This special issue is based on papers presented at a conference organised by Nicolas de Sadeleer and Ivana Damjanovic at Maastricht University in January 2022. Supported by the Erasmus+ EUChMIS Jean Monnet project of the Maastricht University’s Institute for Transnational Legal Research (METRO), the conference addressed the evolving nature of the rule of law in international economic law. It explored the dynamics between the rule of law and the governance of international economic relations, with a particular focus on interaction and integration of broader policies into international trade and investment. In the modern globalised world, the rule of law has gained a new dimension, as it is increasingly focusing on the impact of the international rule of law on individuals. As the rule of law permeates transnational activities, international economic law faces the challenge of playing a more proactive role in achieving global justice beyond economic interests.
The rule of law is the buzzword of the day. Although no one knows exactly what the concept encompasses, everyone seems to be in favour of it. In its essence, the rule of law entails that no one is above the law. However, the rule of law is anything but an unequivocal concept – there are different conceptions of what constitutes the rule of law, several of which overlap.Footnote 1 Basic distinctions can be made between the meaning of this concept in common law vs. civil law legal traditions, which in many aspects mirror the difference between formal or narrower rule of law, and its substantive or broader concept.
In common law countries, the rule of law occupies a pre-eminent position, having evolved to curb, or control the discretionary power of the executive. The creation of the concept of the rule of law is generally attributed to AV Dicey. In his classic 1885 book Introduction to the Study of the Law of the Constitution, this Professor of English Law at Oxford gave three meanings to the rule of law. First, he considered that the concept implies the supremacy of legislation, as opposed to the arbitrariness that arises “whenever there is discretion.”Footnote 2 Arbitrariness in this sense has formal rather than substantive connotation, requiring that laws must be passed in the correct legal manner (through the parliament) and must not be vague and unclear, regardless of the actual content of the laws, that is, regardless of whether they are considered “good” or “bad.”Footnote 3 Secondly, the rule of law in this sense excludes the idea of any exemption for officials or others from the duty of obedience to the law that governs other citizens or from the jurisdiction of the ordinary courts.Footnote 4 As “no man is above the law”,Footnote 5 including the government, the concept implies equality before the law and access to the ordinary courts. Thirdly, in the United Kingdom the constitution is not a source of law but rather the result of the ordinary law of the land. Since the constitution does not differ in terms of its status from ordinary laws, fundamental rights have no supremacy over ordinary laws, thus preserving parliamentary supremacy. As a result, in Dicey’s conception, the rule of law does not incorporate fundamental rights in their substantive aspects, as they are incorporated in the continental European constitutional tradition and in the United States. Instead, individual rights are the result of numerous judicial decisions determining rights of private individuals in particular cases brought before the courts, but the rule of law does not demand adherence to specific substantive rights.Footnote 6 Dicey’s three aspects of the rule of law – regulating government power, equality before the law and access to courts – are frequently cited as basic requirements of a formal understanding of the rule of law.
This vigorous assertion of supremacy of law and the protection of traditional private rights must be understood as a reaction to a “dislike or distrust of the role adopted by the state” which throughout the 19th century was producing a plethora of administrative institutions and agencies.Footnote 7 The rule of law was thus routinely invoked in England by judges in their judgments.Footnote 8 Most scholars are still of the view that the essential meaning of the rule of law is to authorise and control the exercise of coercive power by State authorities against individuals according to the settled principles of law.Footnote 9 Although Dicey’s work has had a profound influence in common law countries, his analysis has increasingly been the object of academic criticism. Various modern commentators do not share Dicey’s hostility towards discretion required to exercise executive powers and argue that the concept of the rule of law should be substantive in nature and therefore encompass human rights.Footnote 10 That being said, neither British lawmakers nor commentators in the literature have been able to formulate a concise definition of the concept, leaving this task to the courts.
In the civil law family, the rule of law has been conceived more broadly with the enunciation of formal and substantive requirements of legality, an approach that places less emphasis on judicial process. The rule of law is known in the Council of Europe and in the EU legal orderFootnote 11 as the Rechtstaat, and in the French-speaking world as l’Etat de droit Footnote 12 which is the literal translation of the German concept. It is also known as the Rätt Staat (Norwegian, Danish and Swedish), Estado de derecho (Spain) and Stato di diritto (Italy). The combination of the terms (State, Staat, Etat, Estado, Stato) with the terms (Law, Recht, Rätt, Droit, Derecho, diritto) implies that the State is subject to a gamut of principles that mutually reinforce one another. The literal translation of the rule of law in French (la règle de droit) or in German (Herrschaft des Rechts) therefore does not capture the essence of the broader notions of Rechtstaat/Etat de droit. Footnote 13
As in the common law tradition, the concepts of Rechtstaat/Etat de droit aim to constrain the actions of the public authorities within a legal framework in order to ward off the risk of arbitrariness. However, the concepts of Rechtstaat/ l’Etat de droit ascribe greater importance to substantive rights. This can be explained by the enshrinement of fundamental rights in national constitutions, in contrast to common law countries (with the exception of the United States). Neither the administration nor the legislature can escape judicial or constitutional review.Footnote 14
In Europe, a body of principles (or constituent elements) structuring the rule of law have gradually emerged. The list of these principles varies from one author to another,Footnote 15 and from one legal order to another.Footnote 16 The European Commission for Democracy through Law of the Council of Europe (Venice Commission) has identified several sub-principles, which are not subordinate to one another: legality, legal certainty, equality and non-discrimination, separation of powers, etc. They are mostly formal and procedural in nature, given that they require control over executive bodies. Although the precise content of these principles is likely to vary from one State to another, depending on their constitutional traditions,Footnote 17 their substance has been identified through the case law of the Court of Justice of the EU (CJEU) and the European Court of Human Rights (ECtHR).Footnote 18 The general nature of these constituent elements does not negate their binding effect in EU law. As their scope has been extensively developed in the case law of the CJEU, they are not a source of legal uncertainty.Footnote 19
Accordingly, it is important to distinguish between those components that are formal and those that are substantive in their nature. The formal conception refers to the characteristics of the legal order and the judicial system, without regard to the content of the law, the pre-eminence of which must be ensured. However, the purely formal conception is subject to limits, as a State cannot be governed by rules that are formally valid but that do not reflect values of society. Indeed, it would be difficult to consider a State that tolerated religious persecution or muzzled freedom of expression as being genuinely compliant with the rule of law, even if it was compliant on a formal level.Footnote 20 According to a substantive conception, a rule must satisfy moral requirements in order to be valid. From this perspective, the rule of law only makes sense in relation to the liberal democratic regime characterised by respect for human rights, to which it is consubstantial.Footnote 21 In the EU and in the Council of Europe, the rule of law requires that laws afford adequate protection of fundamental human rights. The substantive “rights” component of the rule of law must be understood as having regard to the importance afforded by these legal orders to human rights.Footnote 22
To sum up, the rule of law is a concept à géométrie variable that has been evolving over time. The lack of a settled definition is both a weakness and a strength. Given the controversies about its status and substance, international courts (except for the ECtHR and the CJEU) appear to be reluctant to rely upon it. At the same time, the rule of law can be adapted to the specificities of various legal branches or specific legal orders such as the EU legal order or public international law.
In international law, given its traditional State-centric nature, the rule of law has for a long time remained relatively unknown, having been conceived more in the context of the control of State powers in the international legal order.Footnote 23 Traditional distinction between the “rule of law” and “rule by law” is less applicable to the international legal order, where the primary question is not the vertical relationship between the State and the governed (individuals) but rather horizontal, between subject and subjectFootnote 24 (primarily States and international organisations). As there is no international lawmaker, it thus comes as no surprise that several components described above, at the outset, are not relevant in the context of the international legal order. For instance, public international law does not reflect the separation of powers through a tripartite state system of checks and balances (the legislature, the executive and the judiciary). Enforcement of rules is subject to consent of States and there are limited mechanisms to ensure compliance. The principles of equality and non-discrimination – general principles of law in domestic lawFootnote 25 – have a different focus in the international legal order and have been developed primarily to ensure the sovereign equality of States.
However, this has changed with the passage of time and the expansion of international law to individuals and other non-State actors. If we understand the rule of law as the “central principle of constitutional governance,”Footnote 26 it could be argued that “constitutionalisation” of international law more generally has contributed to the need to expand the rule of law beyond the State. This concept refers to, on the one hand, the change of public international legal order from an inter-State to a legal order committed to the individual and global community; and on the other, internal constitutionalisation of international organisations, characterised by judicial application of law.Footnote 27 For example, a more common invocation of the rule of law by the ECtHR and the CJEU can be understood in this regard.
Accordingly, in modern international law, the application of the rule of law can be examined through a set of different relationships: between States (e.g. rules regarding international peace and security as the core objective of the UN Charter); between international organisations and their Member States (e.g. issues of competence and delineation of powers); between States and individuals/non-State actors within their jurisdiction (e.g. international human rights); direct relationship between the international level and the individual (e.g. international criminal law). This poses additional complexity for transposition of the rule of law from the domestic into the international sphere.
The rule of law was recognised by the United Nations General Assembly within both international and national affairs in 2000.Footnote 28 The content of the concept was summarised in a 2004 report by the UN Secretary General as:
“a principle of governance in which all persons, institutions and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced and independently adjudicated, and which are consistent with international human rights norms and standards. It requires, as well, measures to ensure adherence to the principles of supremacy of law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness and procedural and legal transparency.”Footnote 29
This UN definition is a synthesis of the common law understanding of the rule of law and the civil law concepts of Rechtstaat/Etat de droit. In its essence, it is an expression of the application of the rule of law within States, rather than in the international legal order itself. Its focus is also on formal rather than substantive elements. For example, the requirement of State laws’ consistency with international human rights norms and standards does not specify their content, which can be explained by the fact that there is no standard of human rights that is universally agreed among nations.Footnote 30 The UN statement also does not amount to a formal and thus binding source of international law that would, at least from a positivist perspective, compel States to comply with the rule of law, either domestically or internationally.
The development of the rule of law in international law is incomplete, insofar as perceptions of the concept are constantly evolving in time and space. Is the rule of law an objective, a principle,Footnote 31 a guiding principle,Footnote 32 a constitutional principle,Footnote 33 a fundamental principle of a democratic society,Footnote 34 a meta-principle, a customary principle of international law, a value,Footnote 35 or merely a concept deprived of legal effects? In terms of formal sources, international treaties do not define the rule of law, even when their provisions refer to the rule of law or encapsulate its different constituent elements.Footnote 36 To have a status of customary international law, the rule of law would need to meet the requirements of State practice (usus) and opinio iuris. Footnote 37 As a minimum, inconsistencies in the implementation of the rule of law by the States pose a difficulty for demonstrating compliance with these conditions. Article 38(1)(c) sets out the third source of international law – “general principles of law”, which serve to fil gaps in the interpretation of rules by international courts. However, in order to be induced, the rule of law would have to be found in a wide number of domestic legal systems (horizontal generality), and it would need to be suitable for abstraction from the domestic to the international legal regime (vertical generality). For the reasons already discussed, this could also be a challenge.
In their 2012 UN General Assembly Declaration on the Rule of Law,Footnote 38 States expressed their “commitment to the rule of law and its fundamental importance for political dialogue and cooperation among States.”Footnote 39 They recognised the application of the rule of law to “all States equally,” as well as to international organisations,Footnote 40 reaffirming it as a core value and principle of the UN.Footnote 41 Rather than defining the rule of law, States have referred to a number of elements, which they associate with this concept, both formal – such as, the resolution of disputes by peaceful means;Footnote 42 importance of fair, stable and predictable legal frameworks;Footnote 43 good governance;Footnote 44 independence, impartiality and integrity of the judicial system;Footnote 45 equal access to justice;Footnote 46 the role of international institutions, including courts;Footnote 47 but also substantive – e.g., observance and protection of human rights and fundamental freedoms for all.Footnote 48 In its essence, understanding the rule of law in the context of international law requires an understanding of the international legal order as an order that functions on its own terms, different to the national rule of law. The following table summarises our discussion by comparing the core (formal) features of the domestic and international rule of law.
The international rule of law, therefore, may be understood as the application of the rule of law principles to relations between States and other subjects of international law.Footnote 49 The 2012 UNGA Resolution emphasised the link between “fair, stable and predictable legal frameworks” and “inclusive economic growth, sustainable development and eradication of poverty.”Footnote 50 The contributors to this special issue have explored ways in which the rule of law has been implemented and could be further enhanced in the field of international economic law to achieve these objectives. We have not offered a “working definition” of the rule of law. Instead, the contributors have expressed views on the status and implications of the rule of law as a multifaceted meta-principle, developing their analyses around several of its components in international economic law. Indeed, the focus has been placed on the international trade and investment regime, and their intersections with human rights and the environment.
Complementary to our introductory reflections on the rule of law in international law, Henri Culot offers an overview of the different legal sources of the rule of law specifically in international economic law, considers its place in the European context (EU Common Commercial Policy) and its “relative importance” in international trade and investment law. This overview is thus helpful in understanding the ways in which the rule of law can influence this body of law, and provides a basis for more specific analyses in the remaining contributions to the Special Issue.
While international trade involves many actors, its legal regime is based on State-to-State cooperation and resolution of trade disputes in the World Trade Organisation (WTO). Iveta Alexovičová assesses whether the launch of private actions before national courts or through international dispute settlement mechanisms could increase the effectiveness of WTO law and, as a result, enhance the rule of law. While she is sceptical that domestic courts would acknowledge the direct effect of WTO agreements, she argues that the development of private actions could foster the rule of law in international trade.
Protection of human health is one of concerns recognised in international economic law through the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). However, the misuse of SPS measures for protectionist purposes undermines the rule of law. The SPS Agreement thus strikes a balance between the right of WTO members to protect human and animal health and the free movement of goods across international borders. In her analysis, Denise Prévost explores the implementation of SPS measures in light of the rule of law requirements. She highlights that SPS Agreement recognises the right of WTO members to adopt legitimate measures to protect food safety and animal and plant health while ensuring that the procedures are transparent, non-discriminatory and science-based. These requirements stemming from the rule of law imply that SPS domestic measures must not be applied in an unnecessary manner for protectionist purposes.
Complementing these analyses on the application of the rule of law in international trade law, Ivana Damjanovic considers the rule of law with respect to international investment law and its ongoing reform(s). She particularly explores the difficulty of applying this meta-principle given the divergent perspectives of different actors on what the rule of law in international investment law is. With a focus on systemic issues, her analysis considers the interaction between substantive and formal elements of the rule of law, tensions between law and politics, and issues around arbitration as a private dispute settlement mechanism vs. the court, as proposed by the European Union. Given fragmentation and flexibility of the reforms discussed in international fora, she questions whether the changes will lead to more substantial enhancement of the rule of law in international investment law.
In light of increasing trade tensions, Jun Xiao’s analysis provides a very instructive insight into China’s perspectives on the rule of law in international economic law. He explains China’s position as reflecting the developing countries’ approaches to international law, favouring treaties over customary international law, as the later does not reflect the practice and opinio juris of developing States. Given that China is in many aspects a latecomer in shaping international economic law, treaties offer an opportunity to develop new rules. Nevertheless, Xiao argues that China’s approach has been flexible and pragmatic, even when trade and investment norms have placed constraints on its regulatory sovereignty. While China has overall had a good record of compliance with the WTO rulings and ISDS awards, recent tensions confirm the added value of the rule of law for the operation of international trade.
The remaining articles of the Special Issue explore intersections between trade, labour rights and the environment. Ivana Damjanovic and Nicolas de Sadeleer examine different approaches to the implementation and enforcement of labour standards in international trade agreements. Their analysis thus considers the effectiveness of international trade instruments for enforcing international labour standards as a contribution to the international and domestic rule of law.
Taking a different approach, Nicolas de Sadeleer’s analysis focuses more specifically on the enforcement of international environmental agreements through domestic measures. Since these treaties are not self-executing and do not have direct effect, their effectiveness depends on their implementation in clear, precise and binding domestic instruments. The rule of law in the international environmental context thus must take into consideration how international environmental agreements impose obligations on States to regulate the behaviour of non-state entities. Although no multilateral environmental agreements impose any obligation to respect the rule of law, Nicolas de Sadeleer argues that a number of principles that give structure to the rule of law (legality, legal certainty, avoidance of arbitrariness) are relevant in the field of international environmental law. Effective judicial protection (Ubi jus idi remedium) and access to justice in environmental matters are the logical culmination of the emphasis placed by recent multilateral environmental agreements on environmental rights. As stressed by de Sadeleer, the rule of law is considered to require the courts to adopt a stance of the strictest political neutrality. Furthermore, first generation human rights compel the State to establish regulatory frameworks and means of enforcement in order to prevent the occurrence of risks to human health.
Taking advantage of the weaknesses and loopholes in environmental law, whether in international, European or national law, unscrupulous companies market hydrocarbon residues as products or by-products. However, these residues should be classified as hazardous waste. Given the cost of recycling hazardous waste, these companies make huge profits. Giulia Giardi highlights, from a criminologist’s perspective, that international trade in hydrocarbons can facilitate corporate environmental crime. She defends the view that the rule of law could promote sustainability in international trade.
The complementarity of perspectives presented within this Special Issue demonstrates that there is no one-size-fits-all approach to the rule of law in international economic law. However, they all demonstrate that the rule of law serves to supplant the rule of the jungle,Footnote 51 whether as a principle of governance in horizontal relations between States, or as a normative yardstick in vertical relations between States and individuals. As a minimum, it implies the subordination of States to international law. While in many aspects the rule of law remains an ideal, its implementation into practice of international economic law remains as ever important at times of growing challenges for the overall stability of the international legal order.
