What is the WTO? Is it a tool of the rich and powerful Western countries and Japan? Are corporate lobby groups the big winners while the poor the big losers?

Essay , 2005 , 12 Seiten , Note: High Distinction

VWL - Internationale Wirtschaftsbeziehungen

Trade is as old as mankind and with mankind it developed and kept growing into a
jungle of arrangements, contracts, and trade relations summarised by the catch phrase
globalisation. Everyone agrees that there have to be rules to form a common
foundation for international trade around the world, so that all countries which use it
as ‘an instrument for promoting development’1 will profit from its many benefits.
The World Trade Organisation (WTO) is the nations’ solution to the problem of
ensuring free and fair trade in the interest of economic development of the world as a
whole. Keeping this in mind, one might wonder why since 1999 a movement called antiglobalisation
wins more and more followers seeing the WTO as their declared
enemy2. Calls for an abolishment of the system grow louder and louder and the
dissatisfaction amongst the more than two thirds of developing member countries
shows in the debacle of Seattle where African ministers simply walked out or the
collapse of trade talks in Cancun. Has the WTO really developed into a mere tool of the rich and powerful Western
countries and Japan and are corporate lobby groups the big winners, while the poor
the big losers? This question forms the centre of the following explanations, which
shortly outline the original idea behind the WTO, then concentrate on the problems
of implementing this idea, and finally answer the question in a conclusion. Due to the
limitations of this essay it is not possible to cover everything associated with the
WTO. The texts indicated as footnotes should be considered for further exploration.
1 Nitya Nanda, WTO and Development, It’s all about a mercantilist game. From: http://www.gdnet.org/ 2 See The Guardian/Action Aid, TRADE: An insight into the way the world does business, 8 September 2003; p. 3.

Table of content

1. Introduction

2. A critical view of the WTO

3. The cases of agriculture and intellectual property rights

4. Conclusion

1. Introduction

Trade is as old as mankind and with mankind it developed and kept growing into a jungle of arrangements, contracts, and trade relations summarised by the catch phrase globalisation. Everyone agrees that there have to be rules to form a common foundation for international trade around the world, so that all countries which use it as ‘an instrument for promoting development’^[1] will profit from its many benefits. The World Trade Organisation (WTO) is the nations’ solution to the problem of ensuring free and fair trade in the interest of economic development of the world as a whole.

Keeping this in mind, one might wonder why since 1999 a movement called anti-globalisation wins more and more followers seeing the WTO as their declared enemy^[2]. Calls for an abolishment of the system grow louder and louder and the dissatisfaction amongst the more than two thirds of developing member countries shows in the debacle of Seattle where African ministers simply walked out or the collapse of trade talks in Cancun.

Has the WTO really developed into a mere tool of the rich and powerful Western countries and Japan and are corporate lobby groups the big winners, while the poor the big losers? This question forms the centre of the following explanations, which shortly outline the original idea behind the WTO, then concentrate on the problems of implementing this idea, and finally answer the question in a conclusion. Due to the limitations of this essay it is not possible to cover everything associated with the WTO. The texts indicated as footnotes should be considered for further exploration.

2. A critical view of the WTO

The WTO is better described as a platform for members to negotiate trade agreements than as an organisation. The aim of these agreements is to reduce obstacles to trade, as long as there are no negative side effects^[3], and to promote trade without discrimination, which means that no member of the WTO can be favoured over others. To form these agreements every country has one voice and a decision is made if all members consent^[4]. Underlying this system is the principle of comparative advantage: to enhance total economic welfare countries should specialize in what they can do best according to their resources and then trade it for what other countries can produce best^[5].

What gives rise to criticism is not the idea behind the system, but how it is implemented. The accusation is that the economically most powerful countries use the WTO to take advantage of developing countries by forcing them, in the name of free trade, to consent to agreements that benefit almost exclusively the industrial countries. They themselves break these agreements whenever they feel the need, not caring about free trade anymore.

On the one hand the possibility to do so opens up through the organization of the WTO’s decision making process. As already stated, the way of making a decision is that of consensus, which in itself is more than democratic because even a majority vote is not enough to confirm an agreement^[6]. However, one problem is that a lot of developing countries do not have funds to support enough personnel to take part in all the meetings^[7]. Another problem is that developed countries undermine the democratic system of the WTO by using ‘divide-and-rule tactics’^[8]: poor countries are isolated and threats such as shortening development aid or promises such as debt remittance are used to achieve an agreement.

[...]

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^[1] Nitya Nanda, WTO and Development, It’s all about a mercantilist game.

From: http://www.gdnet.org/

^[2] See The Guardian/Action Aid, TRADE: An insight into the way the world does business,

8 September 2003; p. 3.

^[3] Nitya Nanda, WTO and Development, It’s all about a mercantilist game.

From: http://www.gdnet.org/

^[4] See World Trade Organisation, Understanding the WTO, 3rd edition, September 2003; p. 9ff.

From: http://www.wto.org/

^[5] See Kenwood, A. G. and A. L. Lougheed, The Growth of the International Economy 1820-2000,

4th Edition, 1999; p. 62.

^[6] See The Guardian/Action Aid, TRADE: An insight into the way the world does business,

8 September 2003; p. 10.

^[7] See Global Exchange, Top Reasons to Oppose the WTO. From: http://www.globalexchange.org/

^[8] Bello, Walden and Aileen Kwa, G20 leaders succumb to divide-and-rule tactics, 10 August 2004.

From: http://www.globalexchange.org

• Hochschule: University of New England (Australia)
• Note: High Distinction
• Autor: Tanja Hollederer (Autor:in)
• Erscheinungsjahr: 2005
• Seiten: 12
• Katalognummer: V44216
• ISBN (eBook): 9783638418621
• Sprache: Englisch
• Schlagworte: What, Western, Japan