Thoughts on: World Trade Organization

ˈsaˌtīr/
Aug 26, 2017 · 7 min read

The WTO is a continuation of the General Agreement on Tariffs and Trade (GATT) which aims to promote the practice of free trade around the world. According to the WTO website it is ‘an organisation for liberating trade. It’s a forum for governments to negotiate trade agreements. It’s a place for them to settle trade disputes. It operates a system of trade rules. In essence WTO is a contractual body of rules agreed to by member nations and a judicial system to enforce and protect these rules and regulations.

Arguably, the World Trade Organisation helps member states in various ways and this enables them to reap benefits and helps promote peace within nations. Peace is partly an outcome of two of the most fundamental principle of the trading system, helping trade flow smoothly and providing countries with a constructive and fair outlet for dealing with disputes over trade issues. Peace creates international confidence and cooperation in which WTO creates and reinforces. Disputes are handled constructively, as trade expands in volume, in the numbers of products traded and in the number of countries and company trading, there is a greater chance that disputes will arise. The WTO helps resolve these disputes peacefully and constructively. Though, if this could be left to the member states, the dispute may lead to serious conflict, but lot of trade tension is reduced by organisations such as WTO.

In order to build real global security, we need international agreements that respect people’s rights to democracy and trade systems that promote global justice. WTO would like you to believe that creating a world of “free trade” will promote global understanding and peace. Yet, the domination of international trade by rich countries for the benefit of their individual interests fuels anger and resentment that make us less safe. The policies of the WTO impact all aspects of society and the planet, but it is not a democratic, transparent institution. WTO rules are written by and for corporations with inside access to the negotiations. For example, the US Trade Representative gets heavy input for negotiations from 17 “Industry Sector Advisory Committees.” Citizen input by consumer, environmental, human rights and labor organisations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret. Hence, this would lead to agitation, disharmony and corruption within nations.

WTO supposedly operates on a consensus basis, with equal decision-making power for all. In reality, many important decisions get made in a process whereby poor countries’ negotiators are not even invited to closed door meetings and then ‘agreements’ are announced that poor countries didn’t even know were being discussed. Many countries do not even have enough trade personnel to participate in all the negotiations or to even have a permanent representative at the WTO. This severely disadvantages poor countries from representing their interests. Likewise, many countries are too poor to defend themselves from WTO and challenges from the rich countries, They change their laws rather than pay for their own defense.

Regardless, the WTO system shields the government from narrow interest. Government is better placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy, the system encourages good governance. For this reason, the WTO rules discourage a range of unwise policies and the commitment made to liberalise a sector of trade becomes difficult to reverse. Under those circumstances, these rules reduce opportunities for corruption.

Additionally, WTO rules make life easier for all because it is based on rules rather than power. The WTO reduces some inequalities giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of the member states, making basic principles make life more efficient. The basic principles make the system economically more efficient and they cut costs. Many benefits of the trading system are as a result of essential principle at the heart of the WTO system and they make life simpler for the enterprises directly involved in international trade and for the producers of goods and services. With WTO lowered trade barriers, it increases imports and exports, earning the country foreign exchange thus raising the country’s income and gives consumer more choice and a broader range of qualities to choose from. Also with upward trend economic growth, jobs can be created and this can be enhanced by WTO through careful policy making and powers of freer trade leading to a fair promotion of human rights.

However, free trade is not working for the majority of the world. During the most recent period of rapid growth in global trade and investment (1960 to 1998), inequality worsened both internationally and within countries. In fact, the UN Development Program reports that the richest 20 percent of the world’s population consume 86 percent of the world’s resources while the poorest 80 percent consume just 14 percent. WTO rules have hastened these trends by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily exploited and environmental costs are low.

One of the most important debates in trade policy concerns the impact of trade liberalisation on the environment and, hence, on climate change. “Increased trade liberalisation, increased trade, increased production, increased energy use and climate change,” e.g. negotiations over the North American Free Trade Agreement (NAFTA) and the Uruguay round of the General Agreement on Tariffs and Trade (GATT)/ WTO, both of which emerged during a time of rising environmental awareness. Environmentalists argued that the creation of NAFTA would result in an environmental disaster for Mexico and pointed to the Maquiladora zone, where trade with the United States caused a concentration of industry that had detrimental effects on the local environment. Likewise, trade is related to numerous environmental problems.

The WTO is being used by corporations to dismantle hard-won local and national environmental protections, which are attacked as “barriers to trade.” For one thing, the very first WTO panel ruled that a provision of the US Clean Air Act, requiring both domestic and foreign producers alike to produce cleaner gasoline, was illegal. The WTO declared illegal a provision of the Endangered Species Act that requires shrimp sold in the US to be caught with an inexpensive device allowing endangered sea turtles to escape. WTO is attempting to deregulate industries including logging, fishing, water utilities, and energy distribution, which will lead to further exploitation of these natural resources.

In the light of agriculture, farmers produce enough food in the world to feed everyone, and yet because of corporate control of food distribution, as many as 800 million people worldwide suffer from chronic malnutrition. While according to the Universal Declaration of Human Rights, food is a human right. In developing countries, as many as four out of every five people make their living from the land. However, the leading principle in the WTO’s Agreement on Agriculture is that market forces should control agricultural policies rather than a national commitment to guarantee food security and maintain decent family farmer incomes. WTO policies have allowed dumping of heavily subsidised industrially produced food into poor countries, undermining local production and increasing hunger. Protectionism is expensive, it raises prices, as WTO reduces the cost of living, it lowers trade barriers through negotiation and applies the principle of non-discrimination. The result is reduced costs of production (because imports used in production are cheaper) and reduced prices of finished goods and services, and ultimately a lower cost of living.

The WTO has been accused of preventing countries from setting their own health standards, of dangerously eroding citizens’ interests in favour of commercial interests, and of being a veritable nightmare for certain sectors of humanity. These accusations usually end with a call to the WTO to recognise the primacy of human rights over international trade law. Such calls have not been heeded, and one might wonder whether they have even been heard. The WTO rules put the “rights” of corporations to profit over human and labor rights. The WTO encourages a ‘race to the bottom’ in wages by pitting workers against each other rather than promoting internationally recognised labor standards. The WTO has ruled that it is illegal for a government to ban a product based on the way it is produced, such as with child labor. It has also ruled that governments cannot take into account “non commercial values” such as human rights, or the behaviour of companies that do business with vicious dictatorships such as Burma when making purchasing decisions.

Ultimately, however much the WTO aims to increase the level of trade for all its members, there will be far more disadvantages than advantages for economies. Therefore, member countries need to re-examine their involvement within the WTO so that together we can build a more transparent political space that nurtures democratic global economy.

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ˈsaˌtīr/

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An Indonesian cynic attempting to outwit mediocre human beings. Beware, all views are personal. www.instagram.com/lzkafrawi

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