The Transformation of European Trading States

This chapter argues that much of contemporary state transformation is driven not by socialization, nor by trade liberalization in the abstract, but by the particular legal-institutional form of trade liberalization since 1948. Contemporary trade liberalization has been a product of US (and, later, US-European) power, exercised through the creation and operation of the GATT and its successor, the WTO, and reflected in the GATT/WTO's substantive rules. The particular form and processes of trade liberalization have entailed not just the abandonment of certain national policies, but also shifts of authority within the state, the creation of new kinds of state capacities, and new processes of policy-making. European state transformation is part of this story. The changing organization of Western European states and EU institutions can not be fully understood without considering the exigencies of partnering with the United States to govern the institutions of the global trading system. For the EU to join the United States in governing the GATT/WTO required changes in the organization of the European state: shifting authority upward within states and to the Commission, expanding state capacity within states and at the European level, and changing processes of member-state and European trade policy-making. Europe chose to transform along lines that have enabled it to co-govern the world trading system. European-US governance of the world trading system has, in turn, favored changes in the organization of the state in third countries toward a Western industrialized model of the state.