Are World Trading Rules Passé? (forthcoming)

Sungjoon Cho, Chicago-Kent College of Law, Illinois Institute of Technology
Claire R. Kelly, Brooklyn Law School

Abstract

This Article probes previously under-explored failure of the world trading rules to keep abreast with the global marketplace. It argues that the global trading system, despite its well-documented contribution to the spectacular expansion of postwar trade, has never in fact fully moved away from the mercantilist past; its mono-linear conception of production and trading patterns; and its state centric, top-down paradigm of rule making. The inevitable anachronism precipitated by the out of date trading rules structure is seriously ill-suited to the contemporary non-territorial international business transactions defined by global supply chains. Consequently, while the trading rules officially seek to help facilitate trade consistent with the theory of comparative advantage, they often entail diametrically opposite effects, i.e., clogging the arteries of global commerce. The Article concludes that burgeoning “trade networks” can offer an answer to these problems as these networks vigorously co-opt relevant epistemic communities and devise practical tools to confront the complex challenges faced by global businesses nowadays.