Making Sense of the WTO

Regardless of one’s stand on the World Trade Organization (WTO), it is necessary at this point to review what the WTO stands for and what is expected to happen at the fifth ministerial, also known as the Cancun Conference from Sept. 10 to 14. This is especially true if one remains undecided on, or worse indifferent to, what the WTO has done to the life and livelihood of marginalized peoples throughout the world since its establishment in 1995.

By DANILO ARAÑA ARAO
Bulatlat.com

Protest actions worldwide are now in full swing as the 5^th Ministerial Conference of the World Trade Organization (WTO) is held in Cancun, Mexico from Sept. 10 to 14. Just as opposition to the WTO is expected to heighten this week, one may also expect the administration and pro-globalization groups and individuals to speak in its defense.

To make a sound judgment on the WTO, it is necessary at this point to review what it stands for and what is expected to happen at the 5^th ministerial, also known as the Cancun Conference.

Established on Jan. 1, 1995, the WTO’s main function is to ensure that trade flows “as smoothly, predictably and freely as possible.”

In the eyes of traders and investors, there should be no barriers to trade in the form of, among others, high tariffs and other restrictions like quota and import license. The trade regime must also be predictable in the sense that policies and programs remain the same despite the change in administration.

According to its website, the WTO has six official functions. These are the administration of WTO trade agreements, facilitation of trade negotiations, handling trade disputes, monitoring national trade policies, technical assistance and training for developing countries, and cooperation with other international organizations.

As of April 2003, the WTO has 146 member-countries which account for over 97% of world trade. It is currently headed by Director General Supachai Panitchpakdi of Thailand.

Product of GATT

The trade body is a product of the final round of the General Agreement on Tariffs and Trade (GATT) also known as the Uruguay Round which spanned seven years, from 1986 to 1993. The GATT runs to 30,000 pages and consists of 60 agreements and schedules.

The first rounds of GATT negotiations initially focused on tariff reductions, but later rounds included other areas like anti-dumping and non-tariff measures.

The negotiations and agreements, however, did not end with the Uruguay Round. After the establishment of the WTO, for instance, member-countries agreed to liberalize telecommunications in 1997. In the same year, the agreement for the tariff-free entry of information technology (IT) products was also reached.

The year 2000 saw the start of negotiations to further liberalize and widen the scope of agreements on agriculture and services.

The attempts to expand the coverage of the WTO agreements became more apparent with the launching of the Doha Development Agenda (DDA) at the WTO’s 4^th Ministerial Conference in Doha, Qatar in 2001.

In a nutshell, the DDA seeks to start negotiations on non-agricultural tariffs, trade and environment, WTO rules like anti-dumping and subsidies, investment, competition policy, trade facilitation, transparency in government procurement, and intellectual property. The deadline for negotiations is on Jan. 1, 2005.

What to expect in Cancun

The previous four WTO ministerial conferences were held in Singapore (Dec. 9-13, 1996), Geneva (May 18-20,1998), Seattle (Nov. 30-Dec. 3, 1999) and Doha (Nov. 9-14, 2001).

Based on a draft ministerial declaration that was submitted by the WTO director general to ministers last Aug. 31, moves by industrialized countries to include other non-trade issues at the Cancun Conference are facing stiff opposition from selected underdeveloped countries.

For one, the areas of investment, competition, government procurement and trade facilitation may not be subjected yet to negotiations.

Items 13 to 16 of the draft declaration state, “We take note of the discussions that have taken place…since the Fourth Ministerial Conference. The situation does not provide a basis for the commencement of negotiations in (these areas). Accordingly, we decide that further clarification of issues be undertaken in the Working Group.”

Aside from this, the declaration also seeks the adoption of specific measures “that would facilitate the fuller integration of small, vulnerable economies into the multilateral trading system.” (Item 17)

Cambodia’s and Nepal’s membership to the WTO is also expected to be approved, given that Item 28 notes “with particular satisfaction that this Conference has completed the (two countries’) accession procedures.”

The WTO notes that there are still 25 governments negotiating accession. Indeed, the organization’s membership gets wider as its influence covers ground beyond trade.

While its official documents do not explicitly state the attempt to promote and impose globalization, the challenge right now is to be able to read between the lines and analyze the impact of the WTO on various economic sectors, taking into account the plight of marginalized peoples. Bulatlat.com

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