The World Trade Organization in the New Global Economy

The World Trade Organization in the New Global Economy

Trade and Investment Issues in the New Millennium Round

New Horizons in International Business series

Edited by Alan M. Rugman and Gavin Boyd

Despite the disruption of the multilateral trade talks at Seattle in December 1999, the work of the World Trade Organization (WTO) continues. The trade and investment issues that have been outstanding since the Seattle events are explored in this far reaching book. The distinguished contributors combine several analytical approaches for a comprehensive assessment of the trends, problems and opportunities demanding attention in international trade negotiations.

Chapter 10: Designing a market enhancing WTO

J. David Richardson

Subjects: business and management, international business, economics and finance, international economics


J. David Richardson 1 OVERVIEW AND PRELIMINARIES In Richardson (2000b) I argue that certain narrow new issues in global trade negotiations belong there quite naturally. I label these conformable issues ‘market-supportive regulation’. Market-supportive regulation is regulation that enhances the ‘market system’, making it work better and for a broader constituency. That paper argues that ideally both market enthusiasts and society win from a commitment, more specifically to: Wise incorporation of market-supportive regulation into global trade negotiations, which is the key to generating a new wave of ‘gains from trade’ and to widely disseminating those gains within and among societies. In this chapter I refine that argument. I emphasize two particular provocations. First, I believe that the World Trade Organization (WTO) is indeed the right forum for the new-issue experiments that I propose. Second, I believe that one very specific labour-relations policy, open trade in ‘worker-agency services’, is an excellent illustration of market-supportive regulation. My other illustrations are less provocative. They include a narrow subset of regulatory principles and practices from the domains of competition policies and technology policies. But only a narrow subset. Only those regulatory principles that conform most closely to the market system – thereby enhancing it – belong on the WTO negotiating agenda. The rest would threaten the organization and hold back the progress of negotiations. My provocations and terminology beg several questions. Why not take a breather from global trade negotiations? The global backlash has been strong, and not just in Seattle; perhaps now is...

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