A Better Understanding is Needed of the WTO’s Abilities and Limitations
by Brewster Grace 
Quaker United Nations Office 
Geneva, Switzerland
Friends Journal
May 2000

David Morse’s article on the protests in Seattle (Friends Journal Mar. 2000) contains a number of factual errors about the World Trade Organization. The protests and the article raise important concerns about globalization, and the article effectively records the events surrounding the demonstrations. But the errors distort the nature and scope of WTO activities and impair understanding and judgment about the WTO and its role in bringing about international trade rules and overseeing trade practices. 

Morse claims the WTO no longer makes decisions through consensus and now makes such decisions on a “win-lose basis.” In fact, no votes are taken on important decisions leading to WTO agreements. All are approved by consensus. However, since important agreements in any round of negotiation are collectively approved (as a “single undertaken”), the final consensus is a balancing of concessions and benefits. All member governments win some benefits and all make some concessions. 

He also says the WTO is “anti-democratic.” This is an ill-defined concept. If it refers to the ways some decisions are reached in some meetings in which not all member governments participate, it would be fair to criticize the WTO for lack of internal transparency in some of its decision-making processes (which was definitely the case in the Seattle Ministerial Conference). This problem is widely acknowledged by all member governments, and many are selecting to reform this process, including the European Union. But if by “anti-democratic” it is meant that WTO officials are not elected, then the charge is misplaced. The WTO is made up of member governments that appoint WTO senior officials. It is for the member governments to be democratic or not. There is no scope for popular elections beyond the governments themselves. 

It is misleading to assert that “hard-won” environmental legislation is being undermined. In the case David Morse cites, the “shrimp-turtle dispute,” the United States did lose the right to ban imports from four Asian member governments because they were not certified under the U.S. Endangered Species Act for having installed turtle extruders. However, the WTO panel upheld the right of the U.S. under this Act to require such certificates and only ruled that the United States could not apply certificate requirements differently for Asian exporters than it does for Caribbean. It is a fundamental principle in the WTO that national legislation applying environmental standards can only be challenged if it is used to discriminate against foreign producers in favor of other foreign or domestic producers. Restraint of trade was not a factor in this case. 

David Morse is correct in claiming that health is a very important issue in the WTO in reference to pesticides, asbestos, generically modified organisms, and hormones. A WTO Dispute Settlement Panel did rule against the E.U. banning of U.S. beef containing hormones and U.S. products containing genetically modified organisms. The problems in these instances are well recognized. WTO rules on food safety are contained in its Sanitary and Phytosanitary Agreement requirements that discrimination against food imports based on health safety must be based on scientific evidence. This is to avoid arbitrary criteria for protectionist purposes. However, biotechnology and the food industry are not what they were when the agreement was crafted in the 1970s. Now the idea of a “precautionary principle” is widely recognized, and ways need to be found to amend the agreement to bring it up to date. Alternatively, the WTO could recognize the precedence of the Biosafety Protocol of the Convention on Biological Diversity that does provide for a precautionary principle. This is now under active consideration by WTO member governments. 

The WTO does not make decisions that threaten the survival of small farmers or indigenous cultures. These are made by national policies pursued by member governments. But the key WTO agreement that could conceivably affect important traditional farmer’s tights to seeds and indigenous knowledge of biological resources, the Trade Related Intellectual Property Agreement, explicitly excludes any patenting requirements for plants and animals. (See Article 27.3(b) of the Agreement.) At the same time, it recognizes national legislation (sui generis systems) that protects plants, animals, and traditional knowledge with a view of preserving traditional farming methods and indigenous knowledge regarding biological resources. Efforts for the U.S. to eliminate Article 27.3(b) in a review process are being successfully thwarted. 

The Quaker UN Office in Geneva has worked hard over the past year to assist developing country member governments to develop strategies and capacities to strengthen Article 27.3(b) by linking it to the Convention on Biological Diversity and the UN Food and Agricultural Organization’s commitments to farmers’ rights. (For Friends concerned about these issues, see Patents, Trade, Food, and Biological Diversity, available on the Quaker UN Office homepage: www.quaker.org/quno. Printed copies are available through the QUNO office in Geneva.) 

It must be noted that in other ways WTO rules on intellectual property are distressing: e.g. they provide for absolute patent holder rights and do not allow for compulsory licensing. These can affect the ability of developing countries to acquire and use important technologies. The foregoing comments do not diminish concerns expressed in the Seattle protests about the growing global economic and technological powers of large global commercial interests and activities and the impact these can have on environmental and social standards and conditions, Nor do they diminish the important benefits multinational corporations derive from WTO liberalization. 

However, to respond effectively to these requires a better understanding of the limits and abilities of the WTO. Mote often than not, multinational corporations exercise their power through national laws or avoidance of national laws. The WTO has the capacity, given its main role of a venue for negotiating international trade rules, to work on behalf of all its member states— the vast majority of whom are developing countries. Without these rules, U.S. and E.U. trade policies could be conducted unilaterally and benefit powerful multinational corporations even more. 

In order to make the WTO more effective, concerned persons should better understand its policies and practices. It is encouraging that Quakers are becoming more concerned about international trade issues. With adequate information about the WTO, there is the real possibility for action in addressing the two key players in WTO policy-making: the U.S. administration and the European Commission.  

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