Conflict Theory and Functionalism in a Sociological

¶ … conflict theory and functionalism in a sociological context, I have chosen world trade as the topic, mainly the way developing and poorer countries and developed economies evolve and act in the world trade arena.

Conflict theory seems perhaps better suited to explain the contradictions in world trade and, even more profound, the differences that normally appear between developed and developing countries, especially in World Trade Organizations Ministerial Conferences, but also in general trade relations.

The tools and general trends that world trade operates with are liberalization and protectionism (protective measures). High import taxes and subsidies are among the most common protective measures and these have the role of protecting national producers against lower priced, more competitive products that may enter the country and may force the national producers into bankruptcy.

The industrialized countries generally aim at imposing global lower import taxes on manufactured goods. This would ensure them better export capabilities to third world countries, given the fact that manufactured goods from developed countries are generally more competitive, because of higher prices. So, the only chance for national manufactured goods from third world countries would be a price advantage over Western goods.

However, the price advantage is driven by the price level at which these goods are sold. The lower the import taxes, the lower the price that Western goods will be commercialized at and, as such, the lower the price advantage for manufactured goods n developing countries.

The agricultural products are somewhat in a different situation. Many developing countries produce much cheaper goods, but this would tend to suffocate national producers in United States and the European Union, for example, because they would not be able to compete with cheaper grains, fruits, etc. As such, developed countries use either import taxes or export subsidies that will allow for lower price for the producers at which they will sell and will thus protect national farmers by ensuring they stay in business. Over these two different sides of the problem conflict appear and conflict theory best explains this.

Indeed, we are facing a situation where "society and culture influences individual behavior" and where "each individual participant and its groups struggle to maximize their benefits"

. However, it is important to see, in our example, independent states as individual and the world trade arena as society.

The conflict situation manifesting itself in world trade means that each participant to global exchanges will be aiming to maximize profits for national producers, that is, to have the best trade conditions in relation with it partners. Between developed and developing countries, the conflict situation arrives from the fact that predominantly agrarian countries will aim to have lower import taxes on the developed markets, while predominantly manufacturing societies, like most developed countries, will want to lower import taxes and trade restrictions for manufactured goods.

This conflict situation is best exemplified in the last Ministerial Conferences of the WTO, notably Seattle, Cancun and Doha, where developed and developing countries could not find solutions for a common agreement on lowering overall import taxes and trade restrictions measures. Similar to a situation in game theory, both sides attempted to negotiate profitable conditions, while, on the other hand, not giving up too many privileges of their own.

The result of the Cancun Round in 2003 was a complete failure in this sense. Developing countries, grouped around agrarian economic countries, such as Brazil and India, refused to work out a compromise with the industrial countries in reducing import taxes for manufactured goods as long as they did not receive compensations for the agricultural products they exported. As the United States and the European Union both had strong farmer lobby groups that disagreed to lower import taxes (on the basis of what I have already discussed here above), no compromise could be reached.

Another source that would justify the application of conflict theory in this case is the numerous bilateral trade conflicts and the measures that are taken in these cases. Such examples are not only on the North-South relation, developing-developed, but also in trade relations between the European Union and the United States. Retaliation, a measure where a country imposes trade restrictions as a response to measures taken by another country (raising import taxes in response, for example), is commonly used and is an expression of related conflict. The "banana war" between the United States and the European Union is notorious in this sense.

Resuming this part, we may assert that global trade has a series of actors, generally classified as developed and developing countries, fighting to achieve maximum trade benefits in the context.

A functionalist perspective, on the other hand, may be used to describe international trade relations. If we refer to functionalism as a view where "ways social institutions fill social needs, especially social solidarity"

and remain at the context presented in the paragraphs here above, with national states as social players, global trade as the society and social needs in the global trade context, we may find explanations in this sense. For this, we need to refer to the WTO, as well as to specific regional trade organizations, like the EU, NAFTA or ASEAN. Let's first have a look at the World Trade Organization.

The World Trade Organization was created to regulate the world trade arena and to work with the member states towards a general liberalization, that is, a progressive mutual reduction of trade restrictions imposed by the states. In this sense, as functionalism works, the WTO believes that it can best address the needs of the participants, both by installing a regulatory platform for bilateral and global trade and by conceiving rules, through the treaties which the countries signed. As such, a functionalist perception would indicate that the WTO is the best institution to ensure an overall economic growth, profitable both for developing and developed countries in the long run, through adopted measures and joint negotiations.

Further more, the WTO is also a place where conflicts are regulated and solved. Special panels make sure that bilateral trade conflicts do not degenerate and do not impact the overall global trade and economic growth. Perhaps we may have the impression of an influential WTO that tends to impose a certain solidarity between member states in an attempt to increase global revenues and wealth for all actors involved, may they be developing or developed countries.