World Trade Organisation (WTO)

In the wake of the global economic crisis, world leaders are demanding more free trade as the panacea to the world’s economic woes. But moves toward free trade and liberalisation were the driving force behind the financial collapse which eventually brought the global economy to its knees. After years of stalled talks, a World Trade Organisation (WTO) ministerial conference was held in November 2009 where trade ministers renewed their commitment to conclude the Doha round by the end of 2010.

What’s wrong with the WTO?

The WTO is an international body created in 1995 to regulate world trade. However the outcomes of the WTO have served the interests of rich countries and their multinationals while inadequately addressing the concerns of developing countries.

A core principle at the WTO is to work towards more free trade i.e. the removal of government involvement in trade to allow goods and services to flow freely between countries. This includes getting rid of government subsidies, import tariffs and quotas.

This agenda benefits rich countries and multinationals that already have well established products, services and technological advantages. More free trade gives these companies opportunities to make more profit by giving them easier access to overseas markets.

However, for developing countries the free trade agenda is disastrous:

• Job losses: Local producers and industries in developing countries cannot compete with highly finished goods or subsidised agricultural produce from rich countries, threatening livelihoods and jobs.
• Destruction of new industries: New industries lose out when forced to compete with big established western multinationals. This makes it even harder for developing countries to develop diversified economies.
• Loss of policy options: In a time of economic crisis, rich countries can bail out their industries. Developing countries do not have the funds for bail-outs and need to retain a full range of policy options such as tariffs to manage their economies.
• Eliminating vital tax revenue: Developing countries cannot easily replace the revenue they receive from tariffs which are vital for their public services such as health and education

Do what we say, not what we did

The North American, European and Asian Tiger economies all developed using a full range of policy tools including tariffs and quotas and only opened up their markets when their industries were ready to compete. Despite this evidence, rich WTO members like the EU and the US continue to push poor countries to open their markets before they are ready; in effect saying “do what we say, not what we did”.

Past campaigning work on the WTO

Read more about WDM's past campaigning work on the WTO in the about us section.

Heidi Chow, WDM’s Trade Campaigner, went to the WTO ministerial in Geneva in November 2009. Read her blog posts here.