- 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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