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Smart Library on Globalization > Smart Library on Law and Globalization > What Is Globalization? > Overview: What Is Globalized and What Supports Globalization?
Common Business Problems Lead to Common Legal Solutions
A global economy requires a global body of law. Lawrence M. Friedman describes some features of the growing body of international law and legal practice.
Local and Global Law
Legal scholar Lawrence Friedman says that as the culture of consumption becomes global, business and trade are globalized as well. Business thrives on predictability and globalized law can provide predictability.
Most law is still very local (for instance, handling real estate transactions, drawing up wills, handling divorce). However, the international legal sector is growing in importance. Several changes call for the growth of the global business law:
The global legal arena requires a common language. English is the most likely candidate since it is already the dominant language of transnational lawyering. However, the dominance of one language over another is not a neutral matter. The language of law affects the practice of law. If English is the dominant language, “U.S. ways of writing contracts and thinking about the law are likely to have more influence than they otherwise would in the coming global legal order,” says Friedman.
Why does English have prominence as the language of global law? Part of the reason is that the U.S. has had more experience crafting legal tools that fit the needs of modern business.
Hard and Soft International Law
Not all global law is the same. Scholars distinguish between “hard” and “soft” international law.
Hard law includes such things as treaties, conventions, GATT and GATT-like arrangements, regional pacts like NAFTA and Mercosur, and the European Union. In some cases, hard law is created and enforced by international institutions. In other cases, hard law may grow out of multilateral treaties. Hard law shares many features with formal legislation. However, the reach of international hard law is limited because it has to be validated by national courts applying international law according to national law or rules.
Soft law, on the other hand, comprises international customs, practices and behaviors and grows without formal legislation. Transnational lawyers have their own customs, norms and practices. As practices and customs become more widely followed and more settled, private law gives rise to a new kind of global law without legislation. Soft law generally provides more flexibility than hard law. With soft law, norms are not as precise, hard-edged, and precisely known.
If hard law is created in more formal, public arenas, soft law develops through more informal, private interactions. The field of international arbitration provides an example of the development of soft law.
Most international arbitrators are lawyers whose solutions are supposed to flow from common business customs, norms, and understandings. By appealing to “common” customs and norms to settle disputes, arbitrators strengthen the settled nature of conventions. It is not a neat process, however, Different groups prefer different methods or styles for solving common problems (for example, the more litigious American style, versus a more “gentleman's agreement” approach that was once the norm on the Continent).
Even with a diversity of styles for settling disputes, common problems often lead to common solutions. As more businesses participate in a common global market they face increasingly similar challenges. The need for predictability creates a pressure toward “convergence” that pulls different systems of modern law together. And, while there may be differences between local or regional legal styles (for example, family-style enterprise versus more impersonal, market-oriented, managerial approaches), as more and more businesses are drawn into a global arena they will have to operate by more global (in this case “American”) styles.
Data and Methods:
Review of legal research.
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Friedman, Lawrence M. 2001. “Erewhon: The Coming Global Legal Order.” Stanford Journal of International Law 37:347-64.
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