Are World Trading Rules Passé?

Abstract

This Article probes the previously underexplored 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 monolinear 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 The inevitable anachronism precipitated by the out-of-date trading-rules structure is seriously ill suited to the contemporary nonterritorial international business transactions defined by global supply chains.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, that is, clogging the arteries of global commerce. This 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.