In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the Gatt/Wto
Richard H. Steinberg
University of California, Los Angeles (UCLA) - School of Law
UCLA, School of Law Research Paper No. 02-16
This article explains how consensus decision making has operated in practice in the General Agreement on Tariffs and Trade/World Trade Organization. When GATT/WTO bargaining is law-based, consensus outcomes are Pareto-improving and roughly symmetrical. When bargaining is power-based, states bring to bear instruments of power that are extrinsic to rules, invisibly weighting the process and generating consensus outcomes that are asymmetrical and may not be Pareto-improving. Empirical analysis shows that although trade rounds have been launched through law-based bargaining, hard law is generated when a round is closed, and rounds have been closed through power-based bargaining. Agenda- setting has taken place in the shadow of that power and has been dominated by the European Community and the United States. The decision-making rules have been maintained because they help generate information used by powerful states in the agenda- setting process. Consensus decision-making at the GATT/WTO is organized hypocrisy, allowing adherence to the instrumental reality of asymmetrical power and the sovereign equality principle upon which consensus decision-making is purportedly based.
Keywords: WTO, GATT, consensus, decision, decision-making, bargaining, outcome, launch, close, agenda-setting, round, trade round, organized hypocrisy, invisible weighting, trade, trade law
JEL Classification: F1
Date posted: August 8, 2002
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