Smaller
countries enjoy more bargaining power, and life
is simpler for bigger countries
Decisions
in the WTO are made by consensus. The WTO agreements were negotiated
by all members, were approved by consensus and were ratified in all
members’ parliaments. The agreements apply to everyone. Rich and
poor countries alike have an equal right to challenge each other in
the WTO’s dispute settlement procedures.
This
makes life easier for all, in several different ways. Smaller countries
can enjoy some increased bargaining power. Without a multilateral regime
such as the WTO’s system, the more powerful countries would be freer
to impose their will unilaterally on their smaller trading partners.
Smaller countries would have to deal with each of the major economic
powers individually, and would be much less able to resist unwanted
pressure.
In
addition, smaller countries can perform more effectively if they make
use of the opportunities to form alliances and to pool resources.
Several are already doing this.
There
are matching benefits for larger countries. The major economic powers
can use the single forum of the WTO to negotiate with all or most of
their trading partners at the same time. This makes life much simpler
for the bigger trading countries. The alternative would be continuous
and complicated bilateral negotiations with dozens of countries
simultaneously. And each country could end up with different conditions
for trading with each of its trading partners, making life extremely
complicated for its importers and exporters.
The
principle of non-discrimination built into the WTO agreements avoids
that complexity. The fact that there is a single set of rules applying
to all members greatly simplifies the entire trade regime.
And
these agreed rules give governments a clearer view of which trade
policies are acceptable.
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