More protests as WTO meets

The objections of the protesters will, for the most part, be incoherent and baseless. This is because such protests are mostly led by privileged groups, claiming to speak for the oppressed of the world, whose only link is their opposition to globalisation. Apart from that, they have no rigorous position and certainly no workable programmes to fix the ills they speak against.

According to its opponents, the WTO is a tool of the multinationals corporations and rich nations, whose main agenda is to move the wealth of the developing nations to the developed ones. Exactly why the rich countries need the WTO to do this is never explained, and the control of multinationals over governments is an unquestionable article of faith.

However, a dispassionate examination of the facts shows that the demonisation of the WTO is greatly exaggerated. In the first place, the WTO is an association of governments. Given its mandate, this must necessarily be so, for free trade cannot be decided in sovereign isolation. For free trade to work, it must be done by governments negotiating with one another. But one of the prime complaints of these protesting groups is that they have no voice in the WTO. Since these NGOs are not elected by anyone, however, it is not clear why they should have a voice, beyond presenting arguments based on merit rather than ideology. So what the WTO does is service inter-governmental agreements. And it is a relatively tiny secretariat, with a budget of about US $80 million — hardly an organisation with the resources to take over the world, or even the south part of the world.

That being said, the one criticism that is justified has to do with free trade as negotiated within the WTO. Opponents charge that the wealthy countries keep enjoining poorer nations to follow free trade principles, while not doing so themselves. A look at the figures shows this argument to have merit. In high-income nations, the average tariffs are about three percent. But the tariffs in developed nations for labour-intensive manufactured goods from developing countries is around eight percent. For agricultural commodities from developing countries, the figure is 14 percent. The US-based Progressive Policy Institute calculates that the world’s least developed nations face tariffs four times higher than the world’s most developed nations.

This does not mean free trade principles should be shunned by developing countries. Economic theory and economic experience both confirm that free trade helps all those nations who follow liberalisation principles. But what the statistics show is that the rich nations’ rhetoric is hypocritical and stupid — hypocritical, because they do not follow their own advice; and stupid because, if they did follow their own advice, their own economies would benefit. More importantly, global free trade would spur economic growth in poor nations far in excess of any benefits offered by aid.

So the WTO’s main deficiency has been its failure to redress such imbalances — a failure that itself reflects the weakness of the organisation. So, while it is true that the WTO itself must revamp some of its operational principles (bearing in mind that such change can only come about through agreement between the governments), it is actually better for weak nations to have such an organisation than to have no body at all trying, however ineffectually, to level the playing field.