Everything you need to know about the World Trade Organization
Proponents call the World Trade Organization the solution to global poverty and the key to Third World development. Detractors say it’s an enemy of democracy and a corporate tool. Heated rhetoric aside, there’s little doubt that in the decade since it was founded, the WTO has had a greater impact on the global economy than any other institution. Besides knowing that activists broke windows and got tear-gassed in Seattle protesting against it in 1999, however, most people don’t really know what the WTO is or why it’s so important to so many. As the world’s trade ministers prepare for the next WTO meeting in Hong Kong December 13 to 18, we present a field guide to the global trading system, the issues that will be on the agenda, and the players who are wrangling over the future of the global economy. — The Editors
Nonagricultural market access, bilateral free-trade agreements, tariff-reduction coefficients, sensitive products and special safeguard mechanisms, negotiating modalities, non-tariff barriers . . .
Is your head spinning yet? Don’t feel bad. World Trade Organization rules and regulations are not meant for the average citizen. They’re written by and for lawyers, economists, academics, businesspeople, and government officials fluent in an arcane language that makes everyone else’s eyes glaze over. Hidden behind all the jargon is a host of powerful players who make decisions that affect families, communities, the environment, and basic human rights around the globe.
The WTO was established in 1995 to succeed the General Agreement on Tariffs and Trade (GATT), a multilateral body conceived in 1944, along with the World Bank and the International Monetary Fund, at the Bretton Woods summit on rebuilding the global economy after World War II. While GATT encouraged voluntary agreements between countries to reduce import duties and increase trade, the WTO empowered its 148 member states to create a set of global trade rules negotiated during regular rounds of closed-door negotiations and enforceable through economic sanctions.
Proponents of the WTO say that free trade promotes peace through economic integration and interdependence. It makes life easier for companies doing business internationally by cutting bureaucratic red tape and “harmonizing” regulations between countries. It supports developing economies by encouraging poor countries to focus on what they do best and develop a “comparative advantage” in the global marketplace. To bolster its case, the WTO Web site says, “Economists estimate that cutting trade barriers in agriculture, manufacturing, and services by one-third would boost the world economy by $613 billion — equivalent to adding an economy the size of Canada.”
In a recent speech, Pascal Lamy, the WTO’s director-general, described the goal of the current round of negotiations (known as the “Doha Development Round” because they began at the 2001 ministerial in Doha, Qatar) as ensuring “that trade opening continues to contribute to development and that we place the interests of developing countries at the center of the world trading system.” The Doha Round, scheduled to conclude in Hong Kong in mid-December, has involved talks on agriculture, industrial tariffs, services, and intellectual property rights.
The problem, writes Kristin Dawkins, vice president of the Institute for Agriculture and Trade Policy, is that the WTO has created a legal environment in which trade trumps everything else. For instance, the United Nations’ high commissioner for human rights has warned of “apparent conflicts” between WTO rules and the access to food, health, self-determination, water, and numerous other rights enshrined in many international agreements. And because such treaties lack the powerful economic enforcement tools of the WTO, trade has become de facto the most important value in international law.
Internally, if a dispute arises between two member countries — such as when the United States filed a complaint about the European Union’s ban on genetically modified food imports — a closed-door panel of anonymous trade judges hears the case, invariably ruling in favor of those on the side of freer trade. In dozens of cases, WTO judges have demanded that countries strike down national and local laws on public health, the environment, and workers’ rights, calling them illegal trade barriers.
A cadre of think tanks and activist groups (known as nongovernmental organizations, or NGOs) has emerged in the past decade to lobby the WTO and organize public opposition to its policies. Some, like Oxfam, believe the organization has real potential to make trade fair. Others, including the Our World Is Not For Sale network (OWINFS), say the WTO is beyond repair and should “shrink or sink.”
Since the Seattle protests in 1999, the WTO has become progressively less open and democratic, says Anuradha Mittal, executive director of the Oakland Institute, a human rights policy think tank and OWINFS member. The 2001 and 2003 ministerial conferences (a ministerial is a summit of government ministers) were held in Qatar and CancŔn, respectively, to isolate delegates from protesters. Recently, WTO leaders have been moving most of their decisions to regional mini-ministerials and General Council meetings at the Geneva headquarters.
At press time, delegates were gathered in Geneva, attempting furiously to negotiate a series of accords before December. According to Mittal, it was unclear whether there would be sufficient agreement to pass a ministerial declaration closing the Doha Round. “Most likely,” she predicts, “there will be a weak agreement to keep talking.”
WTO Resources
For news and further reading
Web Sites
- World Trade Organization: The official Web site, which contains a wealth of useful information about the global trade regime, including texts of negotiating documents, press releases, and statistics. www.wto.org
- Office of the U.S. Trade Representative: Features regular statements on Bush administration positions on trade negotiations. www.ustr.gov
- Hong Kong People’s Alliance on WTO: The main organizers of this year’s protests. daga.dhs.org/hkpa
- Our World Is Not For Sale: A coalition of civil society groups calling to “shrink or sink” the WTO. www.ourworldisnotforsale.org
- Oxfam’s Make Trade Fair campaign: www.maketradefair.com
- The Institute for Agriculture and Trade Policy’s Trade Observatory: Contains hundreds of policy papers, as well as breaking news on trade issues. www.tradeobservatory.org
- Independent Media Center: Founded for the Seattle WTO meeting, a dynamic network of activist news sites with breaking reports on protests everywhere. www.indymedia.org
Books
- Alternatives to Economic Globalization: A Better World Is Possible, edited by John Cavanagh and Jerry Mander (Berrett-Koehler, second edition, 2004)
- Whose Trade Organization? A Comprehensive Guide to the WTO, by Lori Wallach and Patrick Woodall (The New Press, second edition, 2004)
- Manifesto for a New World Order, by George Monbiot (The New Press, 2004)
