Criticisms of the WTO

Introduction

This page forms the core of the website and is the central reason for its creation. In recent times there have been, at least from a very vociferous minority, many severe criticisms of the WTO. Depending on your perspective this resulted in or began with the ‘Battle for Seattle’ in November-December 1999 at the WTO ministerial conference. Here I hope to set forth as clearly as possible the criticisms of the WTO, to make some attempt to decide to what extent they are justified, and finally to create a basis for an opinion about what changes should be made to the WTO and perhaps also to the world trading system. I should make it clear that I am more interested in realities than ideals, and feel that criticisms (to be of value) must be grounded in what is the case and not in some utopian vision of what the world could be like. Certain elements of the ‘protest’ movement who are opposed to the WTO lose sight of this distinction and while I admire their idealistic vision, feel that in so doing they undermine the effectiveness of their cause. Groups who are more of this persuasion, e.g. the World Social Forum, Jubilee South etc, can be found on the links page.

Summary

Criticism of the WTO fall into two broad categories:

1. Criticism of WTO aims - The WTO is very strongly committed to trade liberalization which means a movement towards free trade both in the reduction and elimination of tariffs and a removal of non-tariff barriers such as quotas. In fact the first four of the WTO’s principles (see Basic Facts About the WTO) are all explicity or implicitly about this. This position (pro free trade) is firmly grounded in main stream trade economics - particularly comparative advantage theory - which implies that free trade is an optimal system (in technical terms it is pareto optimal - see glossary). Importantly it is even good for poor undeveloped countries, hence the WTO’s fifth principle about development. This, however, is controversial. There are some, particularly in development studies and development economics, who are doubtful that free trade and deregulation are in fact good for developing countries or the best development paradigm. In fact it is often felt that free trade is actually bad in a variety of ways for poorer countries and beneficial mainly to richer ones. If this is so then the WTO’s philosophy has serious problems (it’s own principles are mutually contradictory) and the WTO is at its very basic level biased towards the richer countries. The other main criticism of the WTO’s philosophy comes from environmental circles. It is felt that the free trade/deregulatory paradigm is detrimental to the environmental protection and preservation. In fact some environmentalists would argue that the idea of the ultimate economic good being material improvement (GDP growth) which is implicit in the WTO’s philosophy is fundamentally misguided in that it neglects and fails to take into account the (negative) environmental affects of pursuit of this economic goal (e.g. global warming).

2. Criticism of WTO practices/structure - Criticism of WTO practices and/or structure focus on the democratic or undemocratic nature of the organization. The points tend to seperate into two related arguments. First that the structure and personnel of the WTO is undemocratic in various ways that lead to developed richer countries winning out over less developed poorer countries. Second that while not actively biased or undemocratic the WTO facilitates and permits powerful groups to dominate the others (these groups being either the richer developed countries or e.g. TNCs - transnational corporations). Apart from this, the other main criticism of WTO practices would be that it does not implement its philosophy evenhandedly, in particular free trade arguments are used to open up the markets of third world countries while the developed world retains all kind of protectionist measures. In this view the WTO has just been a method of institutionalizing the accumalated advantage of developed countries.

These two areas form the heart of the WTO issue and further discussion can be found on these pages:

WTO Philosophy: Trade and Development
WTO Philosophy: Environment
WTO Practices and Structure

Some References and Further Reading

For two contrasting perspectives on the WTO see:

• ‘What is Wrong with the WTO’ in CAFOD’s Rough Guide to the WTO (see Documents Page). It begins: “An international body for regulating world trade is a good idea,if only to stop the rich countries bullying the poor, but the WTO as currently constituted is failing to do that.”
• Select Committee on International Development: ‘After Seattle - The WTO and Developing Countries’ (see documents page). Its conclusion is: “We disagree strongly with those who claim that the WTO is an enemy of the world’s poor. This Report makes clear that if the poor are to have any hope of better lives their countries must be given greater opportunities to participate in the global trading system. Of course trade liberalisation must be planned, phased in, and based on clear rules. Of course it must be accompanied by increased trade capacity and domestic pro-poor policies. But the WTO is the only place where global trade development can take place in a way shaped by the developing world. Without the WTO we are left with the economics of the bully. Despite all the chaos, at Seattle the voices of developing countries began to be heard. That can only be a good thing for the future of the WTO.”

Created: 03/12/2001
Last updated: 20/06/2002
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