What is the World Trade Organization?
Formed in 1995, it's a global coalition of 135 governments that makes the rules governing international trade in an increasingly global economy. The creation of those rules requires a unanimous vote, which means that agreeing on new rules takes years of extensive, often contentious trade negotiations.
The WTO also functions as a kind of court, making binding rulings when member states are in dispute — for example, when European governments tried to stop importing hormone-treated beef from the U.S. on health grounds, they were overruled by the WTO. The WTO's members gave the body such powers precisely to ensure that trade disputes between countries are resolved quickly and smoothly, by an arbitration mechanism they all recognize as legitimate.
The organization's four aims are:
The Case for the WTO
Advocates of the WTO and free trade — which include all of the serious contenders for both Democratic and Republican presidential nominations — emphasize that globalization and the expansion of trade have created unprecedented wealth in both rich and some previously poor countries. The world's economy has grown to six times its size since 1950, primarily on the basis of a tenfold increase in international trade. Free trade advocates believe global prosperity can be maintained and expanded only through an increasingly borderless economy, which requires standardized rules made by a universally accepted authority. That, they argue, is the only way to ensure fairness and avoid damaging trade wars.
The Case Against the WTO
Critics of the WTO range from the fringe to the mainstream, raising
concerns about democracy, labor rights and the environment. They reject the idea of having a non-elected body with the power to overrule
democratically elected governments on issues of environmental protection and labor rights. For example, environmentally motivated U.S. restrictions on importing shrimp caught with nets that endanger sea turtles have been overruled by the WTO, while laws against dumping low-cost steel in the U.S. may also be eliminated by the international body. Some of the more radical environmentalist groups, as well as
conservatives such as Pat Buchanan, who traditionally oppose
international organizations' having any jurisdiction over the U.S., want
the organization disbanded. Others want to transform it to incorporate
social and environmental concerns, charging that the WTO currently makes
decisions affecting all of society on a purely commercial basis.
Flash Points
A number of contentious issues separate not only the demonstrators from
the WTO, but also the member states themselves.
Labor practices
U.S. labor, with the verbal support of the Clinton administration, is
pushing for the WTO to enforce minimum labor standards in developing
countries, protesting that manufacturers are exploiting sweatshop
conditions. But the governments of many developing countries see this as
an attempt by Washington to protect American jobs at the expense of the
Third World poor. With low labor costs often the only competitive
advantage many developing countries have in the global economy, they
fear that enforcing labor standards will simply expand unemployment in
the developing world.
Environmental and health protections
Environmentalists and public advocacy groups strongly reject the WTO's
right to overrule measures intended to protect the environment or public
health, arguing that the organization puts the narrow interests of
business over those of society in general. But countries disadvantaged
by such measures often charge that they're invoked as a fig leaf for
old-fashioned protectionism. For example, Washington has dismissed
European health concerns over the import of hormone treated beef as an
attempt to protect less competitive European farmers.
Agricultural subsidies
Europe and Japan continue to heavily subsidize their farmers, making
those markets less competitive for food exporting countries such as the
U.S., Canada, Australia and Brazil. Although they'll find it difficult
to maintain those subsidies in the face of WTO opposition, European and
Japanese leaders are under intense political pressure from their
domestic farming communities. They'll fight hard to slow the advance of
agricultural imports into their markets, using arguments about food safety and
consumer protection.
Services
Globalization has dramatically expanded potential international markets
for everything from banking and credit to insurance, telecommunications
and travel. Developing countries tend to resist opening up those sectors
of their economies to international competition.
Dumping
Europe and Japan want a wide-ranging round of trade negotiations to
include limits on the use of anti-dumping legislation to prevent cheap
imports from undermining local industry. The U.S. favors a more limited
agenda, excluding issues such as dumping, which are a major concern of
U.S. labor.
Photo Essay: The Battle in Seattle
Newsfile: The Global Economy
Pat Buchanan and Ralph Nader on
Globalization