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The Inception of the World Trade Organization and of its trade dispute settlement system

English and French closed-captions are available.

The World Trade Organization was born in the early 1990, after the end of communism, the fall of the Berlin Wall, and at a time of considerable convergence around what one might call an economically liberal or neoliberal view, that economic liberalization was the right path to growth and development, not just for rich countries but for all countries.

What existed before the World Trade Organization was something called the GATT: The General Agreement on Tariffs and Trade, which was part of the rebuilding of international institutions at the end of World War II. It was based on the notion that countries could gain, in terms of their own economic development and growth policies by reciprocally removing border barriers like tariffs and quotas on imports but at the same time, protecting diverse public policies which might include in some cases, state enterprises, aspects of state control over the economy, environmental laws, labor laws and so on.

When we shifted to the new system, the WTO, in some respects it became much more intrusive of domestic policies, moving beyond reciprocal restraints on border measures like tariffs, to certain kinds of limits on internal policies including, for example, industrial subsidies and policies to protect human and animal life and health. And that started to generate controversy right from the start.

Just a few years after the WTO was born, it was on the front pages and on the TV news with the riots in Seattle, which were challenging this model of globalization that sought to impose a view of proper domestic public policies that was based on this idea of liberal or neoliberal globalization.

The World Trade Organization (WTO) is an international organization whose rules govern trade between nations. It was established on January 1, 1995, succeeding the General Agreement on Tariffs and Trade (GATT), which was created in 1947. The GATT aimed to promote international trade by reducing or eliminating trade barriers such as tariffs and quotas. The WTO has continued this mission while expanding its scope to cover new areas of international trade, including services and intellectual property rights. More information on the inception of the WTO and its evolution can be found in Robert Howse’s and Joanna Langille’s “Continuity and Change in the World Trade Organization: Pluralism Past, Present, and Future” (117 AJIL 1, 2023). 

Professor Robert Howse of New York University examines the origins of the WTO, particularly its emergence from the prevailing belief in the benefits of economic neoliberalism as the optimal approach for global growth and development. He highlights that the rules of GATT as written allow for regulatory diversity. However, the interpretation of these rules has changed over time. The establishment of the WTO and its new dispute settlement system triggered controversy from its inception due to its perceived intrusion into domestic policies in the name of liberalizing trade. Could the early apprehensions about the WTO’s encroachment on state sovereignty and regulatory autonomy have sown the seeds of its eventual decline in effectiveness and legitimacy?

Professor Howse participated in the 2023 Rethinking WTO Dispute Settlement Ottawa Conference which centered on three key themes of formal WTO adjudication, deliberative mechanisms, and alternative dispute resolution. To learn more, review the Rethinking WTO Dispute Settlement Report which summarizes the key takeaways. This report serves as a comprehensive mapping of disagreements surrounding the problems facing the WTO, shedding light on the trade-offs inherent in various reform paths. While not providing definitive solutions, it offers invaluable insight into where reforms are needed and the reasons behind them. 

References and useful links
About the researcher
Robert Robert Howse
Lloyd C. Nelson Professor of International Law

Robert Howse is the Lloyd C. Nelson Professor of International Law at NYU School of Law. Professor Howse received his B.A. in philosophy and political science with high distinction, as well as an LL.B., with honours, from the University of Toronto, where he was co-editor in chief of the Faculty of Law Review. He also holds an LL.M. from the Harvard Law School. He has been a visiting fellow at the London School of Economics and visiting professor at Harvard Law School, Tel Aviv University, Hebrew University of Jerusalem, the University of Paris 1 (Pantheon-Sorbonne), Tsinghua University, and Osgoode Hall Law School in Canada and taught in the Academy of European Law, European University Institute, Florence.

Professor Howse has been a member of the faculty of the World Trade Institute, Berne, Master’s in International Law and Economics Programme. He is a frequent consultant or adviser to government agencies and international organizations such as the OECD, the World Bank, UNCTAD, the Inter-American Development Bank, the Law Commission of Canada and the UN Office of the High Commissioner for Human Rights. He was a contributor to the American Law Institute WTO project. He is a co-founder and co-convener of the New York City Area Working Group on International Economic Law and serves on the American Bar Association Working Group on Investment Treaties. Professor Howse serves on the editorial boards of the London Review of International Law, Transnational Legal Theory, The Journal of World Trade and Investment, among others. Professor Howse’s article with Ruti Teitel “Beyond Compliance: Rethinking Why International Law Really Matters” was awarded the Global Policy Best Article Prize 2010 (shared with Joseph Stiglitz et al).

Prior to pursuing legal studies, Howse held a variety of posts with the Canadian foreign ministry, including as a member of the Policy Planning Secretariat and a diplomat at the Canadian Embassy in Belgrade.

Howse is the author, co-author, or co-editor of numerous books, including Leo Strauss Man of Peace, Trade and Transitions; Economic Union, Social Justice, and Constitutional Reform; The Regulation of International Trade; Yugoslavia the Former and Future; The World Trading System; and The Federal Vision: Legitimacy and Levels of Governance in the EU and the U.S. He is also the co-translator of Alexander Kojève’s Outline for a Phenomenology of Right and the principal author of the interpretative commentary in that volume.

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