Judicialization: The Third Transformation

Abstract

At the core of the third transformation in international trade diplomacy is the rise to prominence since the 1990s of essentially judicial mechanisms and procedures for resolving trade disputes. As more traditional diplomatic approaches to negotiating and enforcing trade agreements have yielded progressively less fruit over the past two decades, judicial mechanisms increasingly are coming to substitute for traditional diplomacy, perhaps if only by default. Judicial processes have become much more important not just for resolving trade disputes, but in advancing trade coöperation. Judicialization initially appears to focus diplomacy on smaller, narrower objectives: bringing a complaint against another government for depriving one of benefits from trade due under an international agreement, negotiating a resolution, winning the adjudication of a particular dispute. But it is genuinely different diplomacy, in that governments can no longer opt out if they dislike a ruling. Unlike in bilateral or multilateral negotiations, there is not the option of a BATNA, no real choice to withdraw from negotiations. Thus judicialized trade diplomacy, like more traditional types, can be either positive-sum or adversarial, but in a different way. Both sides in a dispute are compelled to negotiate, to accept judgements, to implement rulings. There is an arbitration element present in which the judicial process, whilst not substituting for the essentially diplomatic nature of the interaction between states, has become a permanent part of negotiation.