That brings us to the role of ideas, including perspectives of WTO legitimacy as a forum for liberalization, which has not been addressed in posts so far. It is no coincidence that the GATT was signed after WWII following the Great Depression, and that the Uruguay Round was concluded and the WTO created following the Berlin Wall's collapse and the discrediting of socialism. Yet we are now seeing shifts in domestic opinion that will be less favorable to trade liberalization. Trade negotiations for further liberalization thus do not bode well in the near term. In other words, the economic crisis is not just about political priorities shifting away from trade; it is also about shifting perceptions regarding the benefit of open markets. This loss of faith in liberal markets will affect the constellation of domestic pressures on government negotiators.
Market power matters in affecting WTO negotiation outcomes, as we have all shown in our work. But so does the mobilization of domestic interests and ideas about trade liberalism. Thus, in my view, while the WTO as a negotiating forum is indeed deadlocked, it is not dead in the sense that it is forever gone. We just need to be realistic about what it can accomplish in these times. Acting as a useful shield against protectionism is not insignificant.
Via Dan Drezner