The World Trade Organization (WTO) was established to replace GATT (the General Agreement on Tariffs and Trade) and open up global trade.
The WTO is designed to enhance the original functions of GATT by overseeing the implementation of trade agreements, providing a forum for trade negotiations, giving technical assistance to developing nations, and settling trade disputes.
In the grand theater of global commerce, the World Trade Organization (WTO) stands at a crossroads, beckoning for a reinvention that echoes the pulse of the 21st century.
Picture a world where digital frontiers and e-commerce dance alongside traditional trade routes, and you'll glimpse the canvas upon which the WTO must paint its future.
To truly reinvent, the WTO must undergo a metamorphosis, shedding outdated structures and embracing a nimble, adaptive form that mirrors the warp and weft of our contemporary economic fabric.
At the heart of this transformation lies the imperative to recalibrate dispute resolution mechanisms, infusing them with newfound vigor and efficiency.
It's a call to arms for a more inclusive decision-making tableau, where the voices of both economic titans and emerging players harmonize to create a symphony. of global economic governance.
Yet, the reinvention goes beyond mere procedural changes.
It demands an honest reckoning with non-tariff barriers, regulatory nuances, and the complex interplay of sustainable development goals, urging the WTO to become a steward of a balanced, eco-conscious marketplace.
In the spirit of innovation, the reinvented WTO should not shy away from the digital frontier. It must become a vanguard for the brave new world of digital trade and innovation, navigating the delicate balance between fostering technological progress and safeguarding privacy and security.
A vision where the organization is not merely a bureaucratic entity but a crucible of ideas, a marketplace where the invisible hand of the market dances with the tangible needs of humanity.
Crucially, as we embark on this journey of reinvention, let the WTO emerge as a regulator of commerce. In a world where the health of nations is intertwined with economic prosperity, the WTO must be poised to navigate the storm, ensuring the seamless flow of essential goods in times of need.
Ultimately, the reinvention of the WTO is a narrative of adaptability, resilience, and collaborative imagination. It's a call for a new era of global economic governance, one where the organization stands not as a relic of the past but as a forward-thinking orchestrator, conducting the symphony of international trade in tune with the complexities and nuances of our interconnected world.
Criticisms of the WTO
Opponents of the WTO allege that the organization tends to benefit wealthy countries at the expense of developing countries. Professor Jagdish Bhagwati, for instance, claims that rich-country lobbies have used their economic strength to impose their own agendas on the trade agreements overseen by the WTO.
Although the WTO was designed with the intention of being democratic and increasing free trade for all nations, it has been ineffective in meeting these goals because of the severe inequalities that persist between nations. It is alleged that developing nations with small economies are vulnerable to being exploited by wealthy developed nations.
Some take a more critical tone regarding problems caused by multinational corporations using less developed countries as a source of cheap labor. Comparing the so-called free trade practices of today's developed nations with the colonial exploitation of the past, George P.
Brockway described the WTO as neo-imperialist.
Others note that the WTO has failed to meet standards for protecting health and safety, the environment, and democratic rights. They argue that, contrary to the argument made by the WTO's defenders, the organization has failed.
Developed nations have simply manipulated international trade to their own benefit, which has resulted in making things worse, not better, for the developing nations.
Some even claim that the WTO is actually harmful to both developed nations and developing ones. Multinational corporations have used the opening of trade in order to hire more labor in developing nations, where labor costs are lower as well as where regulations pertaining to the environment and worker health are more lax.
Brockway also refers to this problem and notes that it results in millions of jobs being taken away from employees in developed nations. Brockway warns that this practice might eventually have dire consequences for the developed nations that engage in it.
Should the WTO be abolished?
The more extreme anti-WTO activists have argued that the problems of the organization cannot be fixed. They have presented three basic arguments as to why the WTO should be eliminated.
First, the WTO places commercial interests above all other values (such as human rights and the environment); second, the WTO does not allow individual governments to decide how to handle their own economies; third, the WTO focuses on global trade at the expense of local policies for economic development.
They assert that the WTO intrudes on national sovereignty, is undemocratic in nature, and lacks transparency. Therefore, the WTO is beyond salvation and needs to be replaced with an alternative system that pays greater attention to democracy, diversity, human rights, and the environment.
In a rebuttal, it can be asked: Why go through all the trouble of tearing down the existing system and then building a new one from scratch? It makes much more sense to take the existing structure and find ways to rectify it. In addition, there is no guarantee that creating an alternative system would fix the current problems.
The infamous George Soros, for example, takes the position that the WTO should be reformed rather than abolished. He points out that there is a need for the WTO, or an organization that is exactly like it. He then argues, that the entire world benefits from free trade, but free trade inevitably leads to the kinds of disputes that the WTO was designed to handle. Ultimately, Soros acknowledges that there have been problems with how the WTO has been put to use.
Understandably, arguments have also been made by the WTO in its own defense. They claim, that the organization promotes peace, helps smaller countries with their development goals, contributes to economic growth, and helps protect vulnerable governments from the pressure of interest groups. Others, outside the WTO, have also defended the organization.
Like Soros, they recognize that there are problems with the WTO as it currently exists. And, like Soros, they also believe that the organization serves a vital purpose. Instead, they argue that the WTO should not be dismantled; rather, it should be maintained and strengthened. Bhagwati, for example, argues for the preservation of the WTO and claims that its detractors have based their views on fallacies.
One such fallacy is that the WTO is useless because it is focused on trade, and trade alone is not enough to bring about national development. As Bhagwati points out, although there is truth to this view, it does not follow that freeing trade is no better than not freeing it.
Bhagwati argues further that instead of eliminating the organization, the director general of the WTO should be given the resources needed to do the job.
Conclusion
The WTO should not be abolished. It would be more sensible to fix the existing system. Because of the importance of global trade in the world today, there is a need for a system to settle trade disputes when they arise. Increased participation will be possible if the operations of the WTO are made more transparent and open. With more opportunities for participation, the WTO can become a fair and equal system, satisfactory to all parties in the global economy.
*The writer currently serves as a senior consultant at Global Asia Consulting (GAC) and has a background as a senior researcher at the Malaysian Institute of Economic Research. The viewpoints articulated are solely those of the author.