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Globalization - Trade and investment

Globalization and human rights

“Globalization and continuing rapid technological advances offer unprecedented opportunities for social and economic development. At the same time, they continue to present serious challenges, including widespread financial crises, insecurity, poverty, exclusion and inequality within and among societies. Considerable obstacles to further integration and full participation in the global economy remain for developing countries, in particular the least developed countries, as well as for some countries with economies in transition. Unless the benefits of social and economic development are extended to all countries, a growing number of people in all countries and even entire regions will remain marginalized from the global economy.” General Assembly Resolution S-24/2, A/RES/S-24/2, 15 December 2000, para. 4, Twenty-fourth special session of the General Assembly, “World Summit for Social Development and beyond: achieving social development for all in a globalizing world.”

60 years ago, the international community agreed, within the framework of the Universal Declaration of Human Rights, that, “Everyone is entitled to a social and international order in which the rights and freedoms set forth in this Declaration can be fully realized.” The strategy to achieve social development during the present era of globalization lies in acknowledging that the principles and standards of human rights should be adopted as an indispensable framework for globalization. Human rights embody universal shared values and are the common standard of achievement for all peoples and all nations. By adopting a human rights approach, globalization can be examined in its civil, cultural, political, social and economic contexts so that the international community can meet its commitment to an international and social order conducive to respect for human rights. This must be the strategy of governance at all levels — to secure respect of all human rights for everyone.

How trade rules and policies can affect the enjoyment of human rights

While various national, regional as well as international rules and policies drive many of the processes of globalization, in particular liberalization, deregulation and privatization, the trade rules established within the framework of the World Trade Organization (WTO) Agreement and the macroeconomic policies of international financial institutions have a particularly strong influence in shaping the workings of the global economy.

There is an unavoidable link between the international trading regime and the enjoyment of human rights. Economic growth through free trade can increase the resources available for the realization of human rights. However, economic growth does not automatically lead to greater promotion and protection of human rights.

Trade liberalization in agriculture can create export opportunities in agricultural exporting countries and promote growth and development. However, small farmers might not have the capacity to grow sufficient export crops and might even experience greater competition for resources, including land, thus marginalizing them from the potential benefits of trade. Similarly, greater export opportunities might lead to the reallocation of land and other resources away from domestic food production, with possible adverse consequences for household food security. Without the introduction of appropriate safeguards and transitional measures, trade rules and policies could have adverse effects on the right to food, workers’ rights and other rights of small farmers and the rural poor.

Intellectual property protection—particularly patent protection—should lead to more investment in innovation, including in pharmaceutical research, which is necessary for the promotion of the right to health. At the same time, it may result in an overly commercial approach to innovation and a concentration of control over the dissemination of drugs and other technology in the hands of relatively few corporations. In so doing, the protection of intellectual property might lose sight of its overall developmental objectives. In particular, highly priced drugs could become unaffordable for poor people and have negative implications for the enjoyment of the right to health and other human rights.

The reform of Government procurement could provide greater transparency and effective international competition in this area. However, it could also threaten the use of Government purchasing power to promote opportunities for individuals who have traditionally suffered discrimination, such as women employees or indigenous peoples. It is thus important to ensure that reform of Government procurement proceeds without losing sight of its social functions.

States have used the generalized system of preferences (GSP) to promote human rights, for example in an effort to eliminate forced and child labour or by making its benefits conditional on the ratification of International Labour Organization standards. On the one hand, linking trade and human rights in this way has underscored the social dimensions of trade and the concerns of consumers for fairer trade. On the other, it has raised fears that human rights might be used to cloak narrow protectionist or political aims while reducing trade opportunities in poorer countries and actually worsening the human rights situation of workers there. The use of trade to achieve human rights objectives in other countries consequently remains controversial.

A human rights-based approach to trade

A rights-based approach to trade is a conceptual framework for the processes of trade reform that is normatively based on international human rights standards and operationally directed to promoting and protecting human rights.

Human rights law is neutral with regard to trade liberalization or trade protectionism.  Instead, a human rights approach to trade focuses on processes and outcomes – how trade affects the enjoyment of human rights – and places the promotion and protection of human rights among the objectives of trade reform. 

In short, adopting a human rights approach to trade brings individuals and communities squarely into the processes of negotiating and implementing trade law.  This means:

  • Respecting the principle of non-discrimination by avoiding any distinction, exclusion, restriction or preference made on the basis of sex, race, colour, language, religion, political or other opinion, national or social origin, economic status, property, birth or other status and which has the effect or purpose of impairing or nullifying the recognition, enjoyment or exercise by someone of his or her human rights and fundamental freedoms.  Not only does this mean protecting individuals and groups against overt discrimination, but also not leaving certain individuals and groups out of the trade picture.
  • Promoting popular participation in the development of trade rules and policies.  In particular, trade policies are more likely to take into account the needs of individuals and communities if there is consultation in the process of policy development.
  • Monitoring the potential and real impacts of trade rules and policies on the enjoyment of human rights by individuals and groups – in particular the vulnerable, marginalized and socially excluded – through the use of human rights impact assessments
  • Using human rights impact assessments and consultations with individuals and communities to guide trade rule and policy making so that the progressive liberalization of trade promotes the progressive realization of human rights.  As with any reform process, trade liberalization can result in “losers” if the right form, pace and sequencing of trade reform is not chosen. Consequently, a human rights approach seeks the progressive introduction of trade policies that take into account the needs and rights of individuals and communities, particularly those who could lose out as a result of the reform process – for example, people working in non-competitive industries, or living in outlying areas.
  • Promoting accountability in the processes of trade liberalization.  As investors increasingly have recourse to international arbitration and States can resolve trade disputes through the WTO’s Dispute Settlement Body, it is important that individuals also have recourse to judicial and administrative accountability mechanisms.  Recognizing the justiciability of economic, social and cultural rights is an integral part in this process.
  • Ensuring the promotion of corporate social responsibility initiatives as an integral part of trade and investment liberalization.  As traders and investors benefit from freer trade, it is important to ensure that free trade is also fair and that business enterprises respect human rights, labour standards and environmental standards when trading and investing.
  • Encouraging international cooperation and assistance so that poorer countries can adjust to – and therefore benefit from - the trade reform process.  While ODA is important, the transfer of the know-how and technology concentrated in wealthier countries is equally important so that the people living in poorer countries can be empowered to reap the potential offered by trade. Similarly, ensuring good governance, not only at the national level, but also at the international level, is an important element of international cooperation and assistance to promote human rights.