Revision summary
GATT’s spirit was MFN, bound tariff cuts and legal dispute settlement rather than bilateral retaliation. Recent tariffs, export controls and economic sanctions treat trade as a security and industrial tool. WTO decline factors: blocked Appellate Body, failed Doha round, consensus among a huge membership, U.S.–China systemic clash, food-security and S&DT fights, and an outdated digital text. Megaregionals and plurilaterals moved rule-making away from Geneva. The WTO still functions as a forum; it has weakened as a binding constitution.
Model answer
Introduction
The General Agreement on Tariffs and Trade was a political bet that trade should be non-discriminatory, tariffs should be bound and cut, and disputes should be legal rather than retaliatory. The World Trade Organization of 1995 gave that bet a court and a wider rule-book. The return of trade barriers and economic sanctions has diminished that spirit. The decline of the WTO in recent times has several causes, of which great-power unpolitics is only the loudest.
Body
GATT’s spirit, diminished
Most-favoured-nation treatment and national treatment were the legal heart. Exceptions existed — regional trade agreements, security, safeguards — but they were meant to be narrow. Tariffs as ordinary industrial policy, export controls on technology, green border taxes that poorer exporters read as protection, and sanctions that cut whole economies out of finance sit badly with that heart. Weaponised interdependence after 2022 made trade a tool of war policy. NAFTA/USMCA and other megaregionals moved rule-making out of Geneva. This is the deglobalisation of question 2(a), now named at the organisation that was supposed to prevent a 1930s repeat.
Factors in WTO decline
First, the Appellate Body was emptied by United States blocking of appointments. Members can appeal into the void. The policeman of the 1995 deal lost his court. Second, the Doha Development Round never closed. Agriculture, industrial tariffs and services could not be bargained into one package. Third, the consensus rule lets a few large members halt outcomes, while a much larger membership than 1947 GATT makes consensus harder. Fourth, China’s accession produced a systemic clash: subsidies, state enterprises and forced technology transfer claims that the old GATT text does not settle, and that Washington now prefers to fight with tariffs rather than with panels. Fifth, developing-country coalitions, including India, refuse to treat special and differential treatment as a sunset slogan, especially on public stockholding for food security. That is clout, treated in Paper II’s India questions; it is also gridlock if no bargain is offered. Sixth, digital trade, e-commerce and investment sit poorly in a 1994 text, so willing clubs write plurilaterals outside the single undertaking. Seventh, domestic politics in the United States turned the WTO into a symbol of lost factories, so compliance with adverse rulings became optional.
The organisation still notifies, still hosts talks, and still matters to states that cannot win a tariff war. It has declined as a binding constitutional order of world trade. That is the precise sense of decline.
Flow diagram
flowchart TD GATT[GATT spirit MFN bindings] --> WTO[WTO 1995 court] T[Tariffs sanctions industrial policy] --> D[Decline] AB[Dead Appellate Body] --> D DO[Doha consensus US-China] --> D
Conclusion
GATT’s spirit was non-discrimination and legalised tariff politics. Sanctions, industrial tariffs and security controls have pushed that spirit aside. The WTO has declined because its court was disabled, Doha failed, consensus jammed, and the United States–China clash outgrew the 1994 text. The shell remains. The policeman does not.
Quick related
Students also ask
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Do you agree with the view that the EU has thus far proved to be the most successful experiment in the regional integration processes? Account for its successes and also some of the recent challenges that it is faced with.
Next question in the 2024 paper (Q4). View answer →
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Is the WTO dead?
No. Notifications, some negotiations and first-instance panels continue. What is diminished is automatic appellate discipline of the largest economies.
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Did developing countries kill the WTO?
They used consensus to defend policy space. Decline is also a Northern story of tariffs and a disabled court.
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