A. The Neoliberal Critique

Perhaps surprisingly, given that many commentators and contemporary historians have associated the WTO with the vanguard of neoliberalism, the earliest wave of critique of the WTO was by neoliberals themselves (hereafter the neoliberal critique). These neoliberals had expected that the institutional landmark of creating the WTO would result in rapid progress toward ever deeper integration. Yet however much energy and salience neoliberals gave to the creation of the WTO in 1995, they were almost immediately dissatisfied with the result.

Writing less than three years after the WTO was born, Fred Bergsten warned that any easing of momentum toward further liberalization would create an opportunity for a backlash against globalization to halt progress, declaring that “no significant liberalizing progress is underway at present,” and calling for a new large-scale round of talks to extend economic integration further into highly regulated service industries, such as telecommunications and financial services, as well as investment.Footnote ⁴⁴ Bergsten set as the goal “achieving global free trade by 2010 or 2020”—essentially the elimination of all policies and measures that impede the mobility of goods and services.Footnote ⁴⁵ Likewise, Jeffrey Schott referred to the results of the Uruguay Round negotiations on services as “disappointing,” and expressed frustration at the limited progress in moving beyond the all-too-modest commitments that had been made in the Round, as well as the need to expand as soon as possible the trade agenda to include liberalization of Foreign Direct Investment, global rules on anti-trust, and norms to discipline the purportedly protectionist use of trade measures linked to environment and labor.Footnote ⁴⁶ In this way, the neoliberal understanding of the WTO's purpose was that it should continually produce additional legislation to cement ever-deeper liberalization.

At first, many of these neoliberal calls for more ambitious, deeper integration and new legislative output were not explicitly cast in critical terms, but instead as demands to build on the remarkable progress and promising institutional framework that was brought into being with the conclusion of the Uruguay Round. However, as successive Ministerial Conferences failed to achieve additional legislative gains to take neoliberalism further in the WTO, due in no small part to resistance by developing countries,Footnote ⁴⁷ the neoliberal tone turned sharply critical. Commentators began to suggest that the WTO's consensus-based decision-making procedure was impeding further liberalization. As Arvind Subramanian argued in the Financial Times: “For its future effectiveness, indeed survival, the WTO needs to be de-democratized, with the large countries reasserting themselves.”Footnote ⁴⁸ From this neoliberal perspective, either smaller developing countries had to be pressured into swallowing further neoliberal globalization (as had occurred during the Uruguay Round), or deeper integration would have to proceed through other tracks, such as bilateral and regional approaches.Footnote ⁴⁹

These critiques and a mounting sense of disappointment in the failure to produce new large-scale gains to liberalization through additional multilateral agreements have continued throughout the WTO era. Neoliberal commentators have been particularly scathing in their assessment of the Doha Round and the only major legislative achievement of the WTO era, the TFA.Footnote ⁵⁰

It is not surprising, then, that proponents of the neoliberal critique did not react to the MC12 Ministerial outcome with newfound hope for the WTO.Footnote ⁵¹ While corporate interests were able to fend off both efforts to introduce a far-reaching TRIPS waiver for the pandemicFootnote ⁵² and a move to end a moratorium on taxation of digital trade,Footnote ⁵³ the Geneva package did not signify an advance in any large-scale neoliberal oriented rule-making project in the WTO. For example, there were no breakthroughs on harmonizing domestic regulations affecting digital trade, an area of ongoing negotiation at the WTO. Moreover, proposals from some quarters to tighten disciplines on subsidies and create new rules to limit state capitalism (i.e., through state-owned enterprises) and to stop measures to require technology transfer are not reflected at all in the MC12 outcome; and indeed, are not even an agenda item going forward.Footnote ⁵⁴

B. The Seattle Critique

The second wave of critique, from a rather different and in some ways directly opposite perspective, became prominent with the outbreak of large-scale protests at the WTO Ministerial in Seattle in 1999 (the Seattle critique, hereafter). In the words of Quinn Slobodian, “Seattle was an existential crisis” for the WTO.Footnote ⁵⁵ As Andrew Lang observes:

The Seattle critique focused on the way in which the move from GATT to WTO purportedly narrowed the scope for governments to regulate in the public interest, protecting workers, the environment, public health, and other critical social values, as well as losers from globalization, whether small farmers in developing countries or industrial workers in the North, who were given short shrift in trade negotiations. A further element of the critique was of the undemocratic and untransparent way the Uruguay Round negotiations took place, which gave powerful countries and corporate interests disproportionate and illegitimate influence over what was negotiated and the outcomes of those negotiations.Footnote ⁵⁷ In the words of one of the leading proponents of the Seattle critique, Lori Wallach of Public Citizen:

The concerns of the activists marching in the streets overlapped considerably with those of developing country governments, some of whom already were feeling buyer's remorse about accepting the neoliberal elements of the Uruguay Round grand bargain (particularly regarding intellectual property rights, technical barriers to trade, food safety, and subsidies) with little to show in return.Footnote ⁵⁹ Post-Uruguay Round, pressure tactics were again used to attempt to push developing countries to accept an even more deeply integrating agenda on matters such as investment and antitrust.Footnote ⁶⁰

In time, the Seattle critics divided into different factions or groupings with different emphases. Some, like Public Citizen, remained implacably opposed to the WTO, and framed their stance largely as one of resistance,Footnote ⁶¹ with others going further and actively calling for dismantling the World Trade Organization in the name of creating a new paradigm of globalism and localism in opposition to neocolonial capitalism.Footnote ⁶² But other Seattle critics decided to work to try to wean the WTO from neoliberalism and make it responsive to the Seattle critique, whether in dispute settlement or rulemaking. These critics assumed there were resources within the WTO system itself to push back on the neoliberal agenda to use trade rules to impose or further entrench a neoliberal model of social and economic governance.Footnote ⁶³ Indeed, some even sought to embed an alternative, progressive model of governance in the WTO's legal order, through demands to formally “link” the WTO's disciplines to efforts to secure international labor rights, environmental protection, etc. These activists found homes in NGOs, such as the International Institute for Sustainable Development (IISD) and the International Centre for Trade and Sustainable Development (ICTSD), which had significant advocacy operations in Geneva, weighing in on how WTO law should be interpreted and evolved in light of the Seattle critique.Footnote ⁶⁴ During the WTO era, developing country governments continued, by and large, to work constructively within the WTO, and managed to use their formal veto power to continue to effectively resist the neoliberal agenda they had rejected at Seattle.Footnote ⁶⁵

These kinds of divisions among the Seattle critics were evident in their reactions to the MC12 outcome. Those resistant or opposed to the WTO altogether pointed to the extremely limited TRIPS waiver for COVID-19 vaccines as evidence that the WTO had not and could change its undemocratic, neoliberal stripes, or achieve new legislative output on important matters of global concern.Footnote ⁶⁶ On the other hand, activists and analysts associated with the IISD, for example, took a more nuanced gradualist view of the results of MC12, noting the importance of the conclusion of reaching a deal to curb fishing subsidies.Footnote ⁶⁷

C. The Washington Critique

A third wave of critique is more recent and more U.S.-centered, and has ushered in an acute sense of institutional crisis for the WTO (the Washington critique, hereafter). This critique centers on the apparent failure to manage China's behavior as a WTO member, as well as supposedly unfair trade practices of some other WTO members.Footnote ⁶⁸ This critique was stated most loudly by the Trump administration, and was accompanied by measures such as blocking new Appellate Body appointments (eventually paralyzing the AB)Footnote ⁶⁹ and imposing tariffs on grounds such as national security, which are widely viewed as spurious and illegal under WTO rules.Footnote ⁷⁰

The Washington critique has two dimensions. The first focuses on the claim that the WTO's rules are insufficiently stringent to address the internal policies of state-led/non-market economies such as China. It is not simply that China has been a WTO “cheat” (although the United States has levied this charge as well).Footnote ⁷¹ Rather, it is that the WTO's rules themselves do not do enough to mandate economic and political reform and to prevent intellectual property theft, the improper use of subsidies, and dumping.Footnote ⁷² In short, the WTO is overly permissive of state-led capitalism, and if it is to retain its legitimacy, it must alter its substantive rules to address non-market economies.Footnote ⁷³ The United States has relied on this critique when embarking on its retaliatory trade wars with China, spurning the WTO's dispute settlement process and taking unilateral tariff measures.Footnote ⁷⁴

The second dimension, that pre-dates the Trump administration, and has frequently been heard from the Washington trade bar for a decade or more, is that the WTO dispute system, above all the Appellate Body, unduly constrains the United States (and other members) from exercising their legal rights to retaliate against other countries unfair trade practices in the form of anti-dumping or countervailing duties (the latter responding to “unfair” subsidization).Footnote ⁷⁵ The United States, particularly under the Trump administration,Footnote ⁷⁶ has accused the AB of pursuing a form of hyper-legalism: of issuing lengthy, time-intensive, overly ambitious legal rulings that rely too extensively on precedent, confront unnecessary legal issues, and fill legal “gaps” by drawing on an array of legal sources.Footnote ⁷⁷ In doing so, the United States has argued, the AB has gone beyond its mandate to interpret the WTO's legal rules, as established in the Dispute Settlement Understanding (DSU). Instead, the AB has altered the obligations of member states. On this view, the WTO is burdened with an overly intrusive, burdensome legal order that does not leave sufficient space for diplomatic or political adjustment of trade conflict through unilateral trade remedies. So while the WTO's rule-based, sanction-supported legality was once what portended its success as a regime of international law,Footnote ⁷⁸ its formal legalism is now its Achilles’ heel.Footnote ⁷⁹ The United States has relied on this critique when blocking the appointment of new members of the AB since May 2017, which ground the AB's work to a halt in December 2019 when the AB lacked sufficient membership to hear appeals, and forced WTO members to negotiate an ad hoc appellate mechanism to deal with appeals.Footnote ⁸⁰

To the extent that this critique suggests that rules of the WTO are inadequate to restrict extensive and intensive state intervention in the economy that affects trade, the China-focused critics could have common cause with neoliberal critics. But the second dimension, the critique of the AB's readings of the limits that WTO Agreements imposed on the ability to take anti-dumping action and countervailing duties against subsidies, was arguably the one that attracted greater consensus in Washington and set the scene both for the Trump administration paralyzing the AB and for the failure so far of the Biden administration to reverse this policy.Footnote ⁸¹

The MC12 and the Geneva package did little to respond to the Washington critique. The Geneva package completely ignored the Canada- and U.S.-led Ottawa Group agenda of negotiating rules more restrictive of subsidies, state capitalism, and technology transfer, which was very much targeted at addressing concerns of “unfair trade” by China.Footnote ⁸² On the other hand, despite a vague commitment in the Geneva package to discussions of dispute settlement reform, there was no agreement on any specifics,Footnote ⁸³ and few ideas about how the dispute system could be redesigned to allow greater deference to members imposing duties in response to allegedly unfair trade practices of other members.Footnote ⁸⁴ This being the case, the Biden administration is likely to continue to hold the Trump line on the AB.

A. The Challenge of Pluralism

Any regime of international law confronts a difficult issue. The rules of a particular regime of international law are meant to apply generally to states who are parties to the regime. Yet states themselves are diverse. They operate on the basis of widely divergent legal, constitutional, and economic commitments, rooted in very different normative theories. Roberto Ago observes that the political communities of which the international legal order is composed “could not be more heterogeneous with regard to the origin of their peoples, their way of life, their beliefs, their wealth, their political, social and economic organisation, the degree of their internal cohesion.”Footnote ⁸⁹ The challenge for international law, as Ago emphasizes, is to find a way to manage this normative pluralism among states.Footnote ⁹⁰ Along these same lines, Prosper Weil formulated the challenge of any international legal project as facilitating “the cooperation of basically disparate entities composing a fundamentally pluralistic [international] society.”Footnote ⁹¹ In conventional international law, the law of treaties, techniques such as reservations by individual states parties may be employed to address this challenge; or legal regimes may encompass only a sub-set of states that are relatively homogenous. But there are forms of international law that aspire in principle to encompass the entire society of nations; post-World War II multilateralism, of which the GATT is a product, is among them.

The problem of identifying a normative groundwork for international legal obligations is particularly acute in the international commercial context. International trade law, for example, seeks to regulate the extent to which states can use public law to place restrictions on the cross-border flow of goods and services through private contracts. That is, international trade law seeks to manage the relationship between public law and private transactions in the cross-border context, curtailing the ways in which states can use public law to place restrictions on cross-border private legal transfers of goods and services. But the proper legal relationship between public law and private rights to contract and property is among the most controversial issues in legal and political philosophy. States have historically adopted very different approaches to regulating this relationship, which makes it particularly difficult terrain in which to identify a normative standpoint from which to develop and apply general rules.

The problem of normative pluralism is further reinforced by sovereign equality. As a formal matter in the modern state system, states have an equal right to decide how to organize their societies internally. This means that states have an equal right to pursue their own conception of the good—including their understanding of the relationship between public and private law. The United Nations General Assembly has proclaimed that, “Every State has an inalienable right to choose its political, economic, social and cultural systems, without interference in any form by another State”Footnote ⁹²—what Weil calls the “right to differ” that is “inherent in the very notion of sovereignty.”Footnote ⁹³ But if states possess this right, how can international law identify a normative standpoint from which to posit rules that does not involve one state unilaterally imposing its particular conception of the good on another, in violation of the sovereign equality of states, and in violation of their right to “differ”?

B. Consensus-Based Decision Making and Pluralism

The primary way through which international law has grappled with the problem of pluralism is to root most types of international legal obligation in consent.Footnote ⁹⁴ From this perspective, the foundation of legal obligation is not intrinsic morality, natural law, or divine right. No particular moral theory gives international law its legal force or determines its content. Instead, international law can rightfully govern states because they themselves agree to be bound by the law by manifesting their consent (or lack of opposition) to treaty; states are only obliged to follow laws that they give themselves, and thus they can be rightfully held to the terms of the bargain they enter into.Footnote ⁹⁵

The GATT is a classic example of an international obligation rooted in the consent of states. From a procedural perspective, the GATT (and then subsequently the WTO) has always relied on voluntary and consensus-based decision making to establish its legal obligations:Footnote ⁹⁶ all states must accept through consent an obligation under the multilateral trading system to be bound by it, and multilateral agreements only come into force when there is total consensus among members. The GATT/WTO does not operate on the principle of majoritarianism, where one can be bound by a rule that one voted against if a majority of parties agrees to the rule; all states must agree or there is no obligation. Furthermore, GATT and WTO legal rules do not have the status of customary international law (much less jus cogens peremptory norms).Footnote ⁹⁷ Consensus decision making assures that no member state is required to be bound by any international trade law obligation it did not formally agree to.Footnote ⁹⁸

This commitment to formal, consent-based voluntarism does not, of course, assure the presence of genuine or fulsome consent to the obligations of the GATT/WTO. As we shall discuss below, this principle has been compromised at important points in the WTO's history by power politics. The Uruguay Round was notoriously marked by procedural problems, methods of negotiation that allowed powerful states to pressure in particular developing countries into treaty terms they often did not view as beneficial or legitimate. But in principle at least, the GATT/WTO is characterized by a commitment to voluntarism, which is foundational to its pluralist nature. The legal disciplines of the GATT and the WTO are, in principle, rooted in areas of overlapping consensus among diverse member states, because by definition, all states must agree to make a certain action subject to legal disciplines;Footnote ⁹⁹ they are not tied, again at least in principle, to a pre-determined ideological conception of domestic political economy.

C. The GATT's Substantive Disciplines and Pluralism

Beyond this important procedural mechanism, the substance of the GATT and the WTO's legal disciplines were also designed to respect a robust pluralism among member states. We begin here by outlining the project of the multilateral trading system as reflected in the original GATT, which remains the backbone or operating system of the WTO as a structure for multilateral rules-based trade, as it was incorporated in the WTO's legal architecture post-Uruguay Round.

As a Canadian delegate to the Havana Charter negotiations that would set the scene for the eventual adoption of the GATT reported to his government, the draft agreement offered “a bold compromise, flexible enough to take care of varying needs of different economic philosophies and of different stages of economic development, yet sufficiently true to the principles of multilateral trade to give rise to the hope that the Organization, when it is set up, will prove to be one of the most successful and most enduring of all the intergovernmental organizations established during the last few years.”Footnote ¹⁰⁰ It is for this reason that the GATT was famously described by John Ruggie as capturing the notion of embedded liberalism. On this account, the GATT enshrined a type of liberalization between states that entirely remained consistent with states choosing to intervene in their own domestic economies as they saw fit.Footnote ¹⁰¹

The GATT provided a structure for negotiating the reduction of tariffs and making those concessions legally binding, creating security for traders; and imposes a foundational commitment to non-discrimination. But the GATT rules did not attempt to determine the extent to which states should or must agree together to liberalize access to their domestic markets and did not seek to impose any particular vision of the relationship between states and markets. As one of the architects of what would eventually become the GATT, James Meade (a United Kingdom government official) wrote in his 1942 “A Proposal for an International Commercial Union”: “the removal of trade restrictions do [sic] not, however, imply laissez-faire, and are in no way incompatible with a system of state trading.”Footnote ¹⁰²

The GATT contains no requirement that tariffs be reduced at any given pace or any particular extent—much less eliminated; it merely establishes a framework whereby voluntarily and reciprocally bargained tariff concessions can be made legally enforceable through “bindings” that each state is required to respect in its customs policies.Footnote ¹⁰³ Within these constraints, tariffs remain a legal and legitimate policy instrument available to states. As the WTO Appellate Body observed when interpreting the GATT, “Tariffs are legitimate instruments to accomplish certain trade policy or other objectives such as to generate fiscal revenue.”Footnote ¹⁰⁴

In addition to facilitating tariff reduction, the GATT's core principle is to prohibit discriminatory trade policies such as import and export bans or restrictions, and discriminatory internal taxes, laws, and regulations. To this limited extent, the GATT might well be thought not to be simply neutral between domestic political and economic systems; a state that adopted a policy of radical or absolute economic nationalism, with a preference for domestic products and producers as a supervening value, could not very well commit to non-discrimination in the sense required by the GATT. But, with the exception of these uncompromising forms of economic nationalism, member states are permitted to regulate for all types of reasons, as we have argued at length in prior workFootnote ¹⁰⁵—be they scientific and technical reasons, instrumental (consequentialist) and non-instrumental (deontological) moral reasons, or secular or religious reasons. The GATT also permits states to pursue regulatory aims which are complex and multifaceted, and which entail tradeoffs between different policy positions, or which accommodate the demands of value pluralism within societies.Footnote ¹⁰⁶ Likewise, the GATT accepts non-absolutist legislation, in which states can regulate to achieve policy outcomes on an incremental basis that allows for change over time through legislation that only partially achieves a particular normative or practical end.Footnote ¹⁰⁷

Even the core GATT prohibition against discrimination is not absolute, and in important ways countenances diverse domestic political and economic arrangements. Trade restrictive policies that discriminate among trading partners or in favor of domestic products can be justifiably discriminatory under the GATT such that no legal discipline has been violated. This is the case if the policies are undertaken for certain public policy objectives, such as protection of public morals, human life, or health, or in relation to the conservation of exhaustible natural resources (under Article XX of the GATT).Footnote ¹⁰⁸ Likewise, the GATT has an exception that addresses perceived “essential” security interests of GATT member states. Article XXI of the GATT allows member states to take otherwise GATT-inconsistent measures that a member state “considers necessary” to its essential security interests, for example in time of war or “other emergency in international relations.”Footnote ¹⁰⁹ In effect, the GATT allowed its member states to impose costs on other states through discriminatory policy, where it could be linked sufficiently closely to stipulated legitimate public policy purposes.Footnote ¹¹⁰

This model of legally constraining border or “external” measures while retaining deep pluralism of domestic legal systems largely dovetails with the economic theory of trade and trade agreements as it has evolved. It can be to the economic advantage of every state to liberalize trade by adopting unilateral reductions in border-based restrictions to imports and exports. However, states of a certain size may be able to make economic gains by imposing certain barriers to trade through tariffs. For this reason, it is economically rational for states to enter into trade agreements to ensure that all states pursue a policy of tariff reduction (and other limits on border-based trade restrictions), and to ensure that states do not defect on such a bargain.Footnote ¹¹¹ As such, multilateral cooperation through binding legal constraints makes sense most clearly in the case of those beggar-thy-neighbor policies where the gains to the country imposing the measure come from the harmful effects on its competitors.Footnote ¹¹²

In addition to including exceptions to the core norm of non-discrimination, the GATT protected pluralism in other ways. The GATT itself imposed no limits on what type of state could be a member of the treaty, from a domestic constitutional or political perspective. Accession to the GATT did not in principle require any democratic or market-oriented reform, and GATT (and now WTO) members represent virtually all forms of government. (However, during the neoliberal period of the WTO's existence, accession was used to demand neoliberal-oriented reforms of acceding states—but there is no basis for such demands in the legal architecture itself that pertains to accession.) As such, the GATT/WTO has nothing to say about the appropriate domestic political and legal structures that its member states can adopt; it is possible to be a member as a democracy or an autocracy. This approach differs from other types of international agreements, such as the International Covenant on Civil and Political Rights, and thus is a distinctive feature of the GATT's legal order that carried over into the WTO.

Crucially, the GATT also contains provisions that can be used to facilitate a negotiated partial retreat from liberalization. For example, Article XXVIII provides for renegotiation of tariff concessions.Footnote ¹¹³ A member state may rebalance its tariff reduction commitments and introduce higher tariffs on some products, if it offers compensation that is satisfactory to other states (such as lowering tariffs on different products). If a negotiated understanding for such rebalancing is not accepted, the state in question may still raise its tariffs, but other states may retaliate by raising theirs in turn.

Another provision that could allow a partial retreat from liberalization is that which provides for waivers from obligations, a provision that was extended from the GATT to all of the covered agreements in the Uruguay Round.Footnote ¹¹⁴ Waivers can accommodate the concerns of one single member state, several member states, or the community of states in general. Waivers are temporary, regularly reviewed, and require support of a supermajority of member states.Footnote ¹¹⁵ The GATT also features a safeguards provision, Article XIX, which directly addresses situations where a sudden surge in imports creates adjustment challenges for a domestic industry, including workers.Footnote ¹¹⁶ Tariffs can be reimposed above the thresholds that member states have bound themselves legally to respect, to provide breathing space for the needed adjustments.

These partial retreat provisions make clear that the GATT's commitments to liberalization are not simply a one-way ratchet, which envisions ever-increasing market opening. The GATT's architecture is far more flexible and sensitive, and in this way is consistent with a robust conception of pluralism. Of course, there are good arguments that none of these features of the GATT, taken individually or collectively, would be sufficient to address the problem of losers from liberalization or to truly reverse liberalization where states feel that it is inordinately imposing domestic social costs. But they do indicate that the possibility of adjusting in a “deglobalizing” direction is built into the foundational architecture, as opposed to the neoliberal conception of a multilateral trading system premised on linear advances in liberalization with no retreat or rebalancing imaginable. Different states have different capacities at different times to address the domestic costs of trade liberalization, and so preserving pluralism also means preserving the right to move to a less liberalizing equilibrium that moderates these costs. This demonstrates that the pluralism baked into the architecture of the GATT is more than simply a matter of policy space or embedded liberalism. It envisions the possibility of a calibrated retreat from the commitments of liberalization, for example to address domestic distributive impacts of trade.

The GATT also included important remedial escape devices that further facilitate pluralism. During the negotiation of the GATT, states were able to agree that non-discrimination was a core norm. But there were other economic practices about which consensus could not be reached. These practices included dumping, when products are sold on export markets at a price which is lower than in the country from which the products originate, and subsidization, offering government support to product development which in turn lowers prices.Footnote ¹¹⁷ When consensus could not be reached on these issues, the GATT architects included a further construct: the permissibility of trade remedies in the form of anti-dumping and countervailing duties, unilateral increases in duties in response to perceptions of “unfair trade.”Footnote ¹¹⁸ This meant that there would be no multilateral prohibition of these practices, but states were permitted to take unilateral action against these types of practices if they saw fit.

This approach, as with the non-discrimination norm, seeks to reconcile the twin imperatives of preserving pluralism and allowing sufficient scope to sanction perceived defectors. Banning the subsidies and dumping practices that some states perceived as defection would have threatened pluralism, as other states (particularly in the case of subsidies) viewed these measures as legitimate reflections of their domestic political and economic choices. On the other hand, giving no avenue to respond to perceptions that these practices are unfair would also be contrary to pluralism, denying the legitimacy of the perspectives of the public and policymakers where those views are common.Footnote ¹¹⁹ As such, unilateral trade remedies are an important avenue for managing disagreement about the fairness of trade among countries with diverse approaches to social and economic governance, while preserving the basic bargain regarding non-discrimination.Footnote ¹²⁰

A further aspect of the GATT's pluralism is the way in which it offers differentiated obligations for states at different levels of development, offering even more flexibility in domestic policy choices for developing countries. As the Appellate Body would later recognize in the Shrimp/Turtle dispute, preserving diversity does not simply mean treating all the same; it may also entail treating states in different circumstances differently.Footnote ¹²¹ Thus, another important aspect of the GATT legal architecture that incorporates pluralism is what is known as Special and Differential Treatment (SDT) for developing country member states.Footnote ¹²² This approach has continued during the WTO era; the WTO's covered agreements have been modified to offer more room for developing countries to pursue alternative economic and industrial policies and strategies for development.Footnote ¹²³ The exceptions introduced to facilitate these alternatives include allowing developing countries to offer protection for infant industries under what is known as import substitution industrialization (ISI);Footnote ¹²⁴ allowing developing countries to establish preferential trade agreements that do not comply with the limits on such agreements that are normally imposed by the GATT;Footnote ¹²⁵ and allowing these countries to obtain market access that is non-reciprocal.Footnote ¹²⁶ The adequacy of these flexibilities for developing countries has been strongly contested, and for good reason.Footnote ¹²⁷ But this only reinforces the principle itself rather than undermining it. Likewise, the more recent controversy as to whether as competitive an economy as China's should benefit from Special and Differential Treatment has not shaken the principle, but intensified already existing controversies about the effective and appropriate means of fulfilling it.

A further pluralist aspect of the GATT is its attitude to member states’ right to enter into bilateral and regional agreements among themselves, at a sub-multilateral level. Given the system's tolerance toward different theories of the relationship between public law and markets and its reliance on voluntary cooperation to ground legal obligations to liberalize, smaller grouping of states with more homogenous domestic economic systems might well agree on harmonization or restraint of internal policies to a greater extent than is possible under the conditions of deep diversity among states that characterize the multilateral order. Here, the EU would be the leading example. The GATT (and then the WTO) explicitly permits the establishment of such trading blocs, whether free trade areas or customs unions.Footnote ¹²⁸ Thus, pluralism reconciles the acceptance of deep differences between member states of the GATT/WTO with the logic of “values-based” trade between like-minded states, which may share among themselves certain principles of human rights and democracy, for example.Footnote ¹²⁹

Finally, the GATT contains a withdrawal clause that allows any member state to exit from the Agreement on six months’ notice.Footnote ¹³⁰ This provision has been carried over from the GATT to the WTO, where the same notice period applies to withdrawal from all of the covered agreements under the WTO umbrella.Footnote ¹³¹ Ultimately, this provision is a protection against the risk that, despite the formal principle of consensus decision making, interstate power relations, and/or ideological or interest group capture of real world WTO processes, push the Organization in a direction that threatens domestic regulatory autonomy. This in turn reduces the risk of such an outcome, by imposing the hypothetical price of some states’ exit on such behavior. While exit may not have been a credible threat in the past, except perhaps for the most powerful states who can risk falling back on anarchic trade relations, that risk seems less catastrophic today, with so many regional and bilateral arrangements in place.

D. The Double-Edged Sword of Pluralism

Despite these procedural and substantive aspects of pluralism built into the GATT (and thus the WTO), there is no guarantee that a largely pluralist legal framework will be deployed in a pluralist spirit. Pluralism is a double-edged sword. Precisely because a formally pluralistic legal architecture for cooperation is indeterminate or agnostic as to the ideological or policy projects that it can accommodate, such a framework runs the risk of being coopted or conscripted for a particular project, where its proponents have political, epistemic, or economic power.Footnote ¹³²

An obvious example is the justificatory force of the general exceptions in Article XX of the GATT, which is critical to preserving the right of WTO members to regulate in diverse ways. Legitimate objectives stated in Article XX, like protection of public morals, might be read in a broad or a narrow sense. An interpreter operating from a neoliberal skepticism that much regulation is simply irrational or a product of interest group capture, might require a highly scientific or technocratic justification, placing a heavy burden on the regulating state. Similarly, a neoliberal ideologue might approach the Article XIX safeguards provision in the GATT with a strong presumption that adjustment pressures are due to predictable lack of efficiency in the domestic industry rather than hard-to-anticipate competition from imports. Such a neoliberal might look long and hard to find alternative explanations, such as technological change, for why workers have been displaced, that focuses on developments other than increased import competition, effectively making Article XIX inapplicable.

In a very real sense then, the fate of pluralism is very much in the hands of the actors who interpret, apply, and/or deploy the legal rules and their particular interests and ideologies. As Anne Orford observes: “international economic law works as a means of embedding neoliberalism not because it locks in the designs of [a handful of influential ideologues]” but because “particular contested interpretations of what WTO agreements mean appear necessary and inevitable.”Footnote ¹³³ While one can easily understand why pluralist rules might be susceptible to non-pluralist uses and projects, their pluralist character does not make cooptation by any particular ideology or set of interests in fact inevitable.

This doubled-edge sword of pluralism is visible in the history of the GATT and the WTO. The original neutrality of the GATT's legal architecture toward domestic social and economic governance, and agnosticism as to the degree of trade liberalization that is desirable based on multilateral rules, did not prevent powerful commercial interests, American power, and free trade as ideology from shaping the GATT's real-world impact, including who won and lost in rounds of tariff negotiations. While the GATT benefited developing countries in certain ways, it was the Global North that benefited most from the multilateral trading system.Footnote ¹³⁴ The predominating powers and technocratic elites in the postwar period, increasingly from the 1970s, pushed for more and more reduction of border measures in subsequent rounds of negotiations, gradually putting on the agenda domestic policies such as subsidies and product standards for scrutiny, which go beyond the basically pluralist norm of non-discrimination. Developing countries pushed back through the project of a New International Economic Order. In response, the GATT community developed the Generalized System of Preferences, the program of voluntary non-reciprocal trade concessions for developing countries discussed above.Footnote ¹³⁵ However, this was far less than the aspired transformation of the multilateral trading system to reverse its overall orientation away from a pro-North pattern of trade liberalization that had been negotiated under the legal architecture, a pattern that protected Northern industries in areas like agriculture and textiles while reducing significantly tariffs on finished products that were primarily imported in the Global South. As well, accession negotiations would come to be used, particularly in the post-Uruguay Round WTO era, to tilt the domestic policies of new members in the direction of economic liberalism, even though as noted above the membership criteria for the GATT/WTO do not require any particular system of political or economic governance.Footnote ¹³⁶ Still, the basic legal architecture did not dictate such a result. It simply did not prevent it.

The double-edged sword of pluralism became painfully apparent in the Uruguay Round itself, where the GATT's procedural and substantive pluralist approach appeared to yield to hegemonic and ideological reality in practice. Let us start on the procedural side. As Claerwen O'Hara explains,

For example, one of the most problematic practices that commentators have pointed to is the so called “Green Room” practice that was used extensively to achieve “agreement” in the Uruguay Round negotiations. As Amrita Narlikar describes it:

The Green Room process became synonymous with the way in which powerful Western countries could present legislative outcomes as a fait accompli to smaller countries and members of the Global South.Footnote ¹³⁹ For this reason, the GATT/WTO's consensus-based approach has long been subject to valid critique on the grounds that it does not actually guarantee the sovereign equality or equal voice of all states, and thus its obligations cannot be said to be rooted in pluralism-preserving consent.

The Uruguay Round's substantive results are also famous for having incorporated a neoliberal approach into the multilateral trading system, as discussed above in Parts I and II. As many have commented, the end of communism in the 1990s was the height of the neoliberal moment, where all alternatives to Anglo-American capitalism seemed defunct.Footnote ¹⁴⁰ The transition from GATT to WTO marked a significant change in the multilateral trading system, and appeared to incorporate this neoliberal ideology. While the WTO's core legal disciplines remained encapsulated by the GATT, with its essential commitment to pluralism, several of these new treaties, such as the TRIPS, went beyond non-discrimination to harmonize domestic policies in the direction of a neoliberal model of economic governance. These new treaties, the conventional wisdom goes, brought with them a commitment to neoliberalism.

E. The WTO's Apparent Neoliberal Turn and Its In-Built Limits

Despite the common (and understandable) narrative that the Uruguay Round successfully imposed an ideological approach to multilateral trade, from both a procedural and substantive perspective, our view is that the results of the Uruguay Round and subsequent negotiations are slightly more complex, revealing an ongoing and resilient pluralism in the WTO's legal order.

Let us again start on the procedural side. Despite important evidence that Green Room procedures choked out developing country input during the Uruguay Round, the political science and international relations literature on small state participation in outcomes at the WTO actually presents a somewhat more mixed picture. As Narlikar has illustrated, post-Uruguay Round, developing countries have sometimes been able to be quite successful in resisting the pressure of powerful developed countries and avoiding new rules that serve exclusively rich developed countries’ political and economic systems and perceived interests.Footnote ¹⁴¹ This has been achieved through coalition-building among WTO members from the Global South, and also through strategic alliances between developing countries and global civil society.Footnote ¹⁴²

In another important recent work on power in the WTO system, Greg Shaffer analyzes the significance of the rise of major non-Western powers—the BRICS—for the WTO.Footnote ¹⁴³ In various ways, as Shaffer shows, countries such as Brazil, India, and China have become powerful participants in the WTO, including its legal institutions, through the development of legal expertise, strategic alliances between domestic constituencies and the state, and leveraging of the size of their markets and their increasing economic power in the WTO.Footnote ¹⁴⁴ So while there is no doubt that power politics played a role during the Uruguay Round, challenging the consent-based approach that is so fundamental to pluralism, there is also some evidence that the WTO's consent-based legislative process continues to empower smaller and developing states, so that they are able to resist legal disciplines that are not in conformity with their domestic economic and political normative commitments.

The resilience of pluralism in the WTO post-Uruguay Round is also apparent in the substance of the WTO's legal disciplines. Despite what has appeared to many as a dramatic hard-wiring of neoliberalism into the WTO's legal architecture post-Uruguay Round, we argue that when one strips away how neoliberal ideology and powerful interests backing it attempted to frame and use these new norms during neoliberalism's heyday, the new agreements themselves contain many pluralist features that adapt and reinforce some of the ways in which the original GATT architecture embraced diversity: exceptions and limitations provisions, reservations, and carve-outs of various kinds. As such, despite the impression of the hardwiring of neoliberalism into the WTO with the Uruguay Round, a careful look at the legal agreements that resulted from the Round tells a more nuanced story. Sometimes the abuses of the Green Room succeeded; in other instances, voluntarism and consent allowed developing countries to push back, resulting in limited moves to deep integration, with many qualifications, that, in fact, left the neoliberals unsatiated at the end of the Round.

As discussed above, the neoliberal critique of the WTO reflects the sense of many neoliberals that while an important step toward full globalization or liberalization of markets, the Uruguay Round agreements ultimately fell short. Even the TRIPS agreement contains many exceptions, limitations, and flexibilities, for example for compulsory licensing.Footnote ¹⁴⁵ Big Pharma, supported almost without exception by the United States and the EU, responded on the one hand by espousing very narrow readings of these flexibilities and finding ways of intimidating smaller countries (and especially developing countries) from using them to the fullest extent, and on the other hand, by pressing for “TRIPS-plus” provisions in regional trade agreements.Footnote ¹⁴⁶

The Agreement on Sanitary and Phytosanitary Measures required WTO members to justify their regulation of risks with respect to food and agricultural products, measures based on scientific principles and risk assessments.Footnote ¹⁴⁷ At the same time, the SPS Agreement contained a clause that allowed for provisional measures based on a notion of precaution, where scientific evidence was insufficient.Footnote ¹⁴⁸ The Technical Barriers to Trade Agreement required that WTO members use international standards as a basis for their technical regulations-standards that would usually be created by standardization bodies dominated by technocrats and industry associations.Footnote ¹⁴⁹ At the same time, the use of international standards was only required where relevant, effective, and appropriate, given a particular WTO member's regulatory goals.Footnote ¹⁵⁰

The Subsidies and Countervailing Measures Agreement constrained the use of subsidies, including for legitimate domestic economic development purposes, going significantly beyond the GATT, but it also contained a provision that effectively removed matters from discipline subsidies, “[w]here the granting authority, or the legislation pursuant to which the granting authority operates, establishes objective criteria or conditions governing the eligibility for, and the amount of, the subsidy . . . and such criteria and conditions . . . are strictly adhered to.”Footnote ¹⁵¹ Moreover, to challenge a subsidy successfully in WTO law required proving with economic evidence that the subsidy was producing certain adverse effects in global markets, such as price undercutting, that fall within the meaning of “serious prejudice,” as defined in Article 6 of the SCM Agreement. This in effect limits the use of the SCM Agreement to attack subsidies as a legitimate tool of public policy, to cases where trade impacts are manifest.Footnote ¹⁵²

In the case of trade in services, the neoliberal agenda was clearly aimed at the dismantling of state monopolies and other forms of competition-restricting public policies that existed in most developed countries in sectors such as telecommunications until the Reagan-Thatcher revolution.Footnote ¹⁵³ However, the architecture of the GATS reflected considerable push-back from developing states against legal rules entrenching the neoliberal paradigm of deregulation and privatization. The GATS architecture allowed each individual WTO member to decide which sectors it wanted to open up through commitments to National Treatment and Market Access, and even to qualify commitments to preserve certain specific policies or carve out particularly sensitive subsectors.Footnote ¹⁵⁴ Despite pressure from powerful developed countries, above all the United States, as well as industry groups like the Coalition of Service Industries,Footnote ¹⁵⁵ few commitments were made that went beyond existing regulatory approaches of the countries in question. Hence the particular disappointment of neoliberal critics of the WTO with services liberalization, noted above.Footnote ¹⁵⁶ Although opening up trade in services through demonopolization, privatization, and deregulation was the key impetus behind the GATS, the resulting framework—with its à la carte approach—allowed for enormous differentiation of commitments depending on the perspectives and needs of individual states, and thus is a remarkable example of pluralist legal architecture.

For these reasons, we are of the view that the anti-pluralist nature of the Uruguay Round agreements has been overstated. The “single undertaking” structure of the Uruguay Round, where individual countries could not continue to adhere to the GATT while rejecting for example the TRIPS and SPS Agreements, was arguably a successful coup against pluralism by dominant Western interests at the peak of neoliberalism. Yet, at the same time, not all areas where neoliberals wanted to impose their vision of economic governance were included within the single undertaking, and the resulting agreements contain important flexibility and exceptions that built in a nascent commitment to pluralism, even at the high watermark of the WTO's flirtation with an ideological neoliberal approach to trade policy.

F. The Appellate Body's Pluralist Rebalancing

The Appellate Body's jurisprudence has also been crucial to preserving the pluralism of the GATT/WTO, rebalancing the covered agreements post-Uruguay Round in favor of a fulsome commitment to pluralism by blunting their more neoliberal aspects. In articulating this position, our approach differs from other commentators. For example, Quinn Slobodian has argued that the new dispute settlement system introduced in the Uruguay Round, with compulsory jurisdiction, panel reports becoming automatically binding subject to appellate review, and enforceability through sanctions authorized by an arbitrator, reflects the legalist aspect of neoliberal ideology.Footnote ¹⁵⁷

We take a quite different view of the relationship of legalism in dispute settlement to pluralism and, on the other hand, neoliberalism. Before legalist dispute settlement was introduced into the multilateral trading system, legal interpretation was dominated by the Secretariat of the GATT, which was animated (as Slobodian himself illustrates) by free trade absolutist or “ordoliberal” attitudes.Footnote ¹⁵⁸ The Secretariat to a large extent was able to impose this vision on the interpretive choices of panelists, ad hoc appointees mostly from the Geneva trade diplomatic community.Footnote ¹⁵⁹ While the shift to legalism did not really reform the relationship of the Secretariat to panels, as Pauwelyn and Pelc have recently shown,Footnote ¹⁶⁰ the introduction of the Appellate Body is another matter. As Joseph Weiler explains: “Underlying the pre-WTO ethos of panels was, consciously and subconsciously . . . crafting an opinion consistent with the legal advice given by the Secretariat but, at the same time, an opinion that would settle the dispute by being adopted by both parties.”Footnote ¹⁶¹ But right from the beginning, as Weiler notes, the Appellate Body sent a different message to panels in frequently overturning Secretariat-inspired or derived legal reasoning. The message was clear: “this is a legal process: here the law rules.”Footnote ¹⁶²

With its rulings, the AB systematically developed the law of the WTO in a way that permitted pluralism and ensured that states retained the right to regulate domestically as they saw fit. The AB continually affirmed that states have the “right to regulate”—a right not protected in the text of any covered agreement.Footnote ¹⁶³ As we have argued elsewhere, this makes clear that “the WTO is not a constitutional regime or a normative authority at the bar of which States must justify themselves before regulating. Regulations are presumed to be legitimate unless they have specific features that engage the precise treaty obligations of the WTO system. Merely because, actually or hypothetically, a measure has some effect on trade does not make it suspect or subject to scrutiny; it must actively be shown to violate particular disciplines.”Footnote ¹⁶⁴

The AB has also continually emphasized that states have the ability to set their own level of regulatory protection.Footnote ¹⁶⁵ When defending trade restrictive measures through Article XX, member states have the right to set the degree of risk protection in their regulation at whatever level they choose. This is an important affirmation of the ability of states to respect collective preferences and regulate for reasons that they take to be important, particularly for expressive normative reasons which may not be about “risk” prevention at all.Footnote ¹⁶⁶

In a line of cases on the “public morals” exception in Article XX, the AB also expanded the type of reasons for which states can regulate.Footnote ¹⁶⁷ In the important European Communities (EC) – Seal Products case, the Appellate Body took a deferential approach to the meaning of “public morals” in Article XX(a), broadening the substantive scope of Article XX justifications. The EU had imposed trade-restrictive measures on imported products made from seals, on the grounds that the way in which seals were hunted, with problematic consequences for animal welfare, violated the EU's public morals. Canada and Norway, which have two of the largest sealing industries worldwide, brought a claim against the EU's measures at the WTO. The claimants urged the AB to undertake a searching review of what constitutes a state's “public morals” and to ensure that the state was not inconsistent or morally hypocritical. The AB did not adopt this approach. Following two prior cases on the public morals exception,Footnote ¹⁶⁸ the AB deferred to the state's own conception of public morality, insisting that public morals are a matter of the “systems and scales of values” relevant to each society. It rejected the idea that public values must be fully consistent to be sufficient reason for legislation; as such, it rejected a philosophical consistency argument that would have made the WTO the arbiter of the reasonableness and coherence of the moral beliefs of its members. It rejected the notion that legislation must make a material contribution to some end, when the end in question is non-instrumental. And it did not see the fact that the regulation had multiple objectives, moral and otherwise, as a problem. In all of these ways, the AB acted to preserve normative pluralism among its member states.Footnote ¹⁶⁹

In addition to preserving this fulsome conception of the right to regulate under WTO law, the AB has also blunted many of the more neoliberal aspects of the Uruguay Round Agreements, such as the TBT and the SPS Agreements. These Agreements contained norms imposing constraints on domestic regulation that go beyond the non-discrimination norm in the GATT, and/or lack the general public policy exceptions in the GATT, such as Article XX.

In the case of the TBT Agreement, the AB announced that the TBT should be interpreted as reflecting the same equilibrium between the “right to regulate” and trade liberalization as the (pluralist) GATT—despite all the evidence that this Agreement had as its very rationale shifting that balance in favor of liberalization.Footnote ¹⁷⁰ In addition, the AB built in a GATT-style exceptions clause to the TBT that was absent on the face of the text. The TBT Agreement imposes a non-discrimination obligation on member states that echoes that of the GATT. But unlike the GATT, it does not include any general exceptions provision on its face. In the Clove Cigarettes case, Indonesia challenged an American ban on the sale of clove cigarettes at the WTO, on the grounds that the U.S. ban violated the TBT Agreement's prohibition on discrimination, since the United States still permitted the sale of menthol cigarettes. When analyzing whether there was discrimination in this case, the AB read in an Article XX-like exceptions provision to the TBT Agreement, so that a discriminatory measure could be justified on the basis of “a legitimate regulatory distinction.”Footnote ¹⁷¹

Likewise, the AB read down the TBT Agreement's requirement that members harmonize technical regulations through international standards (Article 2.4). In Tuna/Dolphin II, Mexico brought a claim against the United States at the WTO. The United States had adopted a labeling scheme for tuna caught in a “dolphin safe” fashion, which distinguished between tuna caught in the Eastern Tropical Pacific (ETP) and those outside that area and imposed higher standards on tuna caught in the ETP. Mexico argued that this scheme violated various aspects of the TBT Agreement, including Article 2.4. When applying this provision, the AB significantly qualified the requirement that states harmonize technical regulations through international standards by limiting the obligation to cases where international standards have been created through inclusive, consensual processes open in real terms to participation by and to the needs of developing countries.Footnote ¹⁷²

The AB has taken a similar approach to the SPS Agreement, softening and in some cases coming close to neutralizing those aspects of the Agreement that are more intrusive to regulatory autonomy than the GATT. Take the EC-Hormones case in which the United States brought a claim against the European Communities on the grounds that their legal regime restricting beef that had been treated with certain growth hormones violated WTO disciplines, including the SPS Agreement. When applying the SPS Agreement, the AB held that the requirement in the SPS Agreement that risk regulation of food and agricultural products be based on science was limited to an obligation that regulations bear a rational, objective relationship to some qualified scientific opinion, which could be a “non-mainstream” opinion.Footnote ¹⁷³ This significantly broadened the capacity of states to regulate for reasons that they considered to be legitimate.

The AB has also been active in finding policy space in the interstices and silences of the TRIPS Agreement. In the U.S.-Havana Club case, the EC brought a claim against the United States on the grounds that an American trademark policy violated the TRIPS Agreement. The AB applied in a broad way the public policy exceptions pre-dating the TRIPS Agreement in the relevant World Intellectual Property Organization (WIPO) conventions, noting that states imposing conditions on who can be the owner of intellectual property are compatible with TRIPS.Footnote ¹⁷⁴ Allowing states to impose conditions on who is entitled to own intellectual property, a flexibility only implicit in TRIPS and brought to life by the AB, arguably could have significant value for states attempting to steer intellectual property law to further industrial policy or social goals. As such, it is an important pluralist flexibility built into the TRIPS Agreement through judicial interpretation.

The AB has also been active in building pluralist flexibility into the Subsidies and Countervailing Measures Agreement. In the Canada-Renewable Energy case, Japan brought a claim against Canada under the SCM Agreement, on the grounds that Canada's domestic content requirements in its “Feed-in Tariffs” scheme violated the SCM's rules on subsidies. In analyzing the Canadian regime, the AB made a subtle but at the same time implicitly radical interpretive move. The AB held that, where the government creates a market, for example through establishing prices and quantities to be supplied, such a scheme should not be considered as a trade distorting subsidy benefit, even if the prices supported by the government in its policy goal of shifting to clean energy might be higher than in a market where consumer-driven supply and demand determines the price of electricity, indifferent to the objective of climate mitigation.Footnote ¹⁷⁵ In other words, governments can create market structures driven by policy objectives that are protected from challenges under the SCM Agreement. This, again, secures space for states to pursue diverse economic measures and industrial policies, in line with pluralism.

In all these respects, and in many other instances, the Appellate Body has built pluralism into the aspects of the WTO that, inspired by the neoliberalism of the 1980s and 1990s, most deviate from pluralism. Just as pluralist norms in the GATT had been subject to cooptation by free trade ideologues at certain periods, neoliberal norms could be adjusted to the spirit of pluralism by the AB. The difference is that protecting pluralism is intrinsic to the role of a genuine adjudicator, for independence and impartiality imply the duty to decide in a manner that is not, and does not appear to be, preferential to any particular state and its political and economic system. In this respect, a legalist view of dispute settlement was in inherent tension with entrenching norms that privileged and indeed sought to globalize a particular ideology of economic governance, even though both were elements of the Uruguay Round project that created the WTO. Awareness that voluntarism and consensus were themselves strained to produce the latter result in the Uruguay Round may well have underpinned to some extent the openness of the AB to judicial creativity in the service of a resilient pluralist spirit in the multilateral trading system. Ultimately this reinforces the close relationship of pluralism to legitimacy in the WTO, despite the inroads of neoliberalism and efforts to shape the trading order in a non-pluralist direction. For this reason, we see the dispute settlement process as an essential plank in a pluralist legal system.

A. Responding to the Critics