Trade is as old as mankind and with mankind it developed and kept growing into a
jungle of arrangements, contracts, and trade relations summarised by the catch phrase
globalisation. Everyone agrees that there have to be rules to form a common
foundation for international trade around the world, so that all countries which use it
as ‘an instrument for promoting development’1 will profit from its many benefits.
The World Trade Organisation (WTO) is the nations’ solution to the problem of
ensuring free and fair trade in the interest of economic development of the world as a
whole. Keeping this in mind, one might wonder why since 1999 a movement called antiglobalisation
wins more and more followers seeing the WTO as their declared
enemy2. Calls for an abolishment of the system grow louder and louder and the
dissatisfaction amongst the more than two thirds of developing member countries
shows in the debacle of Seattle where African ministers simply walked out or the
collapse of trade talks in Cancun. Has the WTO really developed into a mere tool of the rich and powerful Western
countries and Japan and are corporate lobby groups the big winners, while the poor
the big losers? This question forms the centre of the following explanations, which
shortly outline the original idea behind the WTO, then concentrate on the problems
of implementing this idea, and finally answer the question in a conclusion. Due to the
limitations of this essay it is not possible to cover everything associated with the
WTO. The texts indicated as footnotes should be considered for further exploration.
1 Nitya Nanda, WTO and Development, It’s all about a mercantilist game. From: http://www.gdnet.org/ 2 See The Guardian/Action Aid, TRADE: An insight into the way the world does business, 8 September 2003; p. 3.
Table of Contents
1. Introduction
2. A critical view of the WTO
3. The cases of agriculture and intellectual property rights
4. Conclusion
Objectives and Themes
This essay explores whether the World Trade Organization (WTO) serves the interests of wealthy nations and corporate lobby groups at the expense of developing countries. It examines the gap between the WTO's theoretical purpose of promoting global trade and the practical inequalities in its implementation, particularly regarding agricultural subsidies and intellectual property rights.
- The original intent versus the practical implementation of the WTO.
- Power imbalances and decision-making processes within the WTO framework.
- The impact of agricultural subsidies on developing nation farmers.
- Access to essential medicines under the TRIPs agreement.
- The role of consumer awareness and fair trade in shifting global economic power.
Excerpt from the Book
3. The cases of agriculture and intellectual property rights
To stay within the limits of this essay the following paragraph gives detail of only two prominent examples showing how governments and multinational companies deal with developing countries, namely the cases of agriculture and intellectual property rights.
The economy of developing countries highly depends on agriculture as it makes up a huge part of their economic output, for example more than 50 % in Africa. With 97 % of the world’s farmers living in developing countries for most families there farming represents the sole source of income. They suffer most from agricultural policies of the US, Japan and the EU, whose governments heavily subsidise their farmers in order to stabilise farm incomes. Without money from the public these farms would have to close down facing competition from developing countries that grow agricultural products at far lower costs. So subsidies turn things around: the farmers of developed countries produce at higher costs but bring their output to the market at lower prices. Like that, subsidies endanger the income and livelihood of families in developing countries and hurt the economy of the subsidising country because of a misallocation of resources disregarding the principle of comparative advantage. Furthermore, it is not the farm families in rich countries that receive most of the subsidies, but the big farming companies already enjoying the advantage of mass production.
Summary of Chapters
1. Introduction: The introduction outlines the evolution of global trade and the theoretical role of the WTO, while presenting the central question of whether the organization disproportionately favors industrialized nations.
2. A critical view of the WTO: This chapter analyzes the practical implementation of WTO policies, highlighting how power imbalances and the dispute settlement system often disadvantage developing member states.
3. The cases of agriculture and intellectual property rights: This section details how agricultural subsidies and the TRIPs agreement on intellectual property create barriers for development in poorer countries.
4. Conclusion: The conclusion argues against abolishing the WTO, instead calling for structural reforms and a shift in consumer behavior to support fair trade and empower developing nations.
Keywords
World Trade Organization, WTO, International Trade, Developing Countries, Globalization, Agriculture, Intellectual Property, TRIPs, Fair Trade, Economic Development, Trade Barriers, Subsidies, Dispute Settlement, Market Access, Corporate Lobbying
Frequently Asked Questions
What is the primary focus of this paper?
The paper evaluates the effectiveness and fairness of the World Trade Organization, specifically questioning whether it acts as a mechanism for developed countries to exploit developing nations.
What are the central thematic areas?
The core themes include global economic power dynamics, the impact of agricultural protectionism, the consequences of strict intellectual property enforcement, and the potential for reform through consumer action.
What is the main research question?
The research asks if the WTO has become a tool for rich countries and corporate interests, leaving developing nations as the primary losers in the global trade system.
Which methodology is employed?
The work utilizes a critical review of trade literature, economic case studies, and policy analysis to examine the implementation of WTO agreements and their real-world outcomes.
What is covered in the main body?
The main body focuses on the disparity between the WTO's stated goals and its operations, with specific deep-dives into the agricultural sector and the TRIPs agreement regarding medicine patents.
What key concepts define the analysis?
Key concepts include comparative advantage, consensus-based decision-making, divide-and-rule tactics, agricultural subsidies, and the role of generics in public health.
How do agricultural subsidies affect developing countries?
Subsidies in wealthy nations allow them to export at artificially low prices, which undercuts local farmers in developing nations and limits their primary source of income and economic growth.
Why does the author argue that TRIPs hinders development?
The author explains that strict patent enforcement under TRIPs limits access to affordable generic medicines, which is detrimental to populations in developing countries where the workforce is highly vulnerable to disease.
Does the author recommend the abolishment of the WTO?
No, the author concludes that abolishing the WTO is not a practical solution, as it would likely leave developing countries even more isolated and vulnerable in bilateral negotiations.
What is the author's proposed solution for change?
The author suggests that real change must come from a shift in mass attitude, where global consumers prioritize fair trade over the lowest possible prices, thereby compelling a change in economic power dynamics.
- Citation du texte
- Tanja Hollederer (Auteur), 2005, What is the WTO? Is it a tool of the rich and powerful Western countries and Japan? Are corporate lobby groups the big winners while the poor the big losers?, Munich, GRIN Verlag, https://www.grin.com/document/44216
