Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, October 14, 2011

Hunger, Aid, WTO Law and International Competition Law – The Missing Links in the World Trading System

Posted by D. Daniel Sokol

Talia Einhorn, Tel Aviv University - Faculty of Management, Ariel University Center Department of Economics and Business Management has written Hunger, Aid, WTO Law and International Competition Law – The Missing Links in the World Trading System.

ABSTRACT: The right to food has been recognized in Art. 25(1), Universal Declaration of Human Rights, 1948, and further elaborated in Art. 11(1), International Covenant on Economic, Social and Cultural Rights, 1966 (ICESCR).1 Art. 11(2), ICESCR, refers also to the right to be free from hunger, which is the only right referred to as a 'fundamental' right.

And, yet, according to the most recent estimate of the United Nations Food and Agriculture Organizations (FAO), made public in October 2009, ca. 1.02 billion people are undernourished worldwide, a sizable increase from the FAO‟s 2006 estimate of 854 million people.2 642 million of them live in Asia and the Pacific, and 265 million – in Sub-Saharan Africa. Hungry people can hardly survive. They are poorly equipped to make a living in the 21st Century. Illiteracy is high. Healthcare is scarce or nonexistent. Life expectancy is short.

It is a shame for the world to have such a large number of hungry people among us. It is submitted that this deplorable situation is by no means a hopeless one with only a bleak future ahead. The countries in which the poorest people live are not all poor. Some are even rich with minerals and natural resources. Some other countries have good quality farmland which is much greater than the area actually farmed. There is an enormous unexploited potential to grow food. Yet, the exploitation of this vast potential requires a change of approach.

Instead of focusing on how to increase international aid, which has so far failed to alleviate the plight, the effort has to be made to create and maintain a market order in which people will have the opportunity to thrive on their own. To that end, there is need for a world trading system which is guided by abstract rules of just conduct, such as the two general principles of WTO/GATT law, namely the Most Favored Nation ('NFN') Treatment and National Treatment ('NT'). As will be shown, not all rules of the WTO/GATT law operate indiscriminately. A good number of them have been heavily influenced by interest groups in developed countries, which have made them result-oriented and tilted the playing field in their favor, imposing heavy burdens not only on the general public in their own countries, but also, and especially, on people in developing countries (DCs) and least developed countries (LDCs) whose livelihood has been reduced to barely subsistence level. These deficiencies must be corrected, but that would not suffice. The abstract rules of just conduct need to be complemented by rules of competition law. 'Competition is not merely the only method which we know for utilizing the knowledge and skills that other people may possess, but it is also the method by which we all have been led to acquire much of the knowledge and skills we do possess'. The importance of competition is not due to the fact that people act rationally, but just the other way around: it forces people to act rationally. If not hindered, it provides them with the signals that they should follow in deciding what they could best produce at prices which buyers will find attractive. By acting as a discovery procedure, it encourages innovation, entrepreneurship and development of talents and skills.

This contribution seeks to explore the link between world hunger and the deficiencies in the world trading system. Accordingly, this paper will address the causes for hunger; the failure of international aid to alleviate hunger; the deficiencies of the world trading system in addressing this situation; Market-Distorting Behavior of Multinational Enterprises ('MNEs'); the need for international competition law rules; and, finally, conclusions.

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