Application of the Theories of International Trade and Exploring the Scope for Welfare-Grundnorm in International Trade Negotiations

Abstract

It is normally true that international trade negotiations result in making international trade rules. What is not evidently understood, however, is whether international trade negotiations are designed to apply international trade theories in making rules or not. To put it clearly, what role do international trade theories play in international trade negotiations and rule-making? This paper delves into this fundamental question and analyzes the reasons for the inclination of sidestepping international trade theories in international trade negotiations and rule-making. It observes that one of the fundamental reasons is that most of the existing trade theories do not provide sufficient methodological grounds to shape the rule-making process in the WTO. Second, some of these theories are built to protect local interests through international regimes and thus are unhelpful in shaping international rule-making. In most cases, trade negotiators obsessively try to apply trade theories which have no prospects in defining the content of international trade rules. Third, as an alternative inquiry, this paper analyzes and suggests welfare grundnorm as a theory and methodology for designing international trade negotiations and making international trade rules.