived
sovereignty costs of action on corruption are increased even further, since
such action would set an inuential precedent.34
C. Initiation of the WTO process
Although the political incentives constraining the demand for action were
undoubtedly important, the institutional character of the WTO has also
played a signicant role in the organizations failure to act on bribery and
corruption. The nature of the WTO rule-making process inuenced decisions
as early as the Singapore Ministerial in 1996, when WTO members decided

30

The most direct attempt to focus discussions in the TGP Working Group on issues of corruption
was a non-paper submitted by Venezuela in February 1999. For a description of this document see
WT/WGTGP/3, above n 15, at para 3.

31

See C. Hwa Loon, WTO Should Focus on Concrete Trade Issues, Says Suharto, The Straits Times
(13 September 1996) 1.

32

Even governments like Hong Kong, China that have successfully controlled corruption at home have
resisted discussion of the issue at the WTO.

33

See Abbott and Snidal, Hard and Soft Law, above n 20, at 43641.

34

For a reection of this position in the opinion of an inuential Southeast Asian journal, see Comment, Dont Distract WTO from Its Job, The Straits Times (27 April 1996) 34.

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Kenneth W. Abbott

to create a Working Group on TGP rather than initiating a more sweeping

discussion of bribery and corruption.
US trade ofcials clearly recognized that bribery and corruption can block
and distort international economic transactions. As the Singapore meeting
approached, however, USTR made the determination to focus its efforts on
issues that promised more immediate economic payoffs, relegating bribery
and corruption to a subsidiary position. That decision reected the longstanding structure of international trade negotiations. In trade, a USTR ofcial
told us, you get what you pay for, and only what you pay for. Whatever
the economic and political benets of an agreement to control bribery and
corruption, in other words, discussion of those issues at the WTO could proceed only on the basis of reciprocal concessions, not mutual interests.35 And
no one in USTR or its business constituencies was willing to trade off concrete, near-term market access for specic goods and services in exchange for
the uncertain future benets of rules on transnational bribery and corruption.
During the run-up to Singapore, then, the US approached the EU (and
subsequently the other Quad governments) with a proposal to initiate negotiations on TGP. One interpretation of this initiative views it as a device to
smuggle anti-corruption measures into the WTO even though TGP is a
relatively poor vehicle for such a strategy, since it encompasses only the
demand side of the issue and then only partially and in a single class of transactions. By framing the issue as one of transparency in procurement, this
interpretation runs, the US could cast it as a trade issue thus avoiding the
argument that corruption was outside the scope of the WTOs mandate
and even link it to an existing trade measure, the plurilateral Agreement on
Government Procurement (GPA).36 The better view, however, seems to be
that TGP was primarily a market access initiative, with constraints on corruption as benecial but largely incidental by-products.37
That was undoubtedly the position of the EU, whose member governments
remained ambivalent about multilateral action on bribery and corruption. In
response to the US proposals on TGP, the Europeans argued that WTO
negotiations would only be meaningful if they promised increased concrete
opportunities to participate in foreign procurement projects by broadening

35

The USTR may have reinforced this tradition by its public statements casting corruption as a nontariff barrier to trade, rather than as an issue of mutual interest. See statements cited above n 26.

36

Uruguay Round Trade Agreements, Texts of Agreements, Implementing Bill, Statement of Administrative Action, and Required Supporting Statements: Message from the President of the United
States, House Doc 103316, vol 1, 103d Cong, 2d Sess (Washington: US Government Printing
Ofce 1994), 1735. For a thorough introduction to the GPA, see B. M. Hoekman and P. C. Mavroidis (eds), Law and Policy in Public Purchasing (Ann Arbor: University of Michigan Press 1997).

37

For an academic analysis of the TGP process which assumes that the goal of such an agreement,
like that of the GPA, is (and should be) to facilitate market access, see S. Arrowsmith, Towards a
Multilateral Agreement on Transparency in Government Procurement, 47 Intl & Comp. LQ 793
(1998).

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287

the GPA and enlarging its substantive coverage. The US shared these goals,
but saw them as politically unattainable in the near term. The USTR therefore argued that it would be more effective to create a new multilateral agreement covering only transparency in procurement, then try to add market
access commitments over time. The eventual USEU joint proposal followed
this line, focusing almost exclusively on transparency; it dealt with EU concerns in a single sentence suggesting the possibility of future market access
negotiations. Although the US and EU thus succeeded in hammering out a
common position by the time of the Singapore Ministerial, their disagreement
over market access prevented the kind of unity that had proven so signicant
in the TRIPS negotiations.
Developing country reaction to even this modest proposal was negative and
harsh, especially among the nations of South and Southeast Asia.38 To the
extent the proposal was seen as a stalking horse for expansion of the GPA, it
evoked resistance to additional market access commitments so soon after the
end of the Uruguay Round.39 To the extent it was seen as a stalking horse for
broader WTO action on corruption, it evoked sovereignty cost concerns.
These were greatly heightened by the contemporaneous proposals from
advanced industrial countries for WTO consideration of labor standards,
environmental regulation, investment measures, and competition policy all
areas in which international rules would intrude on domestic decisionmaking. In addition, the inherent demand side emphasis of the TGP initiative
appeared to put the onus of corruption exclusively on the South. Developing
country representatives sharply criticized the USEU proposal for failing to
mention either active bribery or other arguably corrupt practices, such as
private contributions to political campaigns, that are common in the North.
The two sides compromised at Singapore by creating a Working Group on
TGP. The mandate of the Group was narrow: to conduct a study on [TGP]
practices, taking into account national policies, and, based on this study, to
develop elements for inclusion in an appropriate agreement. The Ministers
decision made no mention either of market access or of formal negotiations
on TGP.
D. The OECD and WTO processes compared
Although the political settings and mandates of the OECD Working Group
on Bribery and Corruption and the TGP Working Group were similar, their
38

India, like the Southeast Asian nations in ASEAN, has been a consistent opponent of behind-theborder measures in GATT and the WTO. See S. Ostry, The Uruguay Round North-South Grand
Bargain: Implications for Future Negotiations, paper prepared for Conference on the Political Economy of International Trade Law, University of Minnesota, 1516 September 2000, forthcoming in
The Political Economy of International Trade Law, above n *.

39

Indeed, developing countries had already begun to argue that the results of the Uruguay Round
should be rebalanced and problems of implementation dealt with before any new WTO negotiations
were initiated. Ibid.

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Kenneth W. Abbott

procedures stand in illuminating contrast. Four differences in process are particularly signicant.
(1) Although both groups were specialized, expert bodies, the TGP process
was much more highly technical and opaque. While the OECD Group
debated compelling issues like the appropriateness of criminal versus civil
penalties for transnational bribery, the vast majority of the TGP Groups
deliberations concerned mundane procurement matters like publication of
national regulations, open versus limited tendering, drafting of specications
and bidder qualications, time periods, record-keeping, and the like.40 These
are important issues, especially in a negotiation whose sub-text is market
access. But the technical TGP approach stripped out of the discussion most
of the normative values associated with bribery and corruption. It thereby
reduced the interest and ability of the general public and of civil society
groups like TI to understand and participate in the process. In fact, civil
society seemed barely aware of the talks; it would have been difcult for the
US to mount a campaign of public diplomacy on TGP even if it had wanted
to. The technical approach of the TGP Working Group probably discouraged
even some government agencies that were actively involved in the OECD
negotiations for example ministries concerned with justice, international
relations, and development from following its discussions.
The primary reason why the Working Groups discussions excluded normative values is that the Group carefully avoided almost any explicit consideration of bribery and corruption. The Chairs summary of the Groups work
contains only a brief section on the subject, near the end of the document.
This reveals that, although one or more delegations sought at least to link the
study of TGP to the problem of corruption, several others (identied to us
as including India, Pakistan, Malaysia, and Egypt) opposed any such link,
arguing that corruption was simply outside the mandate of the Working
Group and the WTO. In February 1999, Venezuela circulated a non-paper
that summarized the contributions the WTO could make to the ght against
corruption and called for a forthright discussion of the subject.41 But this
proposal was dead on arrival even Venezuela did not press the Working
Group to debate its proposals.
(2) The leadership of the TGP Working Group and the Secretariat ofcials
who supported it were much less ambitious than their counterparts in the
OECD. The Chair of the OECD Working Group utilized subtle forms of
leadership that moved the anti-corruption agenda forward without ever losing
the support of the governments resisting action. In addition to guiding the
groups negotiations toward eventual consensus, the Chair opened its discussions (if only a crack) to well-chosen outside inuences. He brought in prosecutors to describe their difculties in prosecuting corruption cases. He
40

See List of the Issues Raised and Points Made, Informal Note by the Chair, Sixth Revision, 12
November 1999, JOB(99)/6782.

41

See above n 30.

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289

arranged for the Group to hear presentations by the World Bank and other
concerned intergovernmental organizations, business organizations, and even
TI. Together with the Secretariat, he organized public symposia and an
informal network of organizations that shared information and reinforced
each others work.
The Chairs of the TGP Working Group and the WTO Secretariat, in contrast, exercised little entrepreneurial leadership, feeling tightly constrained by
national representatives. Their passive role is captured in the title of the document they prepared to summarize discussions in the Group: List of the Issues
Raised and Points Made. The Groups studies limited to materials such as
national procurement laws and international instruments that explicitly
address procurement exposed it almost exclusively to technical procurement
issues. Discussions appear to have consisted largely of the recitation of opposing positions. While the Group granted observer status to the IMF, World
Bank, UNCITRAL, and UNCTAD, they allowed these organizations no
active participatory role. Remarkably, the OECD was not an observer, in spite
of (because of?) its work on corruption; the organization requested observer
status, but the Group had not granted it by the time of Seattle. Business and
civil society groups concerned with corruption were certainly not brought into
the Groups deliberations. The TGP Group and the WTO Secretariat even
avoided participation in the OECDs network and symposia, and participated
only in a limited way in International Anti-Corruption Conferences. The
Chairs and Secretariat ofcials associated with other GATT and WTO negotiations have of course been more aggressive and effective. For whatever
reason, though, effective leadership was not provided or allowed to be provided to the negotiations on TGP.
(3) Discussions in the OECD and WTO were based on very different conceptions of the process of legalization. In the OECD, the US pursued a transformational soft law strategy that over ve years 1993 to 1997 produced
a legally binding Convention. The US undoubtedly adopted a gradualist
strategy in this case because an immediate move to hard law seemed politically infeasible, but the approach was highly congenial to the OECD, which
acts through a variety of soft (recommendations)42 and hard (decisions,43
42

Perhaps the best-known example is the OECD Declaration on International Investment and Multinational Enterprises, which recommends to multinational enterprises operating in or from the territory of member states that they observe the annexed Guidelines for Multinational Enterprises. The
Guidelines were thoroughly revised in 2000. The Declaration is supplemented by legally binding
Decisions setting forth procedures for implementation. The OECD Declaration and Decisions on
International Investment and Multinational Enterprises: Basic Texts, 8 November 2000, OECD
Doc No DAFFE/IME(2000)20. For an example of a Recommendation addressed to governments,
see Revised Recommendation of the Council Concerning Co-Operation Between Member Countries
on Anticompetitive Practices Affecting International Trade, 2728 July 1995, OECD Doc No
C(95)130/Final, 35 ILM 1313 (1995).

43

An important example is the Code of Liberalization of Capital Movements, which has the status of
a legally binding decision. First adopted in 1961, the Code has been expanded several times; since
the 1989 amendment it covers virtually all capital movements, short- and long-term. See OECD,
Code of Liberalization of Capital Movements (Paris: OECD 1997). The text of the Code is also avail-

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Kenneth W. Abbott

conventions44) legal instruments. Combined with a growing consensus on

technical legal issues within the Working Group and the inside-outside political tactics of the US, American business, and TI, the soft law approach
enmeshed the governments of Europe and Japan in a set of commitments
they could not realistically escape. Once the Convention was completed,
moreover, the OECD initiated an implementation process, administered by
the Working Group on Bribery and Corruption, that relied on peer review
and public pressure rather than litigation.45
In the WTO, in contrast, negotiators from the US and other developed
country governments, at least, perceived only two possible outcomes: a hard,
legally binding multilateral agreement (whether on corruption, market access
or TGP) or no action at all. The US, EU and other supporters gave no
consideration to moving through a series of way-stations that were multilateral but legally soft, as in the OECD.46 Nor did they consider an alternative
gradualist strategy: beginning with strong plurilateral obligations, then relying
on market forces or political pressure to expand the group of participants.47
The whole aim of the exercise, from the US and EU perspectives, was to
multilateralize the GPA.48
The focus on hard law was not simply a matter of tactics on this particular
issue. It reected a deep-seated understanding of how the WTO operates and
should operate. The conviction that the WTO is an organization that deals
only in hard law was most clearly revealed in debates over the applicability of
the WTO dispute settlement mechanism to TGP, one of the major issues still
outstanding at the time of Seattle.49 A few developing countries argued with
able on the OECD website at http://www.oecd.org/daf/investment/legal-instruments/clcmart.htm
(visited 7 February 2001). A companion document, the Code of Liberalization of Current Invisible
Operations, has the same legal status.
44

See, e.g., OECD, Model Tax Convention on Income and on Capital (Paris: OECD 2000). The articles
of the Model Convention are also available on the OECD website at http://www.oecd.org/daf/fa/
treaties/articles.pdf (visited 7 February 2001). The proposed OECD Multilateral Agreement on
Investment (MAI) was intended to be a legally binding treaty with effective dispute resolution procedures, open to non-members of the OECD. Negotiations on the MAI were suspended in 1998.
See Ministerial Statement on the Multilateral Agreement on Investment (MAI), 28 April 1998,
http://www.oecd.org/media/release/nw9850a.htm (visited 8 February 2001).

45

See OECD Convention, above n 4, Art 12; 1997 OECD Recommendation, above n 3, Section VIII.

46

The Singapore Ministerial Declaration and discussions in the TGP Working Group were of course
legally soft, but the former did little more than create the Group, and the latter never passed beyond
discussion to the formulation of commitments.

47

For a critique of these alternate strategies, see G. W. Downs, K. W. Danish, and P. N. Barsoom,
The Transformational Model of International Regime Design: Triumph of Hope or Experience?,
38 Colum J Transnatl L 465 (2000).

48

One could say that the TGP negotiations reected a gradualist strategy in terms of substantive scope:
by beginning with commitments limited to transparency, the US and EU hoped to enlarge the scope
of the agreement over time to include commitments on market access.

49

This paper follows K. W. Abbott, R. O. Keohane et al., The Concept of Legalization, 54 Intl Org
401 (2000), in envisioning the hardness or softness of international legal commitments as turning
not solely on the existence of a binding legal commitment, but on three elements legal obligation,

Rule-making in the WTO

291

an eye toward negotiations on labor standards that they should not be asked
to accept binding legal decisions on TGP, which might lead to crossretaliation against product exports, when they had made no substantive
market access commitments under GPA. Representatives of the US and other
developed countries, however, insisted that all WTO agreements, including
TGP, must be legally binding and subject to WTO dispute settlement. They
argued vigorously that individual agreements would be meaningless if they
were not subject to full-edged dispute settlement and that softness on dispute settlement in individual agreements would threaten the entire WTO
legal system.
The US sought to defuse this controversy by assuring opponents that, even
under a hard agreement, it would not initiate dispute settlement proceedings
over anything less than systematic national violations of transparency requirements, but these assurances proved insufcient. The Working Group discussed several compromise solutions. All would subject TGP commitments to
the dispute settlement mechanism but would soften its procedures in some
way: for example, by adding a political pre-screening stage like that found in
certain Tokyo Round codes, by explicitly limiting dispute settlement to general national policies rather than procurement practices in specic projects,
or by specifying a restrictive standard of review like that contained in the
Uruguay Round anti-dumping agreement. By the collapse of negotiations at
Seattle, neither side had accepted any of these solutions.
(4) A nal deep-seated problem held back progress on TGP. The governments of those nations that transparency commitments would most signicantly affect developing and transitional economy countries refused to
agree even to formal negotiations without the promise of some quid pro quo,
either in the context of a new round of negotiations or as part of a Northern
response to the Souths implementation agenda.50 They took this position
even though greater transparency (and broader anti-corruption measures)
should benet their countries both economically and politically. This is the
same thinking that led the US government to narrow its WTO initiative to
TGP in the rst place: USTR believed that it could not obtain a broader
anti-corruption agreement (or a deeper market access agreement) without
offering concessions that were politically unacceptable at home. To some
extent, these positions are simply negotiating tactics. But they also reect the
manner in which GATTWTO negotiations have been conducted over the
past fty years.
precision of commitments, and delegation to third-party institutions each of which can be varied
independently. Under this formulation, a decision to exempt commitments from WTO dispute settlement procedures would constitute a soft law strategy.
50

The US argues that it should not be necessary to offer concessions in exchange for commitments on
transparency so long as these are divorced from explicit commitments on market access. Based on
this position the US pressed at Seattle for a free-standing TGP agreement, or at least a commitment
to negotiate such an agreement by the next Ministerial as an early harvest.

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Kenneth W. Abbott

E. Seattle and beyond

With the Working Group at an impasse and the Seattle Ministerial drawing
near, the US transferred its efforts to a loosely organized group of states
dubbed the Friends of TGP. This group considered four draft legal texts;
one was submitted by the US along with Chile and Hungary, another by the
EU. Political activity in support of these drafts was intense as the Ministerial
approached. Although differences over issues such as domestic review procedures and WTO dispute settlement hampered coordination on a single text,51
the Friends of TGP made considerable progress.
US representatives believe that, had the Ministerial been successful in
launching a new round, they would have obtained a commitment to negotiations on TGP, with a checklist of issues based on the Chairs compilation
and perhaps even an accelerated timetable looking toward an early harvest.
Some governments supported this outcome privately, even while continuing
to oppose action in their public statements. By one account, only India
refused to join the consensus on TGP at Seattle.52
Consistent with the quid pro quo conception of rule-making in international trade, however, much of the support for TGP negotiations was contingent on a satisfactory resolution of the other issues under consideration at
Seattle. Prominent among these for many developing countries was the resolution of concerns about the implementation of the Uruguay Round agreements. Hopes for immediate progress on TGP were therefore dashed with
the collapse of the Seattle Ministerial.53
After Seattle, discussions of TGP stalled completely. The modest aims of
this initiative became embroiled in larger and more intense disputes over
implementation, condence-building, internal transparency, labor rights, and
the like. By all accounts, WTO discussions took on the divisive tone of North
South disputes in the UN, where the rst international negotiations on
bribery and corruption collapsed in the 1970s. Even the Chair of the Working
Groups plan to submit a non-paper summarizing outstanding issues on TGP
as a way to restart discussions was met with resentment and charges that he
was exceeding his mandate. As a result, there remains no international forum
where one can effectively raise the issues of bribery and corruption, or even
the narrow issue of TGP, with the governments of India, Malaysia, Egypt,
and other nations outside the OECD.54
51

The inability of member governments to narrow their differences on numerous issues in advance of
the Ministerial contributed signicantly to the collapse at Seattle. See J. S. Odell, The Seattle
Impasse and Its Implications for the World Trade Organization, paper prepared for Conference on
the Political Economy of International Trade Law, 1516 September 2000, forthcoming in The
Political Economy of International Trade Law, above note *.

52

Ibid., citing World Trade Agenda, December 1999, at p 8.

53

For a detailed analysis of the collapse, see ibid.

54

The nal communique of the 2000 G8 meeting in Okinawa speaks of preparing for negotiations on
a new instrument against corruption within the UN, but few concrete steps appear to have been

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293

What, then, does the failure of the WTO to act on bribery and corruption
or even on TGP to date reveal about the nature of that organization as a
legal and political entity? In this section I suggest several broad implications
growing out of the foregoing analysis. I do not put these forward as denitive
conclusions, for they are based on an extremely narrow empirical base.
Rather, I intend them as speculations designed to stimulate consideration
of institutional issues often neglected in analyses of the international trade
regime.
First, the long history of bartering reciprocal concessions in the GATT
and WTO has rendered the organization less than wholly satisfactory as a
rule-making body. It remains mired in the obsessive quid pro quo thinking
that has always dominated tariff negotiations, even when asked to address
issues like bribery and corruption or TGP on which international rules
could produce signicant mutual benets. The USTR cannot initiate discussions of corruption in the WTO unless it is prepared to offer concrete market
access tradeoffs; Congress and business constituencies monitor USTR closely
to ensure it makes no such offer. Developing countries will not even consider
negotiating on TGP, in spite of its obvious benets, without the promise of
concrete concessions on implementation or market access. Since all issues are
treated in this fashion, little if any action can be taken outside a round only
one country opposed TGP negotiations as such by the end of the Seattle
Ministerial, but no government would even discuss them once the meeting
had collapsed. Because current trade issues increasingly require complex
international rule-making, however, rounds are more difcult to launch.
Second, the success of the WTO legal system has raised the bar for new
international agreements to a height that may in some cases be counterproductive. It is now widely accepted, at least among the most powerful members
of the organization, that no new WTO agreement should be made unless it
is legally binding and subject to the dispute settlement system and the whole
apparatus of compensation and retaliation. As a result, WTO rule-making
procedures offer few if any established soft law pathways, like the series of
increasingly stringent recommendations that led to the OECD Convention,55
and precious few soft law endpoints either.56
taken. See G8 Communique, Okinawa, 23 July 2000, para. 47, text available at http://www.g8kyushu-okinawa.go.jp/e/documents/commu.html, visited 25 October 2000.
55

Some soft law pathways do exist in the WTO member governments can address new issues in
ministerial declarations, for example but they are less well developed than in OECD practice.

56

Some provisions of GATT 1994 notably those dealing with developing countries although technically legally binding, contain hortatory language that softens the obligations considerably. This
represents a form of soft law that could be duplicated in other contexts, though most of the Uruguay
Round agreements were intentionally drafted in more rigid terms. Another possible form of action
that stops short of the multilateral, hard law rule-making characteristic of the WTO is the conclusion
of additional plurilateral agreements under the Marrakesh Agreement Establishing the World Trade
Organization, reprinted in GATT Secretariat, The Results of the Uruguay Round of Multilateral Trade

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Kenneth W. Abbott

The US, at least, appears ready to support this state of affairs to the fullest
except when constituency pressures are irresistible, as they were at the end of
the Uruguay Round when the US demanded and obtained a restrictive standard of review in anti-dumping cases. It is in large part the hard law of the
dispute settlement system or more accurately the assumption that the
system must always be used that leads political actors to try to introduce so
many new issues into WTO. But that system, and the assumption that it must
be used, also lead opponents of these proposals to resist them all the more
strongly or to demand greater concessions. Even desirable agreements
become harder to reach.
Third, the GATTWTO system has achieved results on many issues by
treating them in a technical fashion that allows economic effects to be quantied and tradeoffs calibrated. This approach has for the most part kept the
emotional heat of international trade negotiations below the boil. But many
of the issues on the current trade agenda including corruption, labor rights,
environmental protection, and consumer issues like genetically modied
food have strong normative components that are difcult to keep under
control. If the rule-making process is structured to strip out the normative
aspects, as in the discussions of TGP, public interest and understanding will
be compromised. The WTO will be seen as a technocratic organization out of
touch with public sentiment. If the normative aspects are allowed in, however,
traditional methods of operation will be insufcient, not least because they
envision no role for concerned actors in civil society. If the current backlash
against the effects of globalization and the related criticism of international
institutions persists, this problem will require prompt attention.
Fourth, the WTO has restricted transparency and participation by civil
society more than many other international organizations. Even now,
although considerable strides have been made on issues of external transparency, WTO processes remain largely closed to civil society input. One lesson
of the corruption/TGP case, however, is that even limited participation by
responsible groups in civil society including for this purpose business organizations as well as other NGOs like TI can facilitate the rule-making process,
and presumably other legal and political processes as well, in directions that
increase member state welfare. The OECD Convention, for example, might
not have been achieved without input from TI and responsible transnational
business groups like the International Chamber of Commerce. In the TGP
process, in contrast, the WTO excluded those groups. The problem goes well
beyond corruption. As we were told, the WTO has so alienated many areas
of civil society that groups which should be supporting its market opening
initiatives consumer groups, for instance are unwilling to associate themselves with the organization.
Negotiations, the Legal Texts (Geneva 1994) 6. Article X:9 of the WTO Agreement, though, imposes
some procedural barriers even to this approach.

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295

Finally, the WTO is a member-driven organization, and proud of it. The

US would not have it any other way, and other member governments watch
over the shoulders of the Secretariat, working group chairs and other organization ofcials with equal fervor. To a considerable extent this is as it should
be, and certainly as it is likely to remain. But the deep reluctance to afford
supranational ofcials any independent role57 is in part an artifact of the quid
pro quo mentality. In the TGP case, this approach has hindered progress
toward mutually benecial goals. Ironically, given the growing concern over
the undemocratic nature of supranational organizations, the WTO might now
be in better favor with the worlds publics had the US and its other member
governments afforded a bit more latitude to their supranational agents.

1

Clark, Peter: Deputy Director, Fraud Section, Criminal Division, US Department of Justice, Washington, DC, July 1999.
Eigen, Peter: Chairman, Transparency International, Berlin, Germany, September 1999.
Ellis, John: Ofce of US Trade Representative, Washington, DC, September
2000.
Ervin, Carolyn: Deputy Head of the Private Ofce of the Secretary-General,
OECD, Paris, September 1999.
Hirsch, Mathias: Policy Manager, Standing Committee on Extortion and
Bribery, International Chamber of Commerce, Paris, May 2000.
Kampf, Roger: First Secretary, Permanent Delegation of the European Commission to the International Organizations in Geneva, Geneva, May 2000.
Larson, Alan P.: Under Secretary of State for Economic, Business and Agricultural Affairs, US Department of State, Washington, DC, September
2000.
Lewis, Eleanor Roberts: Chief Counsel for International Commerce, US
Department of Commerce, Washington, DC, July 1999.
Linscott, Mark: Ofce of USTR, Delegation to the WTO, Geneva, May
2000.
Mak, Dick K. Y.: Assistant Representative of the Hong Kong Special Administrative Region of China to the WTO, Geneva, May 2000.
Otten, Adrian: Director, Intellectual Property Division, Secretariat of the
WTO, Geneva, May 2000.
Pieth, Mark: Professor of Criminal Law and Criminology, University of
Basel; Chair, OECD Working Group on Bribery and Corruption, Basel,
September 1999, May 2000.
57

For a discussion of the value of independence in international organizations, see K. W. Abbott and
D. Snidal, Why States Use Formal International Organizations, 42 J Conict Res 3 (1998).

296

Kenneth W. Abbott

Quilter, Peter: Advisor to the Secretary General, Organization of American

States, Washington, DC, July 1999.
Saborio Soto, Ronald: Ambassador and Permanent Representative, Permanent Mission of Costa Rica to the WTO; Chair, WTO Working Group on
Transparency in Government Procurement, Geneva, May 2000.
Small, David: Director of Legal Affairs, OECD, Paris, September 1999.
Tarullo, Daniel: Professor, Georgetown University Law Center; formerly
Under Secretary of State for Economic, Business and Agricultural Affairs,
US Department of State, Washington, DC, July 1999.