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A Cosmopolitan View of Bottom-Up Transnational Lawmaking: The Case of Export Credit Insurance

Janet Koven Levit

University of Tulsa - College of Law

Wayne Law Review Vol. 51, p. 1193, 2005

This essay, based on a presentation at Law Beyond Borders: Jurisdiction in an Era of Globalization, a panel at the AALS 2005 Annual Meeting, examines bottom-up transnational lawmaking via the technical world of export credit insurance.
Export credit insurance is much like automobile insurance, although the asset the insurer protects is not a car but rather a trade receivable. With the backing of an insurance provider, an exporter may extend credit without significantly adding to its risk portfolio and/or monetize the receivable by selling or borrowing against it. Consequently, export credit insurance is a popular financial intermediation instrument, supporting nearly $500 billion annually in international trade.
As an export credit insurance transaction is inherently transnational, it raises a host of cross-border issues that defy effective national regulation. Accordingly, a transnational group of private and public (state-owned) export credit insurers-the Berne Union-has over time developed a regulatory framework that prescribes specific, technical and often cumbersome rules to standardize the policies that export credit insurers may offer; the Berne Union often supplements these rules with sector agreements that reflect industry-specific practices or problematic repayment experiences.
The Berne Union's rules emerge in a manner that is quite distinct from the traditional, top-down account of international law focused on a state's treaty-based commitments. Instead, the Berne Union example offers a glimpse of bottom-up lawmaking at work. The bottom-up lawmaking process starts with a relatively small, homogeneous, yet transnational group of practitioners, often reminiscent of a private club, which either establishes or appropriates an institutional home. These practitioners, who day-in and day-out, must roll up their sleeves and grapple with the technicalities of their trade, create, interpret, and enforce rules, which, in turn, effectively govern such practices. Over time, the informal, practice-based rules embed themselves in a more formal legal system and become law, even under a strict formalist definition. Fundamentally, bottom-up lawmaking is a soft, non-choreographed process that produces hard, legal results.
Yet, the Berne Union operates in many ways as an exclusive club. And, as occurs in many clubs, secrecy and exclusivity have become a type of normative glue that members perceive as necessarily binding the group. While these bottom-up lawmaking communities have been quite effective legal entrepreneurs, their modus operandi inevitably raises questions of democratic legitimacy and accountability.

Number of Pages in PDF File: 15

Keywords: international law, international trade, export credit insurance, insurance, export, pluralism, cosmopolitanism, OECD, WTO

JEL Classification: F13, F34

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Date posted: November 10, 2006  

Suggested Citation

Levit, Janet Koven, A Cosmopolitan View of Bottom-Up Transnational Lawmaking: The Case of Export Credit Insurance. Wayne Law Review Vol. 51, p. 1193, 2005. Available at SSRN: http://ssrn.com/abstract=943810

Contact Information

Janet Koven Levit (Contact Author)
University of Tulsa - College of Law ( email )
John Rogers Hall
3120 E. 4th Pl.
Tulsa, OK 74104
United States
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