Understanding the GATT's wins and the WTO's woes

The WTO’s predicament is a puzzle. Compared to other international organisations it is a huge success, yet the WTO is widely regarded as suffering from a deep malaise. Exhibit A is the inability to conclude a round of multilateral trade negotiations. The last one came in 1994; the current talks (the Doha Round) are in their ninth year and far from done.1 Exhibit B is that most WTO members have lowered their trade barriers since 1994 – just not in the context of the WTO; they lowered them unilaterally and/or only against privileged partners. This paper strives to identify the fundamental sources of the WTO’s woes. Since accounts of the WTO’s quandary stem largely from the contrast between the GATT’s (oft romanticised) wins in the 20th century and the WTO’s woes in the 21st, the point of departure must be identifi cation of the fundamental sources of the GATT’s successes. Two caveats: - To concentrate on essentials, the reasoning is conducted at a high level of abstraction; details are skipped and generalisations are overly broad. The paper lays particular stress on the distinction between woes whose sources are ‘intrinsic’ (i.e. victim-of-its-own-success arguments) and those that are extrinsic (i.e. the world-has-changed arguments). - The historical narrative gives the false impression of rationality and foresight. The GATT’s evolution was driven by natural selection – many, many things were tried; those that worked were maintained, those that failed were dropped and usually forgotten. I use the vehicle of rationality to highlight the political economy forces governing the ‘natural selection.’ The next section considers the sources of the GATT’s successes. The subsequent section considers the changes that created the WTO’s woes. The fi nal section presents a summary and some concluding remarks.


Publication infos:
London, Centre for economic policy research, 2010
Publication year:
2010
Number of pages:
12 p.
Collection:
CEPR policy insight ; no. 49



 Record created 2013-03-13, last modified 2019-08-05

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