Journal of International Economic Law Advance Access originally published online on October 17, 2008
Journal of International Economic Law 2008 11(4):827-884; doi:10.1093/jiel/jgn030
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© Oxford University Press 2008, all rights reserved
Judging Judges: From ‘Principal-Agent Theory’ to ‘Constitutional Justice’ in Multilevel ‘Judicial Governance’ of Economic Cooperation Among Citizens
* Professor of International and European Law and Head of the Law Department, European University Institute, Florence. Previously professor at Geneva University and its Graduate Institute of International Studies (1993–2001), legal advisor/consultant in GATT and the WTO (1981–2007) as well as in the German Ministry of Economic Affairs (1978–81).
Correspondence: E-mail: ulrich.petersmann{at}EUI.eu.
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Abstract |
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How should citizens evaluate the ever more important case law of international economic courts and their sometimes inadequate responses (e.g. by investor-state arbitration) to ‘the governance gaps created by globalization (which) provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation’?1 Section I recalls that the customary law requirement (as codified in the Vienna Convention on the Law of Treaties) of settling ‘disputes concerning treaties, like other international disputes, ... in conformity with the principles of justice and international law’, including ‘universal respect for, and observance of, human rights and fundamental freedoms for all’ (Preamble VCLT), reflects the constitutional functions of courts to interpret and apply law in conformity with ‘rule of law’, justice and human rights as constitutional restraints on the ‘rule of men’ and their ‘rule by law’. Section II explains why some of the governance problems of the World Trade Organization (WTO) are due to power-oriented conceptions of ‘principal-agent’ relationships as ‘member-driven governance’ without regard to the constitutional functions of WTO bodies to provide collective public goods with due respect for citizens as ‘democratic principals’. Sections III and IV recall how the European Court of Justice (ECJ), the European Court of Human Rights (ECtHR) and the European Free Trade Area (EFTA) Court developed diverse ‘constitutional methods’ of interpreting treaties among European states as ‘constitutional instruments’ protecting fundamental freedoms and social rights of European producers, investors, traders and consumers. Sections V and VI argue that the worldwide context of international economic law (IEL) differs from multilevel European constitutionalism and requires WTO and North American Free Trade Agreement (NAFTA) dispute settlement bodies and investor-state arbitral tribunals to exercise more judicial deference and respect for the diversity of constitutional principles in WTO Members and their regulatory discretion. Section VII concludes that national, regional and worldwide economic courts should promote common conceptions of rule of law and ‘constitutional justice’, following the ‘solange method’ of multilevel cooperation among national and international courts in Europe, in order to protect transnational ‘rule of law communities’ for mutually beneficial economic cooperation among citizens across frontiers.
‘Wherever law ends, tyranny begins’John Locke, 1690
... ‘it is essential if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights be protected by the rule of law’
Preamble of the Universal Declaration of Human Rights, 1948