Stephen & Parizek: New Pressures on the WTO – The Rise of Illiberal Trading States

ABSTRACT:

Since its creation in 1995, the WTO has become the major institutional pillar of the global economy, a guarantor of market openness and a prominent disseminator of liberal economic commitments. But the rise of new powers such as China, Brazil and India calls into question the durability of its existing policy content and institutional design, as evidenced by the failure of the Doha Round after 14 years of negotiations. This paper argues that the WTO is facing new challenges not just due to the rise of new powers, but due to rising powers’ economic constitution as ‘illiberal trading states’. Illiberal trading states seek trade integration through market access abroad, but defend their capacity to operate illiberal forms of capitalism at home. The deadlock in the Doha Round therefore not only underscores the salience of power shifts for the performance of international institutions, but also highlights the increased heterogeneity of preferences of the cluster of systemically significant states at the centre of the world trading system. We develop this argument analytically through an analysis of the economic rise and state-society relations of the BRICS countries, and demonstrate its salience empirically during multilateral negotiations at the WTO through an analysis of rising and established powers’ revealed preferences during the Doha Round.

 

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