Thomas CottierThe Constitutionalism of International Economic Law

2.11 Thomas Cottier, The Constitutionalism of International Economic Law, in: Meesen, Karl M. (ed., in cooperation with Marc Bungenberg and Adelheid Puttler), Economic Law as an Economic Good, Its Rule Function and its Tool Function in the Competition of Systems, München 2009, p. 317-333

a) Background

Thomas Cottier had the privilege to participate in the emergence of international economic law as a government official, a negotiator, a participant in WTO panels, a consultant, a teacher and a scholar. Thomas Cottier often uses his constitutional law background and his openness to neighbouring social sciences in describing a bigger picture of the vertical and horizontal paths of mutual influences of the process of globalization on the political and legal system of Switzerland and other nations.

Globalization as a process is the object as well as the cause for the reconfiguration and reconception in the sphere of economic law. Thomas Cottier accepts globalization as a dynamic process and attempts to develop a legal framework adequate to deal with the challenges of globalization. His texts are methodological explorations of how legal frameworks in dealing with globalization could be developed. They attempt to link international, supranational, regional, national, and subnational actors in a coherent manner. They are routed in a firm belief that there is a necessity to develop these frameworks.

The texts advocate a new mind-set to overcome traditional conceptual divisions; they are theoretical bottom-up attempts for the search of common structures, which are grounded in the following values: respect of basic human rights, distributive justice and equality; in particular, the satisfaction of basic needs in terms of food, shelter, clothing and education, fairness and equal opportunities and protection of good faith and legitimate expectations at whatever layer and form of governments to which they are exposed. These values according to Cottier can be found throughout the world in legal cultures and religions in one expression or another. They are nowadays supported by moral philosophy and increasingly in the international relations sphere. They can be found in national constitutions and in international agreements, confirming a common moral ground in law. They allow one to conclude that these are truly human values of global reach and are not limited to the Western hemisphere. These values form a normative agenda of what should be achieved in terms of shared values in a globalized world. These values provide the basis for governments and the work of all lawyers. Cottier asserts that it is fair to conclude from human experience, that these basic values can best be achieved if procedural fairness, inclusiveness, and participation, and the ideas of legal protection through courts are secured.

b) Summary

The text at hand deals with economic law as a branch of law, which emerged from the traditions of commercial law, private and administrative law, in response to the trends of the post-World War II economies and the welfare state. Besides human rights and constitutional law, which shaped post-war legal orders, economic law amounts to a prime and precious public good on which the prosperity of millions of people crucially depends. Economic law covers a wide range of subjects, a wide range of actors and cuts across the divide of private and public law and vertical regulations of all layers of governments, local; national, regional and international.

In Regulatory Competition Versus Harmonisation the text notes that the nation state has been built on the idea of harmonisation of law while internationally nation states operate under the doctrine of regulatory competition. Mixed regulatory forms have been observed within states. The same patterns can be observed in international economic law among states. The structure of EU law on a regional level follows a logic that mixes regulatory competition and harmonisation of law. On a global level, the law of the WTO follows similar patterns using principles of non-discrimination and principles of progressive liberalization. Formal and informal pressures to adjust to rules and regulations of major markets amount to an important feature of today’s economic law. Questions arise as to how the international system as a whole should respond to them in terms of allocating formal decision-making powers. The problem thereby turns into one of constitutional law. Economic law, however defined, profoundly challenges traditional patterns. It calls for a new doctrine of constitutionalism shaping new doctrines of governments able to cope with the challenge of globalization.

International economic law according to Cottier therefore has a constitutional function in which fundamental rules stand out. They amount to basic principles of law, deriving from the principle of equality. They are of a constitutional nature establishing the very foundations upon which the particular regime is based in the WTO. These principles rely on non- discrimination in different forms. They include principles of transparency and access to legal protection, all seeking to bring about equal conditions of competition. In EU law, these principles are embodied in the Four Freedoms, which also include the principle of proportionality of regulation. Principles of non-discrimination as well as free market have important horizontal and vertical effects.

Non-discrimination and transparency exert a structural impact on domestic law that applies across the board. They establish a vertical relationship between the principles of international economic law and domestic law. Such relationship, as submitted by Cottier, is comparable to the structural effects of constitutional law. A functional comparison of these principles allows them to be considered as parts of an overall and multiculturally supportive constitutional structure. They have comparative functions in relation to different layers of governments. Cottier refers to this as a five- story house with local, cantonal, national, regional or global layers of law. In “Multilayered Governence” and the “Impact State Sovereignty” Cottier outlines the argument, that equating domestic and international law in terms of constitutional law is highly controversial. The doctrine of multilayered governance, seeks to understand the overall regime in comprehensive constitutional terms. It seeks to interface different layers of governance and to bring about greater coherence. The effort is not meant to challenge traditional perceptions of constitutional law. Rather, according to Cottier, it seeks to bring about an overall regime that is able to preserve and protect the very values post-war constitutionalism sought in the age of globalization. Though profound differences remain between different layers of governance in terms of decision-making, it is submitted that all layers share common features and principles as they are all human endeavours responding to comparable problems of human interaction. They all share common principles and traits, many of which emerged in economic and international economic law. The operation of the WTO essentially changes the role of the executive branch of government as well as the role of courts. States remain in control in international law making though.

Under the heading “The Impact on Society” Cottier argues that society widely shows diverging levels of economic and social development. Moreover, they have varying attitudes to law and to compliance with it. As for states, it is therefore impossible to assess the impact of international economic law except in very general terms and from a structural perspective. The text takes a long-term perspective using the instrument of progressive liberalization and progressive creation of equal conditions of competition as a guiding principle. There remain many weaknesses of the world trading system and many individual insecurities vis-à-vis the process of globalization. The legitimacy of the system will depend upon in enhancing capacities to fight poverty and to bring about substantial and effective trade.

In the “Challenges” ahead the text highlights that international economic law needs to perfect and improve widely social and economic development. Efforts need to be made to strengthen democratic rules, both on a national and international level, in order to bring about equitable distribution of growth and benefits. The world has moved into a system of legal and de facto multi-layered governance which is characterized by shared and cosmopolitan responsibilities. National laws have come a long way in the field of human rights. The process of constitutionalization of international law is conceptually most advanced in the field of economic law.

c) Text

You can find a scan (PDF) of the original text here:
G_2.11_COTTIER_Constitutionalism of International Economic Law_in Meessen_2009

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