The World Trade Organization in the New Global Economy Trade and Investment Issues in the New Millennium Round
Trade and Investment Issues in the New Millennium Round
- New Horizons in International Business series
Edited by Alan M. Rugman and Gavin Boyd
Chapter 1: The World Trade Organization and the international political economy
1. The World Trade Organization and the international political economy Alan M. Rugman The World Trade Organization (WTO) is in a crisis. This is due to a complex evolution of events in which the protests of its left-wing critics have diverted public and elite technical attention from the critical issues of interdependent trade and growth. These issues have emerged as international commerce has steadily expanded with major reductions of trade barriers, as negotiated in the Uruguay Round of multilateral interactions that concluded in the mid 1990s. The present crisis at the WTO concerns the status and functions of the organization’s secretariat, and the observance of its principles, norms and rules by member governments. The secretariat is an understaffed and overworked technical bureaucracy, facilitating, often opportunistically, bargains by governments to reduce trade barriers. While these facilitating services are valued, the subjective preferences of governments are not to endow the WTO secretariat with substantial independent research and advocacy capabilities. Governments are committed in principle to non-discriminatory and reciprocal reductions of their trade barriers, but tend to view their formal obligations in this regard as matters of expedience. The common trend is to press for their domestic protectionist interests with any available bargaining power. This results in hard and precise agreements, on the basis of which any subsequent disputes have to be settled through methods of adversarial legalism, combined with renewed bargaining leverage. The crisis of the organization is primarily a consequence of increasing unilateralism – an intensiﬁcation of the trend in which...
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