WTO the Developing World and the World Essay
- Length: 8 pages
- Sources: 30
- Subject: Economics
- Type: Essay
- Paper: #91222659
Excerpt from Essay :
The Developing World and the World Trade Organization
The World Trade Organization (WTO) was established as an international organization in 1995 as a successor of the General Agreement on Tariffs and Trade (GATT) ("World Trade Organization" 2009). The negotiations that extended for seven years, also known as Uruguay Round gave birth to WTO with vastly stretched out responsibilities for handling and running the economic affairs on an international level. Since then, the WTO has unquestionably played a major role in the field of global governance. The WTO rules and processes have affected the economic standards and political orientation the member countries (Sampson 2001).
If compared with GATT, the World Trade Organization has been working much powerfully as owing to the fact that it has a strong institutional foundation and a proficient dispute settlement system (Kwa 1998). GATT rules had their main influence on the imports and exports of a country whereas the WTO agreements greatly emphasize on a country's economy (Das). The member countries who do not obey the WTO trade rules and regulations have to eventually face the consequences in the court rooms. The WTO system allows the member developing countries to satisfactorily address their logical concerns. The organization also does not ask for investment or installation opportunities in the developing countries in awkward and irrational measures (Skinner 2010). However, there are several charges, criticisms and accusations that the WTO has been facing since a very long time (Kwa 1998). Some of them are:
The WTO memo, the process of agreements implementation, and the highly-esteemed dispute settlement system are criticized by the accusations that they all serve to move forward and fulfill the interests of developed countries; marginalizing the interests and concerns of the member developing countries (Kwa 1998).
The least developed countries (LDCs) are sidelined when it comes to trade on a global basis. The products produced in the LDCs also face continuous tariff escalations (Kwa 1998).
As each member country has economic circumstances that vary greatly so the uniformly applied WTO rules have instigated inequality (Kwa 1998). Free trade is not an option for majority of the countries.
Poor countries have been penalized and local development has been undermined by the WTO. Under its rules, the policies that are pursued by the developed countries cannot be followed by the developing countries ("Top Reasons to Oppose the WTO" 2011).
WTO definition of Developing Countries
There are no definitions provided by the WTO of developed and developing countries. It is the countries themselves who announce whether they are 'developed' or 'developing'. There are certain rights that are given to the members with developing country status. For instance, they are provided longer transition periods following provisions in few WTO agreements. They are also provided with the required technical assistance ("Who are the developing countries in the WTO?" 2011). It can be concluded that "the WTO may not be the most protective organization of non-trade values, but it is the optimal system to integrate competing concerns and advocate on behalf of sustainable development" (Skinner 2010).
The Role of Developing Countries in the WTO
Developing countries have several priorities that make them join international organizations. These priorities include the relief attainment from many economic difficulties, making industrialized countries open their markets to their products and persuading WTO to be more sensitive about the development in these countries. They are also concerned about the ever-expanding creepy mandate of the WTO that favors developed countries (Bradlow 2001). They also demand exceptional and differential conduct from WTO to look after their manufacturing sectors (Sugathan 2010). It is also important to mention that developed countries seek for textiles and clothing. On the other hand, the main items that developing countries acquire through their membership in WTO are copper, fuels, cotton, vegetable and oil seeds, wood products and minerals ("Poorest Countries Must Improve" 2008).
Despite the fact that developing countries occupy ae of the WTO membership, The WTO framework doesn't allow them to have same power as developed countries. The domestic policy making deficits are the main factors that portray a weak participation in the WTO (Sally 2001).
Though the developing countries have the power to influence the agenda and trade-discussions results by their votes. However, there are no occasions on record where the developing countries have used this power to their advantage. The economies of several developing countries are either dependent on the U.S., the European Union, or Japan. The security and interests of rebellious developing countries might be threatened if they fail to comply with any WTO agreement.
Negotiations and trade-offs happen between the developed countries and very few efficient developing countries.
Very limited human and technical resources are available in developing countries. It is not possible for many countries to attend the 40-50 weekly Geneva meetings. Therefore, when they do attend meetings, they are not prepared for negotiations as their developed opposite members.
Not every developing country is able to acquire the best legal expertise in case they may require consulting the WTO dispute settlement system. Moreover, the system is too costly (Kwa 1998).
WTO and Developing Countries: Bargaining together but why?
Acting as a united group, these birds are flying away with my snare
But without doubt, they will fall as soon as they quarrel among themselves (as qtd. In Narlikar 2003).
It is common for both developed and developing countries to bargain together in groups. In order to be effectively diplomatic in international negotiations, developing countries use their limited power to make coalitions. The same applies to the scenario in WTO. Even though the developing countries have limited powers in WTO framework, they have made inter-state coalitions to overcome some of their weaknesses. However, it is not much easier for them to formulate and maintain effective coalitions (Narlikar 2003).
In most international deals, the negotiating position of developing countries is negatively affected by the inability to bargain power. Unfortunately, the developing countries are still busy in state-making processes. It is, thus, not easy for them to enter into a state system where developed countries are already standing as powerful, accomplished combatants. Developing countries can be categorized as semi-evolved states and therefore, possess partially-established markets. They face all types of problems including lack of resources, limited economies of scale as the market size is small, unavailability of power and workforce, absence of technology etc. Other weaknesses that hinder the economic progress of developing nations are the regional conflicts. They not only increase the instability of the state; they also create obstacles to overcome or improve the economies of scale with the neighboring countries. If a developing country has a late entry as a member into a pre-existing international organization, it makes it a rule taker instead of the strategy maker. All these factors weaken and deteriorate the ability of the developing countries to come forward as international players (Narlikar 2003).
Though it is correct that most of the weaknesses of developing countries could be removed with the domestic remedies. It is also true that internal balancing offers self-reliance as compared with external balancing that makes a developing country dependent on allies with superior economies. However, building up coalitions offer developing countries an escape, even if a short one, from the politico-economic dilemma (Narlikar 2003). This is the reason why developing countries are increasingly assuming the membership of WTO though it provides them limited opportunities to grow and is not much good for them. Still, whatever the WTO is offering, developing countries tend to look up to it for economic support in difficult times (Narlikar 2003).
Internal balancing is also disfavored due to the fact that it yields negligible successes. On the other hand, if a developing nation adopts the policy of external balancing in the international political economy, it ensures the mutual cooperation of the superior developed nations and joint power to put forward strategies that are beneficial for all the concerned members. Joint decision-making and actions in international organizations also produce efficient results. The newly independent or developing countries in the process of state-evolution are helped with their coalitions to define their international identities. Thus, there are several advantages for developing countries that they can achieve from bargaining in coalitions. Joint bargaining grants developing countries the capacity to say 'no' and they can also affect the negotiations, decision-making and outcomes on an international level. Thus, the aggregated power allows developing countries to have a say on the issues that concern the world on a whole. This is the reason why several "small European economies have enjoyed a visible presence in the GATT since the 1960s, by virtue of their joint market power through the EC" (Narlikar 2003).
Limited supply and demand power are not the only factors that hamper the dealing power of the developing countries. Several countries are short of resources for investment purposes in new fields. They do not have adequate means and assistance to ensure consistent fulfillment of their targeted goals and demands. Though it is argued that these weaknesses could be overcome by the facilities available at…