The WTO and Market-Supportive Regulation: A Way Forward on New Competition Technological and Labor Issues

Abstract

I this paper I argue that certain of the “new issues” in global trade negotiations belong there quite naturally. I label these conformable issues “marketsupportive regulation.” I believe that wise incorporation of market-supportive regulation into the World Trade Organization (WTO) is the key to generating a new wave of “gains from trade”—and to widely disseminating those gains within and among societies. I call this my thesis, for lack of an accurate, but humbler, term. My illustrations of market-supportive regulation include a subset of principles and practices from the domains of competition policies, technology policies, and labor-relations policies. ...But only a subset. Only those regulatory principles that conform most closely to the market system belong on the WTO negotiating agenda. The rest would hold back its progress. My thesis begs several questions. Why the title’s emphasis on “a way forward” in WTO negotiations? Obviously because forward momentum is slow, and was slow even before the Seattle debacle.1 Less obviously, because it’s still worth going forward for all WTO members, including the United States. Last and least obviously, because going forward on three specific new issues has unappreciated value. It is a way to do two urgently needed things: To further empower the global market system and, simultaneously, to increase its constituency and thus enhance its broad legitimacy. What “privileges” the market system to lead me to recommend its further empowerment? First, I will argue that it is a remarkable social mechanism for reaching objectives of all kinds—necessary and noble, individual and communal, monetary and intangible— noncoercively. Second, and more important, I believe that the current market system needs an incentive to negotiate on issues of its own legitimacy, limits, and regulation. Its gains from negotiating new issues, standing side-by-side with procedural and material gains for labor unions, technology users, and nascent and small firms, are what make my proposed way forward viable—because it is mutually beneficial.2 Why any new issues at all? Why not WTO business as usual? Why not just say no to new issues?3 I maintain that business as usual no longer is an option. The broad backlash against it is here to stay. There will be no results from multilateral negotiations this way, no chance to enjoy the new gains from global integration without some broadening of the beneficiary base beyond business as usual. Why the WTO for my proposal—there are alternative forums and mechanisms? Part of my answer is that the WTO already oversees a market-supportive body of regulations; indeed that is its main purpose. Another part of my answer is that the WTO has already started implementing market-supportive new issues in the Trade-Related Intellectual Property Rights (TRIPs) Agreement, and in telecommunications and other services. The last part of my answer is that alternative forums have proved incapable of handling new issues effectively (e.g., the Organization for Economic Cooperation and Development on investment) and unable to broaden the constituency of beneficiaries (e.g., the North American Free Trade Area’s failed attempt to draw in labor and environmental communities). I begin below with a very brief discussion of what’s to be gained in a new round of WTO negotiations. In Section 3, I describe what I mean by market-