Analyzing the Relevance of WTO

Finally, the 9th Ministerial Conference (MC), held by the World Trade Organization (WTO) in Nusa Dua, Bali, sealed the Bali Package deal. Although the passage took tough negotiations over many hours (which resulted in the delay of the closing ceremony), the success of the Bali Package made Roberto Azevedo as Director General of the WTO and Gita Wirjawan as the Chair of the MC dare to claim that they’ve recorded new history for the WTO. The Bali Package contents focus on the agricultural sector, trade facilitation, and the capacity of building for the least developed countries. It is believed it will restore public trust in the WTO, which has been besieged by constant failures to protect the global economy.

At the opening ceremony of 9th MC, the delegates also believed the Bali Package would increase the relevance of the WTO to global trade. But does it really? One of the WTO members, India, does not think so. India took a tough stance against the food subsidy points of the Bali Package materials, which were based on WTO rules that require the members to provide subsidized food based on prices from 1986-1988. Anand Sharma, Minister of Commerce and Industry of India, admitted that he had pleaded with the WTO to review the rules and raise the food prices to 2013. Questions about the relevance of the WTO began when its role in global trade was reduced little by little as time went by. The fading relevance began prior to the failure of the Doha Round in 2001 and was followed by the failure of the Ministerial Conference in Mexico in 2003, Hong Kong in 2005, and Geneva in 2009 and 2011. This series of failures made many countries prefer bilateral/regional agreements in trade transaction such as the Trans-Atlantic Partnership, the Trans Pacific Partnership, and the ASEAN Free Trade Area (AFTA). In the end, these pacts unwittingly divided the WTO into two, the South bloc, which comprises the least developed countries, and the North bloc, which comprises the most developed countries.

The split was exacerbated by the failure of the WTO to accommodate the interests of the least developed countries. The original mission of the WTO was to develop a free trade system, which was often considered more favorable for the economies of developed countries. This system included the removal of trade tariffs and import taxes, reduction of subsidies, and product standardization requirements. Looking at how strong and efficient their industries are, these rules are certainly not a big problem for developed countries. But for the least developed countries, where the quality of products is not as high as that produced by developed countries due to limited technology, this rule is very detrimental. So it is not surprising many parties accused the WTO, like other international economic regimes such as the World Bank and the IMF, of applying the practices of colonialism. Among other accusations, critics accused the WTO of extending control over weak governments and giving rise to global economic inequality, as well as widening the gap between the North and the South. For these reasons, many people were pessimistic about the Bali Package. Jean Pierre Lehmann, a professor at a business school in Switzerland, even stated that the Bali Package is like giving candy to a crying baby. If it succeeds, it will be an extremely small victory. But if it fails, it will be a rather big failure for all.

As can be seen from the examples above, it is very clear that the colonialism of the WTO has threatened the sovereignty of its members. A government’s obligation to protect the welfare of its people and its economy has been replaced with WTO policies that follow the trends of the world market. The result is unfair competition, decreasing welfare of farmers, fishermen, and small entrepreneurs, as well as raising the risk of unemployment. WTO Director General Roberto Azevedo, know this very well. Despite the rising voices of protest against the WTO’s unfair policies, why does Azevedo seem like he doesn’t care and keep pushing the Bali Package? Is it because he wants to “redeem” the series of previous WTO’s failures? Or is it because of the lure of USD $1 trillion that will rotate in the world due to the increasing of global trade transactions with the success of the Bali Package? If so, then who will benefit from that U.S. $1 trillion?

About Ika 12 Articles
Ika Virginaputri is an independent writer and current-affairs observer for the Dekker Center. She lives in Jakarta and writing for the Dekker Center and national and international media.

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