Extract
The World Trade Organization and participatory democracy: the historical evidence.
ABSTRACT
Although the World Trade Organization (WTO) is one of the most significant international institutions, its function, domain, and legitimacy are still heavily contested. The Author examines the history of the founding of the General Agreement on Tariffs and Trade (GATT), the WTO's predecessor, to see what history reveals about the role that GATT was originally expected to fulfill. The Author's interpretive examination shows that GATT's founders recognized that trade policy must be internationalized in order to give one country an opportunity to participate in the policy-making of other countries; otherwise, a county can impose costs on other countries without representation from those countries. This review therefore supports the vision of the WTO as an institution of international participatory democracy; suggests that the WTO is a political, not just an economic institution; and rebuts the notion that the domain of the WTO is limited to helping countries overcome protectionist interests at home. TABLE OF CONTENTS I. INTRODUCTION: WHY THE HISTORICAL RECORD MATTERS II. A BRIEF OVERVIEW OF TRADE INTERNATIONALIZATION III. THE U.S. TRANSFORMATION: THE RECIPROCAL TRADE AGREEMENTS ACT OF 1934 IV. THE SECOND TRANSFORMATION: THE KEYNESIAN REVOLUTION V. CONCLUSION I. INTRODUCTION: WHY THE HISTORICAL RECORD MATTERS Although the World Trade Organization (WTO) is one of the most important international economic institutions, its function, domain, and legitimacy are still heavily contested. The WTO's role as a multilateral institution that oversees the international trading system is clear, but it is not at all clear why an international organization is needed to oversee national trade policy (1) or what the scope and penetration of that oversight should be. (2) The WTO is under constant academic and popular scrutiny in an effort to determine the rationale for its work and to assess, given that rationale, the borders and reach of its work. (3) This Article examines the history of the founding of the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), in the 1940s to see what light history sheds on how to understand the WTO and its function. The connection between GATT and the founding of the WTO is direct, albeit separated by forty-five years, because the WTO takes the place of the organization that was envisioned when GATT was signed. (4) Although GATT's history has been well documented in other works, both contemporaneously (5) and retrospectively, (6) few works ask how history can aid understanding the function and domain of GATT, and its successor, the WTO. That interpretive task is undertaken in this Article. The main contours of the interpretation advanced in this Article will not surprise informed readers. GATT's founding recognized that tariffs are a particularly troublesome source of economic friction between countries. (7) Tariffs came to be understood as a way by which the problems of one country were exported to, and visited upon, other countries--a form of economic aggression akin to war. Because a tariff is essentially a tax on the opportunities of foreign producers, it is a form of taxation without representation--a tax on foreign producers over which the foreign producers have no say. Tariffs therefore inevitably invite retaliation because retaliation through government-imposed tariffs is the only "voice" that foreign producers have to counter foreign taxation. The historical record makes it clear that an international institution was understood to be needed to forestall such aggression by providing a forum in which one country could voice its concerns about the policies of another country. (8) Thus, history shows that GATT's founding was driven by the understanding that every country had an interest in the tariff policies of other countries and therefore an interest in having a right to participate in the making of those policies. Although not surprising, this historical interpretation is important for two reasons. First, it suggests that the rationale for the founding of GATT was political, not economic. The gains expected from GATT were not the familiar gains of trade and specialization that result in economic interdependence. Instead, the gains were to come from participatory lawmaking and political interdependence. Second, it suggests that GATT was not founded out of a need to overcome protectionist interests at home or to set up an international organization to counter domestic protectionist interests--but out of a need to counter protectionist interests abroad. GATT founders understood that a tariff policy that meets domestic objectives within a country may be objectionable not because it is bad for the country imposing the tariff, but because of its effect on producers in other countries. This Article concludes that the historical account of the origins of GATT (and through GATT, the WTO) undercuts one common contemporary interpretation of the scope and...See the full content of this document
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