Does the World Trade Organization (WTO) have a constitutional future? It is not too soon to reexamine the institutional structure for global trade relations. The WTO is a young organization, barely more than a decade old, and it is a work in progress. The WTO, and the General Agreement on Tariffs and Trade before it, greatly reduced tariffs and other protectionist measures and, in doing so, fostered economic growth.

Some ask whether the WTO is good or bad. Some ask whether the WTO will survive its shortcomings, including its slow response to the AIDS crisis, or its inability to address the needs of poor people, or its failure to incorporate environmental protections or human rights norms. These are not well-posed questions. In fact, by focusing on these questions about the responsibility of the WTO, instead of the real questions about state and individual responsibility, we delay potential remedies, and hide our inaction by making a scapegoat of the WTO.

The WTO today is little more than a complex set of rules amalgamated under a rather flimsy institutional umbrella. In WTO lingo, it is a “member-driven organization” with little independent power and therefore little responsibility. The WTO has more transnational power than most international organizations, but it has little autonomous authority to make new rules. Thus, the WTO must be understood as a relatively static contract. The responsibility for any sins of commission or omission by the WTO remains largely with the signatories of that contract—the states themselves and their citizens.

The WTO cannot be understood without considering the broader international institutional framework in which it exists. For example, criticizing the WTO for excluding environmental protection without examining the broader environmental regime misses an important dimension. Even more saliently, blaming the WTO for the persistence of poverty is merely attacking a straw man. It might also miss the opportunity to attack the real problem, for which the WTO might not be responsible, but perhaps can address.

Will the WTO survive? If the WTO did not exist, it would immediately need to be invented; if demolished, it would immediately be re-established. Although withdrawal from the WTO is legally permissible, no member state has expressed any serious plans to withdraw. At the core of the WTO are rules restricting protectionism, albeit in incomplete terms. There is little doubt that these rules are in the aggregate beneficial. If they were not, why would states adhere to the WTO; why would states like China struggle to accede? But there is also little doubt that these rules could be improved and that they have distributive effects that could be altered.

The rules contained in the WTO treaty affect state behavior, as well as the international distribution of wealth. Thus, the most important questions to ask today about the WTO are whether particular rules under the WTO umbrella, and those rules proposed to be placed under the WTO umbrella, are beneficial or detrimental, and to whom.

This article is concerned with a second set of questions that concern the institutional structure of the WTO and how its rules are made. It speculates on the potential areas of “constitutional” growth for the WTO. The discussion is motivated by the question of how to open the WTO to changes that would increase its aggregate benefits and distribute those benefits increasingly to poor people.

The Blind Men and the Six Constitutions

A constitution is like the fabled elephant at the hands of six blind men, each of whom thinks he is encountering a different animal because he touches a different part of the elephant. To grapple with the constitutional structure of the WTO, it is necessary to recognize the different parts of the elephant and then try to envision the entire animal. There are those who touch a constitution and perceive only one of the following—an economic constitution in the sense of a set of rules for exchange of value and authority, a political constitution that reflects the cultural and democratic integrity of a people, a human rights constitution that limits the sphere of governmental authority, a functional constitution that allows for the integration of various social values, a legal constitution that provides rules for the making of other rules, or a redistributive constitution founded on social solidarity. This article only sketches the outline of the whole animal.

Constitutions change in what are called “constitutional moments.” As economists James Buchanan of George Mason University and John Harsanyi, formerly of Stanford, and Harvard political theorist John Rawls suggested, constitutional moments are essentially political moments, in which guidelines for how rules will be made are established, with an eye toward both efficiency and distribution. A “constitutional moment” is defined by Buchanan and Tullock as an historical moment at which a Harsanyian “veil of uncertainty” allows individuals, or in this case states, to agree on constitutional change even though they are uncertain of the possible future implications. Constitutional moments generally result from a shift in constituents’ concerns. What types of shifts might result in a future constitutional moment at the WTO? Issues such as increasing public awareness of the WTO, pressures from other global interests including environmental protection, human rights, and health, increasing concern about global poverty and the role of trade, and the fear of terrorism could contribute to a tectonic movement at the WTO.

Economic Constitutions

Economists take a rational institutionalist approach to constitutions. In this positivist analytical perspective, constitutions are nothing more than instruments of interaction, and institutions share authority in order to facilitate the establishment of rules. These rules are not natural law; instead, they are political settlements designed to maximize the achievement of individual citizens’ preferences.

If there were no potential value to be obtained from cooperation, constitutions would be unimportant. Where there is value to be obtained by agreement, constitutions may be important in reducing transaction costs and strategic costs, such as the problem of states defecting from their commitments. A constitution may also produce its own demand by reducing transaction costs and strategic costs of international arrangements.

In the context of the WTO, we may imagine that the move to stronger dispute settlement in 1994 resulted from a constitutional moment involving two kinds of trade-offs. First, the United States demanded a stronger dispute settlement, stipulating that it would not give up unilateralism under Section 301 of the 1974 Trade Act unless stronger dispute settlement was established in the WTO. The US stipulation intended to end discussion of Section 301, but the principal trade partners of the United States accepted the challenge. In the ensuing negotiations, the United States gave up the right to take unilateral action to enforce its rights under WTO law in exchange for strengthened dispute settlement. Second, stronger dispute settlement was expected to strengthen the commitments to WTO norms, which are generally consistent with liberalization. In 1994, the parties did not know which states would benefit and which states would be harmed by a stronger dispute settlement.