Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note

TLDR

The global trade regime has become increasingly legalized, reshaping the information environment and government obligations and thereby altering domestic interest‑group mobilization on trade. From the perspective of encouraging future liberal trade expansion, the authors warn that legalization can have negative consequences that must be weighed against its benefits for national compliance. The authors argue that optimal legalization balances reducing opportunism risks with minimizing negative impacts on domestic politics. Because the weakly legalized GATT institution sufficed for widespread liberalization, further legalization requires a strong case to justify far‑reaching changes to the global trade regime.

Abstract

If the purpose of legalization is to enhance international cooperation, more may not always be better. Achieving the optimal level of legalization requires finding a balance between reducing the risks of opportunism and reducing the potential negative effects of legalization on domestic political processes. The global trade regime, which aims to liberalize trade, has become increasingly legalized over time. Increased legalization has changed the information environment and the nature of government obligations, which in turn have affected the pattern of mobilization of domestic interest groups on trade. From the perspective of encouraging the future expansion of liberal trade, we suggest some possible negative consequences of legalization, arguing that these consequences must be weighed against the positive effects of legalization on increasing national compliance. Since the weakly legalized GATT institution proved sufficient to sustain widespread liberalization, the case for further legalization must be strong to justify far-reaching change in the global trade regime.