10. Globalization and the WTO
The WTO has become the most prominent symbol of globalization and the complex changes that are driving the world economy. As such it has become the target for all opponents of globalization as events in Seattle in December 1999 showed clearly. Despite the criticism, the WTO is a powerful example of a rules-based international system to promote more open trade and investment worldwide.

On the one hand, the WTO is a magnet for countries seeking to participate in the benefits of the globalization process. More that 40 emerging and developing countries have joined in the past five years and a further 30 are currently waiting to get in. On the other hand, the WTO is regarded by the opponents of globalization as the focal point for their concerns.

It may be that the WTO has become a victim of its own success. Along with its predecessor, the General Agreement on Tariffs and Trade (GATT), it has been a key instrument in opening markets and boosting prosperity through successive rounds of multilateral trade liberalization. It is also a powerful example of a rules-based international system, run by its member governments via a consensus-based system of decision-taking involving all its members. Their decisions and agreements underpin the stability, predictability and credibility which are needed to encourage trade and investment.

The WTO has become the scapegoat for everyone with a grievance about the modern world. Incessant and irrational attacks on the WTO are becoming dangerous because they are a threat to the rule of law in world trade. If we go back to the law of the jungle, and the WTO's effective dispute settlement machinery is lost, the principal nations to suffer will be the poor and the weak. The WTO is the best guarantee there is of a level playing field for all countries, at whatever stage of development. The WTO is composed of sovereign governments who have together devised the rules upon which it is based and who negotiate with each other freely under its auspices. Quite simply, the WTO is an agreement among states, as strong and effective as they want it to be.

Far from favouring the rich and powerful countries, international trade rules and WTO disciplines give the poorer countries the chance to defend themselves against pressures from powerful trading partners. The WTO is based on non-discrimination. Rich and poor countries alike can be challenged if they violate an agreement, and they have an equal right to challenge others through the WTO's dispute settlement procedures.

The second half of the 20th century saw an unprecedented expansion of world trade, which has also brought unprecedented economic growth. Since 1948, annual economic statistics have invariably shown growth in world trade outstripping economic growth. In other words, trade has been the engine of economic growth. This means that economic activity is more and more dependent upon trade as the years go by. The World Bank has estimated that a 40 percent cut in trade protection by 2005, through the reduction of tariffs in manufacturing and of other trade barriers in agriculture and services, would boost global output by about 500 billion dollars (Agriculture and Non-Agricultural Liberalization in the Millennium Round, October 2000).

In 1998, world merchandise exports were worth over five trillion dollars, and in volume terms that represents an 18-fold increase over 1948. Although the world's population has more than doubled, to reach six billion this year, exports per capita are eight times as high in real terms as in 1948. The figures are so huge that it is difficult to take them in. Behind them is the reality that trade has contributed enormously to world growth and prosperity over the half century, bringing better jobs and more resources for education, health and other social spending. Despite the poverty that still exists in too many countries, the fact is that the world is far more prosperous now than it has ever been.

On balance, the WTO applies non-discriminatory trade rules and enforces them in an even-handed way. It takes decisions by consensus, allowing all member countries, big and small, to have their say. Its dispute settlements procedures are available for all. Many of its rulings have condemned big countries or regions for their unfair trade practices. The pity is that, in those cases, the US and the European Union have often proved reluctant to comply with some of the negative rulings against them. In so doing, they damage the WTO's credibility just as much as did the protesters at the WTO ministerial meeting in Seattle end-1999.

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