Discuss about the Business Environmental Policies for World Trade Organization.
Background
World Trade Organization (WTO) is the global organization that controls the trade policies between the nations. Many people over the ages have criticized the decision-making. Smith (2013) opined that a non-governmental organization named World Federalist Movement proposed that the WTO should have a parliamentary assembly to establish a more democratic approach in its decision-making. Critics have also found a lack of transparency in WTO operations. The debate is all about whether the policies are unbiased or not. This argument will try to analyze this issue.
Outline of the arguments
According to Matsushita et al (2015), it has been seen in many instances that the World Trade Organization has imposed certain policies on the developing nations that did not benefitted them and also many policies have been designed especially for their improvement. Matsushita et al (2015) added that in most cases the developed nations enjoy some benefits.
Thesis
The World Trade Organization has designed their cultural and environmental trade rules and policies not being partial to the developed nations.
Argument
According to Hoekman and Mavroidis (2015), the World Trade Organization has a Trade and Environment Committee to control the issues. Hoekman and Mavroidis (2015) discussed that this committee manages the trade and environmental policies so that they work together. As discussed by Porter (2015), the WTO governing members have set their environmental objectives and try to protect the environmental issues. According to Baldwin (2015), the 1992 Rio Declaration on Environment and Development stated that the objectives of the environmental standards should be context specific in which they are applied. Cooper (2014) opined that it means that some countries follow inappropriate environmental standards that do not benefit them. Hoekman and Mavroidis (2015) opined that such measures create social and economic costs that are not good for the developing countries because it restricts exports. According to Jordan (2012), WTO has recognized the fact that small and medium sized enterprises need effective exports for their economic development and any inappropriate environmental policy makes these SMEs vulnerable. Baldwin (2015) discussed that therefore, WTO tries to balance between the exports and environmental issues only for the benefit of the developing countries. As discussed by Patterson (2015), these environmental regulations are -Sanitary and Phytosanitary Measures (SPS) Agreement dealing with animal health, plant health and food safety, and Technical Barriers to Trade (TBT) dealing with the labeling and product standards. Gagné (2015) opined that there are more than 250 multilateral environmental agreements (MEAs) that take care of the environmental issues of the developing countries. Twenty among them can restrict trade and this is important for improved environmental condition.
Evidence
As discussed by Wild et al (2014), the Montreal Protocol, the Basel and Rotterdam conventions were conflicted with the WTO’s environmental policies. According to Wild et al (2014), the WTO members have posed restrictions in those areas. However, the clash creates a problematic situation among the negotiation parties. As Ashford and Policy (2014) discussed that some opposed the MEA, and the WTO did not change their standpoint. It proves that WTO is concerned about environmental issues in the developing countries.
According to Khalid (2015), Martin Khor pointed out that they are not partial when it comes to managing the global economy. However, in their operations they seem to be partial towards the rich and affluent countries. As Moïsé and Sorescu (2013) opined that such a system harms the developing countries with less negotiation power. According to Nicita et al (2013), critics has hurled at WTO by pointing out that it does not promote environmental protection. WTO has not taken effective measures to increase trade barriers that does not affect environment. In most cases, they have restricted trade for the development of exports. As discussed by Nicita et al (2013), issues such as fishery, agriculture, road transport subsidies and coal that affect environment are not taken into consideration.
Evidence
As Kumar and Siddharthan (2013) have pointed out that khor has highlighted the Agreements of Uruguay Round. The developing countries did not benefit from the Uruguay Round. Patterson (2015) pointed out that again, the Doha Round too failed drastically as it was directed towards development-friendly results. Patterson (2015) opined that the negotiations done by WTO compelled the developing countries to open up their industrial, agricultural and service sectors.
The developing countries could have been benefitted by the effective exports, which the WTO’s environmental policies have restricted. In a way, it became advantageous to the developed countries. According to Laborde (2012), the free trade policies of WTO help the developed countries to grow more and now the OECD member countries agreed to assess the environmental issues related to the trade liberalization policies. According to Laborde (2012), almost all the countries belonging to the OECD group are developed countries. Laborde (2012) opined that the differences in environmental stringency such as the pollution haven effect have created such a situation in which the developed countries enjoy the comparative advantages. Patterson (2015) has outlined that the liberalization of investment and trade has encouraged the multinational companies to export highly efficient technological parts to other countries. In addition, the liberalization increases income levels.
The cultural policies of World Trade Organizations are not partial to the developed countries; they have considered the benefits of developing countries too.
According to Ludema and Mayda (2013), liberalization and economic expansion are the reasons behind growing cultural diversities. The situation has compelled many policy makers to think about effective policies apprehending the loss of cultural diversities across the globe. According to Michalopoulos (2014), the governments of these countries have introduced policies that discriminates the foreign cultural products and services. It has been seen that WTO has taken effective measures to ensure protection and promotion of cultural goods including books, software, records, magazines and cultural services such as music, circus performances, ballet, and movies. According to Zhang (2016), however, World Trade Organization is responsible for allowing the countries to take measures for promoting their national cultures. Zhang (2016) highlighted that these policies are Unilateral in nature and it is not only beneficial to the developed nations but also help the developing countries to grow. One aspect cannot be avoided that the developing countries are more insecure and vulnerable when it comes to securing their national cultures. According to Ludema and Mayda (2013), they are not the privileged countries enjoying the economic or cultural benefits. WTO has understood this thing, so they have included effective cultural policies for them, and there seems to be no discrimination among policies. One cannot point out that WTO is partial towards developed countries.
Evidence
Developing countries such as India is highly benefitted from the cultural policies of World Trade Organization. India leads as the highest film producer country with an average of 1,000 films in each year. The cultural diversity in the country is reflected in their cinemas too. WTO has ensured wide distribution of Indian films across the globe. It is an example that establishes the fact that WTO is not partial to the developed countries.
Counter-argument
It cannot be said that WTO has tried to improve and protect the culture of the developing countries. However, there are many instances where the organization has thought primarily about the developed nations. According to Wood (2015), the policies have become advantageous to countries such as Canada, United States and Australia.
According to Hill (2013), WTO made a policy that encouraged the distribution of mainly the European films. A new mechanism named “automatic aid” was brought into the media distribution system. It helped the developed countries to distribute their films in the other parts of the world. Bolle (2016) opined that this policy also complemented the support programs initiated by the developed countries. Such cannot be found in case of the developing nations.
Refutation
According to Matsushita et al (2015), WTO has rules and principles focus on non-discrimination. They have rules on unfair trade and rules on subsidies. For the growth of the developing nations, they have initiated subsidy programs, which are beneficial to the countries such as India, and Bangladesh. Matsushita et al (2015) explained that WTO has even rules if there are conflicts regarding trade liberalization. Societal value of interests is another major factor that they have taken care. Furthermore, rules are there regarding the enforcement of intellectual property rights. It protects the copyrights irrespective of the nation’s economic condition.
Conclusion
Some polices of World Trade Organizations have been beneficial to the developed countries undoubtedly. However, one cannot blame the organization for being partial to them. The environmental policies might seem to be against the growth of the developing countries but in reality, they are meant to protect only the environmental hazards. Again, the cultural policies that they have imposed are not always beneficial to the developed countries.
The failure lies on the policy makers of the WTO who could not effectively channelize their planning into implementation. Therefore, the organization should think of effective outcomes and the overall benefit of all the nations irrespective of their economic conditions before they implement any strategy. Only this could remove the wrong notions of the critics about WTO.
References
Ashford, N.A. and Policy, T., (2014). Trade policy
Baldwin, R., 2015. DP11021 The World Trade Organization and the Future of Multilateralism.
Bolle, M.J., (2016). Overview of labor enforcement issues in free trade agreements
Cooper, W.H., (2014). Free trade agreements: Impact on US trade and implications for US trade policy. Current Politics and Economics of the United States, Canada and Mexico, 16(3), p.425
Dutt, P., Mihov, I. and Van Zandt, T., (2013). The Effect of WTO on the Extensive and the Intensive Margins of Trade. Journal of international Economics, 91(2), pp.204-219
Gagné, G., (2015). The World Trade Organization and Preferential Trade Agreements: The Case of Cultural Goods and Services. In Global Governance Facing Structural Changes (pp. 79-90). Palgrave Macmillan US.
Hanf, K. and Soetendorp, B., (2014). Adapting to European integration: small states and the European Union. Routledge
Hill, C.W., Cronk, T. and Wickramasekera, R., (2013). Global business today. McGraw-Hill Education (Australia)
Hoekman, B.M. and Mavroidis, P.C., (2015). World Trade Organization (WTO): Law, Economics, and Politics. Routledge
Jordan, A., (2012). Environmental policy in the European Union: actors, institutions, and processes. Earthscan
Khalid, S.R., (2015). World trade organization WTO changing attitude with special reference to international trade, environment and development
Kumar, N. and Siddharthan, N.S., (2013). Technology, Market Structure and Internationalization: Issues and Policies for Developing Countries. Routledge
Laborde, D., Martin, W. and Van der Mensbrugghe, D., (2012). Implications of the Doha market access proposals for developing countries. World Trade Review, 11(01), pp.1-25
Ludema, R.D. and Mayda, A.M., (2013). Do terms-of-trade effects matter for trade agreements? Theory and evidence from WTO countries. The Quarterly Journal of Economics, 128(4), pp.1837-1893
Matsushita, M., Schoenbaum, T.J., Mavroidis, P.C. and Hahn, M., (2015). The World Trade Organization: law, practice, and policy. Oxford University Press.
Michalopoulos, C., (2014). The Future of the WTO in Global Governance. InEmerging Powers in the WTO (pp. 224-243). Palgrave Macmillan UK
Millimet, D.L. and Roy, J., (2015). Multilateral environmental agreements and the WTO. Economics Letters, 134, pp.20-23.
Moïsé, E. and Sorescu, S., (2013). Trade Facilitation Indicators: The Potential Impact of Trade Facilitation on Developing Countries’ Trade (No. 144). OECD Publishing.
Nicita, A., Ognivtsev, V. and Shirotori, M., (2013). Global supply chains: trade and economic policies for developing countries. United Nations Conference on Trade and Development
Patterson, G., (2015). Discrimination in International Trade, the Policy Issues: 1945-1965. Princeton University Press.
Porter, R.B., (2015). The World Trade Organization at Twenty. The Brown Journal of World Affairs, 21(2), p.104
Smith, K.E., (2013). European Union foreign policy in a changing world. John Wiley & Sons
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Wood, A., (2015). World Trade Report 2014–Trade and Development: Recent Trends and the Role of the WTO World Trade Organization, 2014. World Trade Review, 14(03), pp.546-548
Zhang, Z., (2016). The US proposed carbon tariffs, WTO scrutiny and China’s responses. In Legal Issues on Climate Change and International Trade Law(pp. 67-92). Springer International Publishing
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