The importance of international trade organizations recently became emphasized by thecontroversy over the U.S. imposition of imported steel tariffs. In retaliation, the European Union imposed its own tariffs to prevent low-quality foreign steel that was blocked from the U.S. market from flooding Europe. This action provoked the United States to launch a case against the European Union, and also demonstrated the imperative need for a forum in which countries can discuss trade disputes - once again bringing a controversial agency, the World Trade Organization, to the forefront of the American consciousness.
Regulating the flow of money across national borders is a difficult and time-consuming business. Organizations such as the International Monetary Fund, the World Bank and the World Trade Organization must not only make sound business decisions - they must also take into account factors such as cultural sensitivity, social responsibility and environmental awareness.
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Unfortunately, these goals are often at odds with one another. Given that the work deals with so many touchy subjects, it makes sense that the IMF, the World Bank and the WTO are the center of much heated debate.
Political scientists have referred to this trio as "the real axis of evil." As protests in Seattle and New York City have shown, these organizations provoke strong emotion among ordinary citizens as well.
Established January 1, 1995, the WTO is the successor to the General Agreement on Tariffs and Trade established after World War II. The GATT worked through a system of trade negotiations, or rounds, which worked to lower trade barriers - mainly through tariff reduction, although later rounds did deal with issues such as anti-dumping.
The system of free trade has led to enormous growth since World War II. Trade in 2000 is 22 times the level it was in 1950. In order to deal with this massive increase, the WTO was created after the Uruguay Round, which spanned from 1986 to 1994.
Located in Geneva, Switzerland, the WTO has 144 members as of January 1, 2002. The organization's main function is to ensure that trade flows smoothly by providing a forum for trade negotiations -@ a place where nations can settle disputes, enforce agreements and provide training and assistance for developing nations. These negotiations result in higher product quality, greater variety and universal prosperity.
Although the WTO's intentions sound entirely benign, there are those, such as political scientist Ignacio Romanet, editorial director and president of the French political magazineLe Monde Diplomatique, who would argue that the WTO's trade agreements neglect labor rights and the environment. Is there any justification to these charges? Does the WTO, along with the IMF and the World Bank, truly comprise what Romanet calls "the real axis of evil?"
The controversy stems from the fact that many liberals feel the WTO sacrifices these aforementioned considerations for the sake of free trade.
The first charge to be examined is the fact that the WTO neglects labor rights and the environment. Many non-governmental organizations (NGOs) within developed nations, such as Greenpeace, feel that the WTO's trade agreements fail to take environmental concerns into account.
The preamble of the Marrakesh Agreement Establishing the World Trade Organization mentions, among the WTO's goals, environmental protection. Certain clauses, such as Article 20 of the General Agreements on Trade and Tariffs, allow countries to make provisions to protect their natural resources.
Some feel that these measures are less than what is called for.
"Many [NGOs] are dissatisfied with various international trade rules," Politics Prof. John Echeverri-Gent said. "Here it is important to remember that, aside from the WTO's dispute resolution mechanism, the important decisions by the WTO are made by the member governments."
The WTO's trade agreements are only what the member governments have decided upon themselves. In order to get more pertinent environmental legislation enacted, NGOs must work at changing the viewpoint of the member countries. The same applies to labor rights. The WTO does not enact trade agreements; nations do.
"NGOs who wish to influence trade negotiations are much wiser to direct their energies at the U.S. government ... than at the WTO itself since the WTO is merely the forum where the negotiations take place," Echeverri-Gent said.
The WTO has also been charged with reducing the number of jobs and widening the pay gap between skilled and unskilled workers, as well as increasing the division between developed and developing nations. Again, it is important to remember that decisions are made by the member governments. In addition, free trade has been shown to boost economic growth.
Developed countries do adopt new technologies, and thus more profitable industries, faster than developing nations do. However, the only alternative to free trade is protectionism, which is economically expensive and inefficient.
"Those [in the United States] who dislike aspects of international trade rules should work through the U.S. Congress and the executive branch to maximize their impact," Echeverri-Gent said.
As for charges that the WTO is undemocratic, it is run by its members, with each nation getting only one vote in assembly - in contrast to the IMF and the World Bank weighted voting system, in which it is easier for developed nations to exert their power.
It is debatable whether this practice actually rids the trade agreements of bias, however.
"Developed countries are more powerful and can exercise more influence than the developing countries," Echeverri-Gent said.
Another reason why many developing nations may not be able to make their needs clearly realized is because they are not united in their desires.
"Developing countries are divided and unable to devise common strategies to defend their interests. More equitable rules would be written if the developing countries can develop a common strategy and coordinate their actions," Echeverri-Gent said.
If, perhaps, protests against the WTO are not entirely justified, why has the organization aroused so much anger?
The WTO made its rulings felt in a way that the United States was devoid of experiencing, Politics Prof. Erica Gould said.
The United States, as a nation, is unused to heeding the authority of other bodies. "In other countries, international organizations have more impact," she added.
(Adrienne So is a first-year College student.)
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