The Transformation of World Trade

Document Type



The most up-to-date version of this piece can be found in the Duke Law Scholarship


Why is the trade regime amongst the most robust of international regimes? For half a century we have been told that it is because trade law gradually replaced trade politics. This article contests the orthodox view. Part I rewrites the history of world trade as a carefully balanced transformation where both levels of law or international control and levels of politics or country participation increased. Unlike the traditional from-politics-to-law approach, this novel law-and-politics paradigm convincingly explains otherwise puzzling stages in the system's evolution. How could countries ever agree to decision-making by simple majority in 1947? What made them commit to compulsory dispute settlement in the World Trade Organization (WTO)? And why are they now so vehemently defending the consensus rule? Part II diagnoses the current trade system through this new law-and-politics lens. It finds that the WTO lacks both input legitimacy (not enough politics) and output legitimacy (standstill in trade liberalization and deadlock on transparency and equity-based reforms). Normatively, the article rejects conventional reform proposals - offered by what is referred to as, on the one hand, insider-institutionalists, utilitarians and constitutionalists and, on the other hand, sovereigntists and cosmopolitans - as they focus exclusively on one side of the law and politics spectrum and risk, respectively, an unsupported or an inefficient trade regime. In the alternative, the article suggests a more balanced reform package that tackles both poles and combines gains from trade with broad-based support. It pleads for more, not less, politics and maintaining, not eliminating, crucial exit options.

Date of Authorship for this Version

September 2005