Empty shelves, rationed frozen vegetables, TV show props used as medical equipment in real life. No, this is not an autarkic society cut off from the rest of the world, this is the United States of America entering the second decade of the twenty-first century. Global production has been disrupted; supply chains are in disarray. The hitherto abstract notion of international trade governance has become an everyday reality experienced by nearly everyone. But while we are eagerly anticipating the prospect of a return to normalcy, international commerce and investment may never turn back to business as usual. Aside from the pandemic-related disruptions, the present crisis results from the confluence of several long-term trends. First, the shift in the respective weights of developed and developing countries in the world economy combined with the overtaking of the United States as the largest economy and the rise of China has been a tectonic change. Second, the relative retrenchment of leadership by the United States and the European Union has led to realignments of political and geoeconomic alliances. Third, challenges to multilateralism as a locus of governance are emerging from various parts. These challenges are in part institutional (the very existence and functioning of the institutions) and in part normative (what the institutions stand for). The question, then, is where international economic governance might be headed, and who will shape it.

The new book by Gregory Shaffer, Chancellor Professor of Law and Political Science at the University of California, Irvine School of Law, takes us through a masterful behind-the-scenes journey into how Brazil, India, and China have come to take their place in the global trade ordering, and the ensuing transformations to the multilateral system. The book's core argument may be summarized as follows. Some emerging countries have successfully built their legal capacity to more fully participate in the trade law system originally built by and for the old powers. In so doing, they have transformed their trade policy management domestically, and, externally, they have influenced the functioning of the global trading system. The result is a fluctuating “transnational legal ordering” where trade relations across borders and within borders have significantly shifted (p. 23). This book is the culmination of some twenty years of research, data gathering, and analysis, distilled into a forward-looking account of the vectors for transforming the current international economic governance and the possible future shape it will take.

Methodologically, the book presents qualitative empirical and theoretical analyses informed by hundreds of interviews and discussion with government officials and academics in Brazil, China, India, Europe, and the United States, as well as international organization representatives in Geneva and Washington, D.C. Shaffer dubs his approach a “para-ethnography” because of the mutual interests of interviewers and interviewees in both understanding and affecting the system (p. xiv). The text also draws from a wide range of literatures beyond trade law. Perspectives from international relations, which help understand power dynamics, from economics, sociology, and many others come to bear to help contextualize the phenomena we are observing with respect to trade law and institutions. Shaffer treats the relationship between the law and other social sciences as an iterative process, where other disciplines help explain legal choices and institutional dynamics. In turn, an examination of the social, economic, and political context leads to queries about whether more law is needed, or less (p. 293).

The volume is divided into three parts. The first discusses why capacity building is important and how it affects domestic legal orderings. Legal capacity building is often seen as a technical issue of training and resources. In reality, as is so aptly demonstrated in this book (chs. 2–3) and in earlier works by Greg Shaffer and others,Footnote ¹ it consists in a radical transformation of the fabric of the legal profession in the country at stake; it results in significant institutional overhauls; and it ultimately reshapes the substantive law and policy goals pursued by a new class of actors. By providing an overview of how international trade law and institutions relate to domestic sociolegal systems (ch. 3), Shaffer demystifies the relatively opaque world of trade law, making the field accessible to a broad readership.

The theoretical and empirical enquiry into legal capacity building is also an opportunity to pierce the veil of the state as a unified legal entity. In examining the role of infra-national actors, ranging from corporations, trade groups, and chambers of commerce, to academic communities and civil society, the analysis transcends traditional state-centric accounts of trade law and its institutions. Shaffer identifies five aspects of state change relating to participation in the trade law system: changes in “national law and practice,” changes in “the boundary of the state, the market, and other forms of social ordering,” changes in “the allocation of authority among state institutions,” changes in “expertise and the role of expertise in governance,” and changes in “associational patterns, institutionalized through transnational mechanisms of accountability and their accompanying normative frames” (pp. 40–45). As illustrated in the case studies presented in Part II of the book, each of these changes occurs through transformations of the public and private actors and their relationships with each other and with their foreign counterparts. From students in the legal training pipeline to academics, think tanks, industry leaders, civil society leaders, and government officials, whether career administrator or elected representatives, building legal capacity is an all-hands-on-deck enterprise that mobilizes resources at all levels of society.

The global trade ordering spurs these changes because it presents particular challenges for emerging countries. First, effective participation in the multilateral trade ordering requires the acquisition of technical capacity to understand the implications of negotiations and disputes, to anticipate and articulate positions in negotiations and to implement obligations. Legal technical knowledge is an essential component, amongst other technical skills, to achieve these goals (pp. 62–67). Second, developing and retaining this technical capacity demands financial resources (pp. 67–69). Third, there are often international political and even economic pressures from established powers that might resist capacity building in emerging countries. For instance, a more vocal participation in negotiations by India and Brazil, a more strategic use of the World Trade Organization (WTO) dispute settlement system by those countries has faced backlash from the United States and the European Union, in the forms of threat of withdrawal of some economic benefits, political pressures in non-trade areas, etc. This increases the stakes and the costs, directly and indirectly, of the capacity-building project for emerging countries (pp. 69–72). Last, the transformations associated with capacity building may also create tensions internally within the governance system of the country as it may change the power relationships amongst ministries and the relationship between governmental entities, the business sector, and civil society (pp. 73–77).

Emerging countries have responded variously to these challenges, and the case studies provide overviews of how India, Brazil, and China have addressed these issues. The analysis has implications beyond the countries forming the focus of the case studies. Indeed, smaller developing countries have also taken steps to build their capacity, and the WTO Secretariat has mustered its resources to support these efforts regionally. Because legal capacity building is key to empowering developing countries in the global economic order, as the author so persuasively argues, it will be worth considering to what extent lessons may be derived from the case studies for other countries, and whether some of these experiences could be replicated elsewhere. The highly granular account provided by Shaffer will be invaluable in this respect.

The focus on public and private entities within state borders speaks to the book's grounding in transnational legal order theory. Rather than the analysis being premised in public international law strictly speaking, it is instead rooted in “transnational law,” a theory first formulated by Philip Jessup in a series of lectures at Yale in the 1950s.Footnote ² Shaffer's “transnational legal ordering” retains Jessup's focus on actors and phenomena occurring across borders as the starting points of the analysis, rather than the abstract construct of the state, but beyond that, it elaborates on the temporal, iterative nature of transnational actors’ relationships and their impact on international legal instruments and their institutions. Theorizing the transnational legal order is central to Shaffer's scholarship. From edited volumesFootnote ³ to articles,Footnote ⁴ he has extensively explored international law through the transnational lens to reveal the underlying dynamics of an ostensibly state-centric legal and institutional system. This approach allows for a better account of the role of non-state actors, whether multinational corporations, transnational civil society movements, international NGOs, and even individual decisionmakers, not mediated by the state as a supposed arbiter of infra-national interests, but rather as autonomous actors capable of influencing the system directly.

The second part of the book consists of a series of co-authored chapters using Brazil, India, and China as case studies. Overall, the case studies offer an outstanding legal anthropology account of the countries’ transformation over the past three decades and how, in turn, they are transforming the global trading system. From a legal perspective, the case studies reveal the importance of capacity building internally, and its transformative potential vis-à-vis trade institutions. Indeed, as Kristen Hopewell has theorized, and Shaffer agrees, emerging countries have challenged the multilateral trading system by their participation in it, rather than by an attempt to bypass it or destroy it.Footnote ⁵ It is in response to this shift in the users of the levers of power that the United States, in particular, has decried and stifled the WTO. Throughout the case studies, one can discern three main categories of intervention in the transnational order resulting from domestic transformations: changes in international negotiations, regulation, adjudication or interpretation; changes in foreign law and/or practices in response to domestic actions; and dissemination, imitation, replication, and countermoves in other countries that are inspired by a country's domestic conduct.

With respect to Brazil, a co-authored chapter by Shaffer and Michelle Ratton Sanchez Badin offer a narrative of how Brazil, while not fully realizing its economic potential as a rising middle income country, has harnessed a political and institutional power that goes much beyond its economic might (ch. 4). Multi-level capacity building, both within governmental agencies and beyond—in the private sector, in higher education, and in civil society—has played a critical role in enabling Brazil to develop a significant network of trade and investment treaties, to pursue a developmental industrial policy agenda, and to serve its intellectual property needs.

In the chapter on India, James Nedumpara, Aseem Sinha, and Shaffer analyze how the “emerging giant” (p. 128) has moved from playing a defensive role blocking the ever-sprawling multilateral trade agenda to building an alternative network of trade agreements. At the same time, India has deployed its enhanced domestic trade capacity to define and fiercely protect its domestic policy space. The chapter details how India has transformed itself as a result. It speaks most strongly to the first claim of the book (domestic transformation of the state's role and its relationship with private actors). The discussion of trade remedies is probably the best example of that (pp. 159–62). It illustrates the profound transformation of the state bureaucracy and policy, the whole-cloth creation of a legal industry in this field, and more, on the domestic front. It also fully demonstrates how India has gone from being mostly absent on the international level with respect to trade remedies, to becoming a major user, a frequent participant in disputes, and a challenger of other's positions. Likewise, in the intellectual property field, implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights disciplines has required a significant overhaul of intellectual property policy in India, particularly in reference to pharmaceutical products. The second part of the book's argument, that countries with newly developed capacity have, in turn, influenced the system, plays out perhaps more ambivalently with respect to India. Certainly, India has used flexibilities allowed in the WTO system to the extent that it could, particularly with respect to intellectual property and trade remedies, but the result was not transformative. In areas where its policies chafed against WTO disciplines, such as with respect to large scale industrial policy in the automotive sector and solar panel infrastructure, India has not quite been able to shift the status quo, playing instead a game of “catch me if you can.”

Perhaps not surprisingly, opening the Pandora's box of the state to analyze the role of infra-national actors, of epistemic communities, and professional organizations, as is done so masterfully in the book, only begets more questions. For instance, the co-authors open the chapter with a reference to the tensions between India and its trade partners, with India portrayed as the troublemaker in chief. But within India itself, there are also diverse views on the balance between policy space and the current trade ordering. Compare for instance the positions from Anwarul Hoda at the Indian Council for Research on International Economic Relations, a major think tank, which might be more aligned with open market positions, and the government's policies pushing protectionism and industrial policy programs. One also becomes curious as to the substance of consultations between government departments and trade lawyers regarding the WTO compatibility of proposed industrial policies given that signature programs have been challenged at the WTO and India has lost in a number of cases (India Solar Mission is an example).Footnote ⁶ Was the government advised that it would be challenged and likely lose but decided to go ahead anyway and play for time (successfully so)? Was this the result of conflicts between the government, with some wishing to go ahead no matter the trade implications? Or did the government think it would not be challenged?

Lastly, two chapters co-authored with Henry Gao address China's transformation in the wake of its 2001 WTO accession (ch. 6) and its efforts to shape its economic legal relations outside of the traditional multilateral framework (ch. 7). China's membership in the WTO resulted in profound regulatory and economic reforms internally, and here again, spurred the emergence of a new class of lawyers and policymakers. But the changes, contrary to the expectations of the West in the early 2000s, did not result in China abandoning its state-led political economic system. Rather, China entrenched a unique form of state-managed capitalism that leverages in part and defies in part the multilateral neoliberal economic law framework. Looking beyond the WTO, the authors consider the extent to which China has developed a complex and novel transnational public/private ordering. This chapter, based on an article published earlier in the Journal of International Economic Law,Footnote ⁷ is a deeply insightful account of what the reality of legal-economic relations looks like for countries and businesses involved in deals with China. It is chilling in many respects and a must-read for policy and business executives alike. Most notably, it unpacks the relatively secretive ensemble of agreements that form the Belt and Road Initiative, mapping how the network of trade, investment, and other treaties intersect with public-private contractual arrangements and unilateral policies from China. It foreshadows a system that largely bypasses the rules and accountability mechanisms of multilateral international economic law and that offers little transparency, opportunity for public participation, or reciprocal checks and balances.

Although the case studies, and the book more generally, focus primarily on trade, some parallel dynamics are noted with respect to international investment. It would be interesting to further explore, in future work, whether capacity building in the realm of trade has spurred capacity building in investment, whether the vectors for capacity building in both fields are similar, and where they might diverge. For instance, it seems that the realization that international trade regulation is transformative domestically, albeit not necessarily in positive ways for different economic sectors and policy spaces, happened earlier (late 1990s) than it did for investment (late 2000s), which might lead to a time lag in the capacity-building response. Certainly, emerging countries’ full-scale engagement with trade law dates back to the early 2000s, whereas major moves to denounce or renegotiate bilateral investment treaties took place in more recent times. There are also some structural differences between the world of trade lawyers and that of investment lawyers. For instance, with respect to government attorneys and negotiators, trade experts might have historically been situated in ministries of commerce, whereas investment specialists might originate from finance ministries. In the United States, the United States Trade Representative focuses on trade but the State Department and the Department of Treasury deal with investment treaties. Yet today, the trade track and the investment track are increasingly converging in economic agreements that incorporate both trade and investment regulation. This will raise additional challenges in terms of capacity building and infra-national relationships amongst stakeholders involved in the process.

As a counterpart to these case studies, Part III of the book examines the implications of emerging powers-led internal and external transformations for the United States and, in conclusion, for the global system more broadly.

Different narratives, in the press and the political discourse, attempt to account for the effects of the rise of emerging powers on trade politics within the United States but what is unquestionable is that there has been a significant impact, which can be felt in the U.S. political withdrawal from the very institutions and frameworks it had designed. Rather than endorsing any of the dominant narratives, Shaffer seeks to reveal the vectors of the U.S. reaction to emerging powers’ rise by comparing the situation of the United States with that of the European Union (pp. 272–73). In so doing, he traces the role of external changes in spurring economic nationalism, the wrecking of the Appellate Body at the WTO, and more generally, the repositioning of the United States vis-à-vis international trade institutions.

This analysis leads to the issue of the U.S. strategy in responding to these shifts (pp. 282–86). Here, the author emphasizes dueling dynamics: acceptance/support by emerging countries of the trade order has undermined those same international institutions in the eyes of the old powers, and particularly the United States. This certainly rings true with respect to China. As the latter has instrumentalized WTO law and institutions for its own purposes, the United States’ support for the multilateral regime as a vector of its own legal and economic hegemony has been shaken to the core. From President Obama's “pivot to Asia” with the Trans-Pacific Partnership to entrenching a “geoeconomics cold war” (p. 284) under the Trump administration, recent U.S. trade policies have neither succeeded in maintaining the United States as a premier rule-maker, nor have they led to a new balance of shared power between the old hegemon and aspiring hegemon, particularly China. Yet, the stakes could not be higher for the United States. Domestically, its place in the global trading system critically affects welfare increases and allocation as well as its geoeconomics security (pp. 286–88). Internationally, the existence, efficacy, and legitimacy of a multilateral forum for trade has repercussions for the world order at large and the United States’ place in it (pp. 288–90).

Post-World War II liberalism and 1990s neoliberalism have gone a long way to achieving a significant measure of political and economic convergence but may have reached their limits. What policymakers must realize, and what we need to respond to as lawyers and scholars, is that emerging countries are seeking a combination of market access and policy diversity. Common wisdom typically presents these two as an either/or choice: play within the system and get market access or choose heterodox strategies and be sanctioned in terms of lost market access. A functioning international economic law system must be reframed to allow those two policy priorities to coexist on an equal footing. On the one hand, development policies cannot be treated as a second order consideration because for most of the world, they are not. Economic integration and free markets, on the other hand, need regulation to be sustainable and they need to serve much more diverse constituencies than they have in the past. Liberalization cannot be simply about producers wielding market power. It must also be about the producers that do not have market power, consumers, workers, the global commons and so many other public and private stakeholders in the global economy.

Shaffer responds to this normative challenge by positioning trade law as a transnational interface between domestic policy priorities and their effects on foreign markets and societies. He argues that we need both more multilateral regulation constraining domestic actors, and more policy discretion for states to pursue domestic policy preferences (p. 293). Shaffer resolves this apparent paradox when considering the nature of the prescribed additional regulation. Rather than more baseline substantive obligations, Shaffer calls for disciplines that aim to mitigate or prevent the negative impacts of domestic policies on actors beyond the border. Using externalities on other trade partners as the yardstick to delineate the role of trade law will find sympathy with TrachtmanFootnote ⁸ and others who have theorized trade law as a remedy to collective action failures and to cross-border economic inefficiencies resulting from domestic beggar-thy-neighbor policies. At the WTO, trade remedy rules on safeguard duties, anti-dumping duties, and countervailing duties are, to some extent (and not necessarily efficiently, according to many economists), designed to protect domestic producers against external changes, whether they result from changes in economic circumstances abroad, or from domestic policies. In earlier works, Shaffer has developed more fully some ideas for reforming or adding to these trade instruments.Footnote ⁹ Others have also formulated proposals in this spirit.Footnote ¹⁰

The rise of liberalism and market-oriented policies in developing countries has led to a strengthening of the state as a policymaker, even as the state has pulled out of certain sectors of the economy as a stakeholder. This is particularly true with respect to India and Brazil, where the withdrawal from state-owned enterprise approach to political economy has been more pronounced. In this sense, Shaffer's book joins the scholarly literature inquiring into the role of the state in creating, managing, and circumscribing markets.

A broader question is how to implement this ideal-type of trade law as an interface between domestic policies and their economic impacts abroad. At a time when the multilateral regime is increasingly overtaken by myriad bilateral and larger group preferential trade agreements, or even by amorphous complex public-private trade, investment, and financing orderings such as China's Belt and Road Initiative, localizing this interface at the WTO may be insufficient. Shaffer does not prescribe specifically what the WTO's role (as an institution or as a legal regime) might be, but rather focuses on a meta-analysis of the purpose of trade law. This is an inquiry that is gaining momentum in the trade law community, as illustrated by recent works published in the American Journal of International Law and elsewhere.Footnote ¹¹ This almost existential search for the role and meaning of international economic law is all the more salient in the wake of global disruptions resulting from the COVID-19 pandemic.

In the words of Winston Churchill, “[w]e shape our buildings and afterwards our buildings shape us.”Footnote ¹² In the spirit of Shaffer's iterative relationship between the building (trade law) and its dwellers (states, infra-state public and private actors, and other transnational entities), we might add that the building will in turn require upgrades, renovations, and additions.