New Internationalist

Wto The Facts

Issue 334

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WTO the facts

The WTO is driven by a mission to 'liberalize' world trade and 'open' every country to its balm. This is supposed to be good for everyone. In practice it has proved very much better for some than for others, and no good at all for most of the world's people. The more world trade grows the wider becomes the yawning gulf between rich and poor, both within and between countries.

Location: Geneva, Switzerland
Established: 1 January 1995
Created by: Uruguay Round negotiations (1986-94)
Budget: $83 million
Secretariat staff: 500
Head: Mike Moore (Director-General)
Membership: 140 countries (as of 30 November 2000)
[Countries applying for membership: Algeria, Andorra, Armenia, Azerbaijan, Belarus, Bhutan, Bosnia Herzegovina, Cambodia, Cape Verde, China, Kazakstan, Laos, Lebanon, Macedonia, Moldova, Nepal, Russian Federation, Samoa, Saudi Arabia, Seychelles, Sudan, Chinese Taipei, Tonga, Ukraine, Uzbekistan, Vanuatu, Vietnam, Yemen, Federal Republic of Yugoslavia.]

• Administering WTO trade agreements
• Forum for trade negotiations
• Handling trade disputes
• Monitoring national trade policies
• Technical assistance and training for developing countries
• Co-operation with other international organizations
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[image, unknown] Ministerial Conference [image, unknown] [image, unknown]
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[image, unknown] General Council meeting as Trade Policy Review Body [image, unknown] General Council [image, unknown] General Council meeting as Appellate Body Dispute Settlement Panels [image, unknown] [image, unknown]
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Council for Trade in Goods Council for Trade-Related Aspects of Intellectual Property Rights Council for Trade in Services [image, unknown]
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[image, unknown] Committees, Working parties & Working groups. [image, unknown] Committees, Textiles Monitoring Body & Working party. Committees & Working parties. [image, unknown]
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Plurilateral committee on trade. [image, unknown]
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Committee of Participants on the Expansion of Trade in Information Technology Products [image, unknown]
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'The average American in 1985 made over 30% more than the average German, 40% more than the average Japanese, nearly 50% more than the average citizen of the United Kingdom, and 5,500% more than the average Ethiopian... These gaps defy the imagination... and will double in a century-and-a-half at the current trend.'
World Trade Organization study, Trade, Income Disparity and Poverty, 1999

Terrible terms
Many of the world’s poorest economies
have been forced to export more and more basic,
‘primary’ commodities – like metal ores or coffee and
foodstuffs – by the ‘structural adjustment’ policies of the World
Bank and the International Monetary Fund. Markets for these primary
exports have been glutted. As a result, the price of these commodities
has fallen, while the price of the things they import – mostly from rich
countries – has risen. Their ‘terms of trade’ are said to have deteriorated –
and with them the income of the poorest people in the world. This is a long-
term trend which has continued since the WTO was founded in 1995.5
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Business as usual
Without radical change, the number
of people living in absolute poverty in many parts
of the world will almost double by 2008. These figures
come from a study commissioned by the WTO itself.3 At
least twice as many people in the world live in absolute
poverty as live in all the rich countries put together.

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'Global inequalities increased in the 20th
century by orders of magnitude out of all
proportion to anything experienced before.'
UNDP, Human Development Report 2000

[image, unknown] People-unfriendly
World trade has been expanding fast for rich countries. But the share of developing countries who represent most of the world's population is going down - and even the cash value of their exports has hardly increased at all.1
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Winners and losers
The rewards of liberalizing world trade are
grotesquely skewed towards the rich. High-income
countries expect to gain more than twice as much as the rest
of the world, while Africa actually loses.4 Trade barriers in the
North cost the economies of the South an estimated $100 billion
a year – at least double the amount of development aid.1
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1 Secretary-General's report to the UN Preparatory Committee on Financing for Development, January 2001.
State of World Population 2000, UNFPA.
Trade, Income Disparity and Poverty, WTO Study.
John Madeley, Trade and the Poor, Intermediate Technology, 1996 quoting OECD figures.
International Trade Statistics 2000, WTO.

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This article was originally published in issue 334

New Internationalist Magazine issue 334
Issue 334

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New Internationalist Magazine Issue 436

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