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What Makes the International Investment Rules Regime Undemocratic? - [David Schneiderman, Constitutionalizing Economic Globalization: Investment Rules and Democracy's Promise (Cambridge: Cambridge University Press, 2008, 340pp.]

Published online by Cambridge University Press:  06 March 2019

Joel Colón-Ríos  and
Martín Hevia

Extract

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In an era in which democracy seems to have been relegated to a secondary place by processes associated with economic and political globalization, David Schneiderman's Constitutionalizing Economic Globalization: Investment Rules and Democracy's Promise is an unusual book. Globalization, we have been told, comes accompanied by “a sense of newness, heterogeneity, and fluidity,” but Scheiderman's reminds us that all this emphasis on mobility and constant transformations “draws attention away from a transnational regime concerned with fixity and security.” This fixity not only compromises democracy's tendency towards openness and change, but restricts the state's economic functions and limits its redistributive capacity; in short, it reproduces an ideology according to which democracy is not to be trusted in economic matters. In this context, Schneiderman's proposal to “institutionalize a limited set of constitutional rules that do not impede the possibility of living up to democracy's promise, that of innovation through self-government for the purposes of collective betterment,” appears like a truly democratic call of arms.

Type
Developments
Information
German Law Journal , Volume 10 , Issue 8 , 01 August 2009 , pp. 1309 - 1320
Copyright
Copyright © 2009 by German Law Journal GbR 

References

1 David Schneiderman, Constitutionalizing Economic Globalization: Investment Rules and Democracy's Promise (2008).Google Scholar

2 Id. at 1–2.Google Scholar

3 Id. at 2.Google Scholar

4 Schneiderman began to develop some of the arguments presented in Constitutionalizing Economic Globalization in a series of articles that include: David Schneiderman, Banging Constitutional Bibles: Observing Constitutional Culture in Transition, 55 U. Toronto L. J. 833 (2005); Schneiderman, David, Canadian Constitutionalism, the Rule of Law, and Economic Globalization, in Participatory Justice in a Global Economy: The New Rule of Law (Patricia Hughes & Patrich A. Molinary eds., 2003); David Schneiderman, Constitutional Approaches to Privatization: An Inquiry into the Magnitude of Neo-Liberal Constitutionalism, 63 Law and Contemp. Probs. 83 (2001); Schneiderman, David, Investment Rules and the Rule of Law, 8 Constellations 521 (2001); Schneiderman, David, Investment Rules and the New Constitutionalism 25 Law & Soc. Inquiry 757, 757 (2000); Schneiderman, David, The Constitutional Strictures of the Multilateral Agreement on Investment, 9 The Good Society 90 (1999); Schneiderman, David, NAFTA's Takings Rule: American Constitutionalism Comes to Canada, 46 U Toronto L. J. 499 (1996).Google Scholar

5 There is a large body of literature that, from different perspectives and emphasis, points to the similarities between transnational trade regimes and constitutionalism. See for example Deborah Cass, The Constitutionalization of the World Trade Organization (2005); Gill, Stephen, Power and Resistance in the New World Order (2003). Stephen Clarkson, Uncle Sam and Us: Globalization, Neoconservatism, and the Canadian State (2002); Stone, Alec, What is a Supra National Constitution? An Essay in International Relations Theory, 55 Rev. of Pol. 441 (1994); Ernst-Ulrich Petersmann, Constitutional Functions and Constitutional Problems in International Economic Law (1991).Google Scholar

6 Gill, Stephen, Constitutionalizing Inequality and the Clash of Globalizations, 4 Int'l Stud. Rev. 47, 48 (2002).Google Scholar

7 Schneideman, , Investment Rules and the Rule of Law, supra note 4, at 522.Google Scholar

8 Schneiderman, , NAFTA's Taking Rule, supra note 4, at 501; Schneiderman, Investment Rules and the Rule of Law, supra note 4, at 522. These rules, according to Schneiderman, operate both externally to the state (as independent legal regimes that limit the scope of state action) and internally (through reforms in national constitutions and the exercise of judicial review). Schneiderman, Investment Rules and the Rule of Law, supra note 4, at 523.Google Scholar

9 That is, to the extent that certain basic human rights are respected.Google Scholar

10 See, e.g., Joel Colón-Rios & Martín Hevia, The (Un)rule of Law in Puerto Rico—A Republican Approach, in Rule of Law: Transformative Approaches (K. Padmaja ed., 2008).Google Scholar

11 Schneiderman, , supra note 1, at 8–9.Google Scholar

12 Id. at 38.Google Scholar

13 Id. at 206.Google Scholar

14 Id. at 14.Google Scholar

15 Id. at 14.Google Scholar

16 Id. at 38.Google Scholar

17 Id. at 39.Google Scholar

18 Boaventura de Sousa Santos, Toward a New Common Legal Sense: Law, Globalization, and Emancipation (2002).Google Scholar

19 Schneiderman, , supra note 1, at 47.Google Scholar

20 Id. at 71.Google Scholar

21 Id. at 114.Google Scholar

22 Id, at 128.Google Scholar

23 Id. at 157.Google Scholar

24 Id. at 168.Google Scholar

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26 Id. at 227.Google Scholar

27 Id. at 228.Google Scholar

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30 Unless they have a case that would allow them to go before the courts to issue a complaint, or if the constitution allows for the popular initiative for the abrogation of ordinary laws. See, e.g., Uru. Const. art. 79.Google Scholar

31 Claude Ake, , Dangerous Liaisons: The Interface of Globalization and Democracy, in Democracy's Victory and Crisis 283 (Alex Hadenius ed., 1997).Google Scholar

32 Madison also had in mind the indirect election for the positions of the President, Vice President, and Senators, but that only applies to those countries that followed the US constitutional tradition.Google Scholar

33 Manin, Bernard, The Principles of Representative Government, 132–60 (1997).Google Scholar

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35 This problem may be ameliorated by the state intervention in the funding of political campaigns in order to make the competition more democratic.Google Scholar

36 The European Union provides an additional example of the way countries, through international treaties, limit the scope of their legislative power and submit to the decisions of external institutions.Google Scholar

37 Schneiderman, , supra note 1, at 232.Google Scholar

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40 Schneiderman, , supra note 1, at 2. Moreover, as Sornarajah has argued, it may also be that these treaties are based on the “initial lie that [their] aim was to protect reciprocal flows of foreign investment but in effect protecting only the one-way flow that takes place from the developed state to the developing state.” M. Sornarajah, Power and Justice: Third World Resistance in International Law, 10 Sing. Y.B. Int'l L. 19, 31 (2006).Google Scholar

41 Of course, the procedure/substance dichotomy is fragile as its best: if we favor certain procedures above others is because there is something substantive (e.g. that every participant is treated like an equal member of the community) that we value about them. But our point here is simply that the fact that an international investment or trade treaty imposes limits on the decision making power of democratic institutions is not enough to maintain that they are inconsistent with democracy (if that were the case, we would be forced to abandon, in the name of democracy, the institution of international treaties altogether).Google Scholar

42 The new constitutions of Ecuador and Bolivia contain provisions that allow people to require the government (through the collection of signatures) to call a referendum before an international treaty comes into effect. For example, Article 258 of the Bolivian constitution states that “Any international treaty must be approved through a popular referendum when requested by five percent of the citizens registered to vote, or thirty five percent of the representatives of the Plurinational Legislative Assembly. These initiatives can also be used to petition to the Executive Organ the subscription of a treaty.” (Cualquier tratado internacional requerirá de aprobación mediante referendo popular cuando así lo solicite el cinco por ciento de los ciudadanos registrados en el padrón electoral, o el treinta y cinco por ciento de los representantes de la Asamblea Legislativa Plurinacional. Estas iniciativas podrán utilizarse también para solicitar al Órgano Ejecutivo la suscripción de un tratado”). Bol. Const. art. 258. The constitution of Ecuador, in addition to a similar provision (Article 420), states in Article 422 that “The adoption of international treaties or international instruments in which the Ecuadorian state cedes its sovereign jurisdiction to international arbitration tribunals, in contratual or commercial issues between the State and natural or juridical persons is prohibited…” (“No se podrá celebrar tratados o instrumentos internacionales en los que el Estado ecuatoriano ceda jurisdicción soberana a instancias de arbitraje internacional, en controversias contractuales o de índole comercial, entre el Estado y personas naturales o jurídicas privadas…”). Ecuador Const. art. 420, 422.Google Scholar

43 The agreement was approved by a 51% to 48 % margin. The treaty, the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), also includes Guatemala, Nicaragua, Honduras, El Salvador and the Dominican Republic. The Dominican Republic-Central America-United States Free Trade Agreement, Aug. 5, 2004, Pub. L. No. 109–53, 119 Stat. 462, available at http://www.ustr.gov/Trade_Agreements/Bilateral/CAFTA/CAFTA-DR_Final_Texts/Section_Index.html.Google Scholar

44 Schneiderman, , supra note 1, at 2.Google Scholar