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Lex mercatoria as a global law of economic transactions? The coordination of international transactions within the timber industry
In times of globalised trade, the issue of proper coordination mechanisms for transnational exchanges is gaining importance. Since state law has turned out not to be an adequate basis for the governance of global transactions, the attention shifts to the so called lex mercatoria or the new law merchant, i.e the body of merchant-created commercial rules and arbitral decisions that should govern transnational commerce between private parties. The discourse about the existence, legal nature, scope and autonomy of the lex mercatoria has lasted for more than forty years. Existing empirical research, however, is too scarce to provide a complete and coherent picture about the lex mercatoria approach towards globalisation. This paper presents empirical findings from a study on the international timber trade. It shows that the timber industry has created its own governance structure which consists of relational contracting in the context of long-term business relationships, as well as autonomous rules created through trade organisations and implemented by intra-industry arbitration. The use of private governance mechanisms within the timber industry is facilitated by the network structure of the industry and the type of commodity traded. As a consequence, state law plays a marginal role as a support mechanism for cross-border timber transactions. My contribution seeks to explain the interplay of different governance mechanisms within the timber industry and to clarify whether lex mercatoria is the dominant mechanism within the investigated structures. It should be also elucidated, whether globalisation has led to changes in the governance structure of close-knit branches of trade.
No. 056/2007
Wioletta Konradi

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