Richard and Greg's entries offer a stark contrast about where the WTO is heading and what factors are relevant in determining the faith of the institution. Is the future of the WTO determined by power, domestic coalitions or, ultimately, norms and ideas?
Greg calls for the mobilization of domestic interests and ideas about trade liberalism as a solution to the current deadlock. Domestic coalitions have lost their faith in liberal markets. Without domestic support and, consequently, the prospect for political rents, states have little incentives to negotiate new trade deals.
Given the degree of economic interdependence today, one would expect there to be an even more positive domestic political economy story in favor of free trade. Traditionally, we rely on exporters to counter the protectionist pressures generated by import-competing industries. With a dramatic growth in intra-industry trade, pro-trade coalition of exporters should be joined by a large number of domestic producers who rely on imports as inputs or raw materials. In addition, the extent of foreign direct investment (FDI) would be expected to create new interest groups that benefit from free trade. For instance, if the US were to raise trade barriers vis-a-vis Chinese imports, we would expect US exporters and US companies relying on Chinese goods as inputs object the measures. But shouldn't also an increasing number of US companies that are established in China and that export their goods back to their home country rally againts the proposed measures? I agree with Greg that we do not currently see strong interest groups favoring new WTO deals. But the bottom-line is that there are winners and those winners do have a stake in the system. The fundamental political economy rationale of trade liberalization has therefore not changed. Quite the contrary.