1.1 Why a Theory?

This book puts forward a theory of the law of the World Trade Organization (WTO). A “theory” is a “system of ideas,” with the emphasis being on the “system,” or set of relationships, regularly exhibited between those ideas.Footnote ²

In this book I make the principal point that WTO law is about interdependence as reflected in varying conceptions of the good. The theory emphasizes how WTO law reflects regular relationships between classic forms of justice that work to sustain the good.

Before going into detail on this point, however, I think it is important to address some potential objections to a theory, both as a way of providing some background to the subject and underlining the importance of what is advanced here.

One potential objection is the fact that WTO disputes are difficult to assimilate with justice, at least if justice is thought about in corrective terms. Most WTO disputes are initiated by a single complainant country and defended by a single respondent country. If the complaint is made out, the proceedings normally end in a cryptic direction to the wrongdoing country to bring its laws and regulations “into conformity” with the organization’s basic treaty, WTO Agreement. No compensation is automatically payable.

Another potential objection is the lack of any direct reference to “justice” in WTO texts. When the WTO Agreement was concluded in 1994 member governments spoke chiefly of the new treaty as contributing to the rule of law, not justice, and since that time criticism of the treaty by human rights advocates, environmental activists and others has left the impression of it in many quarters as unjust.Footnote ³

A further potential objection is encapsulated in the question, why is such a theory necessary? After all, until recently WTO dispute settlement has functioned reasonably well without a theory, and so it might be queried whether one is required or useful.

Over time, however, eminent commentators have implied that a theory is useful, either by alluding to one or trying to define its contents in some preliminary way. For instance, as long ago as 1983 Ernst-Ulrich Petersmann observed with respect to the WTO Agreement’s forerunner, the General Agreement on Tariffs and Trade (GATT 1947), that “a comprehensive economic theory of [the international economic system] is not to be found in the (neo) classical treatises on political economy.” Petersmann went on to note that:

More recently in 2005, Thomas Cottier, Matthias Oesch and Thomas Fisher observed that “the absence of a long-standing legal theory or tradition of international trade regulation explains why even basic questions of international trade law are still in the open.”Footnote ⁵

The statements of Petersmann, Cottier and others infer that whatever the current state of thinking about WTO law, a theory is desirable because it conforms with the general intuition that a theory is rational.

There will be limits to this rationality of course. That is because any theory is a distillation. Anne Peters has pointed out how all theories involve simplification. The benefit of simplification is explanatory. “The simpler the theory, the better you understand [it].”Footnote ⁶

At the same time, the simplicity of a theory can generate uncertainty about its explanatory power and elicit criticism.Footnote ⁷ No theory will explain everything and as I intend to show, that is certainly true of the theory put forward in this book.

Instead, what is highlighted by the theory is tendencies as opposed to certainties. As such, some phenomena of WTO law will be explained relatively well by the theory whereas others will not. The theory aims to strike a balance between simplification and explanation. Its shortcomings will spur the quest for other, more accurate theories.

A theory like this one is likely to be useful in a number of ways. First, it will provide an overview, or “map,” of the WTO legal system. With it we will no longer be left to “wander around among the differences”Footnote ⁸ of WTO provisions and cases. Rather, there will be something more schematic to guide legal thinking.

Second, reasoning about WTO law often takes place from within the law – its existing texts and jurisprudence – whereas the theory outlined here analyzes the body of law by means of concepts beyond it, notably community and justice. This approach is particularly promising because there continues to be much debate about the future of the WTO as a community and about the ultimate justice of WTO law, issues which, as of the time of this writing, have provoked a variety of reactions, including an impasse over the role of the WTO dispute settlement system’s court of appeal, the Appellate Body, which in late 2019 suspended operation. To that extent, the theory may offer a diagnosis for what currently ails the WTO.

Third, a theory is useful because it is predictive. It will provide some indication of how WTO law is likely to evolve in future.

In response then to the question posed at the outset of this chapter, why a theory?, there are several answers. A theory is useful because it is rational as well as analytic, diagnostic and predictive.

There is something else too. This is the possibility of using the theory to outline a theory of law in general. At a time of some pessimism about the likelihood of ever successfully identifying a general theory of law, I will suggest that what is observed in WTO law is in some degree an illustration of how law does justice in any community.Footnote ⁹ Such an assertion might appear grandiose – even foolish – but in my view it is nothing more than recognition of the fact that what has happened in the course of WTO law’s short history is the emergence of regular relationships expressive of the need for justice in a community.

1.2 The Outline of a Theory

The word “theory” is often associated with abstraction and complexity. It is therefore worthwhile providing a synopsis of what is put forward here in order to summarize the theory’s contents and help direct subsequent discussion.

The theory outlined in this book is a three-fold theory. It is, first and foremost, a theory of community, a theory about how individual actors come together and depend upon each other to produce certain things they hold together and value that I will refer to as “goods.”

Second, the theory is a theory of justice, or in other words, a theory about how members of a community regularly conceive of what is right or correct in relation to goods.

Third, the theory is a theory of law, a theory about how legal elements relate to each other in an effort to do justice as it relates to goods.

A preliminary outline of the theory’s structure can be summarized as shown in Figure 1.1.

Figure 1.1 A communitarian theory outline

In sum, the theory posits that the law does justice in order to sustain the good of the community.Footnote ¹⁰ Again, it is helpful for the purposes of subsequent discussion to briefly outline these ideas a little further.

1.2.1 A Theory of Community

The foundation of a theory of law lies in interdependence, a phenomenon rooted in biology. Humans are members of a uniquely interdependent species.Footnote ¹¹ We create and rely upon many goods that could not be produced by one individual in a single human lifetime. These include vaccines, jet travel and the internet.

In the latest phase of interdependence from 1990 on the “blend of Western industrial know-how and Asian manufacturing muscle” has fueled a “hyper-globalisation of supply chains” that has left an impression of the world as “flat.”Footnote ¹² Although there are some indications that this hyper-globalizing trend has moderated, interdependence in the form of global supply and value chains remains enormously important.Footnote ¹³

Some idea of its importance was given in US – Aircraft, a WTO dispute concerning subsidies granted to the US aircraft industry. There, a WTO dispute settlement panel detailed the multinational list of suppliers involved in assembling the Boeing 787:

Completion of sub-assemblies and integration of systems takes place in Everett, Washington, with many components being pre-installed before delivery to Everett. The 787 composite wings are being manufactured by Mitsubishi Heavy Industries. The horizontal stabilizers are being manufactured by Alenia Aeronautica in Italy, and various parts of the fuselage sections are being built by Alenia in Italy, Vought in Charleston, South Carolina, Kawasaki Heavy Industries and Fuji Heavy Industries in Japan, Alenia in Italy and Spirit Aerosystems in Wichita, Kansas. The main landing gear and nose landing gear are being supplied by the French company Messier-Dowty, while passenger doors are being made by Latécoère in France, and the cargo, access and crew escape doors by Saab in Sweden.Footnote ¹⁴

The panel noted that as a result of globalized manufacturing, Boeing has “shifted responsibility for detailed component design to suppliers, and focuses on systems integration, managing overall requirements, as well as the assembly process. The 787 is essentially assembled from large substructures designed and produced by suppliers.”Footnote ¹⁵

The panel’s description of the Boeing 787’s assembly process is emblematic of the way that what has arisen through interdependence is an elaborate network of relationships. Much modern production and consumption is characterized by them. They value coordination and integration so that delivery of the final product becomes a unity.

Unity places demands on supply and value chain participants. They need to consider matters differently than they would if acting independently. Regular reliance means that actors have to pay at least as much attention to what they are required to do as to what they want to do.

The experience of Boeing and other actors demonstrates the way that interdependence modifies thinking. Similarly in this book, I maintain that the modification generated by WTO law is primarily mind-driven. The “security and predictability”Footnote ¹⁶ that are repeatedly identified as constituting the core of WTO disciplines are closely linked to interdependence in that they afford officials, producers and consumers in member countries an extended horizon on which to plan. The ultimate purpose of this coordination is to produce goods.Footnote ¹⁷

In light of these ideas, it is possible to begin outlining a theory of community as shown in Figure 1.2.

Figure 1.2 A theory of community

In economics goods are characterized by different degrees of exclusivity and rivalry.Footnote ¹⁸ Exclusivity refers to the way in which a good’s use may be limited or restricted to some individual or group. Rivalry refers to the way a good’s use may diminish its benefits for others.

The combination of exclusivity and rivalry results in four different categories of goods. First, there are exclusive, rivalrous private goods such as real estate. Second, there are exclusive, nonrivalrous “club” goods such as toll roads or the internet. Third, there are nonexclusive, rivalrous common goods such as natural resources. Fourth, there are nonexclusive, nonrival “public” goods such as public health.Footnote ¹⁹

As I will explain, the arrangements establishing the WTO Agreement create a “club” good. This is in the sense that the concessions and commitments made by member countries under it are reserved to the WTO membership, and that at least in theory, one member’s access does not diminish the treaty’s benefits for others.

At the time of the WTO Agreement’s inauguration in 1995, there was broad consensus about the advantages of this good. Over time, however, the sense of benefit and mutual advantage from it has decreased due to misgivings about unconditional interdependence. As a result, the club good of the WTO Agreement now appears to be splintering into a series of bilateral relationships more appropriately likened to private goods. This evolution is emblematic of the way in which the conception of the good can change and how it reflects the changing nature of the community.

1.2.2 A Theory of Justice

Notwithstanding these ideas, actors are unlikely to come together to produce goods without some assurance that they are better off by doing so. This gives rise to a preoccupation in a community with justice.

In this book I take the view that the idea of justice can be distilled into the essence proposed by Herbert Hart in 1958 when he observed that justice consists:

of two parts: a uniform or constant feature, summarized by the precept “Treat like cases alike” and a shifting or varying criterion used in determining when, for any given purpose, cases are alike or different.Footnote ²⁰

A respected body of opinion championed by a number of scholars including Neil MacCormick later refined these ideas to assert that justice is fundamentally composed of values of equality plus fairness.Footnote ²¹ The basic relationship can be represented as follows:

Justice = Equality + Fairness

As I will show, the experience of WTO law suggests that the basic relationship above is accompanied by two provisos:

Proviso #1: Equality ≠ Fairness

Proviso #2: Equality > Fairness

Proviso #1 (i.e. Equality ≠ Fairness) emphasizes how the distinction ordinarily made between “equality” and “fairness” implies that the two terms do not mean the same thing.

The ascription of distinct meanings to equality and fairness dovetails with recent research in anthropology and evolutionary psychology, which indicates that fairness, in particular, is a uniquely human trait, something not observed in our closest genetic relatives.Footnote ²² As David Schmidtz has noted, what makes a result “fair [is] not that our slices are equal – they may not be – but that neither of us has grounds for complaint.”Footnote ²³ From this set of insights, some evolutionary psychologists hypothesize that it is a sense of fairness – a sense that all participants will be treated “appropriately,” if not equally – that is key to explaining individuals’ extraordinary ability to cooperate.

Still, this set of observations leaves open an important question: if fairness is so important and if it has played such a central role in human evolution, why are human communities not entirely fairness-based? Many commentators have observed that fairness cannot serve as the basis for all human relations otherwise the law risks becoming purely subjective.Footnote ²⁴

The natural limits to fairness infer that in an impersonal community another value becomes important.Footnote ²⁵ This is equality.

For a long time equality has been the preeminent ideal of a political community, at least in Western thinking.Footnote ²⁶ In contemporary life it assumes added importance because increased specialization forces actors to engage in many transactions to meet their daily needs. These transactions do not guarantee that actors will be relatively better off than their peers, only that they will have no “grounds for complaint.”

This paradox leads to Proviso #2 (i.e. Equality > Fairness). The proviso introduces a priority in the relationship between equality and fairness. It holds that equality is the primary ideal whereas fairness is the secondary ideal. One way of understanding the priority is to recognize that actors and institutions do fairness in order to attain equality. They participate in all kinds of inequalities for the purpose of realizing whatever equality is deemed to be.

A theory of justice can then be outlined and linked to the theory of community put forward earlier as shown in Figure 1.3.

Figure 1.3 A theory of community and justice

This combination suggests that actors come together and cooperate in communities to produce goods according to ideals of equality and fairness. These ideals are communally determined and unequal although not for that reason alone unjust. What matters, as mentioned, is that actors have no “grounds for complaint.”

The theory of justice put forward in this book is therefore communitarian. In that respect it differs from other theories and accounts of justice based on liberalism, or the school of thought that has traditionally emphasized the importance of the individual and the gradual reform of institutions.Footnote ²⁷

Communitarian thinking took shape in the 1970s largely in response to the work of John Rawls. In A Theory of Justice (1969), Rawls put forward the now-famous liberal view that individuals coming together in a prototypical community would agree to two key principles of justice:

1. 1. that each person should have an equal right to basic liberties (the “liberty principle”)

2. 2. that social and economic inequalities would be arranged to be of the greatest benefit to the least-advantaged members of the community (the “difference principle”).Footnote ²⁸

Communitarian thinkers took issue with these principles in several respects. Their most persistent criticism of Rawls’s work has been that it is inaccurate to maintain, as Rawls initially appeared to do, that a Rawlsian theory of justice is universally true.Footnote ²⁹

Despite the persistence of a communitarian critique of Rawlsian ideas, however, leading communitarian critics of Rawls have never offered “a grand communitarian theory as a systematic alternative to liberalism.”Footnote ³⁰ Communitarian emphasis on the particularity of communities and the uniqueness of justice in each community make it difficult to say much that is definitive about communitarian thinking. To this day there remains no standard account of what a communitarian vision of justice would look like.Footnote ³¹

In this book I undertake the task of outlining a communitarian theory of justice with the help of illustrative examples drawn in the first instance from WTO law. I agree with the basic communitarian thesis that justice is a product of community. At the same time, I posit that although the justice done in a community is community-specific, it will display some combination of the two ideals of justice mentioned above: equality and fairness. A community’s particular expression or “identity”Footnote ³² of these will therefore be distinct.

This position may appear superficially similar to that of Rawls but in the first instance draws more heavily on the work of Aristotle.

Aristotle was interested in many things including the nature of community, or as he put it, what “holds people together.”Footnote ³³ He concluded that what holds people together is justice. This conclusion suggests that the ideas of equality and fairness highlighted above need to be operationalized in standard forms of justice.

In the Nicomachean Ethics Aristotle posited that a community will exhibit justice in two forms: corrective and distributive. Corrective justice applies to private goods and plays a rectificatory role in transactions. It is the justice most familiar in daily life. Thus, when people are wrongfully deprived of their property, they are entitled to have it returned or to be compensated.

Distributive justice, by contrast, applies to public goods such as “honours or wealth or anything else that can be divided among members of a community who have a share in the political system.”Footnote ³⁴ When a breach of the public good occurs, the wrongdoer is usually deprived of community. An example is the case of a convicted criminal whose wrong – a crime – is a wrong done to the entire community and whose traditional penalty is imprisonment, in effect a deprivation of community.Footnote ³⁵

In this book I likewise posit that law in a community will express some combination of corrective and distributive justice. However, while accepting Aristotle’s two-fold arrangement of justice, I do some with some modifications.

Aristotle’s original formulation inferred that the metric of corrective justice is equality – you get back what you’ve lost – whereas the metric of distributive justice is fairness – you get back what you’re entitled to. His position on these points has caused centuries of confusion among commentators who have plainly noted that the outcome of many corrective operations is not equal.Footnote ³⁶

My solution to this problem is to modify Aristotelian ideas by positing the reverse.Footnote ³⁷ In corrective operations you get what you’re entitled to get whereas in distributive ones you get what everyone merits as a member of the community.

What justifies such a rearrangement? First, the metric of corrective justice is fairness or what is appropriate because there are competing communal demands in any corrective operation. Simply put, a community does not have unlimited resources with which to correct injury, and indeed, in many instances has a vested interest in minimizing the communal cost of correction. Rules on settlement and court costs in many legal systems prove this point.Footnote ³⁸

Second, the metric of distributive justice is more appropriately regarded as equality or what is necessary to affirm the equality of actors in the community.Footnote ³⁹

This rearrangement of Aristotle’s ideas can be depicted as shown in Figure 1.4.

Figure 1.4 The structure of justice

The rearrangement infers that the basic relationship postulated in Proviso #2 above between equality and fairness (i.e. Equality > Fairness) is reproduced between distributive and corrective justice (i.e. Distributive Justice > Corrective Justice). Distributive justice is primary, whereas corrective justice is secondary.

On further reflection, however, it also becomes evident that the traditional Aristotelian categories of justice are conservative. They do not envisage any transformation of the good over time. Contemporary thinking recognizes this deficiency. It appreciates that a just legal system, as the hallmark of a sustainable community, must adapt to evolving ideas about the good.

This realization leads to the conclusion that over time there must be a point at which equality and distributive justice merge with fairness and corrective justice. Here the overarching aim of justice is transformative. What does transformative justice transform? Fundamentally it transforms legal relations with respect to the good.

The doing of transformative justice will result in what is deemed to be just – not ideal or “perfect” justice, but simply justice eo instante, the best that can be done in the instant moment. That justice inevitably will be perceived by some as unjust, a factor that provides a continuing impetus for reform.

The doing of equality via distributive justice and of fairness via corrective justice then encourages “accommodative relationships between groups with competing interests.”Footnote ⁴⁰ The accommodation is reached in order to sustain the community. It serves as the basis for an interactive and interdependent view of the relationship between distributive and corrective justice, which I go on to develop in Chapter 3.

How exactly does this theory of justice manifest in WTO law? As will be seen, WTO law is structured chiefly as an egalitarian and distributive legal system. Its principal aim is to ensure the “security and predictability”Footnote ⁴¹ of trade concessions and commitments made by member countries that every other member country is deemed to have an equal expectation of. When injury occurs, the obligation on a wrongdoing country in WTO dispute settlement is to settle the dispute or withdraw the offending measure, action which is understood to restore the equality of competitive conditions.

A second aspect of WTO law is more evidently equitable and corrective. Correction is apparent in certain instances of permissible counteraction and authorizations of countermeasures under the WTO Agreement. As will be discussed, such action, though nominally “equivalent” to the injury sustained, is rarely in fact so and is more likely to be a matter of what is appropriate or “fair.”

Finally, the interaction of distributive and corrective justice in WTO law generates transformative justice. Transformation is particularly evident in a number of settlements achieved under WTO dispute settlement. This typology of justice explains how even though WTO arrangements do not allow for equal counteraction in every instance, they might nevertheless still be considered just.

1.2.3 A Theory of Law

The theories of community and justice outlined above serve as background for a theory of WTO law. In sum, their ideas of the “good” and what is just condition the nature of the WTO legal system. To appreciate this point, some further explanation is necessary.

A convenient starting point for identifying a theory of WTO law is to ask what is legal about the WTO Agreement. In other words, what gives the treaty its lawful, binding character? In Maritime Delimitation and Territorial Questions (Qatar v. Bahrain)Footnote ⁴² the International Court of Justice (ICJ) held that the essence of a legal agreement in international law is whether or not a particular agreement – in that case the minutes of a meeting – discloses an intention to be bound:

the Minutes … do not merely give an account of discussions and summarize points of agreement and disagreement. They enumerate the commitments to which the Parties have consented. They thus create rights and obligations under international law for the Parties.Footnote ⁴³

The Court’s reference to “rights and obligations” is behind my insistence, pursued more fully in subsequent chapters, at focusing on rights and obligations as the basis of a theory of law. Their arrangement, the contrapuntal stress they create, and the way they simultaneously work to “constrain and enable”Footnote ⁴⁴ actors’ behavior offer insight into why WTO law is as it is.

In law the traditional relationship of rights and obligations is correlative. Each right is considered to be matched by a single offsetting obligation (i.e. Right = Obligation).Footnote ⁴⁵ In WTO law, however, the jural matrix is more complex. GATT’s Most Favored Nation (MFN) obligation causes obligations owed by one member country to be owed simultaneously to the entire WTO membership. Due to this and other nondiscrimination provisions in the treaty, the general orientation of the WTO legal system is toward obligations. Hence, obligations are primary whereas rights are secondary (i.e. Obligation > Right).

That same orientation is also discernible in the WTO Agreement structurally. Many commentators have taken to describing WTO legal arrangements as either a “contract” or a “constitution.” The most authoritative reference to contractualism is the WTO Appellate Body’s statement in Japan – Alcoholic Beverages that:

The WTO Agreement is a treaty – the international equivalent of a contract. It is self-evident that in an exercise of their sovereignty, and in pursuit of their own respective national interests, the Members of the WTO have made a bargain. In exchange for the benefits they expect to receive as Members of the WTO, they have agreed to exercise their sovereignty according to the commitments they have made in the WTO Agreement.Footnote ⁴⁶

The Appellate Body’s statement in Japan – Alcoholic Beverages emphasizes the limited nature of the treaty and its legal system. The WTO Agreement is a “contract,” and national sovereignty is constrained only to the extent that countries have made commitments under it. Thus, WTO law would appear to be composed of rights that countries have limited for the purpose of enjoying the benefits extended under the treaty.Footnote ⁴⁷

A second view of the WTO Agreement is constitutive. This is in the sense that the treaty establishes the WTO as an international organization.Footnote ⁴⁸ In addition, John Jackson and others have referred to the WTO Agreement as a “constitution” and Gail Evans has made the observation that “WTO law may be explained as a trade constitution having the capacity to universalize norms of substantive law.”Footnote ⁴⁹ Accordingly, WTO law would appear to be composed of obligations that are more constraining and limitative.Footnote ⁵⁰

The record of WTO law infers a certain priority or orientation between “contract” and “constitution.” That is because WTO member countries are limited in the degree to which they can “contract out” of their WTO obligations.Footnote ⁵¹ From this requirement it is possible to conclude that the WTO legal system is more constitutive than contractual (i.e. Constitution > Contract).

The same orientation is also visible in the temporal perspective of WTO law. WTO law applies over time in a succession of moments progressing from the past to the future. This continuum demonstrates the same general orientation as the other conceptual pairs introduced above in the sense that WTO law is always open to renegotiation and change (i.e. Future > Past).Footnote ⁵²

Finally, the same orientation is visible in WTO law’s reasoning, which is either deductive or inductive. Deduction is the logic of what “will be” based on assumptions.Footnote ⁵³ By contrast, induction is the logic of what “is” or “was” based on proof.Footnote ⁵⁴

WTO law depends heavily on deductive reasoning and presumption. There is, for example, the well-known presumption in WTO law which provides that “[i]n cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment.” Case law has generally upheld the principle that while the presumption is formally rebuttable, in practice, it had “operated as an irrefutable presumption.”Footnote ⁵⁵ This conclusion follows from a number of GATT-era cases wherein nullification or impairment was found even for measures that had no demonstrable trade effect.Footnote ⁵⁶

The presumption mentioned above lies at the heart of the WTO legal system inasmuch as it conditions when state responsibility will be triggered. Much less often does WTO law depend on induction and proof. Proof can be particularly hard to supply in a system without a mechanism for discovery such as WTO dispute settlement, hence the priority of deduction versus induction (i.e. Deduction > Induction).

The regular orientation of elements suggests that the theory of law set out above can be joined to the theories of community and justice outlined earlier. In addition, the alignments observed between conceptual pairs in the theoretic framework above are not only “horizontal” (i.e. between elements of the same pair) but also “vertical” (i.e. between elements of different pairs). In other words, there is a link between ideas of obligation, constitution, an ex ante perspective and deduction. This link is evident inasmuch as an order of obligations is often referred to as a constitution, which is a document “for the future”Footnote ⁵⁷ within which much is presumed. Likewise, a link is observed between rights, contract, an ex post perspective and induction since a contract is frequently described as expressing the will – or rights – of parties and breach is determined by proof of injury after-the-fact.Footnote ⁵⁸

These ideas can now be assembled and arranged together as shown in Figure 1.5.

Figure 1.5 A communitarian theory of law (preliminary)

From the foregoing arrangement, it then becomes possible to identify two distinct “idea-complexes”Footnote ⁵⁹ at work in WTO law. In one idea-complex the law is about the attainment of equality as a matter of distributive justice. In the other it is about the attainment of fairness as a matter of corrective justice. The two complexes describe the law in a single moment.Footnote ⁶⁰

The theory’s division of the law into separate idea-complexes is attractive. It streamlines the law, highlighting its contrasting tendencies.

Nevertheless, the division also involves considerable simplification and, taken literally, might be dismissed as a kind of reductio ad absurdem. That is because, as mentioned, the conception of the good is not static and justice is not purely a matter of equality or fairness but rather aims at transformation.

This preoccupation with transformation emerges from integration. Integration is evident in the way that the two elements of each conceptual pair outlined above over time tend to merge to create a tertium quid or “third thing,” defined as “something novel, yet also dependent on what went on before.”Footnote ⁶¹

The impulse to transformation modifies thinking about legal relationships, notably the conception of obligations and rights in relation to goods. As a result, obligations and rights become interdependent.Footnote ⁶² Working together they generate a sui generis legal system, which conditions the behavior of actors in distinctive ways within the system that are not observed – at least not to the same degree – outside the system.

Similarly, in the case of a legal structure, the interaction of constitutive and contractual frameworks generates what I term a “contractual constitution,” a structure whose content is fluid but whose boundaries are essentially fixed.

In the case of temporal perspectives, the interaction of ex ante perspectives with ex post perspectives generates a contemporary perspective with an emphasis on law doing justice eo instante (i.e. in the present).

Finally, in the case of reasoning the interaction of deductive logic in the form of presumptions and inductive logic in the form of requirements for proof generates abductive logic, often called “an intelligent guess”Footnote ⁶³ or “inference to the best explanation.”Footnote ⁶⁴

The foregoing ideas can then be depicted altogether as shown in Figure 1.6.

Figure 1.6 A communitarian theory of law

The task of identifying a theory of law then becomes one of furnishing proof of these conceptual pairs and their associated relationships by means of examples drawn from WTO law.

1.3 Of Relationships and a System

In the previous section, I discussed how conceptual pairings in both justice and law exhibit the same relationships of correlation, subordination and integration. However, the core of a theory of law is somewhat more complex than this and needs to be more fully explained.

To review, the theoretic background suggests that the first relationship between elements is one of correlation. In short, where there is equality and distributive justice there will be a need for fairness and corrective justice. Here, the existence of obligations implies corresponding rights (i.e. Obligation/Right).

The second relationship is one of subordination. Equality and distributive justice tend to be primary, whereas fairness and corrective justice tend to be secondary. Here, obligations are primary whereas rights are secondary (i.e. Obligation > Right).

The third – and new – relationship is one of transition. Transition infers that at their outer limits, equality and distributive justice will convert or transition into their conceptual opposites of fairness and corrective justice, and vice versa (i.e. Equality/Distributive Justice = Fairness/Corrective Justice). Transition is observed in the way that equality tends to splinter into fairness positions and, likewise, that multiple instances of fairness generate contradiction and demands for egalitarian unity.Footnote ⁶⁵

Transition is similarly exhibited in the relationship between obligations and rights in WTO law. This is in the sense that WTO members are only bound to the extent of their obligations, beyond which they are generally free to exercise their rights (i.e. Obligation = Right). The same tendency is also exhibited between constitution and contract (i.e. Constitution = Contract), future and past (i.e. Future = Past), and deduction and induction (i.e. Deduction = Induction).Footnote ⁶⁶ Transition is a reflection of the way in which each conceptual pair in the theory forms what Jack Balkin has termed a “nested opposition.”Footnote ⁶⁷

Finally, the fourth relationship is one of integration. I have already mentioned how the interaction of equality and fairness generates justice – not “ideal justice,” but justice in the present that is transformative (Distributive Justice + Corrective Justice = Transformative Justice).

Similarly, obligations and rights generate a sui generis legal system (i.e. Obligation + Right = Sui Generis Legal System), constitution and contract generate a “contractual constitution” (i.e. Constitution + Contract = Contractual Constitution), ex ante perspectives and ex post perspectives generate an eo instante perspective (i.e. Future + Past = Present), and deduction and induction generate abduction (i.e. Deduction + Induction = Abduction).

These four recurrent relationships at the level of both justice and law emphasize how the theory put forward in this book works in a coherent way as a “system.” Consequently, the idea of system needs to be examined and explained.

Systems theory suggests that a system exhibits at least five characteristics.Footnote ⁶⁸ First, a system displays coherence and unity. The components of a system relate to each other more closely and regularly than those outside the system. Second, a system is exclusive. It is “closed” to external influence in some degree, and as a result, manifests its own distinctive rationality. Third, a system is ordinarily considered to be self-regulating. That regulation may take the form of correspondence as in a symmetry, or conditionality as in a sequence, or it may assume certain classic forms through its link to a common regulating factor such as a constitution. Fourth, a system displays transformed properties that are different from its constituent elements. These may take the form of independent attributes or identity. Fifth, a system aims to achieve a certain purpose. In legal systems, for instance, the principal purpose of the system is often said to be to do justice.Footnote ⁶⁹

The systematic character of WTO law is well-known. In Brazil – Dessicated Coconut, for instance, the Appellate Body observed that:

The Appellate Body went on to detail how the WTO system alters behavior through the concurrent operation of obligations and rights, in that case involving disciplines on countervailing action by member countries to address trade-distorting subsidies:

What is apparent from these excerpts is the idea that WTO obligations and rights function “concurrently and cumulatively”Footnote ⁷² as a system to shape states’ behavior in a single moment. No one element is individually responsible for doing so. Instead, all elements work together systematically to transform the relationships in question. In Brazil – Dessicated Coconut the Appellate Body confirmed this understanding by referring to the WTO Agreement as “an integrated system.”Footnote ⁷³

1.4 A Theory as Theory

The communitarian theory outlined above naturally raises the question, what kind of a theory is this? Where does it fit within the constellation of generally accepted theories of law?

Theories of law traditionally take as their starting point the “semantic” theories of natural law and positivism.Footnote ⁷⁴ Natural law considers the law to be dictated by higher authority or reason and to be essentially coextensive with justice. Positivism, by contrast, considers the law to be “posited” by those with the authority to do so and hence to be something that may depart from justice.Footnote ⁷⁵

The two semantic theories are often thought to be separate and distinct. However, the communitarian theory put forward in this book appears to combine both. That is because in highlighting interdependence the theory emphasizes how natural law impulses in the form of obligations and positivist impulses in the form of rights are present and reconciled within a single legal system. To that extent, the theory can be thought of as a synthesis.

The foregoing observations apply primarily to the theory’s character as a theory of law. However, as mentioned, the theory outlined here is a combined theory of community, justice and law. It is therefore worthwhile saying something about the theory as a theory of community and justice before returning to the matter of its characterization as a theory of law.

Earlier I said that leading communitarians have never offered a comprehensive theory as a systematic alternative to liberalism. As a result, there continues to be no standard account of what a communitarian theory of law would look like nor any definitive list of what its central tenets might be.

In this book I take the view that the essence of community arises out of what actors share, or in other words, what they have in common and value. It stands to reason that what they share and value they will seek to protect, adjust and transform.

This simple assertion might not be enough for the purposes of identifying a defensible theory of community, however. Instead, a conceptual framework appears necessary. Such a framework may be sourced in thinking about the international community.

In 1998 Bruno Simma and Andreas Paulus observed that “[t]here seems to be general agreement that the factual element of a community, namely, a sufficient degree of interdependence, is present in the international system.”Footnote ⁷⁶ Simma and Paulus went on to identify the international community’s values and institutions.

They referred to three traditions of thought about the international community, each of which “is connected to a certain reception of values incorporated in the international system”Footnote ⁷⁷ First, there is a Hobbesian or “realist” tradition in which “states are seen as being in a permanent situation of cold or hot war,” where “[i]nternational law merely duplicates the power structure.”Footnote ⁷⁸ Second, there is a Kantian or universalist tradition that “sees at work in international politics a potential community of mankind” whose systemic value is justice. This tradition may justify “community intervention for the protection of individuals against their own state.”Footnote ⁷⁹ Third, there is a Grotian or internationalist tradition in which “international society is composed of states … [and] cooperation between states is considered possible … in order to realize common values and interests.”Footnote ⁸⁰

Simma and Paulus went on to divide the Grotian tradition into two strands. One is “Vattelian” and international only in a narrow sense. “It emphasizes the international interest of states.” Here, “[c]ooperation is the exception, not the rule.” The main value “is not cooperation, but order.”Footnote ⁸¹ The other strand is “truly Grotian” or “neo-Grotian” “because of its modern emphasis on institutions.”Footnote ⁸² It “sees the international system on its way to becoming an ‘organized state community’ with an emphasis on common interests, the development of common values and the creation of common institutions.”Footnote ⁸³ Its paramount value is “solidarity between peoples.”Footnote ⁸⁴

An examination of WTO arrangements and certain terminology emanating from WTO dispute settlement suggests that the concept of community prevailing under the WTO Agreement is primarily “neo-Grotian.” As I will show, WTO dispute settlement has managed to identify a club good arising from concessions and commitments made by member countries that involves their common interest. This good emerges from interdependence.

Nevertheless, the theory also suggests that the idea of the good is not completely stable. Its character and identity can change.

As mentioned, at the time of the WTO Agreement’s conclusion in 1994 there was a strong consensus about the advantages of unconditional interdependence. The Cold War had just ended and there was a desire to restructure the international economic system. In that era it was relatively easy to associate the new treaty with distributive justice and an ex ante perspective on its arrangements summed up in the phrase “the equality of competitive conditions.”

Accompanying this consensus was a new streamlined system of dispute settlement in the WTO composed of panels and an Appellate Body, which raised hopes that countries would submit their differences to “fair, prompt and effective” resolution of trade disputes.Footnote ⁸⁵ Where no settlement could be achieved or compensation negotiated, trade sanctions could follow. On this view WTO law would promote “self-enforcing trade”.Footnote ⁸⁶

The idea of “self-enforcing trade” was a popular one and promoted a second, competing conception of community under the WTO Agreement as “Kantian or possibly “Vattelian”. According to that conception, member countries would complain against each other for violations of the treaty, and where necessary, invoke countermeasures to promote compliance. The chief concern of the community would be achieving “justice” or instilling “order.”

The difficulty with that conception is that it is at odds with the treaty’s community, which remains more evidently Grotian. As I will explain, WTO law does not offer compensation for trade injury in the past and is instead primarily distributive and forward-looking. A Kantian or Vattelian conception also seems to ignore or downplay several practical issues that arise in countries’ invocation of countermeasures and the point made earlier that corrective justice imposes costs on a community. Consequently, it has been little realized in practice.

Three decades on, however, both the unconditional interdependence provided for in WTO arrangements and WTO dispute settlement are viewed much more cautiously. While there remains support for the idea of comparative advantage on which WTO arrangements are based, the combined effects of trade liberalization and technical change have caused governments to rethink, and in some cases reduce, their commitment to it. This development, together with growing inequality in many countries and unease at vulnerabilities stemming from interdependence, lies at the core of current concern with the WTO Agreement.

This development is suggestive of the way that the good emanating from the WTO Agreement as a community has come to be regarded as less good, and in certain quarters, as “bad.” Movement away from a view of the treaty as a relatively unified club good now appears to be taking place. Along with it, there appears to be a parallel movement away from WTO law as a matter of equal opportunity ex ante toward one involving debate about the fairness or unfairness of specific outcomes ex post.

One solution to current difficulties may lie in remaking the WTO dispute settlement system into something more evidently Kantian and corrective, but this option would appear to undercut the primarily distributive nature of the treaty and the fact that countermeasures between pairs of countries in the image of action for breach have not proven popular.

The net result suggests that justice under WTO law is far more complex than simply protecting the equality of competitive conditions or promoting correction. Ultimately, the theory put forward in this book suggests that justice is concerned with “solidarity between peoples” and transformation.

Transformation is visible in many settlements reached in WTO dispute settlement. It is also visible in current efforts to reform and repurpose the WTO as an organization.

All of the above hints at a more modest role for the WTO in terms of justice, not as a Kantian “trade enforcer” but as a setting within which common positions can be worked out, with some attention paid to law. Perhaps the best that can be hoped for at present is a “forum organization”Footnote ⁸⁷ in line with Simma and Paulus’s idea of a neo-Grotian community.

Earlier I said that a communitarian theory achieves a synthesis of natural law and positivism. It bears considering what this synthesis involves.

Most wholesale theories of law are preoccupied with identifying the ultimate source of legal obligation, or in other words, where legal obligations come from.

Efforts to answer this question in domestic law – at least in the Anglosphere – focus on “a few key figures and their central claims.”Footnote ⁸⁸ These include the command theory of John Austin,Footnote ⁸⁹ Herbert Hart’s theory of law as the union of primary and secondary rules,Footnote ⁹⁰ Hans Kelsen’s theory of a legal system as resting upon a fundamental norm (grundnorm),Footnote ⁹¹ Joseph Raz’s service conception of authority and sources thesis,Footnote ⁹² and Ronald Dworkin’s theory of interpretation.Footnote ⁹³ These authorities have been supplemented by an array of other theories and approaches in recent decades, generally of more limited scope, attempting to theorize the law in one field, or with respect to one particular doctrine or cause of action.Footnote ⁹⁴

Theories of international law have likewise been preoccupied with identifying the ultimate source of legal obligation but have traditionally approached the job of theory from the perspective of consent.Footnote ⁹⁵ Generally speaking, they appear to forward a mix of natural law and positivist explanations.Footnote ⁹⁶ More recently, some theorists have also attempted to discern whether international law exhibits a “deep structure” based on alternating utopian (i.e. idealist) and apologist (i.e. realist) accounts, but have had difficulty linking these to any larger framework or explanation such as “non-will-related justice.”Footnote ⁹⁷

What is apparent from these efforts is that theories of domestic and international law come at the question of the ultimate source of legal obligations by means of their own frames and rationalities. Notwithstanding the difference, what commentators in both spheres seem to conclude is that the source of obligations is found in no single category or source of law but rather in their combination.Footnote ⁹⁸ The idea of obligation then may be said to arise from the totality of a legal system.

If this is true, then a communitarian theory of law can offer a more coherent and detailed understanding of the ultimate source of legal obligations because of its foundation in “system.”

Still, this bare identification of “system” as the ultimate source of legal obligations may appear a little broad-brush and will not be enough for those who expect theories of law to be more precise. That is why I refer to the four relationships of correlation, subordination, transition and integration identified earlier. They impart a certain direction, or dynamic, in the system. At the same time, commentators will demand to know what the practical consequences of such an identification are.

One immediate consequence is interpretative. For instance, where the question of an obligation arises, a communitarian theory of law suggests that the legal element is likely to be interpreted in a broad and plenary way – to be constitutive, prospective and presumptive, and to involve equal application of the law. Likewise, where the question of a right arises, a communitarian theory suggests that the legal element is likely to be interpreted in a narrow and exceptional way – to be contractual, retrospective and proof-oriented, and to involve fair application of the law.

As I will show, examples of these interpretative practices are frequent in the WTO legal system. Do the same practices hold in every instance? I will suggest that they are likely to, but not invariably. This qualification is tied to a point made earlier, namely, that the theory put forward in this book emphasizes tendencies as opposed to certainties.Footnote ⁹⁹ Particular fact patterns may exhibit in a contrary way (i.e. Equality < Fairness, Obligation < Right). The foregoing interpretative conventions are discernible in WTO law, but in Chapter 7 I will show how they also exhibit to a degree in international investment law. This projection supplies an example of the theory’s “illuminating power.”Footnote ¹⁰⁰

Another consequence of the relationships outlined above is to identify a gradual oscillation, or movement, between the idea-complexes that are part of a theory. In the normal course the conception of the law should move back and forth among polarities, though not necessarily in a monolithic fashion. It seems fairly clear, for instance, that current WTO arrangements are moving away from an obligation-based constitutive regime toward something more rights-based and contractual. In line with this trajectory, some commentators also forecast a further move back toward obligation-based constitutionalism at some point in the future.Footnote ¹⁰¹

One theorist whose work this theory may recall is Hans Kelsen. Kelsen’s “pure” theory of law posited that law should be logically self-supporting and should not depend on extralegal values such as justice. Instead, Kelsen believed that law should be traceable to some basic norm or assumption (the Grundnorm) accepted by a substantial proportion of the community.

Kelsen’s ideas differ from the ones I put forward here in their eschewal of justice. For Kelsen justice was “an irrational ideal … not subject to cognition.”Footnote ¹⁰² That rejection deprives his theory of the directing impulse that justice as equality instills. Instead, the relationships he foresaw were organized hierarchically, with subordinate norms being linked to higher-level ones and ultimately to the basic norm. Again, this conception differs from the view taken here wherein law is composed organically as the product of an interactive system. I submit that this systematic conception provides a more accurate description of the workings of a legal system than Kelsen’s does and is more in line with contemporary understanding of power in a community as being exercised both vertically and horizontally.Footnote ¹⁰³

Where Kelsen and my theories parallel each other, however, is in their monism. Both he and I make little or no distinction between international and domestic law and regard their structures as essentially the same.Footnote ¹⁰⁴ Some commentators continue to assert the centrality and vitality of such differences.Footnote ¹⁰⁵ In this book I have suggested that the idea of basic structural sameness in law is reinforced by similar structures of justice.Footnote ¹⁰⁶ The fact that these structures might express differently in different systems is more a matter of “identity,” that is, how the particular legal system is situated between polarities of equality/distributive justice and fairness/corrective justice, than any presence or absence of elements that might undermine the theory’s architecture.

The theory of law based on justice in this book will also draw comparison with the work of John Rawls. A communitarian theory parallels but also differs from Rawls’s work in a number of ways.

Rawls’s theory of justice was contractarian. By comparison, the theory I put forward in this book is communitarian. Rawls regarded the basic settlement about justice among actors within a community as occurring in a single moment, with only modest attention paid to the need for updating. The theory here exhibits greater awareness of the requirement for ongoing reform. This pivotal distinction generates a series of further differences in our respective positions.

As mentioned, Rawlsian thinking is premised on the founding of a prototypical community, a view that naturally lends itself to a focus on distributive justice.Footnote ¹⁰⁷ For this reason Rawls addressed only minimally the problem of dealing with issues of justice correctively ex post such as the WTO membership now confronts.

In addition, Rawls’s work left open the all-important question of how distributive and corrective justice are related. Many commentators today adhere to either a “dependent” view of the relationshipFootnote ¹⁰⁸ or, alternatively, one of distributive and corrective justice as independent and autonomous of each other.Footnote ¹⁰⁹

The view I take here is that neither of the foregoing views is entirely convincing. Consequently, in Chapter 3 I put forward what I term an “interdependent” view of the relationship.Footnote ¹¹⁰ This view regards the relationship as a variable one that exhibits the four relations of correlation, subordination, transition and integration introduced earlier.

At the same time, there is considerable complexity to such a view. That is because an interdependent view regards a distributive priority as the law’s dominant tendency while also acknowledging corrective justice as the law’s subordinate tendency, generating feedback over time for adjustment of the relevant distribution. Such a hybrid view not only reflects state practice but also better accords with the common understanding of distributive justice as “dynamic” and corrective justice as “static.”Footnote ¹¹¹

More fundamentally, perhaps, Rawls’s and my views on the nature of community differ. A community may emerge from a Rawlsian “overlapping consensus,” but the communitarian theory outlined in this book suggests that the justice which sustains the community is never entirely ideal and encompasses a wide penumbra of dissent, forcing ideas of injustice and change. Moreover, any historic community retains within it a memory of prior inequalities – for instance, about slavery and racial discrimination in the United States or China’s humiliation at the hands of the Western powers in the nineteenth century – that conditions thinking about the contemporary meaning of equality and fairness.

Another difference between contractarian and communitarian theories of justice lies in their respective approaches to fairness. Rawls’s theory of justice was founded on the notion of equality as modified by “justice as fairness” promoting arrangements for the advantage of the least well-off. As part of the communitarian theory put forward in this book, I recognize fairness to be a much more regular and pervasive phenomenon in a community than Rawls’s projected. It is not simply undertaken for the benefit of the less well-off.Footnote ¹¹²

A further difference between contractarian ideas and a communitarian theory is attention to the specific legal elements involved in realizing justice. As mentioned, Rawls was principally concerned with distributive justice and famously articulated entitlements to his liberty and difference principles in terms of “rights.” By contrast, I emphasize the way that a historic community involves both distributive and corrective justice as well as obligations and rights and therefore mandates some degree of priority between them. As a matter of theory, Rawls was not completely clear about the structure of legal relationships arising in a community.

Finally, Rawls disagreed with the application of his theory of justice as fairness to international law. Instead, he projected a separate “Law of Peoples” in international relations, a particular political conception of right and justice that promotes certain key principles and norms of international law.Footnote ¹¹³ These would include an ethic of toleration for decently organized peoples. The communitarian theory put forward in this book makes no such distinction. To the extent that a domestic or international community constitutes a community wherein actors hold things in common, I posit that the same conceptual pairings should be visible in that community’s operation as well.

These then are some of the ways in which our respective theories differ, differences which I will elaborate upon in subsequent chapters. At this point I simply suggest that a communitarian theory supplies a more comprehensive and accurate description of what happens under the rubric of “justice” than a purely distributive or contractarian one does, although this should not be taken as a criticism. It might be concluded instead that a communitarian theory “builds out” Rawlsian ideas, supplementing and extending them.Footnote ¹¹⁴ That conclusion would be consistent with the view taken here that many Rawlsian positions remain valid.

A distinctive aspect of this theory of law is its treatment of time. Time is a substantive component of the theory, a resource used to generate interdependence and transformation. Time is therefore more central and active a component in this theory than in other theories and accounts of law, which often regard time passively as a sort of background against which other more dynamic factors play out or which proceeds haltingly from one epoch to the next.Footnote ¹¹⁵

Time is inherent in the keystone concept of community, a concept that highlights what actors share and value across time. The community’s vision of the good and its value are transformed over time. This is because time transforms perception. Actors within a community are constantly confronted by ideas and views different from their own. They must adapt their ideas and views to those of others. In this way the individual’s views are reconciled with those of the community.Footnote ¹¹⁶

This working out of the relationship between the individual and the communal happens, however, only over time, the conception of which may differ depending on the particular community.Footnote ¹¹⁷ WTO law encompasses two distinct conceptions of time, one which is progressive and dynamic (chronos), the other momentary and static (kairos). Their combination takes a form that is transcendent, hence the need to regard both justice and law under the WTO Agreement as diachronic.Footnote ¹¹⁸

The communitarian theory introduced above is founded on a number of conceptual pairs: equality/fairness, obligation/right and so forth. John Finnis has argued that one cannot do first-order legal theory without taking a stand on what the important features are that an adequate theory of law must explain.Footnote ¹¹⁹ Why then employ these particular pairings to outline a theory?

I focus on these pairs because they appear to describe the most basic conceptual couplets involved in discussions of justice and law and because the individual elements within them are naturally thought of as correlatives and opposites.Footnote ¹²⁰

This is particularly true of obligations and rights, which are frequently referenced together in constitutive instruments of international and domestic law in ways that suggest their preeminence.Footnote ¹²¹ In international law it is noteworthy, for instance, that among the initial tasks undertaken by then new United Nations International Law Commission (ILC) in the late 1940s was the development of a Draft Declaration on Rights and Duties of States, as if “rights” and “duties” (i.e. obligations) are somehow foundational in the formulation of international law.Footnote ¹²² In domestic legal systems their importance as basic legal elements is beyond question.Footnote ¹²³

Inherent in all the referenced pairs, however, is tension, a tension which is also discerned in biology. What do I mean?

Biology is the study of life and living organisms. It emphasizes the life force (zώη) and interaction exhibited during the life cycle of an organism. Each organism establishes a unique set of relationships between itself and its environment. Internally, living organisms are also unique inasmuch as they possess distinct attributes such as metabolism and the capacity to grow and respond to stimuli that are not displayed by their constituents alone. In sum, they are distinct from their constituent elements and surrounding environments but also dependent upon them.

The trade-off between distinctiveness and dependence is not maintained without effort, however. An organism exerts constant effort to sustain and differentiate itself from the rest of its environment.

A community composed of obligations and rights manifests a similar effort. Out of the resulting push-and-pull, what becomes apparent is that in any single moment the legal system of the community approximates a “middle way,” via media, that can be likened to the struggle of an organism to maintain itself between polarities of unity and diversity. The system does so by means of a dialectic.

The dialectic is a process of reasoning dependent upon opposing concepts of thesis, antithesis and synthesis. It has been a regular feature of law and moral philosophy since at least the time of the ancient Greeks. It was famously revived by Hegel, who maintained that mental patterns will manifest themselves over time in pairs of contradictions that ultimately generate a reconciliation.Footnote ¹²⁴

Such a reconciliation takes place out of the interaction and interdependence among the conceptual pairs I have chosen which, working together, result in transformation. The continual dialectic allows for “integrative thinking,” which Roger Martin has described as:

Integrative thinking has four main characteristics. First, it “takes a broader view of what is salient. … More salient features make for a messier problem.”Footnote ¹²⁶

Second, integrative thinking is open to considering multidirectional and nonlinear causal relationships. That is because “[s]imple, unidirectional relationships are easier to hold in the mind, but they don’t generate more satisfactory resolutions.”Footnote ¹²⁷

Third, integrative thinking does not “break a problem into independent pieces [to be worked on] separately.”Footnote ¹²⁸ Instead, the entire problem or system is kept in mind as work proceeds on individual parts. Retention assists in achieving “breakthrough solutions.”Footnote ¹²⁹

Fourth, integrative thinking searches “for creative resolution of tensions, rather than accept unpleasant trade-offs.”Footnote ¹³⁰

The communitarian theory presented in this book is a product of integrative thinking. It attempts to analyze the conceptual oppositions at work in WTO law from the vantage point of the system as a whole. To that extent, it highlights how ideas of obligations and rights are generated and conditioned within a community.

The theory is also open to considering multidirectional influences in WTO law, particularly from anthropology, evolutionary psychology and biology, mentioned above. Because the theory’s implicit frame of reference is system-wide, it does not divide the problem of explaining the nature and shape of WTO law into discrete pieces or cases. Instead, in line with the foundational idea of interdependence, it regards all components of the system as working together.

Finally, the theory’s profiling of complexity reveals how the law in operation arrives at a medial point, searching for “creative resolution of tensions, rather than accept[ing] unpleasant trade-offs.” This is evident in its identification of “third things” emanating from the operation of a legal system.

As mentioned, a communitarian theory draws heavily upon biology. Law is “bio-mimetic” in that it imitates biology “or is a mimesis of the processes that take place in biological systems.”Footnote ¹³¹

The particular contribution of biology to the theory is its emphasis on interdependence and evolutionary adaptation. To sustain interdependence in the form of community certain factors need to be adhered to over time, justice and law being among them. Still, conditions and conceptions of the good change, and so consequently there is a need for justice and law to change.

It is common to speak of justice and law as “evolving.” However, what I am especially interested in identifying a communitarian theory is the overall direction and content of that change.Footnote ¹³² How exactly do justice and law change over time in the face of interdependence?

Interdependence means that actors may become responsible for acts or effects upon those with whom they do not immediately depend or reciprocate. Most evidently, these relationships emphasize obligation. That transformation is visible at the level of justice in the evolution of what is considered right or correct, as in the case of certain transformative outcomes in WTO dispute settlement. It is also visible in the emergence of state responsibility for action that is not, strictly speaking, contrary to any treaty obligation, as indicated for example in the “non-violation” cause of action in GATT/WTO law.Footnote ¹³³

Insight from biology thus promotes a transformative view of the law. The tendency is to see the law either as impermeable, fixed and static, or, alternately, as porous, fluid and dynamic. By contrast, biology tends to emphasize the way law is ultimately adaptive, evolutionary and diachronic. It changes according to the evolving sense of the good. The advantage of this conception is that the law is understood more organically. This is the ultimate product of integrative thinking.

1.5 The Structure of This Book

A few words should be said about the structure of this book. I have intended this opening chapter as an overview of the book’s principal themes and ideas. This chapter has provided a summary of the theory and a justification for its three-fold structure.

Chapter 2 examines the WTO Agreement as a community. It sets out a theory of community before furnishing an overview of GATT/WTO arrangements as a community and some idea of the historical background from which they emerged. The chapter makes the point that the WTO Agreement can be understood as a club good belonging to the membership as a whole. A look is taken at the way in which the treaty’s cognitive framework is shaped by textual and contextual considerations that lead to a substantial degree of cohesion and unity.

From this set of observations it might be concluded that WTO obligations are integral – that is, they are owed unconditionally – as indeed the text of the WTO Agreement provides. However, a number of additional features suggest that WTO member countries consider their obligations under the treaty to be interdependent. There is an astute appraisal by countries of reciprocal behavior. Countries will commit, but only to the extent that others do so.

A look is then taken at how contemporary perceptions of fairness are causing the club good emanating from the community of the treaty to become uncoupled and evolve into something looser and perhaps less well-defined. Here, the common good of the membership appears at some points to be splintering into bilateral relationships more akin to private goods.

Chapter 3 focuses on the idea of justice and what theories have been put forward to explain it. The chapter introduces a modified Aristotelian theory of justice that explains much of what is observed in WTO dispute settlement. The chapter also illustrates how Aristotelian categories of distributive and corrective justice, classically conceived of as separate and distinct, are in fact interrelated and work together interactively and interdependently to promote transformation. The chapter concludes with a survey of how transformative justice falls short of “ideal justice,” thereby instilling a continuing impulse for reform in WTO law.

Chapters 4 to 6 constitute the core of this book. Successive chapters are devoted to explaining WTO law as a law of obligations (Chapter 4), a law of rights (Chapter 5) and as a sui generis legal system (Chapter 6). Each chapter opens with some general observations about the law’s operation in that mode, followed by more detailed remarks about its workings in four respects. These are: juridically in terms of obligations and rights, structurally in terms of constitution and contract, temporally in terms of future and past, and rationally in terms of deduction and induction.

The foregoing framework is reasonably coherent and does a good job of accounting for the nature and structure of WTO law. This raises an intriguing question: to what extent can a communitarian theory be understood as a theory of law in general? The question points to a need to apply and test the theory’s operation in other legal systems.

Chapter 7 therefore applies the communitarian theory to international investment law, a body of law chiefly concerned with the protection of investor rights in host countries. Due to this, a communitarian theory would forecast investment law to be preoccupied with corrective justice and to be heavily contractual, retrospective and inductive. The chapter demonstrates how all of these features are confirmed in the shape of contemporary international investment law, and how in light of considerable dissatisfaction with the current regime an impulse is detected toward something more egalitarian, and therefore more obligatory, constitutive, prospective and presumptive.

Finally, Chapter 8 summarizes the ideas put forward in this book. It details how justice under the WTO Agreement is transformative as opposed to corrective but not for that reason entirely unjust. That is because its chief value is solidarity. The chapter also examines the possibility of a communitarian theory serving as a general theory of law. A theory based on these ideas explains a considerable amount in a way that is naturally coherent and fruitful and offers several predictions and prescriptions about the possible future of WTO law.

At the same time, the chapter acknowledges that a communitarian theory is itself incomplete. This is due to abduction, which stresses the tentative, open-ended nature of current knowledge. Presentism suggests there is a danger in thinking about obligations and rights of countries narrowly in the current moment and not in the broader sense of obligations owed to future generations.

1.6 Conclusion

To conclude this opening chapter, it is helpful to say a few words about the wider context in which a communitarian theory will appear.

A theory of WTO law based on ideas about community and justice is likely to provoke reactions from commentators familiar with existing work on the WTO Agreement. There will be the demand to justify the theory outlined above in terms of prior work and to indicate in greater detail what the benefits of identifying such a theory are. Indeed, an acceptable answer to the question posed at the beginning of this chapter – why a theory? – appears to rest implicitly on perceived shortcomings of existing accounts and to promise something better.

To date, the WTO Agreement and its legal system have generated an enormous literature that analyzes the law according to a number of different approaches. I will mention three here.

First, the dominant textual approach to WTO law tracks or reacts to interpretation of the WTO Agreement principally by means of the Vienna Convention on the Law of Treaties (VCLT). That interpretation focuses on the text, context, object and purpose of the treaty.Footnote ¹³⁴ Although textualism has generated significant commentary about the WTO Agreement, it has been unable to offer a coherent theory of WTO law and says little about developments beyond the treaty language itself.

Second, WTO law, as an acknowledged branch of international economic law, might be expected to draw on economics for theoretic insight. However, despite generating substantial commentary about the WTO Agreement, economics also has failed to identify a generally accepted theory of WTO law.Footnote ¹³⁵ In this respect Petros Mavroidis has pointed out:

This is in addition to the fact that WTO dispute settlement panels and the Appellate Body have been hesitant to engage with economic analysis, treating it for the most part as an “afterthought.”Footnote ¹³⁷

Third, there are power-based approaches to WTO law anchored in ideas about legitimacy. The usual issue in these accounts is why WTO law is lacking in legitimacy or how the law might buttress its legitimacy.Footnote ¹³⁸ That analytical frame normally involves careful analyses of panel and Appellate Body decisions with models of legitimating state authority in mind, an exercise which is inherently problematic given that the WTO is not a state and its organs of dispute settlement are meant to settle disputes, not act as courts. As such, power-based accounts fail to track much of the language employed by the organs of dispute settlement in any systematic way or to explain its content in convincing detail.

Consequently, existing approaches to WTO law offer only fragmentary and limited insight into why the law is as it is. They do not offer a wholesale theory in the sense of an integrated “system of ideas.”

Still, the attempt to set out a communitarian theory of WTO law in this book is likely to encounter the objection that the concept of community is too vague a basis for a theory and that WTO law, like the rest of international law, is not traditionally understood as a form of justice.Footnote ¹³⁹ Furthermore, the principal features which I focus on in order to outline a theory have been traditionally understood as countermeasures promoting compliance, not remedies promoting justice.

Nevertheless, I take the view that whatever objections may be raised to my approach, a wholesale theory is merited if previous attempts at theorization fail to say very much in a systematic manner about the arrangement of WTO law. Such a theory is all the more important and pressing if a persistent criticism of WTO arrangements is that they are unjust.

In short, what I have introduced above and will detail in subsequent chapters is the way that a theory of WTO law is justified because it possesses superior explanatory power. Simply put, the theory offers a richer, more complete explanation for the shape of WTO law than other accounts do.

At the same time, the theory put forward in this book will not be easy to assimilate or appreciate. There is, in addition, much in it that on conventional understandings will appear counterintuitive and even nonsensical.

One universal tenet of thinking about justice is corrective, namely that a successful plaintiff is entitled to full recovery for harm. The theory’s two-fold response to this principle, namely that corrective justice in most instances is constrained by distributive considerations and is about what is “fair,” and beyond that, that justice aims in an overarching sense at transformation, will seem odd and perhaps a little alien.

There are other ways that the theory put forward here will be unsettling as well. In the main, what I set out does not engage with cosmopolitan views of global justice or arguments about the priority of human rights.Footnote ¹⁴⁰ To be sure, core human rights are jus cogens, fundamental norms from which no derogation is possible. However, human rights do not operate on the same plane as the rights and obligations in WTO law. As Gabrielle Marceau has pointed out, “there is no perfect coherence between the human rights and WTO systems of law and jurisdiction.”Footnote ¹⁴¹Instead, I posit that the justice of WTO law is a distinctive form of justice between member states and an example of what Steven Ratner has termed the “thin justice” of international law.Footnote ¹⁴² The justice I describe here applies among equals – that is, among countries that have made the necessary trade concessions and commitments to be part of a community. Individuals do not do this. Thus, while some readers may be apt to champion the need for WTO arrangements to forward global justice and to call my description of WTO law as justice a masquerade for continuing injustice, the explanation I prefer for this inconsistency is simply that individuals and countries are different. That difference is a reflection of the fact that justice in sovereign terms is not always the same as justice in human terms.Footnote ¹⁴³

A further objection to the theory will be thus: why focus on “rights and obligations” as the basis for a theory of law? Isn’t the landscape of a legal system much richer and more complex than this? What about general principles of law, declarations, soft law and so forth? Don’t these merit inclusion and discussion in a theory that aims to be general and comprehensive?

In response I suggest that it is appropriate to focus in the first instance on “rights and obligations” as the foundation for a theory because they reflect a basic understanding of what the law involves. They are backgrounded by consideration of the good and justice and become the nucleus around which other concepts build. Focusing on them to begin with is part of the theory’s simplification.Footnote ¹⁴⁴

Several years ago Ronald Dworkin observed:

Dworkin’s remarks convey the current mood of suspicion and mistrust of theory. A theory can be illuminating and liberating, but it can also be perceived as constraining and “hegemonic.”Footnote ¹⁴⁶

A theory like the one put forward here is likely to attract particular criticism. One view may be to regard it as presumptuous – in effect, an attempt to do too much. The conventional approach to legal analysis in WTO law and elsewhere is to search for answers provision-by-provision or case-by-case, offering only slim generalizations. A theory of law that identifies broad idea-complexes and their associated relationships at work in WTO law and projects them as a theory of law in general is likely to upset incrementalist orthodoxies and provoke resistance.

In addition, one effect of the increasing interdependence referred to above is a marked bias in many fields of research toward “participation,” “inclusiveness” and collaborative development.Footnote ¹⁴⁷ In light of this preference, nothing – let alone anything as fundamental as a theory of law – is thought to be the product of a single all-encompassing explanation. To the extent that the theory is so, it will be attacked as exclusive and simplistic. Some readers may be tempted to dismiss what is put forward in this book as “Grand Theory.”

Another view is likely to criticize the theory as insufficient, in effect doing too little. The apparent novelty of the theory means that it risks being greeted by all sorts of inflated expectations about the insights it will furnish, as the following forecast of a theory of international law implies:

The foregoing description may appear overwrought – a sort of “kitchen sink” description of a theory – but it is symptomatic of the unstated demand in contemporary legal scholarship that a theory of law should explain everything.

Here, I think it is important to keep in mind Thomas Kuhn’s observation in 1962 that a theory is useful if it solves “a few problems” recognized as “acute.”Footnote ¹⁴⁹ Among these acute problems is the need to supply an explanation for the kind of justice available under the WTO Agreement and for the peculiar shape of its legal system. Evidently, the theory put forward in this book will not resolve every problem or question of WTO law. To that extent, however, it leaves room for the development of other theories.