Interest Groups, Power Politics, and the Risks of WTO Mission Creep

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To its detractors, the WTO is an ominous international bureaucracy. (1) It is purportedly plagued by a democratic deficit that will gradually usurp the domestic regulatory prerogatives of sovereign states. (2) My presentation suggests that these concerns of judicial and bureaucratic overreaching by the WTO are exaggerated and reflect a misconception of the relationship between domestic political actors and the WTO.

First, the WTO's substantive mission is unlikely to extend much beyond its current scope. The reason for this is rather straightforward: such mission creep would be unpalatable to the politically salient groups that currently benefit from the international trade regime. My argument assumes that trade agreements are ostensibly contracts among self-interested politicians seeking to maximize their political fortunes and that these politicians would be reluctant to alienate the core political constituency that benefits from such trade agreements. Second, the significant role of power politics in the WTO legal regime renders unnecessary the adoption of traditional judicial avoidance techniques, such as the political question doctrine. The most powerful members of the WTO--the United States and the European Community (EC)--also happen to be the most active consumers of the WTO's dispute resolution mechanism. Because the United States and the EC both benefit disproportionately from this dispute resolution mechanism, these entities also have an incentive to protect the WTO from "politically loaded" claims that are likely to undermine its credibility.

At the outset, it is clear that the most obvious innovation of the Uruguay Round is its implementation of the WTO's dispute resolution mechanism. (3) This dispute resolution mechanism has played a powerful and effective role in resolving international trade disputes. The WTO renders decisions that seem to be authoritative, and, by and large, the disputants tend to comply with these decisions. (4) Indeed, the WTO could be considered the most successful contemporary example of an international adjudicatory body. But its relative effectiveness as an international institution may understandably be a source of concern to proponents of limited government. After all, mission creep by powerful governmental agencies is an everyday reality of modern bureaucratic life. Is the WTO going to succumb to such mission creep and try to extend its role into that of a transnational regulatory authority? Or is it going to try to resolve disputes that do not substantially involve market access concerns?

The answer to both questions, I would venture, is "not very likely." As a practical matter, the WTO's effectiveness and power stem from the very circumscribed and limited role it plays in resolving market access disputes. Or, to put it more bluntly, I would predict that, if the WTO's mission is extended much beyond resolving disputes about market access, it would cease to play the prominent role it does today in the regulation of international trade.

What kinds of forces are likely to hold the WTO in check? One such force is the interest groups who benefit directly from the free trade regime. In this sense, I agree with those commentators who describe the WTO/GATT regime as a transnational bargain in which political leaders from different countries agree to trade access to each other's markets. (5) In this picture, the politicians involved in the bargain are simply responding to pressures from various domestic constituencies that desire such market access. If the politicians bargain successfully and are able to obtain significant liberalization concessions (i.e., reductions in particular tariffs), we would expect those groups that benefit from trade liberalization to handsomely reward those politicians. (6)

This description of the bargain for international trade is, of course, highly stylized and incomplete. Indeed, the bargain also generates substantial but diffuse benefits for consumers, who because of rational ignorance do not often play a significant role in the bargain itself. …