The World Trade Organization’s (WTO) primary purpose in international trade is mediating disputes. Its power originates from agreements made between voluntary member countries and relies on the participation of its members. Considering its status in the international community it is important to analyze claims that the WTO favors developed nations and multinational corporations at the expense of developing nations, the environment, and laborers. Critics charge the WTO as being undemocratic, non-transparent, and valuing free trade above the environment and labor protection. Its record in these areas is mixed and not as simple as critics would have us believe. Working alongside member nations, perhaps the WTO can do more to improve its international standing by addressing some of the concerns of its critics.
One of the major charges against the WTO is that it is ‘undemocratic’ and promotes developed nations and corporations at the expense of developing nations. The WTO dismisses this charge by claiming that decision making is done by consensus and so every member has an equal voice, including developing countries, and no one is forced to sign on to an agreement that they disagree with. However, this in effect creates a possible veto situation where even if 152 of the total 153 members of the WTO agree on an issue, one member has the power to stop the entire process. Democracy is characterized by majority-rule and the fact that one country can determine the outcome of a WTO agreement makes the organizations claim that it is democratic a little dubious.
Critics also point to the non-transparent or secretive nature of WTO negotiations and the use of ‘informal meetings’ as a means for favoring developed nations. Some have even gone so far as to accuse the WTO of being the “most non-transparent of international organizations”. Indeed proponents of the WTO have also criticized this practice as detrimental to the functioning of the WTO and as possible evidence that behind closed doors, certain powerful nations and even multinational corporations are forcing decisions on less influential nations. If the WTO hopes to convince the public that it is not an instrument of the wealthy nations then transparency is absolutely essential. Even if greater transparency in the WTO was established, there are those who still argue that developing nations will never have equal bargaining power simply because of their resources. The WTO itself acknowledges that not every country has the same bargaining power. While all nations maintain the right to enter negotiations and to vote in decisions, some developing countries simply do not have the resources to fully utilize their membership within the WTO. For example, 18 of the African WTO member nations do not even have representation in Geneva where the WTO is headquartered. While this does not necessarily entail that developing nations will be completely neglected it is an issue that should be addressed if the WTO is serious about equal representation for its members.
Critics also add the environment to the list of victims of the WTO. However, often their charges present one version of the story and leave out vital facts. According to Article XX of the GATT, nations should not be prevented from implementing measures that protect human, animal or plant life, and relate to the conservation of ‘exhaustible natural resources’, providing such measures are not used as protectionism in disguise. In 1997 a WTO panel ruled against a U.S. law aimed at requiring gas refiners to turn out cleaner gas. Environmentalists claimed the WTO completely disregarded America’s right to set measures for environmental protection. However, the WTO simply ruled that the U.S. did not follow the requirement of non-discrimination as it did not set the same standards for its domestic producers. If the U.S. had been serious about setting higher standards for fuel production, they would have extended the same standard applied to imports to domestic production rather than just abandoning it altogether. In cases like this it is important to look beyond simple analysis by environmentalists and determine whether it is the WTO reducing environmental standards or the member nations themselves.
In the case of the tuna-dolphin dispute, it was originally decided by a WTO panel that the U.S. was not able to restrict imports of tuna from countries that did not employ dolphin-safe methods. The WTO stated that the restrictions were not justified by the GATT as they only applied to the product and not the process in which the product was produced. Singer describes this as the product-process doctrine, which became an infamous and controversial issue for the WTO. The thinking behind this decision was that there will be an increased danger of protectionism if countries begin to use environmental protection to establish trade barriers. The problem is that many citizens do care about the process in which a product is produced and they place this choice above possible dangers of an increase in protectionism. Clearly this remains a contentious issue in the WTO and is something that needs to be clarified for future disputes.
The final victim, according to critics, are laborers who suffer at the hands of exploitative regimes and from whom developed nations benefit by buying cheap goods procured through labor abuse. According to Article XX member countries are still able to stop imports from countries with bad labor records based on their ‘public morals’. It would appear that WTO treatment of labor protection is similar to environmental protection. Member nations still maintain the right to restrict imports produced in countries with bad labor standards, provided it is done so in a non-discriminatory nature. The onus is on the member to enact such laws and apply them equally and across the board. Therefore, it is not strictly the responsibility of the WTO to enact labor laws but rather to ensure that they are not used as protectionism in disguise.
The claim that the WTO promotes developed nations and multinational corporations at the expense of developing nations, the environment and laborers appears to be limited in scope. The WTO’s power springs from agreements and negotiations between member nations and relies on cooperation of these members. Rules and regulations are decided by the nations themselves and the WTO mainly acts as a mediator in disputes. However, as the product-process doctrine illustrated, the WTO does wield a certain amount of power by interpreting rules and regulations. One also must consider the danger of a world where there is no regulatory body like the WTO to stem abuse and corruption in international trade. While it may not be in our interests to completely disband the WTO, there is scope for working to increase protection for developing nations, the environment and exploited laborers. At the same time, member nations need to take some responsibility in the process and adhere to rules they have previously agreed to. Trade liberalization faces many critics and it is in the WTO’s interest to proactively address these concerns as best it can.