Geoffrey Allen Pigman's research while affiliated with University of Pretoria and other places

The World Economic Forum is a knowledge‐generating, non‐governmental organization, a multi‐stakeholder venue for debating issues of global governance.

A transnational wave of popular anger over liberal trade and the diplomacy that facilitates it was evident in the Brexit and Trump elections of 2016. Drawing upon an understanding of how the diplomacy of international trade has undergone successive transformations over the past two centuries, this article seeks to understand how institutions that facilitate trade diplomacy, such as the World Trade Organizations, increasingly fail to meet the expectations of the global public. The article contends that excessive ‘judicialization’ of WTO trade diplomacy has marginalized the WTO’s all-important legislative and executive functions. WTO institutional reforms are proposed to make the WTO’s institutional structure more akin to that of the European Union, which has been relatively more successful at facilitating trade diplomacy with popular legitimacy.

It is perhaps more than just coincidence that substantive change in the international trading system and in the European Union have both tended to be precipitated by crisis, or at least by public perceptions of crisis. In the second decade of the twenty-first century, international trade plays a more vital rôle in driving global economic growth and prosperity than ever. The real ratio of imports to GDP worldwide more than doubled from the mid-1970s to the mid-2000s, reaching nearly 30 percent by 2004, indicating more clearly than ever the growing importance of international trade to global economic growth.1 Hence in a period in which the global economic recovery from the severe 2008 recession has been slow and uneven, the need for increased global trade, and for the diplomacy that facilitates it, to stimulate global economic growth and to spread global prosperity more widely amongst all the citizenry of the globe has never been more pressing. The second decade of the twenty-first century, if not necessarily a time of crisis for international trade and economic growth, is at least a time of great uncertainty across many fronts.

The second major transformation in trade diplomacy was the process through which venues for trade diplomacy have been transformed into institutions at which or within which trade diplomacy is conducted. Formats and structures of institutions and venues affect trade diplomacy and its prospects for success by conditioning who can communicate with whom and under what rules, as well as what sorts of agreements can be reached and how they are enforced. From the explosion of trade diplomacy in the nineteenth century up until the Second World War, bilateral trade agreements between nation-states remained the most common form of trade pact. Yet since the early twentieth century such treaties have been augmented and in some cases supplanted by regional agreements, such as the treaties of the European Union, NAFTA, MERCOSUR, and SACU; by plurilateral pacts, such as the Yaoundé/Lomé/Cotonou Conventions (between the EU and ACP states); by diplomatic coöperation between groups of large emerging economies in different regions, such as BRICS; and by multilateral trade agreements, such as the GATT/WTO.

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.

The Industrial Revolution of the late eighteenth century and the Napoleonic Wars were catalysts for an unprecedented upheaval in how and why international trade was conducted and for the diplomacy that would make its expansion possible. This first significant transformation in trade diplomacy meant that, for the first time, diplomats would negotiate about trade for its own sake, rather than using trade as an instrument of war. The process by which trade diplomacy increasingly became distinct from other diplomatic issues and became driven by its own policy imperatives could only get underway in earnest once demand for imports and incentives to export goods and services (and for the funds to pay for them) reached certain threshold levels. The late eighteenth and early nineteenth century economic arguments of Adam Smith and David Ricardo for liberalization of international trade and the political arguments of Alexander Hamilton and Friedrich List in favour of protection of the industrial sectors of developing countries all presuppose the necessity of state actors to take trade policy decisions, which itself was a radically new assumption. Scholars and private businesses began to cast governments of states as critical protagonists in much-needed trade-specific diplomacy for the first time: to negotiate trade and tariff treaties, to implement the treaties fairly by collecting duty revenue, to resolve disputes over international trade as and when they arose.

International trade is no longer just about buyers and sellers, shipping and marketing, firms and distributors. Nor is it only about customs officials and border inspections, tariffs and quotas, export subsidies and import licences. Over the past three millennia, international trade has moved from being a series of infrequent journeys to meet unknown peoples, to exchange the familiar for the exotic for the benefit of rulers and elites, to being today a primary driver of global economic growth. International trade as a percentage of world economic output has increased from around two percent in the early nineteenth century to nearly 35 percent in the year 2000.1 Trade today is an inescapable, indispensable component of a global economy that enables the world’s billions to work, earn a living, and consume and invest the fruits of their labours. Without international trade, there can be no global economic prosperity. The dramatic increase in trade relative to overall global economic activity is a metaphor for the increasing necessity for people across the world to engage with one another: to deal with each other’s differences and to do business with one another. Alongside this great rise in international trade has been a parallel increase in another fundamental and essential human activity: diplomacy.

This is the first book to tell the story of the diplomacy that has made the international trading system what it is today. It reveals how three major transformations over the past two centuries have shaped the way goods, services, capital and labour cross borders, as buyers and sellers meet in the global marketplace.

International sporting competition has played a rôle in diplomacy since at least the ancient Olympiad. Competitors in international sporting events have always possessed the capacity to represent their governments and peoples—and, more latterly, sponsoring firms—not only to foreign governments but also to foreign populations and the global public more broadly. The rapid increase in the number and variety of international sporting competitions over the past 50 years has seen “the increase in people-to-people exchanges, both virtual and personal, across national borders.” The communicative power of international sport has increased dramatically by the information and communications technologies revolution over the past several decades, enabling the audience for major sporting events to expand to hundreds of million people. Yet, little study on how international sport relates to public diplomacy has occurred and remains not well understood. This analysis fills in this lacuna.