Information about the organization

7 The WTO can ... give the weak a stronger voice

Small countries would be weaker without the WTO. Differences in bargaining power are narrowed by agreed rules, consensus decision-making and coalition building.

Coalitions give developing countries a stronger voice in negotiations. The resulting agreements mean that all countries, including the most powerful, have to play by the rules. The rule of law replaces might-makes-right.

The WTO can ...

...cut living costs and raise living standards
...settle disputes and reduce trade tensions
...stimulate economic growth and employment
...cut the cost of doing business internationally
...encourage good governance
...help countries develop
...give the weak a stronger voice
...support the environment and health
...contribute to peace and stability
...be effective without hitting the headlines

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WTO geopolitics are evolving. In recent years, developing countries have become considerably more active in all areas of the WTO’s work. They made sure development would be at the heart of the Doha Round talks and submitted an unprecedented number of proposals on agriculture and other subjects.

They are active in all WTO councils and committees. They have set up numerous coalitions to increase their bargaining power, particularly in negotiations. Some of these are developing country coalitions; some are mixed, working on shared interests that cut across developed-developing country boundaries.

Until the mid-1990s, the “Quad” — the US, EU, Japan and Canada, then the largest traders — were seen as the most powerful consensus- brokers. Now, any attempt to break a major deadlock has to include at least some of the major emerging economies and representatives of various coalitions, including the least- developed countries.

There wouldn’t be much point in a “multilateral” trading system if that weren’t the case.

One important point about the WTO is the practice of reaching decisions by consensus. Every country has to be convinced before agreement can be reached. Compromise is key: whatever is proposed has to be refined until it is acceptable to everyone or more precisely until it is objectionable to no one. Consensus means there are no dissenters.

Another is the agreed rules. All countries, big or small, weak or powerful, have to follow broadly the same rules. There are exceptions, delays or flexibilities for poorer countries, but they are still the same package of rules — the flexibilities are just a way of allowing these poorer countries to play by the rules.

The rules are the result of negotiations and consensus decisions, and have been ratified in members’ parliaments. The negotiation that set up the WTO, the Uruguay Round (1986-94), was only possible because of a bargain.

Developed countries agreed to reform trade in textiles and agriculture — both issues were important for developing countries.

Once the rules have been agreed, all countries are equal under them. That also applies to the dispute settlement system, which is similar to a court. This century, except in a handful of years, developing countries have filed complaints in at least half of all legal disputes, sometimes considerably more. And their complaints are against both developed and developing countries. Without the WTO, these smaller countries would have been powerless to act against their more powerful trading partners.

 

 

And then there’s assistance

Technical assistance and training. This is an area where the WTO is actively involved in aid. The WTO trains officials from developing countries so that they can work more effectively in the system. That includes training on how to negotiate effectively within the rules. Each year, the WTO organizes around 100 seminars, workshops and other training sessions for these officials. They also come to Geneva for longer trade policy courses.

Legal advice. Not part of the WTO but associated with it is an Advisory Centre on WTO Law in Geneva. The centre gives low-cost legal advice and training on WTO law to developing countries, and supports them in WTO dispute settlement proceedings at discounted rates.

The centre enables these countries to fully understand their rights and obligations under WTO law and to have an equal opportunity to defend their interests in WTO dispute settlement cases (www.acwl.ch).

Academic institutions. A Chairs Programme set up by the WTO aims to help academic institutions in developing countries increase trade knowledge and contribute to the development of trade policy (see www.wto.org/chairprogramme)