As formal governmental barriers to free international trade have fallen, trade experts both inside and outside governments have devoted an ever increasing amount of attention to other measures that may also impede international trade. Indeed, this was the distinguishing characteristic of the recently completed Uruguay Round of multilateral negotiations under the auspices of the General Agreement on Tariffs and Trade (GATT 1947). Although tariff negotiations certainly took place, the real action was in the ambitious agenda to bring subsidies under control, to address the trade effects of intellectual property and investment measures, to bring the vast world of international trade in services under some rudimentary disciplines, and to address the GATT's institutional weaknesses once and for all. The World Trade Organization (WTO) and the GATT 1994 were the result of those often Herculean efforts. Today, as the WTO looks forward to beginning its work, it is only natural that its constituent states should assign a high priority both to the implementation of the new Uruguay Round agreements and to the development of the “next generation” agenda.

It is also hardly surprising that the “next generation” issues push even farther than the Uruguay Round into subject matters that once were considered purely within the internal jurisdiction of states. Not only in the field of international trade law, but more generally, international law scholars have begun to examine the extent to which the traditional domaine reserve of municipal law is either shrinking or at least coexisting with international norms.

As near earth space becomes increasingly crowded with manmade debris, the risks to further peaceful uses of that region have begun to capture world-wide attention. It seems plain that some kind of regulation, by some sort of entity, is essential to several goals: to name a few, the maintenance of a safe environment for human beings in space; the avoidance of environmental damage to the surface of the Earth; and the continuation of economically beneficial uses of near earth space. Regulation, however, often has unintended consequences, and upon further examination sometimes proves to be more costly than the laissez faire alternative. Even when it is clear that an unregulated environment is inappropriate, important decisions must be made about the level at which regulation ought to occur: local, regional, national, or international.

This paper examines the related questions of (1) the desirability of regulating some or all aspects of the space debris problem, and (2) the optimal source of such regulation. It does so in the light of studies of the economics of regulation that have been conducted principally within the United States, and in the light of international experience in regulating other issues similar to the problem of space debris. In the final analysis, a multilateral approach is preferable to either national regulation or a global free-for-all. Nevertheless, prior efforts at multilateral regulation have not always produced successfully functioning regimes.