The Global Financial Crisis and International Economic Law

Abstract

Economists and political scientists have begun to isolate the causes and implications of the spread of the global financial crisis in late 2008. Critical attention – often accompanied by strident disagreement – has also focused on the efficacy of various domestic plans implemented in response to the crisis. International lawyers have contributed little to these debates. Our analysis aims to partly redress this gap by examining whether and how international economic law might act as a credible constraint on state tendencies towards domestic preference when formalizing emergency responses to the crisis.

The question we then address is whether international economic law will operate to constrain these nuanced forms of protectionism. International economic law comprises a variety of sources, most notably commitments on trading relations (especially under the World Trade Organization) and the treatment of foreign investors. We argue that international investment law is, in the short-term, more likely than any other area of international economic law to give rise to complaint and initiation of legal action and examine the most probable substantive norms likely to be violated.

Keywords: International Investment Law, Economic Crisis, Emergency measures, WTO

JEL Classification: K33, F13, F39