An Analysis of Pascal Lamy's Proposal on Collective Preferences

Abstract

In September 2004, then-European Commissioner for Trade Pascal Lamy released his study on the political challenge of 'collective preferences' for the world trading system. Lamy defines 'collective preferences' as 'the end result of choices made by human communities that apply to the community as a whole'. The adoption of collective preferences by governments can complicate international trade when a good or service from an exporting country is not acceptable in an importing country. Collective preferences cause a problem for the WTO if the resulting measure violates WTO rules and yet the measure is too popular in the regulating country for the government to withdraw it. The paradigmatic example is the European Communities - Hormones dispute in which the European Commission could not comply because of contrary popular and parliamentary opinion. To address cases like that, Lamy proposes the negotiation of a new safeguards provision in the WTO which would permit governments to retain strongly-supported measures provided that compensation is paid. The purpose of this article is to analyze Lamy's paper and to contribute to the continuing international debate on 'collective preferences'. The article concludes that while Lamy's proposal is a worthy idea, achieving it in the WTO is highly unlikely.

Keywords: WTO, international law, European Union, social choice

JEL Classification: A10, F13, H4, K33