Tuesday
(0)Cameron Carswell discusses the role of the World Trade Organization in promoting free trade.
The World Trade Organization (WTO) draws wrath from people of all sides of the political spectrum. There are those supporters of globalization who oppose it on principle, saying that while free trade is a desirable goal such an organization implies it needs to be "managed". It makes sense to be sceptical of the idea that economic liberalism and free trade can be imposed from the top down - for an excellent and balanced view of this by Dr. Razeen Sally see here.
There are those who oppose globalization and see the WTO as advancing the very process others see it as hampering. The question is, does the WTO genuinely advance free trade (with all the associated benefits), or is it merely a vehicle for special interests and rent seeking?
There are some elements of the WTO rules which do seem at odds with the goal of free trade - Chinese clothing exports are currently limited under special WTO rules. However it could equally be argued that this was merely a practical measure to prevent further trade barriers being set up.
The WTO is designed to promote free trade but by its nature as an international organization is open to politicisation. If it is the case that trade barriers are reduced as a result of the pressure it exerts then all the better. On the other hand, unilateral moves toward freer trade are invariably good things, and it would appear that this is the most likely route for the goal of free trade, once again with China leading the way.
Imagine an organisation funded by governments called the World Freedom Organisation that existed to promote liberty and keep governments in check. Would you trust it?
Posted by Bernie at August 16, 2005 06:17 PM
If free trade were established then the WTO should no longer need to exist. Bureaucracies seldom abolish themselves so there is room for real concern about whether the WTO will really promote free trade. On the other hand, the existence of the WTO puts a lot of practical obstacles in the way of any country that wanted to step back into protectionism.
It also institutionalizes "free trade" as an ideal on which all nations agree (or at least which no nation dare openly to oppose) in the same way as "democracy," "human rights," and "the environment." Of course, institutionalizing these ideals can lead to their being hijakced or corrupted.
On balance the WTO is probably doing more good than harm.
Posted by Robert Alderson at August 16, 2005 07:32 PM
From the article, stating what the WTO does:
"It polices free trade agreements, settles trade disputes between governments and organises trade negotiations."
What's that got to do with free trade ? Nothing. It does try to manage and interfere in relations between governments, which is of course not free trade.
It corrupts the idea and concept of free trade, thereby destroying it.
Posted by Jacob at August 16, 2005 10:02 PM
I think you are being a little to harsh. The WTO is a flawed organisation, on that score I will not argue. I hate the Zero sum game mentality of much of the debate.
However, I do think that trade is freer due to its existence and it has a big effect on would be members freeing up their markets.
Compared to the other big international institutions, this one has had a good impact.
Posted by EU-Serf at August 17, 2005 07:37 AM
on Dr Sally's report:
http://www.inquit.com/469/the-swoosh-of-trade-policy
While the WTO is, as any government funded talkshop, flawed, the question to ask is
Would we be better off without it?
Posted by Zilch at August 17, 2005 01:47 PM
