The Role of the WTO in Contemporary International Relations - Essay Example

The role of the WTO in contemporary international relations As the result of the new international system that appeared after the end of World War II, the world has become interdependent. In particular, international governmental organization form these specific political and economic peculiarities of contemporary world system. In case of the WTO (or World Trade Organization), the way richer countries influence poor developing countries is more visible than ever before. In addition, the new concepts of liberalization and multilateralism have started to define the agenda of the global trade. In this context, starting with the establishment of the GATT (General Agreement on Tariffs and Trade), the world realized that the reduction of barriers and uniting on economical means leads to stability in the global perspective. As the illustration of this idea the WTO appeared. However, in most of cases it becomes more and more evident that written in agreements proclaims not always work in the reality. In this situation, on the current level of global development international governmental organizations in general and the WTO in particular meet numerous complications that distract them from its primary goals. In a given essay, the weakness of the WTO is represented in international context because of its historical roots, organizational structure, and policies provided in favor to certain national governments in making the final decisions. To start with, the WTO organization has a long history and its appearance did not change radically all the previous mistakes. At first, the WTO appeared to support the post-war international system in economical dimension. As Sek (2003) defines the historical background of the organization, “the United States and several other developed countries, sought to establish an open and nondiscriminatory trading system with the goal of raising the economic well-being of all countries” (p. 1). In other words, the reason of the WTO creation has rather idealistic than rational purpose for several scholars. However, the real background of contemporary appearance of the WTO is based on the GATT establishment not the ITO (International Trade Organization) just because USA approved the first project nor the latter one (Sek, 2003, p. 1). Therefore, the WTO is the logical outcome of the consensus concerning the future of the international relations. In practice, the GATT played its role as it had succeeded in establishing both certain border measures and the internal policies on trade of good (Sek, 2003, p. 6). Among the chief proposals of the GATT, there is the purpose to eliminate trade barriers that served as the base for all negotiations concerning the reduction of tariffs and other changes created by the GATT rules (Sek, 2003, p. 2). In addition, the GATT system firstly introduced antidumping national policies for all its members; however, it failed because there did not exist any structural pressure on member governments (Bown, 2007, p. 7). Nevertheless, the whole activity of the GATT is long and productive. As the result of this agreement, the Uruguay Round appeared in 1995 and created the WTO as the new institutional trade international system (Sek, 2003, p. 2). Within the WTO, this change is considered as “the most dramatic advance in multilateralism since the inspired period of institution building of the late 1940s” (Sucherland et al., 2004, p. 9). However, the role of the GATT in creating prosperous international economy is doubtful. As Rose (2002) defined it, this agreement itself had no much of an effect on trade as potentially the WTO currently has; in this context, “members of the WTO use a more wide-reaching permanent framework to resolve disputes about trade in goods, services, and intellectual property (p. 21). Moreover, the WTO is also more effective in detailed regulation of labor, ecology, protection of food and other process- and product-related industries (Draper and Sally, 2006, p. 66). Therefore, the very appearance of the WTO was the logic outcome of unfinished agreements under the GATT; however, it served as the institutionalization of all the advantages and weaknesses of the previous system with no corrections but only supplementations. Furthermore, the internal structure of the organization represents its inability to handle with the whole scope of contemporary international economy. In fact, the WTO holds 95% of international trade (Sek, 2003, p. 2); however, this proof of importance in global context is incomplete without understanding of fast changes in international economic processes. For instance, Rose highlights that the total trade in the new millennium is 22-times greater than it was at the beginning of the GATT system establishment (Rose, 2002, p. 2). In addition, the number of members increased from 23 GATT mostly developing countries to nearly 150 WTO members by 2004 (Sucherland et al., 2004, p. 9). Hence, the WTO is a great institution that define trade in the most parts of the world. Thus, it has a complicated internal structure. To start with, Ministerial Conference as the highest-level body is a political structure that represents consensus among all member countries concerning current programs and future agenda of the WTO (Sek. 2003, p. 2). In particular, this body within the WTO structure is the key one for the least developed countries as almost each Ministerial Conference raised the issue of assistance and ‘special treatment’ or ‘special attention’ for them (Hawthorne, 2013). For instance, the result of Ninth Ministerial Conference in Bali, Indonesia, was an adaptation of Bali Package as “a series of decision aimed at streamlining trade (referred to as trade facilitation), allowing developing countries more options for providing food security, boosting least-developed-country trade, and helping development more generally” (Schnepf, 2014, p. 1). In other words, due to the activity of Ministerial Conferences, the WTO concentrates its attention on working with the developing countries not the developed as the issue of crucial importance for it. Therefore, it is reasonable to state that the WTO is an organization that provides liberalization and multilateralism on the global stage not only for several developed industrial countries. However, this is not the single issue investigated within the body structure of the WTO. As for the normal daily routine, General Council works on ordinary activity of the organization and discusses the results of it on monthly forums (Sek, 2003, p. 3). The other two important activities of General Council include Trade Polity Review Mechanism (TPRM) and Dispute Settlement Body (DSB). In the given cases, General Council is able to monitor national trade policies and provide consultations and discussions between governments on these issues (Sek, 2003, p. 3-4). In practice, this body within the WTO structure has a doubtful role. For instance, the very ability of annual notification of domestic support was introduced under the Doha Package. However, by being an ability for “WTO members to monitor other member’s compliance with commitments made under the Agreement” (Orden, Blandford, Josling, and Brink, 2011, p. 2) it served as the platform to complicate the negotiation process itself. Also, major bodies of Council for Trade in Goods, Council for Trade in Services, and Council for Trade-Related Aspects of Intellectual Property Rights investigate most of trade areas from agriculture to communications and copyright protection (Sek, 2003, p. 4). However, in case of generic medicine produced in Asian countries, the WTO intellectual property policy tends to violate human development as the medications become after its implementation more expensive and less accessible for local public (Wong and Dutfield, 2011, p. 68). And so, the WTO activity should be analyzed precisely even while it refers to universal values in different social environments around the world. At the lowest level, there exist various committees and working groups to cover minor interactions. For instance, LDC Sub-Committee regulates rising questions concerning interactions between the least developed countries within the organizational structure (Hawthorne, 2013). Consequently, it is evident that there are numerous dimensions covered by the WTO activity. Nevertheless, in certain cases this extent is sufficient. For instance, in case of agricultural monitoring there are problems with transparency of agricultural policies meaning that the alerts provided by the WTO “must be timely, and they must track changes in the policy measures and report accurate and meaningful values for the support provided” (Orden, Blandford, Josling, and Brink, 2011, p. 7). In other words, the case of the WTO structure shows that the establishment of accurate bodies and procedures does not necessary provide the required changes while it works with diverse international environment and tries to work with the huge area of trade relations within it. Finally, the types of policies shown by the WTO represent rather certain national than international interests, especially in the spheres of agriculture and trade rules. On the one hand, among the main directions of the organization’s activities, agriculture negotiations appear constantly. Since the beginning of its existence, the WTO system “introduced important new disciplines for regulating international trade in agricultural products, with major implications for the domestic support arrangements and external trade policies of the signatories” (Cardwell and Rodgers, 2003, p. 1). On another hand, the WTO introduces several levels of changes which it sees as the required for trade development. At the beginning, after successful negotiations they should result in successful “trade-distorting effects or effects on production” (Cardwell and Rodgers, 2003, p. 16). Afterwards, the more complicated system of financing and control appears. In fact, this scheme works as the base of the agreements within the WTO international activity worldwide. In case of Bali Package, it worked with issues of export competition, tariff rate quota, food security, green-box-eligible general services, and cotton international competition with African countries (Schnepf, 2014, p. 2). In this context, the issue of cotton shows the example of the ability of weaker national governments to influence the process of negotiations as it is one of the key individual interests for them on global perspective (Hawthorne, 2013). As for Doha Package, three levels of measures appeared; firstly, green box means preliminary changes; then, the blue box innovations introduces different types of funding and investment; finally, the amber box category includes interventions and subsidiary (Orden, Blandford, Josling, and Brink, 2011, p. 1). Nevertheless, certain criticism appears in the analysis of this the WTO activity. In particular, the WTO has not guaranteed any accurate measures of quantification of country’s success within the green box category in terms of income, status and level of efficiency for local producers (Cardwell and Rodgers, 2003, p. 16). Moreover, the United States is the most beneficial actor in the WTO as “it provides the only multilateral dispute mechanism for international trade, administers rules to discourage discrimination, and ensures greater security on how trade will be conducted” (Sek, 2003, p. 5). However, these advantages in the long-term perspective are working not only for the sake of the United States. Nevertheless, the current highly influential position of USA possess the question of the role of Congress in the whole participation of the United States; in this context, the internal balance of powers in American political environment is the reason of worrying in the international context (Sek, 2003, p. 7). In case of Bali Package, Schnepf (2014) sees the U.S. Congress as the institution that individually seeks for preferable outcomes of this agreement for U.S. agriculture, food industry, and consumers (p. 11). Nevertheless, the very idea of multilateral platform has nothing in common with unilateral incentives. In addition, Sek (2003) estimates the very ability to see strict individualistic policy provided by the U.S.as an activity that destroys the current power of this institution (p. 6). Nevertheless, in given circumstances certain discussions appear. In this context, the efficiency of the GATT/WTO system is doubtful in providing positive effects on trade; namely, in the created environment of consensus and common sense negative results on trade mysteriously appear (Rose, 2002, p. 22). In practice, this observation has been resulted in numerous misunderstandings based on different approaches in international problems definition. For instance, in case of Bali Package the United States viewed the major policy in creation of Trade Facilitation of Agreement (TFA). Namely, it aims “to improve the efficiency of international trade by harmonizing and streamlining customs procedures such as duplicative documentation requirements, customs processing delays, and nontransparent or unequally enforced importation rules and requirements” (Schnepf, 2014, p. 1). In other words, in case of any international negotiations wherever in the contemporary world the question of authority and country’s value inevitably appear in the moment of decision-making. In the WTO structure, this phenomenon has the title “a race to the top” meaning “the form of political demands from the rich countries that poor nations upgrade their standards and raise the production costs as the price for trade advantages” (Sucherland et al., 2004, p. 13). For instance, in case of antidumping policy it is evident that such a measure came to the policy of 40 WTO members after being a privilege for only the United States, Canada, EU and Australia (Bown, 2007, p. 6). However, this policy means that no individual approach actually works and all the countries should developed with the help of standardized measures. Actually, this situation cause the very ability to use poorer countries’ resources by telling them that this is for the sake of international trade. In other words, in certain debates of the important trade negotiations the most powerful actors in international relations inevitably enter the stage to fix the problem. In the situation around Bali Package, while India failed to meet the deadline of negotiation, it has inevitably put itself in the situation when the direct negotiations with the United States changed the situation of the whole agreement (Schnepf, 2014, p. 11). In this context, there appear an opinion that the GATT/WTO membership has no positive effects on global perspective as reducing the internal barriers simply does not work accordingly (Rose, 2002, p. 21). In fact, it does not correspond with the WTO written incentives. To start with, the organization realizes its importance in overcoming financial crisis with the help of global economy (Steger, 2010, p. 5). For this achievement, the WTO highly encourages new rising economies to become its member. For instance, in case of China’s membership happened in 2001, the WTO recognized their role in China’s modernization, providing normal trade and export relations, normalizing services, intellectual property, and investments, and the whole need of comprehensive trade reformation for this country (Hughes, Lin, and Turner, 2002, p. 6-11). In general, it is visible that in case of negotiations within rising economic powers like China or India the WTO seems ineffective. In Steger’s opinion, this signalizes of the necessity of transformation in the structure of this organization as they “shifted the global power balance[,] and the influence of the United States as a hegemonic power is declining” (Steger, 2010, p. 5). In this context, the previous situations with the negotiations with the least developed countries show that the United States tend to manipulate with agricultural subsidies and provide inconsistency with the accepted in the WTO norms (Hawthorne, 2013). Consequently, the current situation around the WTO illustrates the fundamental changes in the power balance within international system. In the given environment, emerging economies do not want to accept the given set of rules, and USA does not want to lose its influence. Therefore, in the real circumstances within developing countries’ economy like state-owned enterprises (Hughes, Lin, and Turner, 2002) and the constant appearance of the U.S. interests in this multilateral organization (Schnepf, 2014; Sek, 2003) lead to the fact that most of the WTO incentives are rather words than real changes. In particular, this is a severe disadvantage in case when WTO Consultative Board emphasizes on that “the proponents of a favourable link have a two-step argument: that trade promotes growth, and that growth reduces poverty” (Sucherland et al., 2004, p. 12). Thus, the WTO itself relies on the international growth as the background of an activity of this organization; however, the reality shows that it has not achieved this goal after all these years. In order to sum up, it is evident that from the very beginning of its existence such a huge project as the World Trade Organization meets plenty of obstacles while providing its activity. At the very beginning, the GATT agreement showed that the reduction of barriers is not an easy task when the compromise is needed on every decision. Furthermore, the enlargement and institutionalization of this organization is not covering all the problems that appear in contemporary unequal international environment. As the result of all these complications, the real policies of the WTO do not go smoothly and constantly meet some resistance either from developed or from developing countries. Hence, current appearance of financial crisis, diverse reaction on WTO requirements from the developing economies, the U.S. pressure, and the whole stability in absence of trade development show the weakness of this organization and its inability to meet its proclaimed goals. References: Bown, C. (2007). The WTO and Antidumping in Developing Countries. Brandeis University. Retrieved from http://people.brandeis.edu/~cbown/papers/AD_developing.pdf Cardwell, M., and Rodgers, C. (2003). World Trade System. In: M. Cardwell, M. Grossman and C. Rodgers. Agriculture and International Trade: Law, Policy, and the WTO. New York: CAB International. 1-27. Drapper P. and Sally R. (2006). Developing-Country Coalitions in Multilateral Trade Negotiations. In: B. Debroy and D. Chakraborty (2006). The Trade Game: Negotiation Trends at WTO and Concerns of Developing Countries. New Dehli: Academic Foundation. 63-86. Hawthorne, H. (2013). Least Developed Countries and the WTO: Special Treatment in Trade. Hampshire: Palgrave Macmillan. Hughes, K., Lin, G., and Turner, J. (2002) China and the WTO: Domestic Challenges and International Pressures. Woodrow Wilson International Center. Washington, D.C.: Woodrow Wilson International Center for Scholars. Orden. D., Blandford, D., Josling, T., and Brink, L. (2011). WTO Disciplines on Agricultural Support. Experience to Date and Assessment of Doha Proposals. International Food Policy Research Institute. Retrieved from http://www.ifpri.org/sites/default/files/publications/rb16.pdf Rose, A. (2002). Do We Really Know That the WTO Increases Trade? National Bureau of Economic Research. Working Paper. Retrieved from http://fas.org/sgp/crs/misc/R43592.pdf Schnepf, R. (2014). Agriculture in the WTO. Bali Ministerial Agreement. Congressional Research Service. Report. Retrieved from http://fas.org/sgp/crs/misc/R43592.pdf Sek, l. (2003). The World Trade Organization: Background and Issues. Congressional Research Service. Report for Congress. Retrieved from http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/98-928_E.pdf Steger, D. (2010) Redesigning the World Trade Organization for the Twenty-first Century. Ottawa: The Centre for International Governance Innovation and Wildfrid Laurier University Press. Sucherland, P. et al. (2004). The Future of the WTO: Addressing institutional challenges in the new millennium. World Trade Organization. Report by Consultative Board to the Director-General Supachai Panitchpakdi. Geneva: World Trade Organization Press. Wong, T. and Dutfield, G. (2011). Intellectual Property and Human Development: Current Trends and Future Scenarios. New York: Cambridge University Press. Read More