Editorial

Dismantle the WTO

Add a new constituency to the long list of World Trade Organization (WTO) critics which already includes consumers, labor, environmentalists, human rights activists, fair trade groups, AIDS activists, animal protection organizations, those concerned with Third World development, religious communities and women's organizations. The latest set of critics are WTO backers and even the WTO itself.

As the WTO faces crystallized global opposition -- to be manifested in massive street demonstrations and colorful protests in Seattle, where the WTO will hold its Third Ministerial meeting from November 29 to December 3--the global trade agency and its strongest proponents veer between an ineffective defensiveness and the much more dangerous strategy of admitting shortcomings and trumpeting the need for reform.

WTO critics now face a perilous moment. They must not be distracted by illusory or cosmetic reform proposals, nor by even more substantive proposals for changing the WTO--should they ever emerge from the institution or its powerful rich country members. They should unite around an uncompromising demand to dismantle the WTO.

The White House is already gearing up its cooptation machinery. It has proposed formation of a study group at the WTO on trade and labor issues, and has announced that it will henceforth subject all trade agreements to an environmental review.

For the Clinton administration, this is tried and tested ground. It helped defuse environmental, if not labor, objections to NAFTA by negotiating environmental and labor "side agreements"--now almost universally acknowledged to be of little or no consequence.

There will undoubtedly be other reform initiatives, especially relating to openness and emanating from a variety of sources worldwide, in the weeks and months ahead.

None of them, however, will address three fatal, corporate-biased flaws in the WTO.

First, the WTO's trade rules intentionally prioritize trade and commercial considerations over all other values. Never does the WTO say, "Trade should be undertaken in such a way as promote values that the international community has agreed are important in their own right, such as protection of human rights, the environment or labor rights." WTO rules generally require domestic laws, rules and regulations designed to further worker, consumer, environmental, health, safety, human rights, animal protection or other non-commercial interests to be undertaken in the "least trade restrictive" fashion possible. As various articles in this issue illustrate, "least trade restrictive" is a very far-reaching test, invalidating a wide array of safeguards for citizens and the environment.

Second, the WTO intentionally overrides domestic decisions about how economies should be organized and corporations controlled. Its rules drastically shrink the choices available to democratically controlled governments, with violations potentially punished with harsh penalties. The WTO actually touts this undermining of democracy as a benefit of the global trading system, as we note in our Lawrence Summers Award. According to a WTO briefing paper, "Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For businesses, that means greater certainty and clarity about trading conditions. For governments it can often mean good discipline."

Third, the WTO does not just regulate, it actively promotes, global trade. Its rules are biased to facilitate global commerce at the expense of efforts to promote local economic development and policies that move communities, countries and regions in the direction of greater self-reliance--a direction necessary to move towards a world of ecological sustainability and democratic governance.

These are not problems that can be fixed, because they go to the core of what the WTO is (or they could only be fixed by transforming the WTO into a completely different institution).

Because of these unfixable problems, the World Trade Organization should be dismantled, sooner rather than later. Until citizen movements have generated sufficient power to shut the agency down, they must be careful in selecting their reform agenda. Reforms that add new areas of competence to the WTO or enhance its authority go in the wrong direction, even if the new areas appear desirable (such as labor rights or competition). Reforms that limit the WTO's authority--for example, by denying it the power to invalidate laws passed pursuant to international environmental agreements, limiting application of WTO agricultural rules in the Third World, or eliminating certain subject matters (such as essential medicines or life forms) from coverage under the WTO's intellectual property agreement--are necessary and beneficial in their own right, and they help create momentum to close down the WTO.