Neo-Liberal, State-Capitalist and Ordo-Liberal Conceptions of World Trade: The Rise and Fall of the WTO Dispute Settlement System

Abstract

This contribution begins with an overview of the historical evolution of international trade leading to, today, five competing conceptions of international economic regulation (section I). The more some areas of trade regulation (like trade remedies, subsidies, internet services, intellectual property rights, appellate review) became dominated by business-driven, neo-liberal interest-group politics (section II), or are circumvented by non-transparent practices of state-capitalism and state-owned enterprises (section III), the less successful have the ‘regulatory functions’ of the World Trade Organization (WTO) become. From the entry into force of the WTO Agreement in 1995 up to 2020, the more than 420 WTO panel, appellate and arbitration findings – similar to the, by now, more than 1,020 publicly known investor-state arbitration (ISA) cases and related national court decisions (e.g. enforcing ISA awards) – protected higher degrees of transnational rule-of-law in worldwide trade and investment relations than in any previous period (section IV). Compared with rule-of-law among the 30 member states of the European Economic Area, however, ordo-liberal European economic constitutionalism has limited market failures, governance failures and rule-of-law deficits through more comprehensive judicial remedies and ‘constitutional methods’ than in neo-liberal and state-capitalist economies (section V). Since 2017, the hegemonic US assault on the WTO legal and dispute settlement system has disrupted WTO appellate review by re-introducing power politics (section VI). Similar to the criticism of neoliberal ‘investor biases’ in commercial ISA, some WTO Appellate Body judges from the USA revealed political biases in support of neo-liberal, US trade policies (section VII). Justice, democratic constitutionalism and rule-of-law require protecting impartial WTO third-party adjudication as a precondition for rules-based, multilevel governance protecting global public goods like ‘sustainable development’, climate change mitigation, poverty reduction and public health for the benefit of citizens and their human rights, yet with due respect for legitimately diverse ‘constitutional pluralism’ (section VIII).