Globalizing Regulation: A New Progressive Agenda for Trade and Investment

Abstract

The past two decades have witnessed growing concern about the challenges governments face in regulating multinational corporations. Trade and investment agreements play a crucial role in setting the regulatory regime that governs these transnational activities. The multilateral trade and investment regime has been experiencing a period of crisis, with the collapse of proceedings at the World Trade Organization’s appellate body and the failure of the Doha Development Round. During this period, states have turned to unilateral, bilateral and regional channels in lieu of multilateral progress. Bilateral and regional agreements contain a much higher degree of regulatory coordination among members, including a growing number of binding standards on labor, the environment and human rights which apply to multinational corporations operating across the trading blocs. This paper reviews three cases of states, or groups of states, endeavoring to impose binding regulation on multinational corporations through the trade and investment regime. This paper argues, that these efforts, while partial, form the basis for a new multilateral trade and investment regime that holds corporations accountable. It shows that during the multilateral system’s period of crisis, as states in both the Global North and Global South have pursued their own strategies and shown a shared commitment to increasing their regulatory capacity, the policy consensus among practitioners at the multilateral level has shifted towards accommodating these efforts. Together, this paper argues, these developments lay the groundwork for a new multilateral model of trade and corporate accountability.