From Pax Mercatoria to Pax Europea: How Trade Dispute Procedures Serve the EC's Regional Hegemony


The European Union's policies towards the states on its new, post-2004 enlargement, external borders (the European Neighbourhood Policy and the Cotonou project) present complementary yet competing tendencies: the establishment of Pax Mercatoria (the model historically developed in and by the EC itself, wherein international political stability is facilitated by economic interdependence) and the pursuit of Pax Europea (the establishment of a European zone of superior international economic, political and legal influence). The balance between these will ultimately be struck by the cumulative economic, political and social effects of the new legal arrangements. This paper focuses on one issue affecting this balance, the role of trade dispute resolution provisions in the EU's Regional Trade Agreements (RTAs), and their 'juridical interface' with the dispute settlement system of the WTO. I argue that the dispute settlement provisions of most EC RTAs (and their practice) contribute to the maintenance and management of the EC's regional economic pre-eminence by encouraging and perpetuating non-judicialized, bilateral diplomatic dispute settlement in which the EC enjoys distinct advantages. This substitutes and subverts the more judicialized, rule-based dispute resolution system that is available on a formal basis in the WTO, and on an unutilized basis in most EC RTAs. In this regard, existing EC RTA dispute settlement does not conform to the theoretical requisites for the achievement of a regional Pax Mercatoria (which in my analysis include effectiveness, automaticity, and legalized juridical interface with the WTO), but is rather more designed in furtherance of a Pax Europea. This contradicts the Pax Mercatoria ethos of the EU's contemporary regional policies, is contrary to the EU's advocacy of the rule of law, and depicts the EU as a 'poor man's' hegemon in the shadow of the United States. It is therefore in the interest of the EU's own initiatives to reform the dispute settlement procedures in its regional trade agreements, to bring them more in line with its strategic statements, by introducing improved, judicialized dispute settlement in RTAs.


Dispute Resolution and Arbitration | International Law | International Trade Law

Date of this Version

June 2005