Non-state global standard setting and the WTO: Legitimacy and the need for regulatory space

The proliferation of transnational social and environmental standards developed by non-state governance systems potentially poses a challenge to international trade law and the legitimacy of the World Trade Organization (WTO). These systems-in areas including forestry, apparel, tourism, labour practices, agriculture, fisheries, and food-operate largely independently of states as well as of traditional standard setting bodies such as the International Organization for Standardization. In lieu of definitive legal rules on recognition of legitimate international standards under relevant trade agreements [e.g, Technical Barriers to Trade (TBT), Government Procurement Agreement (GPA), and Sanitary and Phytosanitary Measures (SPS)], we identify the legal and political dynamics of standards recognition and find good prospects for these new non-state governance systems to successfully navigate them. Since these systems' standards ultimately aim to socially embed global markets, the WTO's legitimacy is at risk if its rules open the door to legal challenges of states that implicitly or explicitly adopt them. To avoid such legitimacy problems, we propose that a norm of leaving 'transnational regulatory space' for social and environmental standard setting should guide the WTO and its members.