Economic Disintegration? Political, Economic, and Legal Drivers and the Need for ‘Greening Embedded Trade Liberalism’

Ernst-Ulrich Petersmann

Journal of International Economic Law, 2020, vol. 23, issue 2, 347-370

Abstract: This contribution uses the examples of Great Britain’s withdrawal from the EU (Brexit) and US withdrawal from multilateral trade and environmental agreements for exploring political, economic, environmental, social, and legal reasons driving the backlash against economic integration agreements. In both examples, populist battle-cries for ‘taking back control’ and for lowering regulatory standards were followed by governmental attempts at evading parliamentary control over executive foreign policy powers to violate, or withdraw from, multilateral agreements. Anglo-Saxon neo-liberalism, President Trump’s mercantilist power politics, authoritarian state-capitalism (e.g. in China), and European ordo-liberalism reflect systemic divergences that may justify broad interpretations of WTO ‘exceptions’ (e.g. for WTO trade remedies and climate change mitigation). Europe’s multilevel, democratic constitutionalism protecting ‘social market economies’ was comparatively more effective in limiting protectionism and carbon emissions inside Europe’s common market. The EU’s ‘new green deal’ for a carbon-neutral ‘green economy’ was made possible by stronger, social, and democratic support based on ‘constitutional interpretations’ of Europe’s ordo-liberalism assisting adversely affected workers, producers, traders, investors, and other citizens to adjust economic and environmental activities to climate change mitigation. EU leadership for WTO-consistent climate change rules requires ‘greening embedded liberalism’ by interpreting the WTO ‘sustainable development’ objectives in conformity with the 2015 Paris Agreement, the UN ‘sustainable development goals’, and human rights (e.g. as legal basis for climate change litigation in Europe).

Date: 2020
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