This essay argues that the World Trade Organization should not become a forum for global governance in non-trade matters. It responds to those, like Professor Andrew Guzman, who believe that the WTO's success suggests that the organization should be transformed into a forum for "cross-issue" regulatory bargains among member nations on issues, ranging from the environment to human rights, that are not easily resolved in existing international fora. We show that the current focus of the WTO - the reduction of barriers to international trade and the resulting promotion of private contracts - does not require the organization to face the agency problems inherent in regulatory structures. By contrast, global regulatory "deals," even more than domestic legislation, may serve as vehicles for interest-group transfers. We also explain how the WTO's rigorous enforcement mechanism might actually inhibit cross-issue bargaining among member nations. Substantive regulatory bargains would necessarily increase the discretion exercised by WTO dispute settlement tribunals. This increased discretion would entail a lack of predictability that could well be intolerable for WTO members, particularly developing countries. We end by arguing that the WTO can best contribute to the long-run improvement of regulatory standards by deepening its commitment to reducing barriers that prevent trade among the nations of the world.
Date of this Version
John McGinnis and Movsesian L. Movsesian, "Against Global Governance in the WTO" (May 2004). Law and Economics Papers. Working Paper 21.