Constitutionalism and the Regulation of International Markets: How to Define the ‘Development Objectives’ of the World Trading System?
Title: Constitutionalism and the Regulation of International Markets: How to Define the ‘Development Objectives’ of the World Trading System?
Author: PETERSMANN, Ernst-Ulrich
Publisher: European University Institute
Series/Number: EUI LAW; 2007/23
The latin adage ‘ubi commercium, ibi jus’ reflects the insight that the efficiency of markets and trade depend on legal guarantees of market freedoms (such as freedom of contract, property rights), legal security (e.g. as incentive for investments and division of labour) and on legal limitations of ‘market failures’ as well as of ‘government failures’. Since Adam Smith, economists increasingly acknowledge these interdependencies between economic, legal and social order, for example between the economic objective of promoting consumer welfare through legal guarantees of consumer-driven competition and open markets, and the democratic objective of protecting individual self-government and peaceful cooperation among citizens through constitutional guarantees of equal freedoms and social justice. The lawyers, economists and politicians belonging to the post-war German schools of ‘ordo-liberalism’ (including German chancellor L.Erhard and his secretaries of state W.Hallstein and A.Müller-Armack who represented Germany in the EEC Treaty negotiations) succeeded in basing the German and EC ‘economic constitution’ on constitutional guarantees of market freedoms, competition rules and a ‘social market economy’ committed to respect for human rights. Yet, the EC initiatives for ‘constitutionalizing’ the world trading system – for example, by correcting ‘international market failures’ by means of new WTO competition, environmental, investment and development rules, and for limiting the WTO’s ‘governance failures’ by democratic and judicial reforms – appear to have foundered after more than 5 years of negotiations in the ‘Doha Development Round.’ This contribution discusses ‘constitutional problems’ of national and intergovernmental economic governance from the perspective of constitutional theory and constitutional economics by using the example of the disagreement among the 151 WTO Members on defining the ‘development objectives’ of the WTO’s ‘Development Round.’ Constitutional theory suggests to define development as individual freedom, consumerdriven competition and autonomous development of human capacities protected by constitutional rights that limit abuses of power at national, transnational and international levels of human interactions.
Subject: Constitutional change; economic law; GATT; globalization; governance; international agreements; international trade; policy coordination; WTO
Type of Access: openAccess