Evaluation of the WTO


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  • Created by: Ben
  • Created on: 18-05-10 15:57


  • Set up as GATT (General Agreement on Trade Tariffs)
  • Promotes free trade and multilateral negotiation.
  • Every state must reduce trade barriers to those of their "best" trading partner.
  • One country = one vote.
  • Started by trying to reduce tariffs on manufactured goods.
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Successes of the WTO

  • Promotes trade/ free trade.
  • Has increased global wealth, e.g. during Uruguay round the world became $100m richer.
  • Has made China more open.
  • Allowed LEDCs to play a more assertive role (esp. in Doha round).
  • Succeeded in keeping protectionism low during the recession.
  • Has solved trade disputes, e.g. US-EU Steel and GM foods trade wars.
  • Arguably more powerful that the UN
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Failures of the WTO

  • Huge anti globalisation protests causing Seattle round to be abandoned.
  • LEDCs unfairly treated.
  • Only rich states benefit.
  • US, Germany, France, Japan and UK get 100 times more trade than their poor counterparts.
  • Khor argues that WTO does not run economy impartially, with a "systematic bias" towards EDCs and MNCs.
  • Inefficient decision-making.
  • EDCs have kept the most agricultural subsidies.
  • Bilateral trade agreements continue, e.g. between India and Canada
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The WTO has increased in power

  • Increase in member countries.

  • Instigated political change in countries seeking membership, for example China had to increase transparency.
  • Unlike GATT, WTO can intervene in issues of services and intellectual property (first discussed in Uruguay round).
  • Marrakech Agreement gave WTO powers of dispute settlement.
  • Efficient system of mediation, for example ruling against China in a dispute over American media being routed through state-owned companies.
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The WTO has not increased in power

  • Unpopular: violent anti-globalisation protests in Seattle.

  • Illegitimacy of the WTO's and its Capitalist foundations?
  • Failure of the Doha round due to 1) More assertive LEDCs (walking out of Cancun meeting) and 2) US and EU refusing to compromise with LEDCs over subsidies.
  • 1998 proposed Multilateral Agreement on Investment would have allowed corporations to remove laws that interfere with their profit – widely criticised.
  • Regional Free Trade areas, e.g. NAFTA, ASEAN, Mercosur have bypassed multi-lateral system of WTO.
  • Bilateral trade between Canada and India is expected to increase up to 3 times in next 5 years.
  • Global recession has made countries less willing to agree.
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