WTO 101: A dissident overview of the World Trade Organization

An indepth perspective on the problems of the WTO and what it means to the world.

An indepth perspective on the problems of the WTO and what it means to the world.

What is the WTO?

The WTO is an international organization of 134 member countries that is a forum for negotiating international trade agreements and the monitoring and regulating body for enforcing agreements. The WTO was created in 1995, by the passage of the provisions of the “Uruguay Round” of the General Agreement on Tariffs and Trade (GATT). Prior to the Uruguay Round, GATT focused on promoting world trade by pressuring countries to reduce tariffs. But with the creation of the WTO, this corporate-inspired agenda was significantly ratcheted up by targeting so-called “non-tariff barriers to trade”—essentially any national or local protective legislation that might be construed as impacting trade.

The idea is simple—instead of only imposing on third world countries low wages and high pollution due to their weak or bought-off governments, why not weaken all governments and agencies that might defend workers, consumers, or the environment, not only in the third world, but everywhere? Why not remove any efforts to limit trade due to its labor implications, ecology implications, social or cultural implications, or development implications, leaving as the only criteria whether there are immediate, short term profits to be made? If national or local laws impede trade—say an environmental or health law, or a labor law—the WTO adjudicates, and its entirely predictable pro-corporate verdict is binding. The WTO trumps governments and populations on behalf of corporate profits.

Why are people opposed to the WTO?

There is no denying that someone could oppose the WTO out of narrow self-interest—saying, in essence, my country ought to be able to do as it domestically prefers, but other countries should be entirely beholden to this world oversight on behalf of corporations (sort of the way the U.S. government relates to international law and the World Court: it’s for everyone else). But the view of movements against the WTO should be that social, labor, ecology, cultural, and other concerns take precedence over profit-making everywhere, not solely in one’s own neighborhood.

The real debate between WTO advocates and their left critics is not about protectionism, therefore, but about who will be protected from the ravages of unrestrained competition. The WTO has no rules to guard those who labor or to protect long-term development or to foster cultural sustainability or diversity. Without such standards, the majority of people can actually lose from expanding trade, not only relative to a fair ideal, but relative to abstaining entirely.

The critic’s theoretical understanding of the WTO as a vehicle only moved by corporate profit-seeking logic is borne out from the WTO’s history to date. In every case that has been brought to the organization challenging environmental or public safety legislation on behalf of corporations, the corporations have won. When foreign commercial shrimp fishing interests challenged the protection of giant sea turtles in our endangered species act, the turtles didn’t stand a chance. When it was Venezuelan oil interests versus the U.S. Environmental Protection Agency’s air quality standards for imported gasoline, the oil interests won. When it was U.S. cattle producers against the European Union’s ban on hormone-treated beef, European consumers lost. The list goes on.

But don’t we favor regulation of trade?

Yes, but not the type of regulation proposed by the WTO. The WTO is about protecting corporate ownership and monopoly over the patenting of plants, processes, seed varieties, drugs, software, and all capital, fostering its exchanges of goods despite any ill effects, and breaking down any protections of labor, the environment, health and safety, that might limit corporate profit making.

Why do some demand new policies while others demand shutting down the WTO?

Some critics argue that the WTO trade liberalization program is fundamentally flawed and we should abolish this dangerous organization. They urge building global resistance and constructing global solidarity from below. Other people, in particular much of organized labor, argue that while the WTO trade liberalization program is deeply flawed, it’s now well established as a powerful organization and that the concept of negotiated trade regulation is vital to the health and welfare of the world community. They argue that if core labor rights, environmental protections, and what the Europeans refer to as a “social clause” was inserted into the WTO’s mandate and practice, it could be transformed.

What are ten key reasons to oppose or even shut down the WTO?

  1. The WTO prioritizes trade and commercial considerations over all other values. WTO rules generally require domestic laws, rules, and regulations designed to further worker, consumer, environmental, health, safety, human rights, animal protection, or other non-profit centered interests to be undertaken in the “least trade restrictive” fashion possible—almost never is trade subordinated to these noncommercial concerns.
  2. The WTO undermines democracy by shrinking the choices available to democratically controlled governments, with violations potentially punished with harsh penalties.
  3. The WTO actively promotes global trade even at the expense of efforts to promote local economic development and policies that move communities, countries, and regions in the direction of greater self-reliance.
  4. The WTO forces Third World countries to open their markets to rich multinationals and to abandon efforts to protect infant domestic industries. In agriculture, the opening to foreign imports will catalyze a massive social dislocation of many millions of rural people on a scale that only war approximates.
  5. The WTO blocks countries from acting in response to potential risk—impeding governments from moving to resolve harms to human health or the environment, much less imposing preventive precautions.
  6. The WTO establishes international health, environmental, and other standards at a low level through a process called “harmonization.” Countries or even states and cities can only exceed these low norms by winning special permission, rarely granted. The WTO thereby promotes a race to the bottom and imposes powerful constraints to keep people there.
  7. WTO tribunals rule on the “legality” of nations’ laws, but carry out their work behind closed doors. The very few therefore impact the life situations of the many, without even a pretense at participation, cooperation, and democracy.
  8. The WTO limits governments’ ability to use their purchasing dollars for human rights, environmental, worker rights, and other non-commercial purposes. The WTO requires that governments make purchases based only on quality and cost considerations. Not only must corporations operate with an open eye regarding profits and a blind eye to everything else, so must governments and thus whole populations.
  9. WTO rules do not allow countries to treat products differently based on how they were produced—irrespective of whether they were made with brutalized child labor, with workers exposed to toxins or with no regard for species protection.
  10. WTO rules permit and, in some cases, require patents or similar exclusive protections for life forms. In other words, the WTO does whatever it can to promote the interests of huge multinationals—there are no principles at work, only power and greed.

What short-term alternatives are there?

The immediate alternative to the WTO is for international cooperation to restrain out-of-control global corporations, capital, and markets by regulating global corporations and markets to make it possible for people in local communities to control their own economic lives. The alternative is to promote trade that: reduces the threat of financial volatility and meltdown enlarges democracy at every level from the local to the global defends and enriches human rights for all people respects and fosters environmental sustainability worldwide facilitates economic advancement of the most oppressed and exploited groups.

Rather then the global economy being regulated by small elites in corporate boardrooms, we should have bottom up commissions to restrict trade when it is socially or environmentally detrimental. Further short-term alternatives to the WTO are to: encourage domestic economic growth and development, not domestic austerity in the interest of export-led growth encourage the major industrial countries to coordinate their economic policies, currency exchange rates, and short-term capital flows in the public interest establish standards for and oversee the regulation of financial institutions by national and international regulatory authorities, encouraging the shift of financial resources from speculation to useful and sustainable development establish a tax on foreign currency transactions— known as a “Tobin tax”—to reduce the volume of destabilizing short-term cross-border financial flows and to provide pools of funds for investment in long-term environmentally and socially sustainable development in poor communities and countries. create public international investment funds to meet human and environmental needs and ensure adequate global demand by channeling funds into sustainable long-term investment develop international institutions to perform functions of monetary regulation that are currently performed inadequately by national central banks, such as a system of internationally coordinated minimum reserve requirements on the consolidated global balance sheets of all financial firms.

The alternative to the WTO is to reorient international financial institutions from the imposition of austerity and destructive forms of development to support for labor rights, environmental protection, and rising living standards. The alternative is for wealthy countries to write off the debts of the most impoverished countries and to create a permanent insolvency mechanism for adjusting the debts of highly indebted nations. The alternative is to use regulatory institutions to help establish public control and citizen sovereignty over global corporations and curtail corporate evasion of local, state, and national law, such as establishing a binding Code of Conduct for Transnational Corporations that includes regulation of labor, environmental, investment, and social behavior. The alternative is to renegotiate WTO, NAFTA, and all other agreements regulating international trade to reorient trade and investment to be means to just and sustainable development.

Author: Michael Albert