World Trade Organization (WTO)

WTO Overview
WTO News
Doha Round
WTO & Women
WTO & Agriculture
WTO & Environment
WTO & Textiles
WTO & Services
WTO & Access to Medicines
WTO & Labor

WTO Overview
The WTO was established in 1995 as the first permanent multilateral trade negotiating forum. It oversees over 30 trade agreements, currently has over 140 member nations, and is involved in more than 90 percent of world trade. According to the WTO’s organizational statement, its objective is to “help trade flow smoothly, freely, fairly and predictably.” In practice, however, the WTO acts as a global enforcement mechanism for corporate-managed trade at the expense of social, environmental, and development interests.

Though the WTO claims to be a democratic institution, this is far from the case. Trade policy, in rich and poor countries alike, is overwhelmingly a reflection of business interests with scant regard for the public concern: a phenomenon that is only magnified under the WTO. Trade unions, environmental organizations, consumer groups and many others working for the public good are often shut out of the process that determines trade policy domestically and within the WTO. Business interests, on the other hand, have enjoyed priveleged access to negotiators, advisory committees and have been prominent in WTO policy formulation including the drafting of agreements. The most notorious example of such corporate influence is the pharmaceutical industry’s disproportional involvement in drafting one of the WTO’s most controversial agreements: the Trade Related Intellectual Property Rights Agreement (TRIPS), which severely restricts government ability in developing nations to ensure public access to essential medicines.

There is a second level where accountability fails in the WTO. Although formally one-country-one-vote in structure, the WTO seeks to make its decisions by consensus which often means pressure on smaller countries to accept larger countries’ agendas. Moreover, the deeply unequal nature of global trade, where a small number of powerful countries – including the United States – dominate trade policy leaves the process of negotiation very unbalanced. Many of the poorest countries do not have enough personnel to staff the numerous ongoing negotiating committees. Nor are these countries given the necessary technical assistance to have equal influence in the workings of the organization.

This structural lack of democracy within the WTO is of particular concern because the organization has a powerful enforcement mechanism at its disposal. When countries fail to live up to – or are judged by trading partners to have failed to live up to – their trade obligations, WTO member states can challenge each other’s laws in a closed WTO tribunal. Challenges can be brought before the tribunal by any member country on claims that another country’s domestic law is an “unfair barrier” to trade. Such challenges often affect domestic issues that were once the exclusive business of member nations and profoundly impact the public interest. WTO tribunals are made up of three “trade experts” (nominated by their governments and not answerable to any other authority than WTO law) whose mandate is to consider only the trade implications of their decisions, not social or environmental factors. So far cases have been brought against several U.S. domestic environmental laws, as well as public interest laws in developing nations. The losing country in a WTO case has three choices: change the law in question, pay enormous fines to the winning country, or face sanctions. In most cases, the losing country simply changes their law. (It should also be noted that for poor countries, paying a large fine is often not an option, though rich countries have more than once opted to pay rather than rewrite a law).

Of all the cases heard regarding environmental or public-health laws since the WTOs inception, only one ruled to uphold public interest in the face of corporate challange. For example, ten years of environmental activism were reversed when a WTO panel ruled that a law protecting endangered sea turtles poses an illegal barrier to trade. In fact, several countries are now threatening to challenge laws in other nations designed to meet obligations under the Kyoto Treaty on climate change.

This powerful dispute resolution system has had a significant impact on Federal, state, and local democratic governance in the last eight years, and has fueled opposition movements throughout the world including the demonstrations that shut down the 1999 WTO Ministerial meeting in Seattle, Washington.

Negotiations within the WTO take place continually as it is set up as a permanent forum. Negotiating committees report to several councils, which in turn report to the General Council, the highest level of WTO decision-making in the institutions’ day to day work. Every two years, ministerial level meetings are held for member-state Trade Ministers. The Ministers decide the WTO’s workplan and have the final say in the wording of new agreements. In addition to these highly publicized ministerials, “mini-ministerials” are sometimes held between the larger gatherings, particularly when a number of negotiations are in progress. These meetings are not open to all WTO member states, but are held on a by-invitation only basis, usually for some 25 countries.

Current negotiations at the WTO center around a “built-in agenda”, which was mandated at the Uruguay Round so as to update existing agreements aftertheir initial implementation period ended. These agreements include agriculture, services, and intellectual property rights. At the fourth WTO Ministerial, in Doha, Qatar, governments decided to turn these negotiations into a broader round of negotiations, and added other concerns, including industrial tariffs, environmental concerns and the possibility of four new areas – strongly resisted by many developing countries – including competition and investment.

The next ministerial is scheduled to take place in Cancun, Mexico September 10-14, 2003. Social justice organizations and grassroots movements in Mexico and around the world are already mobilizing in anticipation.

General Agreement on Trade in Services (GATS)
At one time, trade rules dealt strictly with goods and therefore focused on the lowering of tariffs and quotas. But today “trade” has expanded to deal in services (which can be thought of as “everything you cannot drop on your foot”) and includes banking, telecommunications, postal services, tourism, transportation, waste disposal, oil and gas production, and electricity. It also covers services universally considered to be essential to human health and development, like healthcare, education and drinking water. The rules proposed by the GATS seek to phase out all governmental “barriers” to international trade in the service sector: turning public services into deregulated private markets all over the world.

One of the more striking effects of the GATS would be the restricted use of government funds for municipal services and social programs. With the WTO’s National Treatment rules, the new negotiations seek to make funds allocated for public services directly available to foreign-based, private service corporations. In addition, the agreement forces governments to grant unlimited market access to multinational corporations providing these services, without regard to the environmental or social impacts of their activities. March 31 is the deadline for WTO member countries to produce initial offers of sectors and regulations for coverage by GATS rules.

Agreement on Agriculture (AOA)
The Agreement on Agriculture (AOA), sets rules on the international food trade and restricts domestic agriculture policy, down to the level of support for farmers, the ability to maintain emergency foodstocks and food safety rules and to ensure a secure food supply. The AOA has been repeatedly criticized for much of its policy includeing favoring corporate farming at the expense of small farmers, failing to protect food resources or to allow developing countries to build strong food security programs, and undermining incentives for programs that encourage good environmental practices.

Trade Related Intellectual Property Rights (TRIPS)
As of January 1, 2000, all WTO member countries are now subject to the rules of the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Intellectual property refers to intangible property “rights” such as patents. TRIPS requires member countries to uphold and enforce protection of these ‘rights.’

The TRIPS agreement creates enforceable global rules on patents, copyrights and trademarks to protect inventions or artistic products, but also extends far beyond this scope. Intellectual “property” now includes the practice of patenting plant and animal forms as well as seeds. By taking such public and cultural goods out of the hands of people and communities, the private rights of corporations are promoted over the rights of local communities; and the protection of ecosystems, public health, and traditional cultures are all undermined. In addition, the TRIPS agreement harms farmers in the Global South because it creates norms that take control of seeds and their propagation out of the hands of farmers and concentrates that control in the hands of commercial seed breeders.

Government Procurement Agreement (GPA)
The WTO Agreement on Government Procurement was signed in 1994. The agreement sets limits on the criteria permitted for decisions regarding government purchase of goods. Government procurement has traditionally been a tool for the promotion of social goals: e.g. investing in local businesses or placing requirements on the way goods are produced (as in recycled content laws, local content laws, or anti-sweatshop laws). Unlike other WTO agreements, not all WTO countries are bound by the GPA, rather, only those who have signed on. There are currently 26 countries (including the U.S.) signed to the agreement. Additionally, a majority of U.S. states have signed on, as well as seven cities. Decisions to sign on at the state and local level have generally been made by the respective governor or mayor and have not been debated by state legislatures or city councils, though the impact of the GPA on the authority of these bodies is substantial. In the next round of negotiations, the U.S. will probably try to increase the number of countries signed on to the agreement.

Report Warns Poor Countries Against Signing Bad Trade Deals Oxfam, April 27, 2006
Impact of the Doha Round on Developing Countries Carneige Endowment for Internationl Peace, March 15, 2006
A Decade of Results Shows the WTO Model has Failed Public Citizen, December 7, 2005
Top Ten Reasons to Oppose the WTO Global Exchange
Opposition to the expansion of the WTO’s GATS Alliance for Democracy
The Shrinking Gains from Trade Tufts University, October 2005
Power Politics in the WTO Focus on the Global South, January 2003
Freedom to Trade? Food First, Fall 2001