This is an essay about the World Trade Organization—how and why it was founded, what it is as an international institution, and what it aims for.
More importantly, the essay effectively elaborates on the disadvantages caused by WTO to nations all over the world, specifically for farmers in third world countries and on the realms of poverty, unemployment rate, health, and the environment.
Definition
The World Trade Organization (WTO) is an international, multilateral organization that promotes and implements rules and regulations for the system of global trade (“, 2006). The WTO has the responsibility to create and monitor free trade arrangements, oversee world trade procedures, and resolve trade disagreements among member states (“”, 2006).
As of December 15, 2005, The WTO is composed of 149 members, while another 32 countries and 7 organizations have observer status. These nations represent more than 97 percent of the global trade (“”, 2006).
The WTO’s headquarters is in Geneva, Switzerland. The organization is directed by a General Council composed of the ambassadors of member states, who also have responsibilities on other auxiliary and specialist committees (“”, 2006). The ministerial conference meets every two years and selects the Director-General, who would oversee the General Council (“”, 2006). WTO’s current Director-General is (“”, 2006).
History
The 1944 Conference recommended the formation of the International Trade Organization (ITO) to form rules and regulations for worldwide trade (“”, 2006). Members of the UN Conference on Trade and Employment approved the ITO charter in March 1948 but the US Senate refused its ratification (“”, 2006). As a result, only one element of the ITO subsisted—the General Agreement on Tariffs and Trade or GATT (“”, 2006).
Eventually, in 1994, members of the GATT authorized a new trade agreement which resulted to the formation of the WTO. The WTO effectively began on January 1, 1995 thus substituting the GATT as a more extensive institutional structure (“”, 2006).
Objectives
It is the WTO’s goal to have a trading system that has no bias—one nation cannot favor another country over others within the structure, nor can it show prejudice against foreign goods and services (“”, 2006). In addition, the WTO aims to establish a trading system that has lesser trade barriers, a system that is for better competition, and one that is more helpful to less progressive nations (“”, 2006).
Lastly, the WTO aspires for a trading process that assures foreign institutions and administrations that markets would stay open and that hindrances to trade will not be arbitrarily created (“”, 2006).
Disadvantages of the WTO
A number of member countries attest to the fact that the WTO has helped them immensely, since the objectives of the institution promotes free trade and economic growth. Unfortunately, since its creation, the organization has attracted criticisms from those concerned about the aforementioned issues (“”, 2006). For example, WTO’s opponents believe that free trade, in addition to the organization’s bias for multinational corporations, would result to the further increase of the already vast gap between the rich countries and poor nations (“”, 2006).
Others argue that WTO does not have democratic responsibility because its trade discussions and deliberations are kept confidential from the press and the general public (“”, 2006). Critics also contend that the organization’s trade regulations do not effectively protect workers’ rights, human health and wellbeing, and the environment (“”, 2006).
WTO and Poverty
It is a well-known fact that trade encourages development and economic success. However, an increasing number of individuals presently doubt the advantages of free trade (, 2006). This is because trade agreements among countries favor the industrialized world at the expense of third world nations ( 2006).
Journalist and economist attests to the fact that the WTO does not neutrally deal with the global economy because it actually favors developed countries and multinational corporations (“”, 2006). Consequently, less powerful states are further harmed and damaged (“”, 2006).
Therefore, through WTO’s unbalanced promotion of free trade the inequality between rich and underdeveloped countries is enhanced (“”, 2006). To illustrate, the UN Development Program stated that the wealthiest 20 percent of the world’s populace utilize 86 percent of the resources of the world, while the poorest 80 percent expend only 14 percent (“”, 2006). The regulations of WTO accelerated such trend because free trade caused nations to entertain foreign investment. Thus it is easier for production to go where employment is cheapest and most oppressed (“”, 2006).
WTO and Farmers in Third World Nations
Since its establishment, the WTO was criticized for it has caused devastation for the livelihoods of workers and farmers all over the world (, 2006).
To illustrate, third world countries such as the Philippines, are fiercely against their membership in the WTO. In fact, in the year 2003, Filipino farmers rallied against the institution’s 5th Ministerial Meeting in Cancun, Mexico (, 2003).
The reason why farmers strongly oppose the WTO is that the country’s local agricultural trade already experienced a shortage of .2 billion in the first five years of WTO and the Agreement of Agriculture (AoA), contrasted with the .2 billion national gain when it was not a member of the WTO (, 2003).
According to the Secretary-General of KMP-Peasant Movement of the Philippines (KMP), , the Philippine’s local agriculture could possibly experience a larger setback in the next five years, as an effect of the Cancun round (, 2003). He also added that the Philippines’ rural trade deficit might swell up to billion if the government persists with its allegiance with the WTO ( 2003).
As further evidence of the negative impacts of the WTO on farmers, said that from 1999 to 2000, 1.3 million rural producers and farmers lost their source of revenue to liberalization and globalization, two causes promoted by the WTO (, 2003). Additional reports pronounced that in the year 2000, rural employments declined to 10.83 million from 1994’s 11.29 million, because of the growth of agricultural imports (, 2003).
These damages prompted to say that “the first nine years of WTO showed us the way to national devastation. The next chapter of this round would send us further to daily scourge of disaster, hunger and death (, 2003).”
WTO and Unemployment
A number of humanitarians, labor unionists, and environmentalists are also against the WTO and its promotion of free trade because it promotes unemployment ( 2000). To support this claim, a group on non-governmental organizations in Hong Kong protested against the negotiations involved in the WTO (“”, 2005). According to them, ever since the WTO operated, unemployment rates all over the world have increased. Moreover, there has also been an upsurge in the dirty, hazardous and demeaning work opportunities for people. Worse, much of such types of work are even unstable (“” 2005).
According to the spokesperson of the International Union of Foodworkers, “In the global countryside, there is more unemployment, more hunger, more food insecurity. Those who help to feed the world are increasingly unable to feed themselves (“” 2005).”
Unemployment is specifically experienced by people in third world countries, since their industries are not yet fully developed. Free-flowing import and export of products would prevent the progress of sustainable industrial employment that is normally the means towards development. Thus, WTO negotiations do not bring decent employment and growth; it may even cause considerable unemployment and devastation of livelihoods (“” 2005).
WTO and Health
Increased worldwide trade has an effect on the health of people all over the world in a number ways, both directly and indirectly (, 1999).
For example, the creation of the WTO gave way to the approval of the Trade and Related Intellectual Property Rights agreement or TRIPS (“”, 2006). For chief pharmaceutical companies, this is the official confirmation of their global rights. But for public health protesters TRIPS is an embodiment of corporate power and moral apathy (“”, 2006).
This is because patents on drugs and other health related products and services, as well as increased corporate power over the pharmaceutical industry, would only lead to increased costs. As a result, people, specifically the underprivileged, are denied of vital health services (, 2003).
WTO and the Environment
Multinational corporations use the WTO to eradicate laws on local and national environmental safety, which they consider as obstacles to free trade (“”, 2006). Furthermore, the WTO attempts to deregulate industries on fishing, logging, and energy allocation, which would promote the mistreatment of national resources (“”, 2006).
To illustrate, the first WTO panel said disqualified a provision on the US Clean Air Act which necessitates domestic and foreign producers to yield cleaner gasoline (“”, 2006). In addition, the WTO also declared a provision of the US’ Endangered Species Act which resulted to the escape of endangered sea turtles (“”, 2006).
Conclusion
With these said, it is therefore vital to have a substantial understanding of organizations that operate internationally, since their provisions and principles would greatly affect people and nations all over the world. Moreover, it is important to exercise critical and analytical examinations of such institutions to see whether they really support worldwide development, or if they just want to promote their own gains. If the latter is proven, it is therefore our right and responsibility to make an effort to oppose and eradicate such oppressive organizations.
BIBLIOGRAPHY
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