Redesigning the World Trade Organization for the Twenty-first Century

4. WTO Decision-Making: Can We Get a Little Help from the Secretariat and the Critical Mass?

67 4 WTO Decision-Making: Can We Get a Little Help from the Secretariat and the Critical Mass? MANFRED ELSIG I. Introduction The current design of the international organization system regulating the world economy was conceived by a small group of experts and politicians from the United States and Great Britain in the early 1940s. The mandates and principles guiding the World Bank, the International Monetary Fund, and the envisaged International Trade Organization were inspired by Keynesianism and embraced by British and U.S. economists and high-ranking civil servants. These ideas also resonated well within the political establishments across the transatlantic community .1 Two explanations, in the form of necessary conditions, for the genesis of the global economic architecture have been advanced: first, the existence of a ‘constitutional moment’after the end of World War II; and second,the presence of a liberal hegemonic power to provide for an open and stable trade and monetary regime.2 Today, the creation of new international organizations is rare despite the opening of a new constitutional moment of liberal orientation after the end of the Cold War.3 Not only is the establishment of new international organizations costly,but there exists already a multitude of institutions that claim (sometimes competing) regulatory authority over just about all policy issues. Abandoning non-performing international organizations is also difficult. Thus internal reform is the most likely observed outcome when thinking about reforming international organizations. However, redesigning the rules governing existing international organizations presents a number of challenges. The power of the status quo stands out as a particular problem.4 First, actors have learned and adapted to decision rules over time, allowing them to navigate the system efficiently given the opportunities and constraints of existing rules. This leads, in many cases, to the development of a substantial degree of ‘loyalty’ toward existing rules and resistance to change.5 Second, from the field of psychology , we also need to take seriously the argument that actors are more likely to defend existing practices and are relatively risk-averse when it comes to new modes of decision-making where outcomes are hard to predict.Thus actors seek a high degree of certainty that post-reform governance models will not lead to pareto-inferior outcomes as measured in procedural and outcome influence. Third, powerful nations hold a veto on the issue of redesign. If they are satisfied with the status quo, the contra-factual case that they will profit from design change is most likely the hardest challenge to be faced in reform activities. This chapter discusses two reform suggestions related to improving decision -making within the World Trade Organization (WTO). These proposals have been promoted in two recent reports that discuss the future of the WTO. The first (the Sutherland Report) advocates inter alia a stronger role for the WTO Secretariat.6 The second (the Warwick Report) endorses a critical mass approach to decision-making.7 This chapter explores both proposals further with a view to improving and streamlining decision-making within the WTO. Selected evidence from current and past practices in European Union (EU) decision-making is discussed for the purpose of comparison across IOs (international organizations).The chapter is organized as follows.First,some reflections related to reforming the current system are presented. Second, a more prominent role for the WTO Secretariat in negotiations is discussed as well as new decision-making rules. Third, alternative decision-making approaches leading to variable geometry (in particular‘critical mass’) are analyzed. The chapter concludes with a note on challenges that may influence future discussions on reform in the context of the multilateral trading system. II. Reflections on Reform A. The Need for Reform In recent years, international organizations have been subject to intensified scrutiny from an ever-growing number of stakeholders. Many IOs suffer from poor performance and appear insufficiently equipped to deal with 21st-century challenges. The causes of underperformance, however, are not only found within the organizations, but largely emanate from conflicting interests of the members delegating to international organizations. In the case of the WTO, this is borne out by the lack of timely responses to new challenges and general difficulties in finding consensus on further liberalization of markets and designing new rules to govern the world economy. 68 Part II Decision-Making in the WTO Early liberal contributions in the international relations literature analyzed various ways international organizations help overcome obstacles to cooperation...