The next step in governance: The need for global micro-regulatory frameworks in the context of expanding international production

Explicit barriers to international trade, investment, technology, and financial flows have been reduced considerably. As a result, "macroliberalization" of international economic transactions has largely run its course. Now, attention needs to shift from international rules for governments to international rules dealing with the various aspects of the international operations of firms - what are called "micro-issues" in this chapter; these include, by way of example, cross-border mergers and acquisitions and international bankruptcies. Such international rules for the principal actors in international production and markets would complement (or replace) the unilateral rules that exist at the national level. International rules would set the direct parameters for certain aspects of the international activities of firms and hence provide the global governance for operating in the global production and trading spaces. This chapter exemplifies for a number of areas the state of rulemaking for some micro-issues, analyzes the nature of this rule-making, and suggests a way forward. Developing international micro-regulatory frameworks of rules of the road for the various aspects of the international operations of firms in the globalizing world economy should be the new frontier of international commercial diplomacy.