WTO Crisis through the Lens of Hegemony Theories: When International Trade Law and Geopolitics Collide

Abstract The liberal trade order that prevailed after World War II is shifting to an order where major powers increasingly intervene to secure political, economic, and technological gains – in a dynamic that results in a deep crisis of the WTO and the retreat of globalization. Whereas International Trade Law-centered analysis points out that this phenomenon occurs due to faults in the WTO legal framework, the assessment of the issue through the lens of Hegemony Theories indicate that the roots of the crisis stand in the ongoing process of hegemonic transition since the U.S. – the traditional patron of free trade, perceive such order as beneficial to China, which is the emerging power that has been grasping huge advantages from international trade. International regimes and the institutions that govern it are forged by the hegemons’ leadership and largely reflect their preferences. Consequently, the emergence of a new challenger and the hegemon declining power tend to cause disruptions in the prevailing order. Policy recommendations to overcome the WTO crisis must benefit from the insights from Hegemony Theories.