Sunday, May 16, 2004

Why The WTO Should Be Supported

There are few institutions that have been more maligned than the World Trade Organization. The WTO is commonly viewed by the Left, as well as the isolationists on the Right, as an institution that puts profit ahead of the needs of the poor and the environment, all while facilitating the dominance of multinational corporations at the expense of American workers. Virtually any instance in which trade, environmental degradation, and poverty coexist is seen as proof that the WTO (and “free-trade” more generally) is driving global inequity and harming workers. Unfortunately, there are few misperceptions that are more damaging to global progress or farther from the truth. Let me preface my arguments by saying that there are legitimate grievances with the WTO, particularly its lack of complete transparency, and there are vast inequities, which can and should be ameliorated, between the resources and expertise that developed and developing countries bring to the negotiating table. However, overall the WTO is largely a force for global good and here’s why:

1) Contrary to popular belief, the WTO is one of the most democratic international institutions in the world. Each country has one vote and unlike the UN, where a select powerful few have veto power, no such concentration of power exists in the WTO.

2) Also contrary to popular belief, the majority of WTO rulings have not pitted the interests of rich countries over poorer countries. In fact, the majority of WTO cases brought before the judicial body have been between poorer nations. In addition, last year’s rulings against U.S. steel tariffs and the recent ruling against U.S. cotton subsidies makes the WTO one of the only organizations that takes on the world’s most powerful countries and wins.

3) Regarding the recent ruling against U.S. cotton subsidies, the WTO has made a historic step towards the eventual elimination of all agricultural subsidies, which are some of the world’s most environmentally destructive, trade distorting, and unfair to the poor. Environmentalists and labor activist should be celebrating in the streets. (As an added note, the EU announced on 5/10/04 that it was willing to dismantle its agricultural export subsidies if other developed nations did the same in order to revive the latest round of global trade talks- I doubt it is a coincidence that this declaration follows so closely on the heels of the ruling against U.S. cotton subsidies)

4) The WTO is one of the few international bodies with real enforcement power that can back up its rulings. When the Bush administration contemplated maintaining the steel tariffs, despite the WTO’s ruling that they were in fact illegal, it was the targeted retaliations by the EU sanctioned by the WTO that were largely responsible for our ultimate compliance.

5) Membership in the WTO is entirely voluntary and although some may argue that opting out of the international trading system isn’t really an option for nations in our modern inter-connected world, this is exactly the point. Since international trade is essential for a nation’s economic growth and prosperity it is far better to be part of an enforceable system with uniform rules than one in which countries find themselves at the mercy of arbitrary and variable trade protectionism that makes for a highly unpredictable and inefficient economic environment.

6) Although there are many legitimate labor rights and environmental issues that the world community currently faces, these will not be helped by moving away from multilateralism, but by further embracing and expanding it. The WTO has established a strong institutional foundation with which to begin to address these larger issues; even if in many cases they are not directly linked to increased global trade (more on this in a later piece).



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