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Power and Politics in the WTO

by Aileen Kwa, Focus on the Global South

Aileen Kwa is a Research Associate with Focus on the Global South, currently based in Geneva. She works on WTO issues pertaining to developing countries. A large part of her work is to track WTO negotiations, and to send out analyses to NGO groups on the problems developing countries are experiencing in the negotiating process. She also works with Geneva-based developing country delegates to the WTO on a variety of issues.

Aileen Kwa's publication, Power and Politics in the WTO, was launched at the Seminar and is available through the Focus on the Global South website www.focusweb.org


The World Trade Organization (WTO) is often portrayed as the pinnacle of the multilateral system of global economic governance. It prides itself for being a ‘rules-based’ organisation, without which, world trade would descend into the anarchy of the jungle. And then, we are told, the poor and weak would go to the wall.

This report, Power and Politics in the WTO, unveils a different reality. The WTO is in fact one of the most undemocratic organisations around. At critical moments of WTO negotiations, there simply are no procedural rules. The rules of decision-making that do exist are frequently flouted.

Formally speaking, the WTO makes decisions through consensus and a one-country, one-vote system. Yet actual decision-making is done with a great deal of informality, and largely behind closed doors between only about 25–30 Members. The ‘consensus’ arrived at is then imposed on the rest of the Members as a take-it-or-leave-it package. In such a system, the majority of developing countries are reduced to damage control and scrabbling to secure negligible benefits. Most receive nothing, and silently acquiesce against their better judgement, condemning themselves to a system that has so far proved highly unbalanced and detrimental to their interests. They do this to avoid the political and economic repercussions of displeasing the powerful Members.

The result? Highly inequitable trade rules that favour the interests of the powerful. The poor and weak are going to the wall. And precisely because of the WTO and its rules. The marginalisation of the majority is a serious concern since the WTO’s 23 agreements have sweeping social, economic and political implications on all its 144 members.

How is it that the less than fair trade rules are endorsed by developing countries? What is going on behind the scene that allows this to happen? This report presents sordid evidence of the manipulation and subversion of decision-making and rule-making at the WTO. It illustrates the exact points in the process and strategies used by the influential Members and the less than neutral WTO Secretariat, that allow the will of the majority to be subverted.

Developing country negotiators are the ones that bear testimony to the decision-making and process problems at the heart of the trading system. The report draws on extensive interviews with delegates who are daily grappling with these problems.

Quotes from the publication

‘We are simply asking for fair and equitable rules that would take into account our development needs and allow us to participate fully in the trade system. But instead we risk being pressured once again into accepting rules we don’t need and can’t afford.’

Ambassador Nathan Irumba, Mission of Uganda and Representative of the Least Developed Countries (LDC) at the WTO.

This is quite a remarkable statement. Six years after the founding of the WTO, and three years after the debacle of the Seattle Ministerial, the representative of the poorest members of the WTO feels it is still necessary to ask for ‘fair and equitable rules’.

But the WTO prides itself exactly on being a ‘rules-based’ organization. The argument is that without the rules of the WTO, world trade would descend into the anarchy of the jungle. And then, we are told, the poor and the weak would go to the wall.

This image, as we are about to demonstrate, is not true.

This paper will show that at crucial points in the WTO system, there simply are no rules. Attempts to set ‘fair and equitable’ rules are routinely rebuffed. Some rules are made up on the spot in a way that cannot be ‘fair and equitable’. And the rules that do exist are commonly flouted, not just by the rich and powerful countries, but also by the supposedly neutral WTO staff.

But there is one respect in which the WTO scenario outlined above is quite true. The poor and the weak are going to the wall. And precisely because of the WTO and its rules.

The claim is made not by ideologues with an axe to grind, not by ivory tower academics, not by people who can be brushed aside as anti-WTO activists. It is made by the people best placed to know, by ambassadors and government officials to the WTO. These are the people who are supposed to represent the interests of the weak and the poor. Their own words show how the South is marginalized in the WTO.

Developing countries are reduced to damage control and scrabbling to secure negligible benefits. A few with sufficient negotiating clout are given minor rewards to ensure their compliance. Most receive nothing, and silently acquiesce against their better judgment, condemning themselves to the enlargement of a system that has so far proved to be highly unbalanced and detrimental to their own interests. They do this to avoid the consequences of displeasing the politically and economically powerful.

The marginalization of the South in the WTO is a serious concern. The WTO now wields executive power over 23 separate agreements, from trade related investment measures (TRIMS), to intellectual property rights, agriculture, and industrial goods. The Fourth Ministerial Conference at Doha in November 2001 put more agreements on the table. Member states are required to change their national laws to ensure compliance with WTO agreements. Non-compliance can result in a country being hauled before the Dispute Settlement Body, the WTO’s own court of law.

This report presents evidence of the manipulation and subversion of decision-making and rule-making at the WTO. How is it that less than fair rules are endorsed by developing countries? What is going on behind the scene that allows this to happen? We show the exact points in the process and the strategies that allow the will of the majority to be subverted.

Unless the rules by which the WTO itself operates are made fair, developing countries are unlikely to make progress in bringing more equity to any of the substantive areas: TRIPS, services, agriculture, nor in the new negotiations launched at Doha. This was felt keenly by many countries before the Doha ministerial. One delegate had this to say at that time:

‘It is not a question of substance. Nobody can say that we have not participated. We have done so, and we have simply been ignored. The text [Doha draft declaration] does not take our interests into account. We will not have a third draft, not because we have no time. The text came in on Saturday. By Monday, we sent a letter signed by 20 developing countries to make changes in implementation. And he [the Chair of the General Council, Stuart Harbinson, ambassador of Hong Kong] simply said no. We all know why he said that, because our Ministers will have a difficult time. We are in the worst possible situation, and it is a question of politics, not a lack of arguments.

B. L. Das, former Indian Ambassador to the GATT, also describes how developing countries end up compromising their own interests:

‘If [developing country negotiators] feel that any proposal is not in the interest of their country, they oppose it. Their opposition is quite firm sometimes, and they stick to their line almost till the very end. But finally when intense pressures are built up in the capitals or if all other countries have acquiesced in the proposal, they also drop their objection and remain sullenly silent. Decisions are taken to which they become parties even though they had earlier raised objections. And in this manner their countries get bound by the obligations imposed by the decisions. The immediate political cost of withholding consensus appears to them to be much heavier than the burden of these obligations in the future.’

The strategies used by the powerful to bring about such an outcome are the topic of this publication.

The voices of developing country negotiators that appear in this paper are seldom heard by the public. Yet they are the ones that bear testimony to the decision-making and process problems at the heart of the trading system. A conscious effort has been made in this document to bring these voices to the fore. Almost thirty interviews were conducted after the Doha ministerial for this purpose. Most delegates, out of fear of repercussions on their jobs or pressure on their capitals, have chosen to remain anonymous.

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