The WTO: A Brave New World?

Often mentioned in my posts is the World Trade Organization, WTO for short. Mostly it is in a complaint about the negative side-effects of its policies and actions. The WTO was established in 1995 as the successor to the GATT-negotiations. Its goal was to realize global free trade. I noticed however that more and more the organization is used as a battleground for the resolution of national interest conflicts. The big trading blocs - United States, European Union and China - are pursuing their economic self-interest, disguising it as concerns of free trade, ecology or fair trade.

One of the first big clashes was between Europe and the Cairns Group. The latter attacked the agricultural policy of the Union. Of course this was a genuine case of protectionism versus free trade. But when Europe masked its subsidies as support for environmental development, things got really nasty. The WTO was expected to decide on the legitimacy of environmental and other 'progressive' arguments, something it had no mandate for. Indeed the WTO assesses mostly in favor of free trade. Two clear-cut cases are the Banana War and the dispute about Europe's unilateral guarantee of free trade to its poorest trading partners. In both cases Europe had nothing to gain financially itself, but the WTO ruled that such practices are 'against the spirit of freeing up world trade'. I wonder what will become of the Union's aircraft carbon tax...

With its one-sided focus on free trade the WTO can
only serve capital. There is no attention for legitimate
concerns regarding the environment or free trade...

The WTO was created in a moment that everyone believed capitalism had triumphed. A brave new world dawned, a world in which free trade was good trade, best trade. In this spirit the rules of good practice were enshrined in legislation that could only be changed by unanimous vote of the WTO members. This gave rise to what political scientist Stephen Gill calls the new constitutionalism of disciplinary neoliberalism: governments across the world have to abide the rules regardless of their orientation, resisting or retreating equals economic suicide. Truly globalization at its best here, or should I perhaps say at its worst?

Nations sometimes win, sometimes they lose. The real winner in this game is capital: it enjoys the freedom to exploit without the hinderance of border, it is free to set up governments against each other. Who gives the biggest tax cut? Who provides the juiciest subsidies? Who doesn't care that the world dies tomorrow if we can feast today? The one-sided stress of free trade is the real tragedy of the WTO. When we have global exchange we need global regulation. Not the kind of night-watchman authority the WTO provides. Perhaps the resolution lies in the blockage the organization is currently in: being stuck halfway between painful fines and equally painful import taxes can only cause irritation with the WTO's members.