The World Trade Organization (WTO) stands at the center of an emerging structure of global economic governance. Its rules affect important aspects of everyone's lives--how much people pay for the products that they purchase, what types of employment are open to them, and which medicines they can access. And yet, while the WTO was conceived as a "negotiating machine" that would develop rules in sync with an increasingly dynamic global economy, negotiations on a new set of global trade rules have now been deadlocked for over a decade. This impasse is all the more surprising in light of the fact that the multilateral trade regime was, up until the establishment of the WTO in 1995, one of the most productive engines of international lawmaking. The present Article explores why multilateral trade lawmaking used to work, and why it is no longer working today.
A key part of the answer is that before the establishment of the WTO, the multilateral trading system worked as a "club," which allowed the major trading powers to manipulate the circle of participants in trade negotiations depending on how these powers weighed the costs and benefits of the participation of additional states. The Article identifies three factors that led the major trading nations to adopt this approach: (1) the greater practicality of negotiations among a smaller group of countries,(2) the insiders' greater influence on the outcome of the negotiations, and (3) the chance to subsequently compel outsiders to join the agreement on the insiders' terms. The Article shows how the major trading powers were able to implement the club approach to multilateral trade lawmaking throughout the pre-WTO era-an ability that accounts for much of the legislative dynamism of that time. The Article then argues that the founding of the WTO, while itself an example of the successful employment of the club logic, has made the use of the club approach in the multilateral trading system much more difficult, if not impracticable. As a result, the pace of lawmaking in the multilateral trading system is now circumscribed by the need to seek the support, or at least acquiescence, of all WTO members.
The Club Approach to Multilateral Trade Lawmaking,
49 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vjtl/vol49/iss1/3