Great-power support creates international pressures for follow-on. Empirically spills up.
Yu 15 (Peter K. Yu, Kern Family Chair in Intellectual Property Law, founding director of the Intellectual Property Law Center, Drake University Law School, citing Daniel Drezner, Distinguished Professor of International Politics at Tufts University; "The Non-multilateral Approach to International Intellectual Property Normsetting", in International Intellectual Property: A Handbook of Contemporary Research, p. 83-120, January 2015, Texas A&M Law Scholarship, https://scholarship.law.tamu.edu/facscholar/1009/, DOA: 6-28-2024)//ATJ
According to Professor Drezner, club standards tend to emerge when adjustment costs are low for great powers but high for the rest of the world. As he explained:
[a] great power concert will generate enough market power to lock in the concert’s preferred set of regulatory standards. The combined market size of a great power concert will induce most recalcitrant states into shifting their standards. However, states with severe adjustment costs will still resist, and the Prisoner’s Dilemma aspect of enforcement can tempt some governments into noncompliance; under this constellation of interests, the enforcement of standards becomes an issue. The crucial step for coordination to take place is a coalition of the willing among the greater powers.69
Although less developed countries and their supportive commentators have widely criticized the arbitrariness and exclusiveness of club standards, those standards have been used in other fields of international law. In 1989, the Group of Seven (G-7) established the Financial Action Task Force in the Paris Summit to combat money laundering (and later terrorist financing).70 In the early 1990s, this task force was extended to countries in the Organisation for Economic Cooperation and Development (OECD) as well as to a select group of non-OECD economies, such as Hong Kong and Singapore, and to regional organizations, such as the Gulf Cooperation Council.71
While club standards have not been widely used in the intellectual property arena, one could arguably trace the development of the TRIPS Agreement back to a two-stage process involving these standards. The first stage took place when the US, the European Communities and Japan banded together to develop ‘highest common denominator’ standards for the protection and enforcement of intellectual property rights.72 After these standards had been accepted, the second stage kicked in when these trading powers sought to multilateralize the standards by extending them to other members of the GATT, and later the WTO.