The global economic crisis born in 2008 and widespread nowadays has created a debate about the convenience of application that WTO rules have in these contexts. After the critical Lehamns Brother collapse governments intervened helping its financial sector and some particularly affected industrial sectors subsequently.These measures, taken by some WTO members, are strongly opposite to free trade WTO policies. Does WTO System lose credibility?
Firstly, I would like all of you consider the events occurred in the 1930s. Global economy suffered a similar crisis (Great Crash). Protectionist policies started being used and surprisingly the prompted effect was opposite to the expected effect: trade volumes failed. Most of the countries started recovering on 1933 but, it is remarkable that only a few years later some countries made an effort to create GATT, an agreement which tries to avoid protectionist practices.[1]
Based on these events, Group of G20 pledged to “refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO inconsistent measures to stimulate exports”[2] in November 2008. However, WTO director-general Pascal Lamy warned about the risks of protectionism and the necessity of avoid it[3] at the 2009 World Economic Forum in Davos because, as cited at the beginning of this post, governments were using it to protect their economies. His speech remains still continuous and according to him, economic nationalisms will finish when states seriously accept the basic restraint of WTO rules. He talks about “unthinkable consequences” if it does not happen.[4]
Therefore, this is the situation: an International Organisation “suggesting” the imposition of its rules between members who deliberately and desperately try to find solutions to self-problems through protectionist measures. These are related to the creation of differences between countries: richest states will be able to help their economies more than poor countries will. To summarize, the consequence will be a bigger difference between developed and developing countries. Why does not WTO take strong measures against countries which are using protectionism as a defence? WTO was originally created (GATT), curiously by some of the countries which now infringe WTO rules, to avoid these policies precisely due to they were considered as wrong and detrimental. Additionally WTO is an Organization which is supposed to help developing countries trade. However, representation of them inside the Organization is insignificant as mentioned at 'WTO: Intention or nonsense?'
Complex global picture…different situations and interests, lots of problems waiting for an effective solution, a 15 years life, 153 members, and ONE REALITY: Differences between North and South still remain. It is undoubted that WTO internal work has repercussions all over the work but, CAN A SINGLE ORGANIZATION AS WTO BE RESPONSIBLE FOR ALL OF THEM? Which are the historical links related to the current situation? Maybe, WTO is not the modern trade regulator that it says to be…maybe, it is just a trading instrument looking for “its owners´ benefits” and used capriciously by them in that sense.
[1]H Stewart, ‘Is this the last stand for globalisation?’ The Guardian (20 July 2008)
[2]‘Declaration of the Summit on Financial Markets and the World Economy’, Washington DC (15 November, 2008) 13.
[3]A Seager, ‘Now is not the time for protectionism, warns WTO’ The Guardian (29 January 2009)
[4]P Mandelson, ‘Globalism has been good for everyone’ The Telegraph (01 Apr 2009)
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