A World Trading System for the Twenty-First Century

I explore whether the world trading system of the twentieth century can be adapted to address the challenges of the twenty-first. I first develop an understanding of how GATT functioned during the twentieth century, and which features of the economic environment were most important in determining its success. I then examine a list of changes in the global economy that are sometimes identified as warranting changes in the design of the GATT/WTO. I argue that the "terms-of-trade" theory of trade agreements provides a compelling framework for understanding the impact of GATT in the twentieth century, and I show that when viewed through this lens, the rationale for GATT’s design features transcend many, though not all, of the current challenges facing the WTO.