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Reading 16- The World Trade Organization.pdf

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McGill University
GEOG 216
Geraldine Akman

Reading 16: The World Trade Organization 12/5/12 1:25 AM International trade has grown faster than world economic output in every decade since 1950 and flows of foreign direct investment have grown faster than international trade since the mid 1980s. WTO • Formed in 1995 • Origins date back to 1948, GATT • 142 member countries à most recent Taiwan and China • budget in excess of 80 million USD • headquartered in Geneva UN founding members envisioned an organization that would regulate world trade and international investment towards economic recovery and international financial stability. Serves to limit the restrictive and protectionist polices brought about by the Great Depression • 23 of the richest countries did not approve of the charter, withdrew and formed GATT GATT • ‘weaker’ institution • contract between countries, not an organization • designed to encourage free trade and prevent trade wars • ‘national treatment’: must treat participants in their economies the same as domestic firms • ‘most favoured nation’: aims to ensure that any concession granted to one trading partner is extended to all The WTO upholds GATTs principles but is much stronger as it has legal status and its rules are binding. The WTO has a dispute settlement body. The WTO also includes areas such as services and patents. Many fear the WTO has too much power. Commodity prices do not fall under the power of the WTO, but finance and patents do. Voting is un-weighted, each member receives one vote. The World Bank Inspection Panel 1993: created the Inspection Panel • in response to the international environmental and human rights campaigns and criticisms • North-South campaign against India’s Narmada dam This panel is illustrative of the power of civil society organizations to effect change in the operation of an international financial institution. Panel • Composed of non-world bank development experts • Citizens of developing countries can make grievances regarding the environmental and social costs of World Bank projects o Must be directly affected by the project o Must be due to World Bank failures o Must have been brought to the world bank before • Has 21 days to respond to the claim • Most claims to date have focused on resettlement, environmental impact assessment and indigenous people’s policy violations Arun III dam in Nepal à only claim leading to a victory for the claimants Factors Constraining Impact of the Panel • Relatively autonomous, but remains a world bank institution • Many civil society actors remain unaware of the Panel’s existence or of the World Bank’s social and environmental safeguard policies • Focuses only on mandatory World Bank policies, rather than recommended good practice • Substantial costs and risks involved for civil society groups Agreeing A New Round of Negotiations for the WTO in Doha Major victory for developing nations: TRIPS, bringing down the cost of patent medicines First time, the WTO will discuss the relationships between its rules and the multilateral environmental agreements US
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