Defining Development in WTO Law : The Legality and Parameters of Labour Rights Conditionality in the Generalised System of Preferences

This paper argues that GSP labour rights conditionality is in conformity with WTO law. This hinges on the critical question of whether the realisation of labour standards can meet a ‘development need,' a term considered by the WTO Appellate Body report in the EC – Tariffs Preferences case, but yet undefined in WTO law. This paper first analyses the framework against which the lawfulness of non-trade conditions must be assessed: Article XX GATT and the WTO's Enabling Clause. It then examines the meaning of ‘development needs.' Based on a contemporary understanding of development theory, and consistent with the WTO Appellate Body's own jurisprudence, this paper rejects the proposition that ‘development needs' should be defined narrowly, in pure economic terms. Instead, it makes the case for an expansive yet nuanced understanding of this critical term which, properly construed, should be seen as including social and environmental concerns. The paper then assesses the legitimacy of labour rights conditionality as a means to advance development needs. The analysis demonstrates that the fulfilment of labour rights can be both constitutive of and instrumental to development. This makes GSP trade-labour linkage and differentiation between developing countries based on compliance with certain labour standards, in principle, permissible under WTO law. Finally, this paper addresses some of the technical aspects of labour conditionality schemes and suggests where they may need strengthening