WTO at a Crossroads: The Crisis of Multilateral Trade and the Political Economy of the Flexibility Debate

Abstract

This article has a two-fold purpose: first, to problematize the WTO’s official response to the crisis, particularly its insistence on trade liberalisation as the universally desirable means for stimulating growth; secondly, to reflect on the political economic assumptions underlying calls for greater flexibility to be built in the WTO system. Although the article considers the flexibility debate to be of crucial importance in thinking about the future of the multilateral trading system, it evaluates the stakes in arguing for policy autonomy or ‘developmental legal capacity’ in the context of international trade relations. In this respect, it shows that flexibility arguments share an understanding of multilateral trade relations as governed by competition. While recognising that the role of competition, as opposed to comparative advantage, is important to challenge the assumption about the universal beneficial role of trade liberalisation, the argument this article makes is that accepting competition as the sole or prevalent modality informing multilateral trade relations is problematic from both a normative and a positive perspective. By reflecting on the limitations of an approach that accepts the need ‘to prosper in conditions of global competition’ as its necessary starting point, this article emphasizes the importance of rethinking international trade relations, particularly under conditions of global recession characterised by high levels of inequality.