Tags: world trade organization | wto | Tariffs | Trade

Is the WTO's 20th Anniversary Worth Celebrating?

Is the WTO's 20th Anniversary Worth Celebrating?

By    |   Thursday, 11 February 2016 10:52 AM

The World Trade Organization was formed Jan. 1, 1995, replacing the General Agreement on Tariffs and Trade Treaty (GATT) which was created in 1947. 

The WTO is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

As an exporter, I had hopes for the effectiveness of the WTO to create a level playing field for American exporters. 

But after 20 years, it’s time to take a closer look at some of the deficiencies of the WTO.

In my book, “Conscientious Equity,” I maintain that we all must be committed to do the right thing. By doing so, we create shared “equity” amongst peoples and nations because we all have ownership in doing the right thing.  The idea is there is a way for all good people to do business freely and fairly.

With this mind, I wanted to get a fresh perspective from Global Exchange, an international human rights organization dedicated to promoting social, economic and environmental justice around the world.

They take the WTO to task for “putting the rights of corporations to profit over human and labor rights.”

From their perspective, the WTO encourages a race to the bottom in wages by pitting workers against each other rather than promoting internationally recognized labor standards. The WTO has ruled that it is illegal for a government to ban a product based on the way it is produced, such as with child labor. It has also ruled that governments cannot take into account non-commercial values, such as human rights, or the behavior of companies that do business with vicious dictatorships such as Burma when making purchasing decisions.

This does not capture American values.  The WTO has created a skewed system, relegating smaller countries to a seat of weakness. Its rules are written by and for corporations with inside access to the negotiations.

For example, the U.S. Trade Representative gets heavy input for negotiations from 17 “Industry Sector Advisory Committees.” Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even simple requests for information are denied, and the proceedings are held in secret.

The U.N. Development Program reports that the richest 20 percent of the world’s population consume 86 percent of the world’s resources while the poorest 80 percent consume just 14 percent. WTO rules have hastened these trends by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily manipulated.

One of the real challenges to American trade is the rise of foreign corruption and cronyism which has led to the theft of intellectual property that cost exporters billions of dollars.

So the WTO would be assumed to protect the rights of exporters, but according to the WTO’s own website. “Around 300 disputes have been brought to the WTO since it was set up in 1995. Without a means of tackling these constructively and harmoniously, some could have led to more serious political conflict.”

Settling only 300 disputes in 20 years?  There are more than 300 disputes a day around the world.  The WTO simply has no teeth in policing international trade.

Who really benefits from the WTO? The China Review notes that “Since entering the WTO in 2001, China has benefited from WTO rules that lower tariff and non-tariff barriers to trade for all WTO members and that prevent WTO members from engaging in trade discrimination against each other.

Basic WTO rules that require non-discriminatory “national treatment” and “most-favored-nation treatment” for the traded products of WTO members benefit China worldwide. Without the legal entitlements and the legal protection of these rules, China’s export boom might have gone bust, and Chinese exports would likely have been targeted worldwide for discriminatory protectionism.”  

It doesn’t take a genius to figure out that the WTO gives China protection from other countries who rightfully want to stop China from stealing their trade secrets and patents. 

The WTO has become a second “Great Wall of China” giving Chinese exporters protection from litigation and punishment.

U.S. senator from Oregon Ron Wyden has artfully captured the WTO failures.  “If China is helping its domestic industries charge an artificially low price for solar panels and other environmental goods, then China is violating international trade rules that it agreed to when it became a member of the World Trade Organization.”

In short, the WTO has become an ineffective body that has failed to live up to its core principles.        

Neal Asbury is chief executive of The Legacy Companies. To read more of his work, CLICK HERE NOW.

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The WTO has become an ineffective body that has failed to live up to its core principles.
world trade organization, wto, Tariffs, Trade
Thursday, 11 February 2016 10:52 AM
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