Hegemonic Stability Theory

The introduction of the World Trade Organization (WTO) in 1995 was considered a historic milestone for the rules-based trade order instituted in the aftermath of World War II. In particular, the Dispute Settlement Mechanism (DSM), a rules-based dispute settlement system designed to ensure fair resolution of trade disputes among WTO members, was hailed as a "crown jewel" of the new system. Although not devoid of criticism, the two-tier system of the DSM had a relatively excellent start to life. Considered one of the most active international dispute mechanisms, especially since the turn of the millennium, the DSM has handled 621 disputes brought to the organisation, with over 350 rulings issued since its inception in 1995. However, the system's success has waned in recent years, effectively "grinding to a halt" with the U.S. spearheading its sabotage. Although the US was a major architect for its introduction in 1995, it opposed the appointment of new Appellate Body members, through successive US administrations and there are now no Appellate Body members since 2019. The demise of the Appellate Body created an impasse in the WTO that is yet to be resolved despite several efforts from WTO members. A primary criticism of the current system by the U.S. is that the Appellate Body has overstepped its limits and created new rules not envisaged by the WTO, an approach that the U.S. maintains does not support its interests. In this analysis, we argue that the proposed reforms to the WTO's DSM by the U.S. are self-serving, aligning with a consistent pattern of hegemonic powers shifting the goalposts and changing the rules when they face adverse consequences—the "bite"—of a regime they erstwhile championed.