A Trade War of Attrition: Attempted Unilateral De-Legalization and the Struggle over the WTO Regime

The actions of the United States (US) government towards the World Trade Organization (WTO) offer a window into a rarely seen event: a unilateral attempt by a hegemonic power to delegalize a previously highly legalized regime. Over the past decade, the US has shifted from the WTO’s ‘benevolent hegemon’, decisive for establishing and sustaining the highly legalized regime governing global trade relations, into a ‘revisionist hegemon’ that aims to delegalize this regime. In this article we consider two US moves. First, undermining the WTO as an institution by dismantling the Appellate Body, which had become the de facto ultimate interpreter of WTO rules. Second, undermining the WTO Agreements as a set of substantive rules governing multilateral trade relations. We assess the extent to which the US’s disruptive behavior has, ten years on, managed to displace the WTO as an institution and WTO law as the rules governing global trade relations. We show that these moves have been resisted and countered by a group of ‘preservationist’ WTO members, seeking to retain rules-based and WTO-mediated relations in the field of trade. The outcome is a ‘trade war of attrition’, in which each side’s objective is to increase the costs for the other one of retaining its position. If preservationist members can retain trade relations between them governed by WTO rules, they may be able to make the US’s normative isolationism a costly and ineffective policy and preserve the WTO regime.