State-centered international lawyers often ignore that markets are a necessary consequence of, and an indispensable means for, effective protection of human rights. European integration confirms the insight of "functional theories" that citizen-driven market integration can set strong incentives for transforming "market freedoms" into "fundamental rights" which - if directly enforceable by producers, investors, workers, traders and consumers through courts (as in the EC) - can reinforce and extend the protection of basic human rights (e.g. to liberty, property, food and health). Functional "low policy integration" may also contribute more effectively to "democratic peace" than it may be possible in government-centered "high policy organizations" (like the UN) whose foreign policy and security objectives often meet with political resistance on grounds of national sovereignty.
Wherever freedom and property rights are protected, individuals start producing and exchanging goods and services demanded by consumers. Enjoyment of human rights requires use of dispersed informations and economic resources that can be supplied most efficiently, and most democratically, through division of labor among free citizens and liberal trade promoting economic welfare, freedom of choice, and the free flow of scarce goods, services and informations across frontiers.24 The fact that most people spend most of their time on their "economic freedoms" (e.g. to produce and exchange goods and services including one's labor and ideas) illustrates that for ordinary people, unlike for many lawyers25, economic liberties are no less important than civil and political freedoms (e.g. to participate in the democratic supply of "public goods").
The moral "categorical imperative" and the legal human rights objective of maximizing equal liberties across frontiers corresponds with the economic objective of maximizing consumer welfare through open markets and non-discriminatory competition. Hence, there is no reason for human rights lawyers to neglect the economic dimensions of human rights problems - such as the dependence of human rights (e.g. to work, food, education, housing and health-care) on supply of scarce goods, services and job opportunities. Likewise, "economic lawyers" must not disregard the human rights dimensions of economic law, for instance that savings, investments and economic transactions depend on property rights and liberty rights (such as freedom of contract and transfers of property rights).26 Also foreign policy-makers and economists need to reconsider their often one-sided views that economic development should be defined in purely quantitative terms (e.g. without regard to real human capability to enjoy human rights), or that the economic tasks of "specialized agencies" (like the IMF, the World Bank, and the WTO) should not be "overloaded" with human rights considerations because they may be abused as pretexts for protectionist restrictions.27
Free trade area agreements, customs unions and common markets were important stages in the historical formation of many federal states. The progressive evolution of the EC Treaty - from a customs union treaty focusing on economic freedoms to a modern "treaty constitution" protecting human rights and "democratic peace" far beyond the economic area - illustrates the functional interrelationships between economic, political and legal integration.
The negotiators of the 1957 Treaty establishing the European Economic Community thought that the human rights guarantees in the national constitutions of EC member states and in the European Convention on Human Rights (ECHR, 1950) were sufficient for protecting human rights in the common market. Hence, similar to GATT 1947 and the WTO Agreement, the EC Treaty of 1957 did not refer to human rights law based on the belief that mutually beneficial economic liberalization would promote, rather than endanger, the national and international human rights guarantees. Today, however, EU law has evolved into a comprehensive constitutional system for the protection of civil, political, economic and social rights of EU citizens across national frontiers. Also the objective of the EU's common foreign and security policy is defined by the EU Treaty as "to develop and consolidate democracy and the rule of law, and respect for human rights and fundamental freedoms" (Article 11). The EU has consequently insisted on including "human rights clauses" and "democracy clauses" into international agreements concluded by the EC with more than hundred third countries. The adoption of the Charter of Fundamental Rights of the European Union in December 2000, and the proposals for incorporating this Charter into a European Constitution at the intergovernmental conference scheduled for 2004, confirm the "functional theory" underlying European integration, i.e. the view that economic market integration can progressively promote peaceful cooperation and rule of law beyond economic areas, thereby enabling more comprehensive and more effective protection of human rights than has been possible in traditional state-centered international law.28
Inside the EC and in the European Economic Area between the EC and third European countries, the treaty prohibitions of restrictions of the free movement of goods, services, persons, capital and related payments, as well as the treaty guarantees of non-discrimination (e.g. in Article 141), were construed by the EC Court and national courts as individual economic freedoms to be protected by the courts.29 The national constitutional guarantees of "the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law" were progressively recognized as "principles which are common to the Member States" and legally binding also on all EU institutions, as later acknowledged in Article 6 of the EU Treaty. In conformity with the EC Treaty requirements to comply with international law (cf. Articles 300,307) and cooperate with other international organizations (cf. Articles 302-306), the EU Treaty now requires explicitly respect for the European Convention on Human Rights (cf. Article 6:2 EU Treaty), the 1961 European Social Charter and 1989 Community Charter of the Fundamental Social Rights of Workers (cf. Article 136 EC Treaty), and for the 1951 Geneva Convention and 1967 Protocol on the protection of refugees (cf. Article 63 EC Treaty).
The constitutional guarantees of the EU for economic liberties and complementary constitutional, competition, environmental and social safeguards have also induced numerous EU initiatives to strengthen competition, environmental and social law in worldwide international agreements. The strong competition law of the EC reflects the constitutional insight that - in the economy no less than in the polity - equal freedoms of citizens and open markets need to be legally protected against abuses of public powers as well as of private powers.30 The EC Treaty prohibitions of cartel agreements (Article 81) and of abuses of market power (Article 82) are not only protected by the ECJ as individual rights of "market citizens". They also prompted all EC member states to enact national competition laws enforced by independent national competition authorities. Likewise, under the influence of EC competition law and of the incorporation of competition safeguards into the EC's' "Europe agreements" and association agreements, also most third states in Europe have progressively introduced, since the 1980s, national competition laws protecting citizens and economic competition against abuses of private and public power.
The paradoxical fact that many developing countries remain poor
wealth of natural resources (e.g. more than 90% of biogenetical resources in the world), is attributed by many economists to their lack of effective human rights guarantees and of liberal trade and competition laws. The absence of effective legal and judicial protection of liberty rights and property rights inhibits investments and acts as an incentive for welfare-reducing private and governmental restrictions of trade and competition and collaboration between cartelized industries and authoritarian governments.31 The widespread abuses of private power in Africa, Asia and Latin America are no less dangerous for human rights and social welfare than abuses of public government powers. The EC proposals for complementing the liberal trade rules of the WTO by worldwide competition rules have met with increasing support notably by less-developed countries who have suffered from discriminatory cartel practices and find it politically difficult to overcome anti-competitive practices of powerful domestic industries through unilateral national legislation.32
Investments, production, trade and also protection of the environment
depend on legal
incentives and legal rights for investors, producers, traders, polluters and consumers. The EC's integration approach - notably the recognition and empowerment of citizens as legal subjects not only of human rights but also of competition law and integration law - should serve as a model also for worldwide integration law. The modern universal recognition of human rights as part of general international law implies that human rights have become part of the "context" for interpreting the law of worldwide organizations and must be taken into account in all rule-making and policy-making processes at national and international levels. 33 Just as the human rights guarantees and competition safeguards of the EC Treaty have reinforced the legitimacy and effectiveness of EC law and of protection of human rights throughout Europe, also UN human rights law and WTO rules offer mutually beneficial synergies for rendering human rights and the social functions and democratic legitimacy of the emerging global integration law more effective.
24 On the contribution of liberal trade to economic welfare and to protection of human rights (which, like any legal system, involve economic costs), and, vice versa, on the reciprocal contribution of human rights to economic welfare, see the two contributions by A.Sykes, International Trade and Human Rights: An Economic Perspective, and E.U.Petersmann, Economics and Human Rights, to the forthcoming book by: F.Abbott/T.Cottier (eds.), International Trade and Human Rights, 2002.
25 On the "double standard" in the jurisprudence of US courts which protect civil and political liberties through higher standards of judicial scrutiny than economic liberties, see e.g. B.H.Siegan, Economic Liberties and the Constitution, 1980.
26 On the recognition of the importance of human rights for rendering environmental law and environmental protection more effective see: A.Boyle/M.Anderson (eds.), Human Rights Approaches to Environmental Protection, 1998.
27 See e.g. the paper on `Economic, Social and Cultural Human Rights and the International Monetary Fund', submitted by the IMF's General Counsel F. Gianviti to the UN Committee on Economic, Social and Cultural Rights at its "day of general discussion" on 7 May 2001, which emphasizes "the principle of specialization that has governed the establishment of the specialized agencies and their relationships with the United Nations" (p.44), and concludes that the UN human rights covenants "apply only to States, not to international organizations" (p.10). These arguments, however, do not preclude the legal relevance of general international human rights law for the IMF.
28 The number of "human rights cases" before the European Court of Human Rights far outnumbers those before the EC Court of Justice. Yet, the guarantees in the European Convention on Human Rights (ECHR) focus on civil and political rights which often do not go beyond those in national constitutions. The EC's common market freedoms and constitutional law, by contrast, go far beyond national and ECHR guarantees and have contributed to unpredented levels of economic and social welfare, individual freedom and democratic peace of European citizens.
29 See above note 20.
30 Also the US Supreme Court rightly emphasized that "antitrust laws ... are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free enterprise system as the Bill of Rights is to the protection of our fundamental freedoms" (United States v. Topco Assoc. Inc., 405 U.S. 596,610, 1972). Yet, unlike the EC, US law does not protect economic liberties and social rights as fundamental constitutional rights of citizens, and US politicians favor a power-oriented, extraterritorial application of US antitrust laws vis-à-vis third countries rather than worldwide competition rules as suggested by the EC.
31 See e.g.H. de Soto, the Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, 2001 (e.g. describing why many natural resources in developing countries remain "dead capital" due to the lack of secure property titles and legal insecurity).
32 Cf. E.U.Petersmann, Competition-oriented Reforms of the WTO World Trade System, in: R.Zäch (ed.), Towards WTO Competition Rules, 1999, 43-73.
33 See Resolution 1998/12 on "Human rights as the primary objective of international trade, investment and finance policy and practice", adopted by the UN Sub-Commission on Prevention of Discrimination and Protection of Minorities in August 1998 and subsequently endorsed by numerous NGOs, cf.: M.Mehra (note 18), at 123 et seq.