International economic governance is of pivotal importance. All economic activity and economic distribution have an enormous impact on human well-being and hence, economic distribution is a key component of theories of justice. Often economic activity and economic regulation are perceived as a matter of ‘economic’ and even ‘mathematical’ necessity, denying the ideological and normative background assumptions. However, international economic law and policies show us that the global economic system has been made and continues to be made. Economic globalization, facilitated by contemporary economic regulation, has created a new ethical landscape. This new ‘global order’ with new human interdependencies gives rise to new ethical challenges.
This research project encompasses three in-depth case studies. The first case-study examines the impact of increased international protection of intellectual property over the last three decades, with the conclusion of the WTO-TRIPs Agreement (‘Trade-Related Aspects of Intellectual Property Rights’) as a key milestone. Intellectual property protection has become an important aspect of economic globalization, especially as the world moves towards a knowledge economy. How we regulate this impacts how the economy works and who benefits. Despite reluctance and protests of many developing and least-developed countries, the protection of intellectual property is increasingly included in bilateral agreements on investment and trade, increasing the international standards of protection. This case-study specifically focusses on patent protection and regulatory protection for pharmaceuticals. Various TRIPs and ‘TRIPs Plus’ obligations have significantly extended pharmaceutical market monopolies, having a severe impact on the access to medicines and pharmaceutical development.
The second case-study takes a closer look at International Investment Agreements (IIAs). International investment law protects foreign direct investment (FDI), private investment in foreign countries. As total FDI stock continues to increase, it has become one of the defining features of globalization. Continuously, new investment agreements are negotiated and concluded. Today, over 2500 IIAs limit the regulatory autonomy of governments and firmly protect the interests of investors. Contrary to their modest fame, these agreements have significant impact. Besides the fact that these agreements can also be employed to protect intellectual property, this case-study will mainly focus on its dispute settlement mechanisms. Most investment agreements foresee ‘investor-state’ arbitration, allowing private investors to press charges against states. As a result, investors can obtain significant compensations when states impair their investments. In some cases, even regulatory actions intended to protect health, safety or the environment can constitute an ‘indirect expropriation’, resulting in such damage-claims.
The third case study will examine international trade regulation and its main institutional arena, the World Trade Organization (WTO). One of the basic principles of the WTO framework is non-discrimination. For trade in goods, this entails the obligation to treat “like products” equally, irrespective of their origin or the way these products have been produced. As a result, if the production process does not affect the intrinsic quality of the product, states cannot treat goods produced in an environmentally unfriendly manner differently. Similarly, states are not allowed to take working conditions in factories into account when deciding to allow or ban the import of goods. Although WTO laws mention the possibility for member states to take social and environmental measures, there has been significant controversy over the acceptability of taking these so-called ‘process and production methods’ into account.
At first sight these three cases might seem unrelated, but they have something in common: they demonstrate possible consequences and effects of current institutional structures and international economic regulation. Based on concepts of economic and global justice, these regulatory standards are assessed, unfolding important ethical problems. First, current international economic rules often have adverse impacts on the life and well-being of numerous people, especially in developing countries. Second, the formulation, negotiation and conclusion of the relevant international laws often lacks sufficient democratic legitimacy. Third, these cases indicate a problematic relationship between international economic law and international human rights law. This research project aims to unravel these issues and answer the following questions: Can the current international economic rules on intellectual property, investment and trade be justified? Can states be forbidden to ban goods produced in deplorable social and environmental circumstances? Can strict obligations to protect property claims (patents and investments) on a global level be legitimized? If such claims are acceptable, what are fair conditions for their global enforcement?