The World Trade Organization

The World Trade Organization (WTO) plays a central role in shaping trade at the international level: Can Third World Countries expect a more responsive, representative and sensitive WTO with the election of an Illustrious son of Africa as the Director General?

Towards encouraging smooth and free trade and to provide a platform for the negotiation of trade, the World Trade Organization (WTO) was born on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. Aside dealing with regulation of trade between the 153 participating countries, the World Trade Organization provides a framework for negotiating and formalizing trade agreements, and a dispute resolution process aimed at enforcing participants’ adherence to WTO’s agreements unanimously endorsed by member countries. Its ultimate goal is to help producers of goods and services, exporters, and importers conduct their businesses in a friendly and collaborative milieu irrespective of geographical origin or circumstance.

No doubt, the contribution of the organization to the advancement of global trade, economic development and liberalization is immense. It has ever since its inception been an ambassador of five principles including the promotion of fair competition, encouragement of economic and development reforms, increment in predictability through transparency, lowering of trade barriers for freer trade and ensuring fair treatment to locals and foreigners. In the midst of manifold objectives like helping trade flow smoothly, freely, fairly and predictably, WTO has become capable of organizing trade and commerce over the Globe through the mantra of liberalization, privatization and globalization. It has among others enhanced the value and quantity of trade, eradicated trade and non-trade barriers, broadened the trade governance scope, increased transparency and encouraged sustainable trade development. These among others justify the important role WTO plays in international trade.

By principle, the WTO is supposed to champion the trade and economic concerns of all member countries irrespective of their levels of development. Nonetheless, the effectiveness of the organization leaves much to be desired as it is beset with many challenges.

Looked at from governance point of view, some people would be moved into conclusion that, WTO is democratic in the sense that, all the 153 member countries legitimately have one vote and that decisions are usually made through consensus building. Interestingly, contrary is the state of affairs on the ground as votes from the voiceless countries are almost never respected. In contrast with Third World Countries like Ghana, Togo, Benin, Angola, Nigeria and the rest, the United Kingdom, U.S, China, Japan, Russia, Germany and other major powers have strong influence on most decisions of the WTO. The Seattle Ministerial justifies the reality of this phenomenon. In 1999, such longstanding undemocratic practices finally ignited a disorder by some less-developed countries and ultimately led to the failure to launch a new round of trade negotiations.

Again, it is hardly possible for smaller and poorer countries to maintain the representatives and trade lawyers essential to make their concerns heard on policy issues at the headquarters of WTO. As a result, the dispute-resolution processes are unfair to developing countries, which do not have the power and resources to shield themselves against complaints by rich countries. In most cases, just the threat of a complaint compels them to settle a dispute in favor of transnational enterprises and against the welfare of the greater part of their citizens.

Similarly, giant business lobbyists have privileged right of entry to government policy makers and use it to push trade agreements that challenge the fight against poverty, deprivation and inequality in the less fortunate countries. Instead of making the rights of poor people a priority, the profits of multinational corporations continue to gain prominence over poverty reduction initiatives and efforts.

Furthermore, instead of encouraging free and fair trade among member countries, free trade benefits developed countries more than developing countries. It is argued, developing countries need some trade protection to be able to develop new industries. However, the WTO has sought to maintain the same rules for developing countries preventing them from protecting new industries.

Arguably, developing countries that specialize in primary products (e.g. agricultural products) need to diversify into other sectors. To diversify, they may need some tariff protection, at least in the short term. Many of the existing industrialized nations used tariff protection when they were developing. Therefore, the effectiveness of WTO has been criticized for being unfair and insensitive to the plights of developing countries.

From the mission, functions and principles of WTO highlighted above, it is clear in theory that the WTO is committed to serving the collective interests of all member states. In practice however, the role of WTO as a conduit for improved and democratic international trade has been very controversial as it seems to serve the interests of predominantly the major nations and multinational enterprises. It continuously remains governed by world superpowers to the detriment of the voiceless economies. Can we expect a more responsive, representative and sensitive global trade governance with the election of yet another illustrious son of Africa – Mr. Alan Kwadwo Kyerematen - as the Director General of the World Trade Organization?

In order that, the World Trade Organization (WTO) remains focused on its guiding principles, the need to reduce the influence of superpowers is paramount. There should be a redefined commitment to encourage sustained economic development and transparency. Not until this is done, there is little the developing world can do to compete favorably with the advanced world. Consequently, the effectiveness of WTO would be scarcely felt. In the events where the WTO does not give a listening ear to the concerns of the less-privileged nations, the dream and desire to bridge the inequality gap between the north and the south will everlastingly be a hallucination. Taking constructive actions to respect the views of the marginalized in the trade policy-making process is the surest way to address the anti-democratic and non-transparent negotiating procedures characterized by the World Trade Organization (WTO).

Submitted by:

Ishak Mohammed

Department of Planning, KNUST

Ishakmohammed61@yahoo.com/ishakmohammed61@gmail.com

+233248513000