WTO poses little threat to member-states

The world watched somewhat incredulously last December as a handful of protesters held up the meetings of the World Trade Organization (WTO) in Seattle. Spectacular scenes of combat in this normally serene US agglomeration occupied international media for weeks as demonstrators kicked in shop windows and shouted slogans against free trade. These scenes might have caused pangs in the hearts of a generation of yuppies nostalgic for the activism of the ’60s and ’70s, but it is unfortunate that none of the claims voiced by the protestors stands up to any kind of factual examination.

Some on the right have decried the threat that the WTO poses to US sovereignty in economic matters. The truth of the matter is that the WTO does not have the power to impose anything on anybody. It is a contractual agreement between some 135 states to mediate trade disputes according to explicit rules. While a country may face sanctions for violating these rules, they are responsible for the implementation of these sanctions. In fact, so far only a few countries have been sanctioned, and in the case of the EU, they have openly flouted its rulings concerning beef hormone imports. In addition, the WTO cannot prevent nations from imposing their own sanctions and restrictions (c.f. Section 301, US trade law).

Others have even protested that the WTO has worsened working conditions around the world. Again, this argument withers under scrutiny. East Asia opened its markets during the 1980s and has since seen the number of people there living in absolute poverty drop by 200 million. By contrast, sub-Saharan Africa, arguably the world’s most self-enclosed region, has seen a marginal increase in poverty during those years.

They argue that free trade keeps wages low in developing countries and kills jobs in the first world. The problem with this kind of argument is that it stems from a narrow perspective. While some jobs in the US are being cut, many more, often better paying ones are being created to accommodate the growth spurred by free trade. In developing countries, foreign investment creates jobs that weren’t there before. Their choice is not between low and better paying jobs, but between those jobs and unemployment or even more abject, but less visible, rural poverty. Neither Nike nor the WTO nor Satan nor Bill Gates ever forced anybody from an idyllic village life into sweatshops.

Many have protested that free trade hinders environmental protection efforts. Article XX of the WTO Charter specifically grants members the right to place restrictions “necessary to protect the health of animals, plants and people.” Moreover, becuase they grow faster, free trade enables developing countries to adopt higher environmental standards and to develop the middle classes necessary to support them. Claims that the WTO weakens environmental protection in the US are counter-factual. The US has some of the highest environmental standards anywhere and they have come about in the last 50 years with the expansion of free trade. In fact, in recent years when more and more trade barriers have been lifted US pollution has been at its lowest in almost a century. Certainly, since the end of the Cold War, American air and water have been cleaner, and the number of trees in the US has been on the rise.

France, by far the most vociferous protestor against the cultural depredations of open markets, is a member of the WTO. It is amusing that the French delegation at the summit included the now-famous José Bové, scourge of Southern-French McDonald’s fast food operations. Yet he claims to have been there merely to ask the US why they have a 100 percent tariff on Roquefort cheese. In other words, he was protesting against an American violation of the principles of free trade.

More seriously, however, it is undeniable that free trade often destroys to rebuild anew. Forests and industries are destroyed, then rebuilt. Some people lose jobs and many more other find others…While this poses some problems for the economy, this poses far more for culture. Indeed, once culture is lost, it is lost for good. Any resurrection lacks any of the authenticity inherent in cultural practice. If free trade destroys France’s cultural heritage, it will only increase the sorrow of a wealthier, more educated population later on who realize what they cannot bring back.

The WTO so far has not intervened to stop countries like France and Italy placing barriers on the destruction of priceless culture. The issue, as I see it, is to protect people from entering coercive relationships with the economy while not forcing them to keep traditional lifestyles they might well be more than tired with. The line, of course, is very thin. In any case, the WTO is not the cause of any destruction of national heritage.

The problem with free trade, it has been often said, is that it is counterintuitive. By abrogating barriers to trade, one exposes one’s home industries to often vicious competition. Yet, while some traditional sectors die, competition clearly spurs areas where the country is particularly strong. For over four millennia the countries that have traded are those which have prospered and those which have not have died away.

Of course, it might be better if one could export free of tariffs and protect home industries as well. This is not, however, very likely. In fact, it may be very costly to protect ailing industries. Western European countries are discovering this at the moment, and the transition will likely be far more brutal due to a public opinion hostile to changes in their way of life. There is a saying, however, that one cannot have one’s cake and eat it too. Economic growth does not sit well with trade barriers and vice versa.

Of course there is a choice to be made, but why one would sacrifice the prosperity of a country to the interests of a minority is beyond my understanding. Certainly, the WTO has no actual coercive power. It is an informal club of sorts: another international organization that accommodates the wishes of those who want to accelerate the new age of globalization while not actually having the power to force it upon those who dislike this vision.