Saturday, August 02, 2008

Institutionalizing Politics: Neutrality and Choice in the Construction of Public and Private International Legal Regimes.

The current debate over the relationship of “politics” and international law hearkens back to the more fundamental question posed by Marxian theory and investigated by critical legal theory about the extent to which legal systems organized around particular political interests can come to transcend their limitations for the benefit of the wider polis. The question haunts both public law and its institutions and private law and its actors. Increasingly, private international law and new global actors intrude on legal questions formerly the exclusive domain of sovereign jurisdictions. These new private actors and their normative apparatuses have their own “politics,” as does the dynamically syncretic process through which sovereign and other polities converge and diverge. Applying a broad definition of the “political,” it is worth examining the way in which rule of law systems grapple with the emerging international public and private global order.

I have begun examining ALBA (Alternativa Bolivariana para los Pueblos de Nuestra América) and the Politics of Public/Private Regimes of International Trade. Until 2005 there was no real viable alternative to the sort of trade regimes that had become the stable of the global system of economic regulation since the 1990s. These regimes emphasized certain values reflected in the legal regimes built around them: private market support, state neutrality, and free movement at the instance of private parties under a regime in which contract, and contract law provided the superior method of interaction. ALBA, a state-to-state trade group created by Cuba, Venezuela and Bolivia attempts an alternative legal and political approach to the structuring of regional trade regimes: public intervention in markets for the common good, markets grounded in state to state interventions, privileging of politics and political sovereignty, and a disciplining of economic concerns by anti-subordination programs at the political, social, cultural and economic spheres. The rise of ALBA permits an examination of the ways in which choice of normative substructure (public/private; state/market) can affect the neutrality of legal regimes used to advance even the same set of objectives. Interrogating neutrality in law as a second order variable permits a look at the extent to which the Marxists are right--law is politics, even in strictly market oriented international econo-legal regimes--and wrong--politics is not individual, but institutional and collective.

My colleague Jose Gabilondo (FIU/USA) has examined leverage Cycles, financial conglomerates, and the politics of liquidit. During the past ten years, a new debt market structure has emerged in response to low interest rates, a secondary debt market which has increased the credit supply, and the growth of new equity capital intermediaries – e.g., hedge and private equity funds, sovereign wealth funds – which mobilize large amounts of debt capital. As a result, a substantial leverage cycle is underway involving the recapitalization of corporate capital structure. At the same, market practices of formerly separate financial sectors – banking, securities, and insurance – have converged in important ways, including through products, such as credit derivatives, which have increased the number of firms which are, effectively, financial conglomerates, whether labeled as such or not. This paper presents a new paradigm for understanding the liquidity implications of the leverage cycle against the background of the new credit market.

Welber Barral, the Brazilian Foreign Trade Secretary has looked at legal certainty MERCOSUR and WTO. International trade regimes at the regional and international level seek a certain measure of certainty and predictability. Each has sought predictability and certainly through the institution of distinct techniques. MERCOSUR retains a focus on political, state-to-state mechanisms, while WTO is moving gradually to a more juridical model. This paper will examine the structure of juridico-politics inherent in these distinct trade regimes by focusing on Brazil's experiences. Concentrating on Brazil’s significant status within the WTO's Dispute Settlement System, although Brazil makes up only 1 percent of world GDP, it accounts for 14 percent of all WTO trade disputes, the political contours of these disputes is interrogated, in terms of their value as political discourse as a function of detriments of politically motivated overzealousness, and its costs in terms of time, alternatives and uncertainty.

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