What’s Behind the WTO Crisis? A Marxist Analysis

Abstract

The main objective of this article is to explore the background of the World Trade Organization’s (WTO) Dispute Settlement Body (DSB) crisis using Marxist, neo-Marxist or, at least, Marxist-influenced theories of political economy and international relations. Its purpose is twofold. First, to propose an interpretation of the actual WTO crisis that will address alternative interpretations’ gaps. Second, to advance theoretical inputs founded on Marxist or Marxist-influenced writing in political economy, inputs which could be useful elsewhere in critical studies in international law. At the root of the crisis lies the functioning of neoliberalism (understood as the regime of accumulation promoted by US-dominant classes) and the institutions it uses to regulate itself, to deal with contradictions that hurt its capacity to produce profit, and to allow capital accumulation. One of the most important of these institutions, at the international level, is the WTO. We argue that neoliberalism’s incapacity to continuously provide, since the Asian crisis in 1997, a satisfying rate of profit to US capitalists (and to Western capitalists in general, even if our argument focuses on the former) lured it into a crisis. Since the WTO’s main function is to prevent neoliberalism from being hurt by contradictions that would limit its capacity to provide profits allowing capital accumulation, it was inevitable that one day or another, the struggle faced by the latter would also drag the former down in an institutional crisis.

Class Struggle and International Economic Institutions: The Origins of the GATT and “Embedded Liberalism”

“…As argued elsewhere (Bachand, 2020), the current institutional crisis that the WTO faces is directly linked to the crisis of its regime of accumulation. Indeed, an analysis of the rates of profit of American non-financial enterprises since 1997 shows that the only periods when good rates of profit were obtained are characterized by financial bubbles or by the enlargement of credit and that both characteristics have led the US and world economy towards crisis (the Asian crisis, the Dotcom crisis, the Subprime crisis, etc.).…”

“…Otherwise, the regime of accumulation enters into crisis, bringing the mode of regulation with it in its fall. In other words, the primary explanation for the crisis of an institutional arrangement should be found in the bad functioning of the regime of accumulation sustained by the arrangement (Bachand, 2020).…”