Moving Ahead While Standing Still: Dynamics of Institutional Evolution in a Gridlocked WTO

Almost two decades after the WTO’s creation, the state of the organization can be assessed very differently. On the one hand, political gridlock and lack of legislative progress have become almost all-encompassing and a key characteristic of multilateral trade governance. On the other hand, the WTO still exists and even continues to attract new members. The persistence of these two opposing trends can be explained with the WTO’s ever-increasing membership, the complexity of trade issues under negotiation, and the WTO’s dispute settlement mechanism: where the first two factors make it increasingly difficult and maybe even impossible to reach political agreement on further liberalization, the latter serves a function in international trade governance that is appreciated by all trading nations. The WTO’s continued attraction thus stems in large parts from the services provided by its system for the settlement of disputes between member states. As part of this system, the WTO’s standing judicial organ—the Appellate Body—has become an increasingly strong international court; its decisions have become authoritative and determinative not only for the solution of individual disputes but also for changes in the WTO’s overall legal and institutional setup. Increasing “relative judicial power”—i.e., the potency of the judicial branch in relation to that of the political branch—means that governance in the WTO has become increasingly judicialized.