WTO and after

THE World Trade Organisation (WTO) came into existence on January 1, 1995, after successful completion of prolonged negotiations from 1986 to 1994, as a sequel to Uruguay Round of negotiations and as a successor to the General Agreement on Tariffs and Trade (GATT). The current membership strength of WTO is 153 as on July 23.
This rule-based multilateral institution, which is a successor to the General Agreements on Tariffs and Trade (GATT) created in 1947 in the wake of world war two and in conformity with the provisions of WTO agreements, negotiated, signed and ratified by majority of the UN member countries with a view to helping the producers of various goods and services to pursue their respective trades and services in compliance with a uniform set of rules enshrined therein. It may be mentioned here that GATT was created with a view to reducing trade barriers through negotiations.
The broad functions of the organisation are: to administer WTO agreements, to act as a forum for trade negotiations, resolve trade-related disputes, monitor trade policies of member countries, and cooperate with other international organisations.
Upon careful scrutiny of the activities of the organisation, one will find it to be a stronger and more democratic institution in comparison with other international organisations -- like the World Bank (WB) and the International Monetary Fund (IMF) -- as it follows the practice of one member one vote and consensus-based decision-making.
Other positive aspects of the organisation are: its special emphasis on sustainable and trade-related developmental aspects of its members; creation of increased number of committees, and undertaking additional programs towards providing technical; policy and financial assistance for its LDC members; ensuring transparency through prevention of greenroom negotiations and effective use of web-page; enhancement of its monitoring capacity through World Trade Report and Trade Policy Review; increase in the volume of trade of its members; removal of tariff, non-tariff and para-tariff barriers to a great extent; widening of the scope of trade governance from trade in goods to trade in services, intellectual property rights and investment.
Formulation of new enforceable rules and newer mechanisms to handle matters relating to dispute settlement; bringing trade in agriculture and textiles under its umbrella, and inclusion of development policies in the WTO agenda could be seen as no less achievements.
However, people have started questioning the nature of democratic practices that the organisation has been pursuing lately. One can observe lack of transparency and accountability in the decision-making process as, at times, it takes place through informal meetings. Also there are significant failures of the organiation, such as its lack of capacity in human resources and limitations in effective monitoring and enforcement of regulations and decisions, especially in respect of dispute settlement that involve its powerful members; failure to involve NGOs as an integral part of world trade governance.
Other major failures of WTO that a dispassionate observer will come across are: Its inability to fully liberalise trade in agriculture and, to some extent, textiles; partial and unbalanced implementation of services agreement -- like failure to ensure free movement of labour; increasing the burden on developing countries through fixation of rather limited transition periods in respect of Trade Related Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMs) and General Agreement on Trade in Services (GATS); failure in effective implementation of rules relating to providing special and differential treatment (Swiss formula in Nama agreement) to deserving members; absence of clear policy regarding protection of environment and labour rights, and last but not the least overloading the WTO agenda by turning it into a forum for discussion rather than a place for resolving critical issues.
Currently, an increasing number of voices are being raised to the effect that free trade should not be an end in itself; rather, it should be a tool for achieving equitable and sustainable development that would help create a better world.
Nowadays, there is criticism galore that the rich and the mighty dominate WTO and that it functions in a secretive manner to serve the causes of the rich in the garb of trade liberalisation. Failure of the latest Doha Round ministerial negotiations held in Geneva from July 21-29 could be cited as an example.
However, in spite of the shortcomings and limitations, there is no denying that there has been a significant increase in the volume of world trade as an aftermath of the creation of WTO. Both rich and poor countries gained out of it. Maybe the richer gained more. But it cannot be said in absolute terms that the LDCs did not reap any benefit at all.
This scribe feels that the increase in the volume of world trade could be much more had organisation followed its avowed path both in letter and spirit.

Jahangir Bin Alam is former Secretary, FBCCI.