The Economic System of the World Trade Organization - Case Study Example

DO WTO AND OECD HELP OR HINDER DEMOCRACY? By Student’s Name Code + Course Name Professor’s Name University Cite, State Date Do WTO and OECD Help or Hinder Democracy? The World Trade Organization (WTO) and the Organization for Economic Co-operation and Development are two essential international institutions, whose members are states. Both these two organizations are involved in issues that focus on the conduct and operations of international trade and different international economic systems.The World Trade Organization (WTO)founded in 1995, was brought in to replace the General Agreement on Trade and Tariffs which had been around since 1948. The World Trade Organization was formed to focus its operations and activities on different issues that pertained to the regulation and governance of international trading activities and trade negotiations. The organization currently has 159 member states across the entire globe. The World Trade Organization also has a number of other different functions and activities, of which the international trade and economic organization draws its basis upon. One of these functions includes; the facilitation of the administration of trade agreements and arrangements between and among different member states. The trade agreements and arrangements that the World Trade Organization facilitates and administrates range from multilateral trade agreements involving hundreds or tens of countries, as well as bilateral trade and economic agreements. The World Trade Organization also seeks to further the operations and activities of its predecessor organization, the General Agreement on Tariffs and Trade. Even though the World Trade Organization was formed to replace the General Agreement on Tariffs and Trade, some of the frameworks, activities and operations of the predecessor organization were to be incorporated into the new incoming organization (Atik, 2001). The World Trade Organization also avails the forum for different countries that are member states to negotiate in multilateral trade deals and agreements among themselves, in a bid to foster international rules and regulations governing international trade and economics.The World Trade Organization further seeks to eliminate all barriers and obstacles to international trade activities, since international trade is the biggest way of strengthening economic growth in the different member states of the trade organization. The organization further provides mechanisms and an international framework for the settlement of trade disputes emanating from both bilateral and multilateral trade activities and agreements. Finally, The World Trade Organizationalsowishesthatits entire member states benefit from the numerous advantages that smoother and regulated international trade activities brings along(Atik, 2001). The Organization for Economic Co-operation and Development was founded back in 1961 when 34 different countries came together to form an international organization that would provide stimulation for progress in the economic sector as well as in international trade. The Organization for Economic Co-operation and Development also espouses democratic principles, which are the rules that ought to govern all its operations and activities, as well as the decision making procedures within the international economic and trade organization. Just like the World Trade Organization, the Organization for Economic Co-operation and Development also had a predecessor organization, known as the Organisation for European Economic Co-operation (OEEC)which was founded in 1948. There are many different objectives that the Organization for Economic Co-operation and Development seeks to pursue in the interests of its different member states, chief of which is to facilitate and provide a forum whereby member states are able to negotiate and share ideas on different economic, environment and social matters as well (Alexiadou, 2013). The areas the Organization for Economic Co-operation and Development facilitates dialogue and negotiations in includes international investments, international trade activities, the setting up and running of multinational enterprises, international taxation cooperation and coordination among others.The Organization for Economic Co-operation and Development also provides statistical databases for the different aforesaid areas of interest that it covers. Being that most of the member countries of the Organization for Economic Co-operation and Development practice democratic systems of governance, it thus follows that this organization espouses many democratic tendencies and principles.The Organization for Economic Co-operation and Development has 34 member countries (Alemán, 2011). As to the question whether both the World Trade Organization and the Organization for Economic Co-operation and Development hinder or help democracy, both within themselves and in the territories of their different member states, the answer can be twofold. To begin with, both the Organization for Economic Co-operation and Development and the World Trade Organization help in the further development and strengthening of democratic ideals and principles among their different member states(Fukunaga, 2009). Through the different international trade and economic programs and initiatives that both the World Trade Organization and the Organization for Economic Co-operation and Development carry out in the territories of their member states, these two international trade and economic organizations are able to foster and encourage the practice of different democratic principles and ideals in the day to day governance operations of their signatory members. For instance, the Organization for Economic Co-operation and Development is involved in the coordination of both international as well as domestic democratic policies among member states, as well as the identification of ideal practices that its member states can practice(Schuster et al. 2013). The World Trade Organization, by requiring member states to implement accountability and open governance in the different multilateral and bilateral trade agreements, as well as providing dispute resolution mechanisms for trade and economic disputes among member states, manages to foster democratic practices among its members in a much profound manner. On the other hand, it can also be conversely argued that both the Organization for Economic Co-operation and Development as well as the World Trade Organization provide a number of hindrances to the practice of democracy in the different member states of the two international trade and economic organizations. Both of these two organizations, particularly the World Trade Organization havebeen accused of very undemocratic governance, decision making as well as operations and activities. It is further argued that the World Trade Organization normally deals with some countries and regimes thatstifle democratic practices and ideals through dictatorship, corruption and embezzlement of funds, such as most of its member states from the third world (Fukunaga, 2009). Such accusations would imply that whenever dealing with some regimes and member states, the World Trade Organization looks the other way and helps in the condoning of undemocratic, corrupt and dictatorial governments. This is a clear indication that the World Trade Organization sometimesacts in such a manner as to hinder the development and spread of democracy and its principles/ideals in the 159 member countries belonging to it. As such, both the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development and their different decisions, activities and operations can at times hinder democracy, while in other cases, especially in regard to the Organization for Economic Co-operation and Development, these organizations have the unique potential and capability of fostering and helping the growth of democratic principles and ideals in their member countries (Singh, 2008). Democratic Deficit Democratic deficit is a term that is used to imply the deficit that exists in institutions and organizations that are deemed to be sufficiently democratic in terms of their operations and activities. Democratic deficit concept focuses on governments and the different authorities deriving their power and control from states, nevertheless the concept has also been applied to different international institutions and organizations operating in different countries of the world. These international institutions and organizations include economic integrations and unions, such as the European Union, as well as supra national organizations that supersede state sovereignty in some issues such as the United Nations (Aman, 2004). The concept of democratic deficit further implies a situation where a supposedly democratic institution or organization, national, regional or global apparently lacks control of decision making processes and procedures, as well as the accountability that is synonymous with democratic institutions. Both the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD) are international institutions deemed to be democratic in nature, and in their different international operations and activities. Most of the member states of the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD) are governments that practice democratic systems of governance in their territories, and as such, these two international organizations are by association democratic (Aman, 2004). Case Studies Nevertheless, despite this democratic association, these two international trade organizations suffer from different levels of democracy deficit. In the case of the World Trade Organization, during the Uruguay Round Talks (1984-1994), the secretary-general of the General Agreement on Tariffs and Trade established a ‘green room’ where he would invite a few powerful states to deliberate on different trade issues, and these states would later report to the other member states. This was a huge sign of democracy deficit in the operations and decision making of the organization. Another case point regards the dispute settlement body of the World Trade Organization, whose legal costs are too expensive for many developing countries, thereby discouraging them from using the body. Most of the complaints filed at the body come from industrialized nations such as the United States, Japan and European Countries (Joseph, 2011). Another case point is the wide assertion that the World Trade Organization undermines the capacity of states to regulate matters of internal and domestic trade, proving that the organization indeed has democratic deficits. In the case of the Organization for Economic Co-operation and Development (OECD), the levels of democratic deficit are minimal since most of the member states are advanced democracies. However, due to varying power politics of some powerful members, the organization also experiences some levels of democratic deficit(Joseph, 2011). In conclusion, both the World Trade Organization (WTO) and the Organization for Economic Co-operation and Development (OECD) and their operations normally help while at the same time hindering democracy in the different territories of their member states. Varying degrees of democracy deficit is also witnessed in these two international trade organizations References List Alemán, J.2011. Cooperative Institutions and Inequality in the OECD: Bringing the Firm Back In.Social Science Quarterly (Wiley-Blackwell).vol. 92 no.3, p.830-849. Alexiadou, D.2013. In search of successful reform: the politics of opposition and consensus in OECD parliamentary democracies. West European Politics, vol. 36, no.4, p.704 Aman, A.2004. The Democracy Deficit: Taming Globalization through Law Reform. New York : New York University Press. Atik, J.2001. Global Trade Issues in the New Millennium: Democratizing the WTO. George Washington International Law Review. vol. 33, pp.451 Fukunaga, Y.2009. Discontinuity in the Internalization of the World Trade Organization Rules: Assessing the Democratic Deficit Critique against the World Trade Organization Dispute Settlement System. Alberta Law Review, vol. 46, pp.1039 Joseph, Sarah. 2011. Democratic Deficit and the WTO. In Joseph, Sarah, Blame it on the WTO? A Human Rights Critique. Oxford: Oxford University Press. Pillai, A.2011. Impact of Political Regime and Economic Openness on Income Inequality: A Tale of Low-Income and OECD Countries.IUP Journal of Financial Economics.vol. 9, no.4, p.60-75. Schuster, P. S, C. and Traub, S.2013. The retreat of the state from entrepreneurial activities: A convergence analysis for OECD countries, 1980–2007. European Journal of Political Economy. vol. 32, pp.95-112 Singh, R.2008. The World Trade Organization and Legitimacy: Evolving a Framework for Bridging the Democratic Deficit.Journal of World Trade vol. 42, no.2, p.347-365 West, J.2011. The OECD and Asia: Worlds Apart In Today's Globalization?Revista de Economía Mundial, no.28, p67-92 Read More