The Three Views and WTO
Globalization has extended the opportunities available for economic growth leading to extensive lobbying amongst world financial institutions. The high influence of exchange rates has also extensively affected business transactions. The price of commodities, air fare tariffs, foreign exchange levels and export and import licenses have been affected across world markets. The World Bank, major banking institutions, World Trade Organization and UN agencies have converged to control the world markets from various levels due their extensive consultations and economic persuasions on vital financial matters. The economic control by these organizations has also lead to ...view middle of the document...
The theories that have been uplifted to support the economic principles include Wealth of nations. It argues that free markets are beneficial and more productive to their societies.
The attitude change towards international trading system especially in marginalized nations came about with the Uruguay round. Since the GATT had always been viewed as a club of rich nations, the establishment of WTO ensured substantive contributions to trade issues by marginalized nations. By setting of trading rules to serve trading partners, the WTO ensured liberalized markets to all trading partners without tapering into internal politics of its members. The keen interest of countries especially marginalized ones into WTO was due to the re-orientation to their trading policies. This was as per there market growth and interests into world trade and the fact that WTO acknowledged and supported their trading interests.
In the Uruguay Round, the negotiations allowed for market access hence the famous GATT rules were extensively reversed. Formation of the provision of single undertaking, all rules that were applied by all the WTO members compared to the optional codes in the GATT. This equaled the rights and obligations as they could not be revoked by other members hence creating a fair trading field for all participants. Liberalism hence is the most favorable design adopted by the WTO to run its operations and make its principles. (WTO,Economic Research and Analysis Division, 1997).
According to Bello Walden, the World Trade Organization undermines the world’s poorest countries by setting policies that favor developed countries especially the USA. Most of WTO agreements do not serve the interests of developing markets as they want to develop a monopoly in conjunction with to US in order to control world trade. A clear example is the introduction of agriculture into the GATT-WTO in 1995 system. By stating that developing countries should feed themselves, it was a clear indication of the importance to create food security in the US due to reliance on US produced products. Due to the easy available of food at a low cost in the USA compared to other developing markets.
The creation of WTO dispute resolution mechanism was to ensure favorable resolution of disputes especially financial, a point emphasized by C Fred Bergsten. He states that ‘’ We (USA) can now use the full weight of the international machinery to go after trade barriers, reduce them, get them eliminated’’ (Gregory 2000, p. 9). This is because they considered GATT efforts to be weak as they are unable to give favorable financial rulings to the USA.
The establishment of the WTO in 1995 was an idea formulated by the USA to serve its interests and help in its raid on monopoly of markets. By assessing the interests of its corporations and realizing that they are not served effectively, it led to the structured and highly US favoring WTO. It led to development of free markets, setting up of the...