What is the role of the World Trade Organisation (WTO) and has it been successful in achieving its goals? Why? What’s the future of the WTO?

What is the role of the World Trade Organisation (WTO) and has it been successful in achieving its goals? Why? What’s the future of the WTO?

Globalisation is the move towards interdependence between nations, organizations and people. There are many global institutions that facilitate globalisation and their roles are to regulate and monitor international exchange to ensure that there is co-operation in areas like finance, aid, peace keeping and politics on a global scale.

 

It was believed that a certain structure and framework was needed to prevent the economic policies that contributed to the 1930 Great Depression. However, I will focus only on the World Trade Organisation (WTO) for this entry.

 

The WTO deals with the rules of trade between nations. It was created to supervise and liberalise international trade. Its role in the global market is to negotiate and implement new trade agreements. It functions as an international court to resolve trade disputes. Currently, the WTO has 153 members, which represents more than 95% of world trade.

 

In light of all these, I would like to examine how the WTO has been effective. Countries join the WTO for many reasons such as to increase trade and exports. Through the WTO, two countries, for example, can experience improved trade. If Country A is a producer of rice, and country B is a producer of coffee, both countries can trade and exchange their goods, and citizens benefit.

 

The presence of trade agreements, which usually involve reciprocal benefits, for example, exchanges or tax cuts on the exchange of goods is a reason why countries are encouraged to negotiate these agreements. Countries that have negotiated trade agreements get access to foreign markets, and this facilitates growth and benefits the economy. Countries also get to save on resources when they pay lower prices for goods exchanged.

 

Despite the benefits of being a member of the WTO, some critics say that the smaller countries in WTO have little influence in decision making – the most influential nations in the WTO focus on commercial interests of profit making companies.

 

About 80 countries have in the WTO have per capita incomes lower than they were in a decade ago, and the numbers of people living in poverty especially in sub Saharan Africa has continued to grow.

 

For example, the United States’ attempt to ban shrimp caught using equipment that were harmful to endangered sea turtles has been ruled as an illegal act by the WTO, thus causing the US to change its decision. National laws like these are considered as detrimental to trade, and countries are forced to abolish laws like these.

 

The question remains: why do governments still want to be members of the WTO then?

Despite the controversy, WTO membership has grown steadily, and currently, 30 countries are holding observer status and are waiting to be members. Perhaps countries still benefit from joining the WTO.  WTO aims to be non discriminating and transparent. A small country can enjoy the benefits that WTO grants to its members. Smaller countries can also join alliances with larger countries to increase their bargaining power.

 

I believe to make the WTO more relevant to the citizens of the world, there should be a complete change of the WTO’s policies. There should be a moving away from serving the interests of large corporations, and promote environmental pollution. This is sustainable growth, and is a remedy for poverty. It must also attempt to change people’s perceptions of the WTO, and redefine itself as a development institution. Many people believe that it is simply an institution used by the rich to make decisions favourable for them.

 

The WTO should focus on maintaining its original agreements that aim to provide a level playing field for the global economy and to provide transparency in settling conflicts.

 

Bibliography

The Ecologist. Criticism of World Trade Organisation. Retrieved August 25, 2008 from The Ecologist. Website: http://findarticles.com/p/articles/mi_m2465/is_6_30/ai_65653637/pg_4?tag=artBody;col1

Anup Shah. The WTO and Free Trade. Retrieved August 25, 2008 from Global Issues. Website: http://www.globalissues.org/article/42/the-wto-and-free-trade.

 

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