The opposite is therefore true, that if a country cannot sell certain goods to other nations profitably, or even at all, it must abandon that industry and move onto ‘greener pastures’. The sad irony is that moving to ‘greener pastures’ means moving towards a more industrialised economy where the needs of workers, farmers and small business are ignored (Callaghan 2001). To show sympathy and compassion for such globally useless industries would mean the government would either have to subsidise their excess production cost, or impose trade barriers on the cheaper imports which threatened their production in the first place. Such an action, under the WTO’s rules and agreements, is illegal under any pretence, whether the imports be genetically modified or the product of slave labour (WTO Online(1) 1999). Such free trade opportunities obviously encourage a negative attitude from countries towards their labourers, and therefore result in poor work conditions and a diminished lifestyle; or even poverty. This phenomenon is referred to when we read about a country who ‘exports jobs’ to another, a catchcry of those who are in favour of tariffs (Ebeling 2000).
Thus it can be seen, that through achieving the wants of multinational corporations, the livelihood of ordinary people can be severely compromised. In the constant search for profit and greed, headless organisations which hold the trade practices of an entire nation in their hands, can do insurmountable damage to exposed economies. The WTO states that its ultimate aim is to generate development in order to increase growth, it says that this is achieved by breaking down the barriers between economies and therefore forcing upon them the need to adopt new strategies. This, it says, will allow them to cope with fluctuating trends in the global marketplace (WTO Online(2) 1999). It forgets that these economies lack the infrastructure to capitalise on their own potentially competitive industries, and therefore must succumb to the will of self-focussed multinationals in order to preserve a tortured survival (Sirico 2000).
It makes no sense that the WTO wishes countries to focus on those industries in which they are globally competitive, and yet allows dominating multinationals to ‘milk’ their local industries of their rightful funds. Wills proffers the example of Uganda and Nestle. Coffee being Uganda’s main export good, and Nestle being the multinational corporation which ‘exports jobs’ from its home economy, in order to rob Uganda’s workers of their equivalent wage and work conditions. The entire production process of the coffee is completed in Nestle’s factories located in Uganda, before being shipped over and sold to retailers in Nestle’s home economies. The only profit the Ugandan’s truly receive, is the paltry price for which they sold the unprocessed coffee. It is very easy to rationalise this unfair exploitation with economic rules and models which follow logical principles, a task the WTO is trying to achieve using the support of its four major member-country economies; the US, Canada, the European Union, and Japan. Unfortunately, on the other side of this free-trade coin, there is a country whose majority of members suffer from exploitative work practices and sub-standard work conditions.
That the WTO serves as a forum for countries to “thrash out their difficulties”3 regarding their trade practices, is of no consequence when the foundations upon which the WTO’s rules and agreements stand is considered. The evolving international trading scene is akin to the changes which were and are taking place within the Australian economy. Privatisation of government companies and deregulation of industries, was a tactic designed to increase efficiency and provide better service (Steketee 2001). Yet we are seeing more and more evidence that efficiency comes with a different kind of price. In Australia, we noted that the people living in the country areas were forced to pay a greater sum for their services, due to the increased costs of providing those services (The Australian 2000). For us Australians, the introduction of competition resulted in the “[weeding out] of the weak companies . . . [in order to] encourage and reward the strong, efficient producers”4. Does this mean that because third-world economies cannot maintain the efficiency of developed economies, they should simply be “[weeded out]”4? Privatisation of government business enterprises has certainly increased their efficiency, but at what cost? It seems that the economic definition of efficiency is grossly different from the dictionary one. Today efficiency in business means saving funds by cutting corners and sacking employees. The same is mirrored in the international marketplace. Only the big players are favoured by the WTO’s agreements, everyone else can either be manipulated by multinationals, or left out of the equation entirely.
According to my stated criteria, the WTO has failed miserably. The WTO will inform you with much authority that it:
1. Administers WTO trade agreements
2. Provides a forum for trade negotiations
3. Handles trade disputes
4. Monitors national trade policies
5. Provides technical and training assistance for developing countries and
6. Co-operates with other international organisations
(WTO Online(3) 1999)
Yet it refuses to elaborate on its promise of greater efficiency “ . . . the [WTO] . . . helps to increase efficiency and to cut costs even more because of important principles enshrined in the system.”5, those principles being, to apply a set of rules which are equally applicable to both the most developed world nation and the least; an edict comparable to racing an athlete against a child (Laurel 2000). Dispiriting also, is its passive refusal to expound the three-point system of economic success, accurately summarised into: trade = growth = jobs. A system which fails to acknowledge a constantly transforming world climate, which has (need the WTO be reminded) passed through Alvin Toffler’s Second Wave, a wave which demanded the realisation of an industrial revolution. As of yet, the WTO still demonstrates its failure to recognise that the world’s economy has in fact moved beyond the traditional mercantilist ideals that were so prevalent in its predecessor GATT’s founding, and that a great sum of the world’s profit is now being circulated in info-tech oriented industries (Mitchell 2001). Industries which developing economies still struggling to obtain the means of processing their primary export, have hopelessly pathetic chances of developing (Stoeckel 2000).
Most frightening however, is the WTO’s encouragement - through the use of anti-unilateral trading rules - of small vulnerable nations to pool together their trading power (WTO Online(3) 1999). An action which fosters the development of a scenario likeable to Florence Chong’s “Slow out of the blocs”. Chong describes a future where three economically continental super-blocs – euro, yen and dollar – form a tight multilateral trading arrangement, that isolates those economies who cannot secure their trading partners. At present, this includes Australasia and “the economic backwaters of the world”6, Africa and the Indian sub-continent. Within such a future, those countries not in supranational trading blocs, are denied access to “half of all global imports” 6. To this degree, it doesn’t seem as if the WTO wants to unite the world’s trading arrangements. In fact, its motives would appear simply to capitalise on those trade arrangements occurring between the three proposed regional trading blocs; a move which would almost certainly cleave a planet’s trading arrangements in two, with one side geographically and economically disadvantaged.
For all of these reasons, I have decided that the WTO should be abolished. Inefficiency is nothing compared to poverty and greed. Why is it that we must always compete so viciously that someone must get hurt? Where does growth really lead, but to one’s overindulgence and another’s lack thereof? More humanitarian ideals are necessary, if we as a global entity are to truly unite. No organisation which fosters monetary gain over sub-standard living, should ever be backed so powerfully by such greedy nations. By simply existing, the WTO serves as figurehead of what is wrong with the world; and what we need to do to fix it.
Bibliography
FOOTNOTES:
1: WTO – Website (http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm)
2: WTO – Website (http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm)
3: WTO – Website (http://www.wto.org/english/thewto_e/whatis_e/10ben_e/10b00_e.htm)
4: Callaghan, D., Class Notes : 2001
5: WTO – Website (http://www.wto.org/english/thewto_e/whatis_e/inbrief_e/inbr00_e.htm)
6: Chong, F., February 1 The Australian p.28.
BIBLIOGRAPHY:
Books:
Stoeckel, A. (2000) Solving the Problem: A Look at the Political Economy of Agricultural Reform Canberra. Rural Industries Research and Development Corporation.
Toffler, A. (1991) Third Wave New York. Bantam Books.
Magazines:
APEC Branch – Department of Foreign Affairs and Trade (1999) Report on the APEC Business Forum Sydney. Market Development Division.
Laurel, J. (2000) “Proceed with Liberalization” Report to the APEC Economic Leaders October p.16.
Newspapers:
Chong, F. (2001) “Slow out of the blocs” The Australian February 1 p.28.
Mitchell, A. (2001) “Let community have its say” The Australian Financial Review March 7 p.6.
Steketee, M. (2000) “Unhappy days are here again” The Australian June 17 p.4.
The Australian (2000) “Fabric of the fair go ripped to shreds” June 17 p.4.
Internet:
Ebeling, R. (2000) Free Trade Versus Protectionism
[ON-LINE] http://www.freerepublic.com/forum/a3950b6be763d.htm
S-11 Online (2001) Frequently Asked Questions: FAQ
[ON-LINE] http://www.s11.org/s14/s11.html
Sirico, R. (2000) Free Trade and Human Rights: The Moral Case For Engagement
[ON-LINE] http://www.freerepublic.com/forum/a392420130b93.htm
Wills, J. (2000) Multinationals and the Poverty Trap
[ON-LINE] http://www.unfairtrade.co.uk/pov/articles.shtml
WTO Online(1) (1999) 10 Benefits of the WTO Trading System
[ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/10ben_e/10b03_e.htm
WTO Online(2) (1999) 10 Benefits of the WTO Trading System
[ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm
WTO Online(3) (1999) What is the WTO?
[ON-LINE] http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm
Other:
Callaghan, D. (2001) Australia’s Response to the Challenge of Globalisation
Class Notes
Callaghan, D. (2001) Theory of Comparative Advantage
International Economics – Booklet 1
