The post-neoliberal world will be one characterized by pluralism. – Rana Foroohar
Is there life for the World Trade Organization (WTO) after neoliberalism? The WTO is often assumed to exist to provide “neoliberal standards and rules for interaction in the global economy.” What role might the WTO have in a post-neoliberal world, where maximizing the free movement of goods, services, and capital is no longer presumed to be the desired path to development and growth?
Today, the going wisdom is that the WTO is no longer fit for purpose, and even its supporters have suggested that major institutional reform is essential for its survival. While the WTO was once seen by many as the standard bearer for global economic governance, in recent years, the WTO has been hit by escalating critique from virtually all corners, and has been consigned to irrelevance by many. If, as a leading Financial Times business journalist has declared, “[t]he bottom line is that globalization as we’ve known it for the last half century is over” and “we need much more focus on the local,” the WTO appears fated to die, as some of its critics have already predicted, albeit slowly and painfully.
On this logic, the WTO’s Twelfth Ministerial Conference (MC12) in June 2022 in Geneva should have taken on the character of a funeral or wake. Instead, at the eleventh hour, after days of marathon negotiating sessions, the MC12 resulted in several significant multilateral agreements on issues such as WTO reform, e-commerce, fisheries subsidies, agriculture, and food security (the “Geneva package”). Still, some of these accords were merely undertakings to keep negotiating, or require additional talks to become final. So depending on your perspective, the MC12 either resurrected the WTO from the dead to live again, or merely kept a mortally wounded WTO on “life support.”
In this Article, we aim to contribute, as legal scholars, to the debate about the WTO’s future after the MC12, in a post-neoliberal world—a time that some have even described as “deglobalization.” Our objective is not to sketch a new, comprehensive model of global justice or global economic governance to suit the times. Instead, by focusing on the underlying legal architecture of the WTO, we want to suggest that the WTO’s legal order is already well-suited to pivot to a post-neoliberal world. It is fundamentally compatible with an era where no single governance paradigm has emerged to replace neoliberalism, and where states are actively experimenting with a return to strong domestic economic governance, including industrial policies, as well as what former Canadian international trade and foreign affairs minister Chrystia Freeland described as “values-based” domestic and regional trade policies, which take into account fairness to workers as well as principles of human rights and democracy.
In this Article, we argue that the WTO’s legal architecture is fundamentally pluralist, building in acceptance and respect for different political and economic systems, and different approaches to governance and industrial policies among diverse nations. Despite some troubling departures from pluralism during its history, such as the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), taken together and understood in their best light, the WTO’s legal disciplines protect the normative, economic, political, and ideological diversity of states at the domestic level. This architecture allows states to be held accountable where they impose certain collectively sanctioned economic costs or harms on other states through their trade policies. But it simultaneously seeks to ensure that these constraints do not require the adoption of a particular model or system of social or economic governance by any WTO member state.
This claim that the WTO’s legal disciplines are not ideological does not mean, however, that they are “neutral” or value-free. As we shall discuss below, there is a normative logic to the WTO’s legal order, rooted in consensual political agreement that states should avoid imposing certain harms or costs on one another through trade policies, while otherwise preserving domestic regulatory differences. As Dani Rodrik describes the underlying logic: “[The] purpose was never to maximize free trade. It was to achieve the maximum amount of trade compatible with different nations doing their own thing.”
Our analysis also does not deny there have been problematic departures from this commitment to pluralism, particularly during and after the Uruguay Round, as we shall discuss. But these have been mitigated by the WTO’s Appellate Body (AB) case law, which has emphasized the need for a balance between liberalization commitments and the right to regulate. In this way, we shall argue, legal interpretation has played has an essential and constitutive role in the WTO’s commitment to pluralism.
Understanding the WTO’s future role as empowering diversity through pluralism is novel for trade law scholarship. We are not simply arguing that the WTO should protect or respect domestic policy space, that the WTO should merely return to its original legal disciplines as encapsulated in the original General Agreement on Tariffs and Trade (GATT), or that the WTO should embrace embedded liberalism, although we incorporate elements of all of these important prior claims. Instead, our conception of pluralism is forward-looking, and offers suggestions for how to deepen the WTO’s commitment to pluralism by empowering more diverse actors to benefit from the gains of open trade. This means tackling obstacles to such opportunities, including those that do not look like typical trade “barriers.” For example, lack of availability of trade finance and of information technologies means it is much easier for large trading companies to benefit from the legal security the WTO provides than smaller or poorer economic actors, for whom the transaction costs of plugging in directly to the global economy and its opportunities may be prohibitive. Here we see existing initiatives at the WTO on inclusive trade, on trade and gender, and on micro-, small, and medium-sized enterprises as pointing the way toward a more pluralist approach, as well as inclusive implementation of the Trade Facilitation Agreement on customs practices.
We proceed in four Parts. To understand where the WTO should go from here, we need to know where it came from. Thus, in Part I, we offer an introduction to the standard history of the GATT and the WTO. We describe the Organization’s origins with the GATT in 1947, and explain how its membership and mandate expanded over a series of negotiating “rounds,” culminating in the creation of the WTO in 1995, with the conclusion of the Uruguay Round. We also explain how the standard view of this history is that the move from GATT to WTO fully entrenched a nascent neoliberalism in the WTO’s legal disciplines.
This move from the GATT to WTO resulted in unprecedented levels of critique of the multilateral trading system. In Part II, we describe three waves of critique of the WTO as a legal order: what we will call the neoliberal critique, the Seattle critique, and the recent Washington critique. These three types of critiques, we argue, inform in various important ways contemporary debates about the WTO’s future and how to interpret the results of the recent MC12.
In Part III, we offer our own conception of the WTO as an international legal project by offering a rereading of its history and its legal architecture. We argue that the core of the WTO’s legal order protects the domestic pluralism of its member states by allowing them to define their own constitutional orders and industrial policies. We do this by analyzing several foundational aspects of the law of the GATT and the WTO, both procedural and substantive, which entrench pluralism. The identification of the WTO legal system with neoliberalism is therefore an error, although of course there are important deviations from pluralism in the WTO’s history. This pluralist approach, we argue, also requires legal interpretation guided by the notion that the goal or telos of the trade system is not to generate as much free trade or integration as possible, but rather to preserve a healthy balance between the gains from liberalization and the need to protect the diversity of domestic political and economic systems. As such, the AB’s jurisprudence has been crucial in “rebalancing” the WTO toward pluralism.
In light of this exposé of the resilient pluralism of the WTO’s legal architecture, we go on to consider what kind of life the WTO could or should have going forward. In Part IV, we return to the contemporary critiques of the Organization with our pluralist understanding of the WTO in hand. We argue that the neoliberal and Washington critiques of the WTO are largely misplaced, as they misunderstand the Organization’s institutional mandate and underlying norms; and that progressive, Seattle-type critics of the WTO may have to temper their expectations for reform. We also discuss the path forward for the WTO in a post-neoliberal world. We argue that there is a fit between this durable pluralist architecture and relaunching the WTO with a vision of positively facilitating pluralism, diversity, and experimentation in social and economic policy, as a guiding aspiration. This goal seems plausible, given the collapse or erosion of the neoliberal paradigm and the absence of some new emerging overall dominant ideology of globalism. But if pluralism is to become a lodestar, the formal acceptance of difference has to be supplemented by new initiatives that allow for broader inclusion in the global trading system and that redress the imbalance and inequity in the pattern of real winners and losers from the application of its rules. By restating pluralism as a guiding aspiration, we leave ample space for critique, if the WTO again finds itself coopted by the interests of powerful states or unable to move past the dominance of powerful lobbies such as Big Pharma, or where trade under its rules continues to reproduce an arguably inequitable distribution of the benefits and burdens.
Continuity and change in the world trade organization pluralism past present and future
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