ABSTRACT
This chapter argues that the neoliberal policies that have facilitated private contractual governance by Western, transnational firms have also generated new contradictions that destabilize their rule. Drawing on the case of the transnational cotton trade, it demonstrates that growing market volatility and the rise of new rivals, particularly in China, threaten the legitimacy and enforceability of Western-led contractual governance. In the 1980s and 1990s, Western merchants were largely able to impose their private contractual governance regime on textile manufacturers, regional merchants/ginners/brokers, and cotton producers given their growing economic power. The Western merchant-dominated LCA attempted to establish the hegemony of their contractual governance regime by offering material concessions and moral leadership to private trade associations representing merchants and textile manufacturers around the world. Western firms are thus attempting to construct hegemony, or consent to their rule, by making their membership structure and dispute settlement procedures more inclusive and crafting a discourse of neoliberal business ethics that obscures structural inequalities.
