An Interview with John H. Jackson: Shaping International Economic LawSkip other details (including permanent urls, DOI, citation information)
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J: Your scholarship on international economics continues to grow in importance. Trade has become the ways it has become such a crucial issue, one that has moved prominently into public discourse. I’m sure when you were writing in the late sixties that was not the case.
Jackson: That’s true. The GATT [General Agreement on Tariffs and Trade] was hardly known in the sixties, at least not publicly or among academics, though it was known in government diplomatic circles. We used to say, "GATT, what’s that?" Now it is front-page material with the new World Trade Organization (WTO). I remember about 1989 when the first tuna/dolphin trade case appeared on the front page of the New York Times: there may have been some articles about GATT negotiating rounds and so on in earlier years, but for a panel case, which is often considered highly technical, to be on the front page was quite novel.
Of course what was driving that was the beginning recognition by environmental groups of the potential impact of trade rules. The trade-environment interface has become increasingly troublesome. I think that we are over the heavy criticism by environmentalists. But conceptually there remain some very, very difficult issues of how to mesh environmental goals with trade policy.
There exists a heightened awareness of globalization now, with all sorts of discussion this year of globalization: French President Jacques Chirac’s speech, for example, in which he blamed globalization for some of the problems of France. In general we are seeing increased tension, worry, and to some extent fear of the globalized economy. Yet I think essentially the economists are right that there is not much that governments can do about it. Both technology and markets simply outstrip governments’ capabilities in regulation unless they are willing to try to keep abreast. One example of this is the telecoms agreement in February [WTO agreement to liberalize telecommunications ownership], which is really an outstanding achievement. Two years ago it was hard to reach, and one of the things that helped lead to a satisfactory conclusion was the realization on the part of diplomats and governments that they were essentially just trying to catch up, that the technology was way out ahead. A single government could not regulate effectively anymore; having some kind of global system in place was necessary.
J: You’ve described the kind of trade issues you work on as divided between political, economic, and legal perspectives — or rather, your work has been devoted to showing the connections between these perspectives. How do you see the relative prominence of those different facets of your research?
Jackson: My comparative advantage, of course, is legal. Now first of all, to try to describe the subject in legal terms is not easy. I use the term "international economic law," which in various parts of the world doesn’t mean too much. The way I view it, international economic law is a regulatory subject, the best domestic counterpart to which is perhaps anti-trust or securities law, or labor law: it’s an economic-regulation question, but in this case with an international overlay. So we’re struggling with the meshing of the international law and domestic law on the question of regulating economic behavior that crosses borders.
J: Does the issue of sovereignty figure in this?
Jackson: Yes, sovereignty is the big question. First of all, the word sovereignty is crazy. Important scholars like Louis Henkin at Columbia have said we should get rid of the word: I have just written in a festschrift for him that the notion of sovereignty from two centuries ago is not meaningful today. The old idea of sovereignty was the supremacy of the state, but we no longer think that sovereigns have the right to chop people’s heads off willy-nilly. If there is some remaining usefulness to the word sovereignty, I suggest that it relates to the question of where and to whom you should properly allocate the kind of power, decision-making power, that affects people. Should Geneva, Washington, Lansing, or Ann Arbor make these decisions? These are all really questions about the allocation of power. Then we can look more systemically and in a more disaggregated way at particular decisions and say, for example, that telecoms should be dealt with at the world level because of the nature of the technology, while fixing street pot holes should be accomplished locally. Similarly, the U.S. Supreme Court is currently struggling with federal-state allocation of power questions in a way it hasn’t for some decades.
J: Along with issues like the internet. What other areas, in your view, escape national regulation and need international attention?
Jackson: The result of the Uruguay Round [the multilateral trade negotiations that established the WTO] was massive - 26,000 pages long, probably a world record-length treaty. And though most of that is schedules, with only about a thousand pages of text, that thousand pages of text has enormous potential. One of the additions in the new system is the services agreement, GATS [General Agreement on Trade in Services]. If you look at that in combination with the previous agreement you can see that there is probably no single area of economic endeavor that isn’t going to be affected by international regulation in some way in the future. In other words, every time a government thinks about regulating an economic endeavor, there is at least a potential that those treaties are going to have some kind of bite on what nation-states can do, though some of this we won’t feel for a decade or two. I have also said that no country understood quite what it was signing when it got into this. And I have had some of the key negotiators of the Uruguay Round tell me "yes, that’s right, we didn’t fully understand it." In Europe recently I had many talks with people in the middle of this, and you can see the beginning of the sense that there has been quite a fundamental change in trade diplomacy from that under the previous GATT.
J: In your view is it the organizational structure of the WTO that marks the really significant shift from GATT?
Jackson: No doubt. The GATT was not supposed to be an organization. The International Trade Organization [plans for which came from the Havana Conference of 1948] failed. I wrote a book in 1990 called Restructuring the GATT in which I inventoried some of the problems I called "birth defects" of GATT, and suggested some institutional changes that were needed. That book actually had something of a role in the development of the WTO charter. The Canadians in particular picked it up and developed a proposal structured on some of the things that I said in that book, which gradually worked its way into the new treaty. They used me as a consultant.
J: You describe the WTO as being very successful, as marking a watershed. What in your view would be a dystopic or nightmare scenario for the system of world trade?
Jackson: If we began to see a backlash in societies like the U.S., in major trading powers, against internationalism and globalization and a tendency towards whatever you call it - isolationism, protectionism, restrictiveness. Some might worry that this is happening in France or in other parts of Europe, and maybe in parts of the world. Personally I don’t think that’s so, even in the U.S. I think there are always loudmouths that try to play to the fears of the public for political purposes, but how quickly the light of some of them has faded is an important indication. You could envisage a scenario where things got more and more acerbic between nations on trade and the U.S. began to pull back, or if this country faced a decision from Geneva that caused the U.S. to say, "politically we are not going to follow it, we are going to thumb our nose at it." Then you could see the possibility of the system unraveling.
If that happened I think markets would be greatly affected, and the stock market would recoil. I’m not saying that the WTO is the factor that caused the market to rise two thousand points in the last year or so, but it’s one of a series of things that makes investors think the world is relatively at peace, relatively stable and predictable. This reduces the need for a "risk premium," and when you reduce the risk premium presumably you can pay higher prices for the same rate of return. I can see a scenario that would undo that, but I don’t think it’s very likely.
J: What about the risks or challenges from trade blocs like NAFTA [North American Free Trade Agreement]?
Jackson: There has been a lot of discussion recently about the connection or disconnection of trade blocs in the multi-lateral system. My own view is that regionalism can make important contributions to the system. For instance, regional groups can go further and deeper on integration and market-opening measures, and can more easily reach consensus than 130 nations. NAFTA in fact went even further than the Uruguay Round on services, intellectual property, and so on. Thus it becomes a way to test some ideas, a little bit like the Supreme Court has said the states can do in our federal system. However, there are always temptations to "gimmick" the system to prevent competition from outside sources, and the big gimmick of regional blocks is rules of origin [that determine the national origin of imported goods for possible tariff consideration], which become complex, expensive to administer, and probably distorting. There are other possible gimmicks as well.
Thus what is needed is a multi-lateral supervisory authority that prevents these "gimmicks," which is where the WTO comes in. Whether it is strong enough to adequately supervise that we don’t know: I think it is, but some people are skeptical. We may be seeing the beginning of a more significant multi-lateral supervision of regional blocs, though how far it will go we don’t know.
J: So this may become something above the bloc system.
Jackson: Yes, so it will be able to say, we can tolerate NAFTA or free trade of the Americas, or APEC [Asia-Pacific Economic Cooperation], but only if other parts of the world feel they have a right to redress when their interests are trampled on. Indeed, what I’ve witnessed both in a conference in London in May and also on the continent more recently is a remarkable worry by the European community about regionalism, particularly the regional blocs that the U.S. belongs to — NAFTA, potentially the free trade area of the Americas, APEC. This is ironic, because after all the European community is the original great regional bloc. But some of them are really worried that they are going to be excluded, that they will have more trouble getting their products into Brazil and Argentina and Mexico because of the free-trade area here in this hemisphere. I think it’s appropriate for them to worry, but I don’t think it’s appropriate for them to say that then we should abolish blocs.
J: What are the mechanisms that make the resolutions of the WTO or that of other multi-lateral agreements binding?
Jackson: It’s the dispute-settlement procedure. It’s not a perfect system, and the analogies to the domestic legal system are not too strong. For example, there’s not an effective sanctions system: there are sanctions built into the new agreement, but we haven’t seen these happen yet and I doubt that’s a really significant part of it. Indeed, the whole trend under the new agreement is toward much tighter analysis of the legality of actions of states. A government can claim that it can’t be forced to take a course of action prescribed by the WTO; and though this is true it becomes very uncomfortable for governments to thumb their nose at it. Thus there’s kind of an informal reciprocity, a shaming process, finger-pointing, which also becomes a process of education. You know, some governments really didn’t know what they were doing, and all of a sudden they wake up and find, "oh my gosh, we just violated the agreement, how do we get out of this? Politically we can’t do it ourselves." ? Thus it’s kind of handy for them to have the international system say, "You’ve got to do this" as an answer to public pressure.
J: What kind of special challenges have appearedarisen in your career as an academic exploring issues with such enormous utility for governments, businesses and international organizations, from working on something which has proved so timely and vital?
Jackson: There have been two or three important goals for me. One is multidisciplinarity, especially in economics and in political science. Many decades ago I studied a lot of economics. I like economics, and the great thing about Michigan has been working with the economists here. Another motivator has been empiricism. That is, I have felt uneasy almost from the beginning of my career about some of the overly theoretical pronouncements in scholarship, particularly in international law. A certain amount of it is very unrealistic and thus pretty much ignored, so my approach has been to try as hard as I could to get in touch with what’s really going on. I have been able to do that partly because I was in government for awhile and subsequently have had lots of contact with people in government and in other governments. I’ve been an advisor to various governments and to various parts of the U.S. government, to members of Congress and to some private clients, which has helped give me a little window into those things. It’s been very, very useful. And by empirical I don’t mean statistical, necessarily — a lot of it is anecdotal, particularly because not that many cases exist in any one context in the international area.
J: So do you see a kind of conversation between the reliance on cases and precedent in legal research and the use of statistics in economic research?
Jackson: Yes, I do. What I do is rely on my economics friends for what you might call the statistical or model-building, but on the other hand I am able to offer them insights into what goes on in the minds of diplomats, officials, practitioners and so on. Melding the two is quite important, particularly intoin the minds of students, so that for instance they are not just reading high-flying generalities of international law, or statistics alone. I wrote an article that evolved from a keynote talk to a conference on international economic law, and I used the word "boiler room" in the title, which emerged from a long telephone conversation I had with an editorial writer for the Washington Post about four or five years ago. He had been struggling with the problem of an anti-dumping case, and somebody told him to call me up. I spent about two hours on the phone walking him through the anti-dumping case, and anti-dumping cases are wild, really bizarre things. I explained to him how governments can manipulate numbers in these cases and achieve basically what they want to accomplish, to keep goods out and help out their own private sector. After I got all through that, he said, "Boy, this really is the boiler room of international relations!" And I like that concept, the "boiler room" as the site of the detailed nitty-gritty without which you don’t really understand what is going on.
J: Where are some of the areas in which the internationalization of the University could be pushed further?
Jackson: I would like to see the University assuming a place equal to, say, the Woodrow Wilson School at Princeton, or the Columbia School of International Studies, or maybe even the institutes at Stanford and Berkeley. This university tends to be more fragmented. People say that the University has a lot of international activity — and it does, spread around in different places, but the trouble seems to be in bringing this together in a way that emphasizes the role of the university. For example, we do not have much of a television presence. Some might say to forget that, but you can’t entirely forget that in today’s world: we want the university to play more of a role in actually affecting policy than it does compared to some of our peer institutions. We’ve also lost some important people.
J: What kind of skills or understandings do law students need today to comprehend changes in the international economy?
Jackson: I would advise them to acquire a year of experience abroad, and I would advise them to take significant coursework in international subjects in law, meaning probably at least three major international courses. One hopes those courses would cause the student to realize that almost everything in his or her professional life will call upon him or her to have some sensitivity to the international context. This is true whether in government or the academy, in private practice, or working at different levels in national or international organizations. But it’s true even in smaller communities;: one of the major cases in international law came out of Kalamazoo, Michigan about 15 years ago, and I’ve had practitioners call me from places like Grand Rapids with problems where it was clear they did not know conceptually how to begin. So I think more and more the legal practitioner in whatever context is going to need that additional dimension. The question is whether the curriculum should require professors in the so-called domestic subjects to begin to introduce elements of the international aspect of their subjects, be it antitrust, labor, securities regulation, taxation, and so on. At the same time, you can’t understand international law if you study it in the context of international law alone;: you have to study it at least partly in the context of national law and the connection between them.
J: In the U.S. political context, how have the shifts in trade practice altered the balance between legislative and executive control?
Jackson: I think Congress has become more assertive, and in a sense more powerful, not just in trade but in a lot of subjects, and I sometimes wonder if that isn’t due to a lack of presidential leadership. In the Reagan era, for instance, many members of Congress said that President Reagan was not leading on international economic relations, that he wasn’t interested in it and he didn’t know much about it, and therefore the Congress had to step in and play a role. President Clinton has gone to bat on some big issues, like the Uruguay Round, NAFTA, APEC and others, but also let his subordinates play around a bit with things that were not good. The Helms-Burton law [written to allow the U.S. to further isolate Cuba via trade policy] was a congressional initiative that is a foreign-relations disaster in many ways, and this was partly triggered by presidential election-year politics. The president would not have signed that law but for the political context, and now he and the U. S. government are reaping the consequences, consequences that are not all that happy. There are some constructive things behind the scenes that come out of this, but it’s greatly diminished the leadership potential of the U.S. in international economic relations. Foreign governments feel it was irresponsible, and are trying to come up with ways to check potential U.S. abuse of this type in the future. It’s held up certain other treaties that were in the process of being negotiated.
J: You spent time with the United State’s Trade Representative’s office.
Jackson: I was the general counsel for a couple of years in the mid-1970s, on leave from the University. The experience was critical to my thinking and my scholarship, and to my empirical orientation. Without it, there is little doubt in my mind I would not have continued in the way I have. It was a period when I really had an open window on lots of governmental structures, on processes of deliberation, on policy-making. It’s very hard to get that clear a window without that experience. I was responsible for drafting basically the first version of the trade act of 1974, and helping to move that through Congress.
J: How has that office grown in stature and importance?
Jackson: I think by that time it was already very important. It was introduced in the 1962 trade-expansion act. Up to that time trade was a tug-of-war issue between the State and Commerce Departments, with Treasury somewhat involved. It was partly in a compromise between those agencies that Congress set up this agency, which at the time in fact was not technically an agency: it was just one person, the so-called Special Trade Representative, ambassador extraordinaire and plenipotentiary, a direct ambassador of the president. But then he needed an agency around him, and that began to grow. And though now it is an agency very central to trade policy, it’s still a tiny agency of 200-300 professionals who still work heavily with inter-agency committees, with negotiating teams composed of maybe six to eight persons, mostly from other departments and agencies of the U.S. government.
J: In your wide range of experience and work, who do you see as your audience? For whom are you writing?
Jackson: Well, I’m not writing just for academics. My audience includes those who make policy and have direct influence on these issues.
J: What sorts of micro-level studies of world trade shifts do you think would be useful?
Jackson: A careful look at particular societies, or groups within societies, and how they are affected by globalization and interdependence is useful. Such studies could be valuable for explaining how such groups face social change generally, and particularly to the social change that is caused by globalization.
J: What possibilities for the future do you see for the nation-state?
Jackson: I don't think one can dismiss the nation-state yet. The developing system of "governance" in world economic and other relations [through organizations like the WTO] demands attention to the allocation of power among different levels of government, as well as among different institutions of government at the same level. Power at the level of the nation-state can be an important check on the misuse of power at an international or multilateral level.
John H. Jackson has been a faculty member at the University of Michigan Law School since 1966. Combining a pragmatic approach from his experience in government with his expertise in international law, he ranks among the preeminent scholars in international economics and law. Jackson’s scholarship on trade law has developed into a broad theory for the study of international economic relations. His 1969 book, World Trade and the Law of GATT , has been nicknamed the "GATT Bible" for detailing the emerging regulatory system of transnational trade. Similar high praise accompanied his 1989 volume The World Trading System (second edition to appear in October 1997), which surveys the implications of multilateral institutions administering international economic activity. Given the enormous growth of the global economy, Jackson’s work addresses an equally growing audience, and he has written widely forrin professional journals of law, economics, and politics, and has lectured throughout the world. In January 1998 he will be University Professor of Law at Georgetown University, while retaining an emeritus relationship with the University of Michigan. He spoke with Thomas Williamson, an editor of the Journal.