Unequal Bargaining Power and Status Differences at the WTO and Megaregional Trade Agreements

Although the current state of the world might be interpreted as pointing to another direction, e.g., trade wars between the US and China, international trade was traditionally driven by mutually beneficial exchanges. Any voluntary exchange of goods between parties trading (whether firms, countries, or individuals) will be unproblematic, not meriting any moral analysis: whether discussions on inequalities among trading parties or objectionable differences in standing or status among them. However, as it is widely accepted, significant and persistent differences in endowments among trading countries may contribute to the disempowerment of weaker countries. This is the case of multilateral negotiations within the World Trade Organisation (WTO), and especially, of megaregional agreements. During the former, greater difficulties partly due to the differences in development and endowments among countries, especially between developed and developing ones (mainly former colonies) were the cornerstone of achieving mutually advantageous agreements. Contrary to developing countries’ interests, megaregional treaties such as the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP), which neither aim at integrating developing countries in trade nor contribute to global justice, have been on the rise (Risse, 2017). Now, although someone could say that differences in endowments and socioeconomic development do not seem a priori problematic for establishing trading exchanges, the literature on justice in trade argues that trade exchanges between highly different parties are detrimental to the interests of the weaker; this is the case of noxious markets (Satz, 2010). These relevant inequalities include strongly unequal development, which contributes to unequal bargaining power and, ultimately, to some taking advantage of others, perpetuating differences in status detrimental to parties with already scarce trading alternatives and negotiation power who lose control over their needs, interests, and eventually, regulation. While the literature has argued both to implement a linkage between trade and labour standards (Barry, Reddy, 2008) and make trade condition upon the promotion of human rights (Risse, 2017), this article aims at addressing the more demanding question of whether trading institutions and trading parties should promote egalitarian relations. It argues that they do, and asks what this entails in terms of status, power, and authority among them. To do so, it first analyses proposals of labour rights and human rights promotion and argues that they fail to account for differences in status, power, and authority that have a pervasive impact in developing countries taking part in international trade. Second, it discusses which differences in power, status, and authority might be justified and which ones are morally objectionable; specifically, it looks at what morally objectionable hierarchies might justify severely unequal decision-making power. Finally, it focuses on compensatory mechanisms from a twofold perspective: first, it considers two mechanisms for fair bargaining, including having an equal say and the application of Samuel Scheffler’s deliberative constraint; second, it analyses whether morally objectionable hierarchies justifying severe unequal decision-making processes can be compensated or tempered by Niko Kolodny’s secondary tempering factors (Kolodny, 2023).