We have inherited a fractured system of global economic governance. Multilateral commitments at the WTO are undermined by preferential commitments in bilateral, regional and mega-regional free trade agreements that have broader and deeper commitments for treaty parties. Many of those treaties grant special privileges and rights to multinational corporations without demanding anything in return. Even commitments in nontrade areas of governance, such as public health and energy, are backed by trade rule enforcement mechanisms.

Narrower and Shallower: A Call to Scale Back International Trade and Investment Commitments

If we are to reform the system we must pull in the opposite direction. First, as has been noted in various parts of this volume: words matter. More specifically, treaty texts matter. The exact text of a treaty may make the difference between whether an exception applies or whether the tribunal finds jurisdiction over the case at all. Knowing what the existing texts say and, even more importantly, how they may be interpreted before an international tribunal is the first step toward making a change in the system.

The second, much more challenging, step is to guide the trajectory of new treaty texts toward a coherent and consistent goal—to resolve the tension in favor of individual state interests in making public policy. In order to meet that goal, new treaty texts must preserve and expand existing policy flexibilities. Negotiations should take place at a multilateral level where the playing field is more balanced. Treaties should give deference to state regulators and prefer domestic judicial processes and diplomatic methods of dispute settlement. New commitments should focus on supporting “developing and least developed countries’ integration into the global economy” through capacity building and reinforcing special and differential treatment.

This volume acknowledges that not every national government has the altruistic aim to protect and preserve their citizens. In fact, in some cases, development and economic diversification goals can conflict with environmental or social sustainability. Policies that benefit producers or consumers in one country may be bad for their trading partners or foreign investors. Debt restructuring, while good for the economic stability of a country's constituents, necessarily involves losses for bondholders, both domestic and foreign.