International Economic Law at a Crossroads: Global Governance and Normative Coherence

Abstract

AbstractInternational economic law (IEL) is now at a crossroads regarding the reconfiguration of the international economic order. Many scholars regard the multilateral trading system as a major legal achievement and agree that the World Trade Organization (WTO) has performed as expected with respect to the 2008 crisis. By contrast, the recent financial crisis has demonstrated the inability of the international financial architecture to ensure financial stability. However, this article will review the strength of the multilateral trading system and the challenges that it now faces regarding its main goal (the stability of trade relations). A material reform in the mode of a horizontal expansion in order to protect societal values other than trade liberalization seems to be needed if we want the WTO to be up to the tasks and demands flowing from global governance. Similarly, this article will analyse the current structure of the international financial system as well as the elements that would need to be changed in order to achieve the aim of financial stability. To accomplish that end, an institutional reform in the mode of a vertical expansion of IEL is proposed. Global governance and normative coherence have been used as the theoretical tools to unveil the similarities stemming from the functions performed and the need for transformation that both areas of IEL have in common. The reform proposals submitted for both areas of law would introduce a meaningful step from negative regulation towards a more positive approach to regulation.