When people talk about the WTO they often mean one of three different things:
- The WTO as institution. So this refers to the way the WTO is structured – its voting process, dispute settlement procedures etc.
- The philosophy the WTO promulgates and stands for: promotion of trade and free trade in particular and thus for globalization of a kind (though this kind of question requires a much more detailed answer see elsewhere on this site in particular Criticisms of the WTO page)
- The Multilateral Trade Agreements: GATT, GATS, TRIPS etc, that are agreed to by members of WTO
Of course there is overlap between these three areas but they do provide a very useful division and I will structure my conclusions around it.
The WTO as Institution
The WTO is democratically and fairly structured and provides a good framework for the regulation of international trade. That said there are many imbalances of power and resources between different members within WTO (e.g. very crudely: the US has 500 negotiators, Burkina Faso has 1). However this is a reflection of an imbalance between countries in the world in general and does not derive from any bias of the WTO. Moreover there is substantial evidence that WTO ‘rules-based’ system does lead to a more transparent situation that protects weaker countries from being exploited by the stronger. This is not to say that there is not more to be done in making the informal workings of the WTO (e.g. the green-room system) are conducted more transparently and with greater fairness. However the informal nature of these areas not only make this difficult but suggest this may relate more to power imbalances external to the WTO. Nevertheless one major recommendation is that all WTO documents be automatically derestricted immediately with only special exceptions.In conclusion I quote the following from the Select Committee on International Development’s report (Exec Summary 2.iv): ‘The WTO as a rule-based system is the best and fairest process for trade liberalisation, ensuring the voices of developing countries are heard.’
(More discussion of this whole issue can be found on the Criticism of WTO Practices and Structures page)
The WTO’s Philosophy
The WTO’s core philosophy centres on promoting free and equal trade through trade liberalazition. As the extensive sections on this issue elsewhere on the website make clear this is a complicated area but one in which the consensus of informed economic opinion is that free trade is beneficial to economic growth (conceived in its widest terms). It should be emphasized that growth without pro-poor policies may not lead to many benefits for the poor but this is a domestic issue for the countries concered and is something about which the WTO can do little directly (nevertheless it is an issue that concerns the WTO).
The WTO’s Multilateral Agreements
As a reader of the Introduction on the Multilateral Agreements page will know, one’s perspective on this issue is greatly determined by how one regards the WTO’s philosophy. Essentially the evaluation boils down to setting the Economic Benefits to be derived from promoting trade and some kinds of liberalization against the losses suffered from the concominant diminution of sovereignty (in that the country is now constrained in terms of policies it can pursue and laws it can have by the Agreements). It is my opinion that in general there is a net benefit. This is not to say that there do not exist many areas in which there could be improvement. One very obvious one is trade issues relating to the environment. Another is clarification of the scope of GATS. Another is more active attention to the needs of developing countries. Another, and perhaps the most important, is the reduction of protectionism by the developed countries (particulary the US, EU and Japan) in the areas of agricultue and textiles. However as has been emphasized so often, the flaws that exist are a reflection less of problems with the WTO as of the behaviour of the members that make it up, particularly the most powerful – the EU bloc, the US, Japan etc1. In a world where the most developed countries are not willing to contribute the minimal 0.7% of GDP on official development assistance mandated at Rio in 1992.2 it is not surprising that the WTO does not see more altruistic behaviour by its richer members. Despite the failures nevertheless the WTO has seen some significant progress on these issues and more importantly provides the best hope of seeing further improvements.
Last Updated: 2003-03-24
For example the slow progress on removing major protectionist barriers in the realm of agriculture is due to strong and sustained opposition from the US, Japan and especially the EU. This itself is due to the strong political clout of farming lobbies in the developed countries (consider e.g. France). ↩
Rio 1992 Agenda 21 among other things put forward a target of 0.7% of GDP for ODA (Official Development Assistance) for rich countries (e.g. OECD). Almost all rich countries (with the exception of Denmark, Sweden, Norway, the Netherlands and Luxembourg) have failed to meet that target, often woefully so (e.g. US = 0.11% in 2001). See [oecd_2000] and [oecd_2001] on the documents page. ↩