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This chapter introduces three cross-cutting themes that illustrate the relationship between artificial intelligence and international economic law (IEL): disruption, regulation, and reconfiguration. We explore the theme of disruption along the trifecta of AI-related technological, economic, and legal change. In this context, the impact of AI triggers political and economic pressures, as evidenced by intensive lobbying and engagement in different governance venues for and against various regulatory choices, including what will be regulated, how to regulate it, and whom should be regulated. Along these lines, we assess the extent to which IEL has already been reconfigured and examine the need for further reconfiguration. We conclude this introduction chapter by bringing the contributions we assembled in this volume into conversation with one another and identify topics that warrant further research. Taken as a whole, this book portrays the interaction between AI and IEL. We have collectively explored and evaluated the impact of AI disruption, the need for AI regulation, and directions for IEL reconfiguration.
The strained U.S.-China trade relationship poses a frontal challenge to the multilateral trading system and has broad repercussions for international law. This Article addresses three dimensions of this relationship: (1) the economic dimension; (2) the geopolitical/national security dimension; and (3) the normative/social policy dimension. The Article advances a middle ground between those seeking to reinforce the World Trade Organization (WTO) system with new rules that limit the state's role in the economy, and those who reject WTO constraints in favor of a power-based system. It proposes pragmatic reforms to govern the interface of the two states’ respective systems across these three dimensions to facilitate ongoing exchange while giving each country latitude to protect itself from the externalities of the other's policies. The result would be greater room for bilateral and plurilateral bargaining, but conducted within the umbrella of the multilateral system.
The WTO created incentives for Brazil, India, and China to develop trade law capacity. But before turning to how they invested in developing it, we should recognize the major challenges posed to effective participation in international trade negotiations, monitoring, and dispute settlement in the WTO and the broader ecology of the trading system. Only then will we have a better sense of how differences in legal capacity matter in practice. Building trade law capacity is not a simple matter. The demands are significant and are beyond many countries’ hopes, although much progress has been made since the WTO’s creation, including through collective efforts.1 As the scope of trade agreements expanded and as countries negotiated in other fora, creating parallel dispute settlement mechanisms, the challenges grew.
“Now the US has become a wrecking ball to the system,” a WTO insider tells me. “It’s like Gotham City where the Joker took over.” In the words of the European Union’s ambassador to the WTO, the United States is “walking away from the system it largely built up itself; the architect of global governance is taking time off.” It is a sea change in Geneva and for the world.
We live in a pivotal time for international economic law. Emerging powers have ascended in prominence and the United States and Europe declined as economic and trading powers. China has become a rival to the United States. Economists tend to explain the shift from the angle of efficiency and innovation, while political scientists in terms of power, and more precisely market and economic power. This book provides a necessary complement to these analyses by assessing changes in law and legal institutions, and, in particular, these countries’ development of trade law capacity, which is linked to broader policy capacity, to interpret, apply, develop, and shape the rules of the game.
Victorious after World War II and the Cold War, the United States and its allies largely wrote the rules for international trade and investment. Critically, the United States and European Union drove the creation of the World Trade Organization (WTO) in 1995 with the aim of opening trade in goods and services for their products, ramping up protection for their intellectual property, and transforming national trade-related law and institutions within countries around the world to look more like American and European law and institutions. Developing countries joined the WTO but often complained that its rules were skewed. As a result, it was argued that the United States and European Union could rule the global economy through rules. They were incredibly successful, as WTO norms transformed laws and institutions within emerging economies.
The US challenge to the legitimacy and efficacy of the international trade regime that it created, and emerging powers’ defense of that regime, is a paradox that cuts across international relations theories. John Ikenberry, in his book After Victory, published a decade after the end of the Cold War and five years after the WTO’s creation, asked this central political question: “What do states that have just won major wars do with their newly acquired powers.” His answer was a legal one: they create the rules of the game. In this situation, he wrote, states “have sought to hold onto that power and make it last” through institutionalizing it.1 He called the order that the United States created a “liberal hegemonic order” because other states consented to it in the context of American unipolar power, while the United States agreed to constrain itself under the rules to “make it acceptable.”2 Michael Zurn, in his theory of global governance, argues that such regimes endogenously create resistance because they are “embedded in a normative and institutional structure that contains hierarchies and power inequalities.” He thus contends that “counter-institutionalization is the preferred strategy by rising powers.”3 And the realist Graham Allison, in his book Destined for War, writes, “Americans urge other powers to accept a ‘rule-based international order’. But through Chinese eyes, this appears to be an order in which Americans make the rules, and others obey the orders.”4 To turn from international relations to sociologist Pierre Bourdieu’s field theory, Bourdieu also finds that change within a field occurs through struggles where challengers employ “subversion” strategies to undermine the legitimacy of the status quo and dominant groups deploy “conservation” strategies.5 The paradox with the trade legal order is that, although Brazil and India initially resisted and complained about the WTO, they, along with China, became its defenders, while the United States, under the Trump administration, attacked it as illegitimate and neutered its dispute settlement system.6 The United States has become the revisionist power.
Victorious after World War II and the Cold War, the United States and its allies largely wrote the rules for international trade and investment. Yet, by 2020, it was the United States that became the great disrupter – disenchanted with the rules' constraints. Paradoxically, China, India, Brazil, and other emerging economies became stakeholders in and, at times, defenders of economic globalization and the rules regulating it. Emerging Powers and the World Trading System explains how this came to be and addresses the micropolitics of trade law – what has been developing under the surface of the business of trade through the practice of law, which has broad macro implications. This book provides a necessary complement to political and economic accounts for understanding why, at a time of hegemonic transition where economic security and geopolitics assume greater roles, the United States challenged, and emerging powers became defenders, of the legal order that the United States created.