World Trade Organisation (WTO)

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  • Aims
    • WTO
      • Successes
        • By discouraging tariffs and subsidies, the WTO has helped to dramatically expand global trade. This has created global prosperity and helped to reduce global poverty.
        • WTO has resolved many trade disputes between its members so encouraging a 'rules-based' approach to global conflict.
        • Despite the 2008 economic crash, WTO members didn't resort to tariff protectionism, which would have expanded the recession and encouraged dangerous resentment between states.
        • According to the democratic peace thesis, by encouraging free trade, WTO reduces risk of conflict.
        • Considered to be a more democratic institution than its fellow Bretton Woods institutions. Decisions are made by simple majorities and 2/3 of members are developing states. Rules were written by its member states, many of which are democracies and member states elect its leadership. Consequently developing states are more influential than in the IMF and World Bank.
      • Criticisms
        • It's solely concerned with expanding global trade. It doesn't address related problems like the impact on workers' rights, child labour, environmental degradation or sustainability. Many of its meetings have been targeted by violent anti-capitalist protestors like those in Seattle in 1999 and Cancun in 2003.
        • Powerful lobbying groups from the developed world exert too much influence at WTO headquarters in Geneva.
        • By encouraging developing countries to open up their markets to foreign competition, WTO is undermining their potential for growth. The Doha Trade Round (2001-) has been so ineffective because developing countries haven't been prepared to open their markets to cheaply produced agricultural produce from the developed world.
        • Too powerful - it can compel sovereign states to change laws and regulations by declaring them to be in violation of free-trade rules.
        • Despite WTO, more developed countries haven't fully opened their markets to products from less developed countries. E.g. the US + EU have been unwilling to abandon protection of their agricultural and textile industries, which had disadvantaged countries like China and India (who produce large amounts of these goods at lower prices than US and EU producers).
        • Although the organisation is internally democratic, it lacks external accountability. Its hearings on trade disputes are closed to the public and media. Leads to suspicions that judgements aren't based on impartial interpretation of the rules but on the basis of quid pro quos and compromises.
        • Decision-making is dominated by the US and EU. Through their membership of the Quad, they set the agenda on Single Undertakings, which have to be accepted or rejected in full. Therefore problems of developing countries aren't being given significant weight.
    • To expand global trade by encouraging its member states to reduce tariffs and subsidies.
    • It also negotiates trade disputes between countries.


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