8 Main Limitations and Challenges faced by the World Trade Organisations
Deliberation is arguing and not bargaining.” To substantiate, first, many of the third world countries lack the research and information base to effectively participate in the negotiation of the complex agreements. Second, the different agreements are essentially negotiated by a small club of countries and majority of countries come into picture only when this club arrives at some conclusions.
It was the cause of protests by a majority of African states at the Seattle ministerial meeting. “This has been efficient from a transaction cost point of view, but unfair from a distributive point of view. Future negotiations will be more complicated because LDCs will have to be involved in earlier stages so that they can defend their interests better.” “Most powerful countries usually agree on their world-trade negotiating positions in advance. The US, the EU, Japan and Canada (collectively known as Quad) first decide their joint position, then invite other OECD countries to join them, and only then present it to a handful of the larger developing countries.
Many of the most important WTO negotiations have been in so-called Green Room discussions, which are restricted to twenty to thirty key negotiators. Third, the informal component of WTO decision-making has had an adverse impact on the coalitions of developing countries. And aid is often used as a lever to win over key Southern governments.
Hence, the WTO has often been a divisive instrument, not well serving the interest of the South.” Fourth, There is absence of staff parity from the developed and Third World countries, thus while seeking technical and other assistance from WTO, the general impression is that a particular line of ideology would prevail.
Fifth, Developing countries “fear the consequence of expressing their objections publicly, and hence choose the option of remaining silent. A variety of threats and pressures are used by powerful nations to ensure that their positions are accepted. Finally, the technique of “single undertaking” is used to ensure that Third World countries cannot opt out of agreements which are not in their national interests.
iv. There is need for hermeneutic democracy. In the famous Shrimp Turtle case (1998) the Appellate Body rejected the panel view that non-requested information could not be accepted from non-governmental sources. Developing countries could not digest the fact and feared undue interference from NGOs.
Negotiating history shows that the idea of allowing NGOs access to the dispute settlement process had been proposed but rejected. The developing countries must remember that the international community is not necessarily hostile to their interests. But an NGO should have no financial or other links with business interests at stake or be funded by governments.
v. “Even though the WTO charter formally commits it to poverty alleviation” it is not seen by anyone as a primary WTO objective. The WTO has so far failed to make world trade for the poor. There is no process of social audit in place to see if, inter alia, there is poverty alleviation, employment generation, and gender equality promoted through trade. The problem is politics of rich countries.
The WTO has not been able to avoid being used by these powers. Thus, the WTO has not helped to raise living standards of the poor but to retain the trade advantages of the richest countries. The list of priorities of WTO is the list of priorities of the rich countries, while postponing everything the developing countries want.
The rules are framed so as to take away distortions because of subsidies, dumping, etc. Developing countries have agreed to a “grand bargain” in which they lowered tariffs and agreed to respect patents in exchange of the abolition of rich-country quotas on textiles and clothing, reduced agricultural protection, and abolition of “voluntary export restraints.” Developing countries have done their bit, but rich countries have reneged.
vi. The parliamentary participation in the Uruguay Round and WTO negotiation process was and continues to be almost non-existent, with the notable exception of the US National Congress. National parliaments are mostly faced with the negotiations only after they are finished. The results are presented to them as fait accompli.
vii. WTO needs to come to grips with the environmental issue raised by social movements and civil societies, though it does not fall into its free trade agenda.
viii. The non-governmental organisations need to be heard at WTO. Although they cannot be accepted as full partners, but at least they may be associated in the initial stages of fact finding, proposal formulation, and dispute settlement.
There are many protagonists of the WTO. They think these limitations untrue.” Reality requires that WTO to be successful, it needs to focus on its core mission, which deals with international trade and investment. The piling on of social causes may appear politically expedient, but will be a key cause for divisiveness and dissent within the WTO and thus inhibit progress on further liberalisation of trade and investment. Failure to achieve such progress would leave the WTO without teeth and would negate much of the progress achieved in the field.
Social causes can be taken up by other agencies – Labour by the ILO. Let trade and investment increase, they will help to assimilate cultures, values and ethics among nations. These changes will automatically lead to social changes. “The liberalism from above’ manifest in the creation of an international institution to encourage, manage, and regulate. International trade has still to overcome the existence of “liberalism from below” in the form of sovereign states defending their perceived national interests through a range of explicit and implicit protectionist measures.”