The World Trade Organisation (WTO)
Aims
to liberalise world trade
promote economic growth and stability
lay down the rules for world trade
It achieves these aims through four main functions
providies a forum for negotiation and the exchange of information, whether through issue specific groups or biennial trade minister meetings.
oversees the treaty commitments of its members. Can constrain members' trade policies based on their principles.
provides exceptions from constraints to allow flexibility in international trade agreements.
offers a dispute settlement mechanism for states to resolve their trade disputes, where rulings are mandatory.
Background
Set up in 1995 to replace the General Agreements on Tariffs and Trade, which was part of the 1944 Breton Woods Agreement.
Not part of the UN
Has 161 members and 23 observer countries as of April 2015
Is the legal and institutional foundation of the multilateral trade system.
TRIPs
Sucesses
Failures
WTO agreement on Trade-Related Aspects of Intellectual Property Rights
Heavily strengthens patent and copyright laws on "invention, innovation, research, design and testing involved."
Includes medicine, drugs, and surgeries
Impact on State Sovereingty
Will heavily increase drug prices
Puts drugs out of reach of people living in developing states because their government cannot afford them
Impacts governments ability to take measure to protect public health
AIDS drugs sent to Brazil have been seized in the Netherlands on copyright grounds. Brazil sees this as an infringement on its sovereignty
The Doha Round
operated under a principle of "nothing is agreed until anything is agreed
More efficient than the GATT, its predecessor, as a mechanism for solving disputes. Since 2016, 500 cases have been brought to the dispute settlement mechanism of the WTO compared to the 300 disputes dealt with in the 47 years of the GATT's existence
Environment
The organisation has been used by TNCs to dismantle environmental regulations, which are considered "barriers to trade"
Forced the EU in 2006 to lift restrictions on genetically modified corn, soybean and cotton products, despite their highly contentious nature and questionable impact on the environment
Effectiveness of Free Trade
Free trade imposed by the WTO has arguably had more negative impacts on developing countries than positive.
Encourages a "race to the bottom" for countries to offer the cheapest global labour at the expense of the living standards of workers
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During the world's most recent period of rapid growth and investment (1960-1998), inequality has worsened. The WTO is attempting to hasten these trends
After a breakdown of negotiations in 2008, attempts to revive the talks have so far proven unsuccessful.
The failure to reach any meaningful agreement despite 15 years of negotiations brings the WTO's effectiveness and the potential need for reform into question.
It is the only institution of global governance that supervises 95% of the worlds trade
Has been relatively successful in preventing a "trade war", which has historically lead to actual war e.g. wars during the 1930s depression leading to WWII
Benefits for (wealthy) consumers
Less barriers to trade means a wider variety of goods to choose from.
Textiles and food are cheaper
The group of economists led by
Robert Stern also estimates that
lowering services barriers by one third
under the Doha Development Agenda
would raise developing countries’
incomes by around $60 billion.