Reform of WTO - Essay Example

Reform of WTO Various meetings and discussions were held to determine whether globalization is good for the economy and how the role of WTO can be made effective. Without a global authority, it is impossible to set minimum standards on issues like child labor, worker safety, the right to form a union and environmental and animal welfare protection1. Benefits of free trade The issue of free trade remains unresolved. According to Karl Marx, WTO has resolved the personal worth into exchange value2. Opinions are divided on the economic benefits of a global free market. The standard economic model suggest that no one’s welfare can be improved without reducing the welfare of at least one other person3. A corporation that pollutes a river into which it discharges wastes will be made to clean it up and to compensate those who have been harmed. Thus, the cost of keeping the environment clean becomes a part of the production cost. This can be enforced when there is a global authority to regulate pollution. Without global environment protection welfare cannot be maximized. Unconstrained globalization is likely to lead to economic efficiencies4. The ruling elite have to care about the overall welfare otherwise they will out-compete countries that provide minimal conditions for their workers. According to Herman Daly when world production shifts to countries that do the poorest jobs, it reduces the efficiency of global production5. The fear is that rich countries would use high standards to keep goods out of the poor countries. Instituting global standards is the only way to prevent an equally inhuman form of uncontrolled global capital6. So far, WTO has adopted by neoliberal economic thinking7. After the November 2001 meeting, it appears that WTO could think in terms of replacing its commitment to free trade by a commitment to more fundamental goals. WTO could then be globally used as a tool for pursuing these objectives. If WTO could seriously acts upon Article XXXVI (3) of GATT, then WTO could be used as a platform to promote minimum standards environmental protection, workers’ safety, union rights and animal welfare8. Trade and politics nexus Trade and politics should be independent of each other. Governments may trade with other countries even while disapproving of their regimes. The US has attacked China for its human rights record while it expanded its trade with China9. At times though, many trade deals are done with the governments. Transnational corporations arrange with governments for oil exploration, to cut timer and to fish. They thus accept the government’s rights to sell the resources that lie within its border. What gives the government the moral right to sell the resources of the country over which it rules? Borrowing rights International borrowing privileges also need urgent attention. Corrupt dictators borrow money from foreign lending institutions and if they are overthrown, the successor is obliged to repay the loan10. Its refusal to pay will lead to serious consequences. Being a part of the legitimate government gives it the right to trade in the country’s resources. Doubts on the Legitimacy of a government Much debate has taken place over the issue of legitimacy of a government. Once a government is recognized as legitimate, this legitimacy gives it the right to trade in the country’s resources. The standard view suggests that the recognition of a government as legitimate has nothing to do with how the government came to power or how it works. What matters is whether it is in effective control of the territory. International bodies including the United Nations and the WTO agree that ‘…a government is recognized because its existence is a fact of life’11. The Jefforsonian principle implies that if a government had come to power by force of arms or dismissed democratically the elected rulers, such governments would not be considered as legitimate12. The will of the people has to be proved or represented because it is a fundamental human right to take part in deciding who governs us. A democratic government is expected to have more concern for the people over whom it rules than those who are nor answerable to the electorate. In international law, this view has been gathering support in recent years13. Alternative views have come up and if all such views were given importance, an entirely new concept of a legitimate government would arise with far reaching consequences not just in trade but in other sectors also. Democracy Democracy is another issue of concern. Various Summits and meetings emerge with diverse opinions. The deliberations between 34 American leaders implied that democracy takes precedence over free trade14. These leaders envisioned a kind of club of democratic nations who trade with each other, assist each other, but deny these benefits to those democracies that fall into the hands of the dictators. WTO, on the other hand, does not allow its members to refuse free trade with others because they are undemocratic. The EU is a free trade zone and inducts members who have a democratic form of government and basic human rights guarantees. In other words, they put democracy and human rights above free trade. In Africa too, there has been an increasing acceptance of the monitoring of elections by international observers. Democracy is seen as a great value to be promoted through international collaboration15. A trade pact between democracies would promote the value of democracy. Similarly, blacklisting illegitimate governments also could help promote the value of democracy. It is not a coincidence that Nigeria has one of the world’s highest levels of corruption and enormous revenue from sale of oil16. Wealth becomes a temptation to overthrow civilian governments and pocket the wealth. If overthrowing governments did not fetch the control of oil revenues, then legitimacy and democracy would hold value. Obtaining power by illegitimate means would become unattractive when trade is linked to it and the prospects of such governments staying in power would greatly reduce. Hence, linking trade pacts with legitimacy of the ruling government and democracy would help WTO to realize its vision of global prosperity and development of the poor. Read More