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Lingard, Nicholas --- "Trade, Aid, and Arbitrate: The Globalization of Western Law, Ronald Charles Wolf" [2005] UQLawJl 16; (2005) 24(1) University of Queensland Law Journal 241


Trade, Aid, and Arbitrate: The Globalization of Western Law, Ronald Charles Wolf, Ashgate/Dartmouth, Aldershot, England, 2004, pp 291, ISBN 0754622851

NICHOLAS LINGARD[*]

In legal scholarship, analysis of globalisation has tended to focus on international convergence in particular areas of law,[1] or theoretical analysis of ‘globalisation and the law’.[2] For attempting to strike a balance between these two approaches, Trade, Aid, and Arbitrate makes an important and original contribution to the literature. In this timely monograph, Lisbon-based US lawyer Ronald Wolf analyses the concrete structures of economic globalisation (international organisations, free-trade agreements, and so on) and the ways in which they impinge upon states’ lawmaking activities, both philosophically and practically. Wolf’s central argument is that, thanks to the advisory and dispute settlement roles of international organisations, a ‘new legal order’ is emerging ‘under the dominion of Western law’.[3]

To develop this argument, Wolf begins with the premise that economic factors yield important influences on law. This foundation fits with Wolf’s focus on international trade, economic aid, and the arbitration of international commercial disputes. Those three foci in turn correspond with the tripartite division of the book. In Part 1, Wolf centres his attention on international trade (broadly conceived to include trade in goods and services, as well as international capital movements), analysed through the international organisations involved in trade regulation. Part 2 moves the discussion to legal globalisation through the lens of international aid. The third and final part of the book is charged with demonstrating the role of international arbitration in the globalisation of Western law. Each of these three parts is further divided into chapters; there are 24 short chapters in all.

Wolf’s case rests, in part, on a distinction between globalisation and internationalisation. For the author, ‘[t]he globalization of the law is not about volume, speed, or compression of distance; these are descriptions of the internationalization of products or ideas’.[4] By contrast, the globalisation of the law is a ‘silent, but invasive process’ involving the ‘transposition of laws from one culture to another’.[5] While this division enhances the clarity of Wolf’s argument, it is perhaps artificial. The utility of the term ‘globalisation’ to our analysis of domestic legal change stems from its ability to encompass the activities both of nation-states (and organisations comprised thereof) and non-state actors. Despite alluding to the significance of ‘lawyers specializing in international private commercial law’, ‘investment banks … private capital venture firms … [and] global capital movements’,[6] Wolf’s analysis in fact pays relatively little attention to non-state flows of capital, ideas and people.[7] Instead, he directs close attention to the role of international organisations whose members are nation-states.

In Part 1, the international organisations and arrangements considered by Wolf include the North American Free Trade Agreement (NAFTA), the World Trade Organization and the Organisation for Economic Co-operation and Development (OECD). Among these, his analysis of the OECD is particularly original and important. Although NAFTA and the WTO have been subject to considerable scrutiny[8] by academic and practising lawyers, the OECD has received less attention.[9] Wolf claims that the OECD is an oligarchic club, which, through publication of guidelines, model laws and conventions, manages to influence the shape of law in its member states. Wolf uses the OECD’s principles of corporate governance and its role in the globalisation of competition law as examples of the Organisation’s influence. Importantly, the author argues, the OECD’s influence then extends beyond its membership of exclusively wealthy, industrialised states. Despite lacking enforcement mechanisms and dispute resolution procedures, the OECD is able to ‘bring non-members into conformity’ through ‘the tribal technique of exclusion’.[10] Wolf’s chapter on the OECD, though engaging and original, is brief. It thus presents a wealth of opportunities for further research and systematic study of the OECD’s influence in specific fields of regulation in various jurisdictions.

The organisations that attract Wolf’s attention in Part 2 — on international aid — include the International Monetary Fund (IMF) and the World Bank. The basic argument here, summarised in the emotive title of Chapter 10, is that ‘IMF debtor nations are bribed into globalization’. It is in this section that the author’s distaste for the processes he describes is most obvious. Indeed, Wolf’s description of the book as ‘an investigation into the wide-ranging, highly-influential commercial activities of our present era rather than … the elaboration of a theoretical model’,[11] is belied by the pejorative tone with which he claims that developing states are forced into sovereign debt and subjected to Western principles regulating its repayment and recovery. This section, and indeed the book as a whole, would have benefited from a more candid statement, early in the piece, of Wolf’s assessment of the processes he describes. In the absence of such a statement, the author’s often original, erudite arguments are sometimes diminished in force by the lack of a theoretical or normative framework. As it is, the reader is treated to Wolf’s acerbic, cynical language (from Part 2: ‘with these laws, I thee wed’;[12] the World Bank should perhaps ‘be called the New York World Justice Foundation, which, unlike its predecessor the New York World Fair, is destined to endure for decades’[13]) but no clear statement of his philosophical position.

This critique also applies to the treatment of international commercial arbitration in Part 3. Here Wolf argues that the preference of multinational enterprises for their disputes to be resolved by arbitration and governed by Western law means that local law is increasingly irrelevant for international businesses operating in non-Western jurisdictions. Wolf offers a compelling analysis of the lack of an ‘international law of arbitration’, and thus shows the way in which the dominant practices of international business become self-perpetuating and self-regulating. The analysis in Part 3 gives the clear impression that Wolf does not support the customary emergence of a new Western-dominated lex mercatoria, yet there is no explicit statement of Wolf’s philosophical position on the role of arbitration in extending the reach of Western law.

‘Western law’, throughout Trade, Aid, and Arbitrate, is used as a synonym for US law and US legal principles. This is not necessarily problematic – after all, a key part of Wolf’s case is that ‘[t]o do business with US, Inc. you must execute documents prepared by their counsel’.[14] However, Wolf’s stated definition of ‘Western law’ is in fact broader:

By Western law, we mean precepts emanating from those countries dominating world trade, substantially under the influence of either the common or civil law of the US or Europe: nations possessed of a parliamentary democracy; social units whose political economy acknowledges the consensual basis of society and the primacy of individual liberties.[15]

With this definition in mind, Wolf’s analysis could be augmented by a nuanced account of diverse regional flows of legal influence. In particular, East Asia provides ample evidence that the ‘globalisation’ of international commercial law does not simply entail unidirectional imposition of ‘Western law’ in non-Western jurisdictions. Japanese antitrust law, for example, has been influential in the establishment of competition regimes in developing countries in Southeast Asia.[16] Japan arguably fits Wolf’s interpretation of ‘Western’ (and Japan’s Antimonopoly Law was initially drafted by US occupying forces), but the country’s role in commercial law reform in Asia demonstrates that the ‘globalisation of Western law’ is in fact a mediated process that also entails regionalisation. Similarly, scholars have pointed to the role of Taiwanese commercial law in the growth of securities and other commercial regulation in the People’s Republic of China.[17] Here, we see the way in which linguistic and cultural specificities can mediate the globalisation (and regionalisation) of commercial law. This critique does not detract from Wolf’s overall case, but serves to demonstrate that the ‘globalisation of Western law’ may in fact be a more complex process than a first reading of Trade, Aid, and Arbitrate suggests.

This review has identified a number of critiques of Wolf”s work — revolving around the lack of a forthright theoretical position and the scope for closer analysis of regional, as distinct from global, flows of legal influence. In many ways, however, even as these shortcomings pull readers in different directions, the great strength of Trade, Aid, and Arbitrate emerges: this book opens up a dialogue on important themes in international and comparative legal studies and presents us with countless opportunities for further theorising and research. In all, Wolf has produced an important and original contribution to our understanding of the contemporary nature of international law and regulation. Trade, Aid, and Arbitrate deserves the attention of — and further critical reflection from — all those in the legal academy, international organisations and private international practice who are concerned with the ways in which economic globalisation is changing national legal cultures.


[*] BA(Hons); LLB student, TC Beirne School of Law, The University of Queensland.

[1] See, eg, Anthony Woodwiss, Globalisation, Human Rights and Labour Law in Pacific Asia 1998; Martin Shapiro, ‘Globalization of Freedom of Contract’ in Harry N Scheiber, The State and Freedom of Contract 1998, 269; Clifford A Jones and Mitsuo Matsushita, Competition Policy in the Global Trading System (2002); John Braithewaite and Peter Drahos, Global Business Regulation (2000).

[2] See, eg, William Twining, Globalisation and Legal Theory (2000); Richard Perry and Bill Maurer, Globalization Under Construction: Governmentality, Law, and Identity (2003); Belinda Bennett and Rosemary Lyster (eds), Reimagining the Global Space: Feminism, Globalisation and the Law (2002).

[3] Wolf 4.

[4] Ibid 5.

[5] Ibid.

[6] Ibid 263.

[7] See generally on diverse flows of people, capital and technology, Manuel Castells, The Rise of the Network Society (2nd ed, 2000).

[8] See, as examples of a very extensive literature, Leon Trakman, Dispute Settlement Under the NAFTA: Manual and Source Book (1994); Ernst Ulrich, The GATT/WTO Dispute Settlement System: International Law, International Organizations, and Dispute Settlement (1997).

[9] Philip Baker’s study of the OECD’s model tax law is one exception: Philip Baker, Double Taxation Conventions: A Manual on the OECD Model Tax Convention on Income and on Capital (2001).

[10] Wolf 69.

[11] Ibid xi.

[12] Ibid 116.

[13] Ibid 121.

[14] Ibid 10.

[15] Ibid 12.

[16] See, eg, Thi Le-Thuy Tran, ‘The Impact of Japan’s Anti-monopoly Law on Vietnamese Competition Law’ (Paper presented at ‘Japanese Law’s Place in the World and the World’s Place in Japanese Law’ Conference, University of New South Wales, Sydney, 22 June 2004); Japan Fair Trade Commission, ‘Kaigai Kyosōkyoku nado no Shokuin ni taisuru dai 11 kai Dokusen Kinshi-ho to Kyosō Seisaku Gijutsu Kenshū no Jishi ni Tsuite [About the Implementation of the 11th Technical Training Program in Antitrust Law and Competition Policy for Staff of Overseas Competition Agencies]’

(Press release, 18 August 2004) <http://www.jftc.go.jp/pressrelease/04.august/04081801.pdf> at 23 November 2004, English version at <http://www2.jftc.go.jp/e-page/pressreleases/2004/August/11thseminar.html>

[17] Christine Chaigne, ‘Forging a New Legal Reality: China’ (Paper presented at Harvard Project for Asian and International Relations Conference, Shanghai, 17 August 2004); also, see generally, Jin Huang and Andrew Xuefeng Qian, ‘“One Country, Two Systems,” Three Law Families, and Four Legal Regions: The Emerging Inter-Regional Conflicts of Laws in China’ (1995) 5 Duke Journal of Comparative and International Law 289, 302.


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