In seeming contrast with the previous chapters in this book, we are not directly concerned with the contribution that international trade and investment law makes to the rule of law in more or less organized modern States; but are turning instead to the role of transparency within the legal regime designed to govern international trade and guarantee non-arbitrariness in the exercise of State power in the market. More precisely, we are interested in how rules on transparency serve an area of international law where elements of the international rule of law – understood in formal/functional terms – are distinctly visible. As I will show, international trade law is sufficiently prospective, accessible, and clear, requires avoidance of arbitrariness and demands procedural and legal transparency. However, rules on transparency sometimes fail in advancing the repertory of substantive values which define the role of law in the international trading regime. In order to address this problem in a viable way, the present study first investigates the existence and the meaning of the international rule of law and then, after discussing the logic of transparency in general and in the international trading system, focuses on State intervention in markets and the related trade rules, particularly those regulating subsidies and the operation of SOEs. These two peculiar case studies are, indeed, rather telling. The quantitative and qualitative transformations of modern state capitalism around the globe raise issues of increasing importance for the international trading system: it is no secret that State interventions in the market stand out among the stated and unstated causes of current trade tensions. Moreover, both the issues of subsides and SOEs are essentially political and ideological: with the two instruments, what is ultimately involved is a confrontation between different philosophical and political conceptions of the relations between the state, market, and society; i.e. the normative social ethos shaping the role of law in the international trading system. I thus plan to make five related points. First, functionalist/instrumental understandings of how and why the rule of law is used by States and other actors match the manner in which the rule of law is articulated at the international level more properly than alternative conceptions based on positivist theories of compliance. Second, such functional conceptions of the international rule of law are very much focused on legality: international law-making processes should be as such to satisfy some of the requirements associated with the international rule of law, and, in particular, procedural and legal transparency and non-arbitrariness. In the limited field of trade relations among States, this translates into a legal system whose design and operation is supposed to yield clear, predictable, and formally sound rules. Third, rules on transparency – expectations for which have lately arisen in respect to international law – contribute to international rule of law and represent a key aspect also for the international trading system. Four, only transparency in WTO decision-making and adjudication are elements of the international rule of law. Conversely, the transparency institutional and procedural rules for reducing uncertainty about domestic policy, although not directly related with the international rule of law, have two key imports for the system: they enhance the effectiveness of the trade agreements and, hence, contribute to the systemic stability; and favor the emergence of consensual understanding of new problems among the Members. Finally, the detailed case studies of the multilateral rules on subsidies and the trade disciplines of SOEs shows that WTO’s window on the trading system are opaquer than they ought to be and that the PTAs’ rules on SOEs do not really contribute much new to the objective of securing non-arbitrariness in the exercise of State power in the economic sphere through more transparency. However, whilst the lack of transparency affects the effectiveness of the trade rules on subsides, for SOEs, it seems to impede the very possibility of designing targeted trade rules in an adaptive way, with a view to responding to the extensive and pervasive uncertainty confronting States and trade operators in markets where SOEs play an important role.

The international rule of law and the role of transparency in the iInternational trading system

Leonardo Borlini
2020

Abstract

In seeming contrast with the previous chapters in this book, we are not directly concerned with the contribution that international trade and investment law makes to the rule of law in more or less organized modern States; but are turning instead to the role of transparency within the legal regime designed to govern international trade and guarantee non-arbitrariness in the exercise of State power in the market. More precisely, we are interested in how rules on transparency serve an area of international law where elements of the international rule of law – understood in formal/functional terms – are distinctly visible. As I will show, international trade law is sufficiently prospective, accessible, and clear, requires avoidance of arbitrariness and demands procedural and legal transparency. However, rules on transparency sometimes fail in advancing the repertory of substantive values which define the role of law in the international trading regime. In order to address this problem in a viable way, the present study first investigates the existence and the meaning of the international rule of law and then, after discussing the logic of transparency in general and in the international trading system, focuses on State intervention in markets and the related trade rules, particularly those regulating subsidies and the operation of SOEs. These two peculiar case studies are, indeed, rather telling. The quantitative and qualitative transformations of modern state capitalism around the globe raise issues of increasing importance for the international trading system: it is no secret that State interventions in the market stand out among the stated and unstated causes of current trade tensions. Moreover, both the issues of subsides and SOEs are essentially political and ideological: with the two instruments, what is ultimately involved is a confrontation between different philosophical and political conceptions of the relations between the state, market, and society; i.e. the normative social ethos shaping the role of law in the international trading system. I thus plan to make five related points. First, functionalist/instrumental understandings of how and why the rule of law is used by States and other actors match the manner in which the rule of law is articulated at the international level more properly than alternative conceptions based on positivist theories of compliance. Second, such functional conceptions of the international rule of law are very much focused on legality: international law-making processes should be as such to satisfy some of the requirements associated with the international rule of law, and, in particular, procedural and legal transparency and non-arbitrariness. In the limited field of trade relations among States, this translates into a legal system whose design and operation is supposed to yield clear, predictable, and formally sound rules. Third, rules on transparency – expectations for which have lately arisen in respect to international law – contribute to international rule of law and represent a key aspect also for the international trading system. Four, only transparency in WTO decision-making and adjudication are elements of the international rule of law. Conversely, the transparency institutional and procedural rules for reducing uncertainty about domestic policy, although not directly related with the international rule of law, have two key imports for the system: they enhance the effectiveness of the trade agreements and, hence, contribute to the systemic stability; and favor the emergence of consensual understanding of new problems among the Members. Finally, the detailed case studies of the multilateral rules on subsidies and the trade disciplines of SOEs shows that WTO’s window on the trading system are opaquer than they ought to be and that the PTAs’ rules on SOEs do not really contribute much new to the objective of securing non-arbitrariness in the exercise of State power in the economic sphere through more transparency. However, whilst the lack of transparency affects the effectiveness of the trade rules on subsides, for SOEs, it seems to impede the very possibility of designing targeted trade rules in an adaptive way, with a view to responding to the extensive and pervasive uncertainty confronting States and trade operators in markets where SOEs play an important role.
2020
9781952751752
Leal-Arcas, Rafael
The future of international economic law and the rule of law
Borlini, Leonardo
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4031604
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