SOYOUWANNA KNOW ABOUT THE WTO?

2. HEAR SOME ARGUMENTS IN FAVOR OF THE WTO

"In this era of rapid globalization, we need an international organization to smooth and enhance trade relations. The WTO is the best instrument we have for that purpose."

The Argument: Between 1950 and 1998 global exports rose eighteen fold, and global output six and a half fold. Globalization is a fact. We should all attempt to get the most from it.

The WTO's simple aims are to "restrict unfair barriers to trade and promote equal access to a rule-based trading system." In other words, the WTO encourages nations to liberalize their economies. They do this by removing trade quotas and subsidies to uncompetitive local industries, and by limiting public spending that leads to inflation and disproportionately affects the poor. Capitalism works best when unfettered markets set prices.

Nations benefit from increasing their levels of international trade. Developing nations and LDCs gain greater access to the markets of wealthier societies and foreign investment capital. Local economic sectors such as coffee and textile production then become infused with capital.

Foreign trade is a source of strong and consistent economic growth. Developing nations know that the way to escape grinding poverty is to join the world trading system, not to hide behind walls of protectionism. That's why many are WTO charter members. They need more property rights, not fewer, and more debt relief, benefits that flow from WTO membership.

Another benefit of the WTO is less apparent, though equally important. By stimulating world trade under a system of rules, the WTO helps fight government corruption. Businessmen transacting with greasy-palmed foreign officials have always been prepared to pay "surcharges" as a cost of doing business overseas. Globalization gives them more trading possibilities and thus alternatives to dealing with corrupt government officials. Corrupt countries become exposed and isolated, and their citizens may even be emboldened to rise in revolt. When a nation prospers, its citizens become less tolerant of corrupt and/or autocratic regimes.

The Response: Don't be misled. The "clear and simple" goal of the WTO is to enable rich nations to plunder developing nations.

Globalization can warp a nation's economic development, but the WTO won't admit this. It has the wrong prescription for developing nations. Restrictions on government spending, lowered corporate taxes, and privatization are too risky for countries with pressing health and education needs. For countries inexperienced with free markets, making them suddenly flush with foreign capital is a recipe for disaster. Hasty adoption of free market reforms made the chaotic mess that is modern Russia. It lowered financial controls before it could develop political institutions capable of containing corruption. In Albania, people unschooled in capitalism lost their life savings in pyramid schemes.

The WTO, IMF and World Bank act in concert to control the economies of entire countries. They restructure debt and oversee the monetary policy of developing nations according to the dictates of Wall Street. They euphemistically label their loan sharking activities "bail-out agreements." This is colonization by another name. It's no coincidence that deregulation of American banks occurred just before the Seattle WTO Summit. The banks' aim is to drive national producers into bankruptcy unless they pattern themselves after Western public corporations.

"The WTO's formal structure allows it to balance transactional efficiency with transparency and equity, and this makes it the best international organization for the job."

The Argument: WTO rules are made and ratified by member states. Contrary to rumor, multinational corporations have no role in negotiations. Negotiations are multilateral so no single nation dominates negotiations and decisions are reached by consensus. No nation is ignored. On the other hand, bilateral negotiations disadvantage small states because they can't combine into blocs to get more leverage. The gradual "round" method of negotiations is the best way to create consensus and good will conducive to smooth trade relations.

The WTO makes national trade policies more transparent with its Trade Policy Review Mechanism. If you have any doubts about the WTO's transparency (openness to public view), check out the WTO's website (www.wto.org). There you can download any WTO document.

The Response: The 550 page-long Final Act is only comprehensible to the lawyers and technocrats who drafted it. If the goal were really to simplify trade, such a lengthy document wouldn't be necessary.

A glimpse at the Dispute Resolution Mechanism gives the lie to the WTO's "transparency." A roster of potential panelists (of whom more than 90% are male) circulates. When a complaint is brought, three are selected from the roster to serve on a panel. The panel deliberates in secret. This panel may issue decisions and levy sanctions for violations. Appeals are made to a seven-member Appellate Body, which also meets secretly. With the Dispute Resolution Panel, the WTO has the strongest enforcement capabilities of any international organization. Documents are restricted to panelists and the parties involved. Third party appeals are not heard, which precludes the submission of amicus briefs. The inability to access documents hurts poorer countries that don't have money to burn on international trade litigation. Panel decisions are automatically binding and don't require unanimous consent of the members.