Trade governance rests upon certain economic assumptions and the ensuing political compromises made possible by the growth of an incremental legal consensus. The main economic assumptions are that trade will deliver upon the objectives of socio-economic development, stable, long-term employment opportunities and poverty reduction. These assumptions are theoretically sound, but are increasingly challenged by the complex political realities of global trade. The study of trade in the field of international political economy (IPE) has deep roots in the postwar disciplines of economics and political science. The literature on the history of trade regulation places the current system, with its emphasis on the legitimizing imprimatur of political power and the significance of binding treaty, into a more nuanced context in which present practices, while sometimes novel, are frequently older than most policy makers realize. In the two decades since the finalization of the Uruguay Round and the creation of the World Trade Organization (WTO), a host of significant issues have arisen as scholars and policy makers attempt to implement the WTO’s mandate and navigate the political waters of trade regulation as it relates to domestic law and policy. These include the set of issues raised by the broadening of trade regulation post-Uruguay Round to include trade related intellectual property rights and trade in services, the contentious issue of trade and economic development, and the issue of WTO reform.
Marc D. Froese
After World War II, a body of rules and institutions have emerged for the purpose of regulating global flows of goods and services. These are known as world trade law, classified under international economic law, an expanding body of transnational regulatory treaties and institutions. World trade law has evolved within the global trading system following the Second World War, beginning with the General Agreement on Tariffs and Trade (GATT), which came into force in 1948. The most-favored nation and national treatment principles are the most prominent principles that give world trade law its distinctive form. The World Trade Organization (WTO) provides a vast store of literature, which covers the waterfront of legal and political issues that animate the global political economy of trade. The WTO’s predecessor, the GATT, also contributed extensively to the growing body of literature on world trade law. The WTO’s inclusion of agreements on the liberalization of services, investment, and intellectual property have begun lively debates about the possible trajectories of governance in new issue areas, such as anti-dumping and intellectual property rights. In addition to the issues raised by the inclusion of many small economies in the institutions of global trade governance, the rise of world trade law has simultaneously highlighted the many areas of importance to national publics in developed economies where trade overlaps with social priorities.
Matthias Finger and David Svarin
Transnational corporations (TNCs) refer to businesses that cross over borders, armed with capital as well as products, processes, marketing methods, trade names, skills, technology, and most importantly management. TNCs have drawn the interest of political scientists and specialists of international relations as they reflect a new, transnational, or even global economic reality. The shift towards trade liberalization and the expansion of market economies have enabled TNCs to grow in size and expand their operations all over the world. Thus, they also affect the natural environment. Three hypotheses or ideas have been put forward by various authors about TNCs’ relationships with the global environment: TNCs as “dirty industries” hypothesis, pollution haven hypothesis, and “business advantage of environmental standards hypothesis.” TNCs are said to operate in some sort of a political and legal vacuum, which they try to shape by defining private environmental standards and at the same time take advantage of this very vacuum to the detriment of the environment. However, they are obliged to deal with other actors such as environmental groups, governments, and consumers. TNCs are engaged in various environmental initiatives and activities relating to environmental protection, including voluntary initiatives, often mandatory environmental reporting, and private certification standards. Given their impact on the environment, it is important to engage TNCs in a global environmental governance processes and for states to adopt restrictive measures and foster international collaboration in order to regulate TNCs which neglect their environmental and social responsibilities.