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Trade and the Third World

Hypocrisy and trade-talk go together, as America's decision to impose tariffs on imported steel shows. Although that action is expected to be judged illegal by the World Trade Organization (WTO), developing countries remain wary. Historically, they (India prominent among them) argued that the WTO is a tool of rich countries and so resisted much of what it sought to do. Indeed, before the WTO ministerial meeting in Doha earlier this year, India's line was to oppose the launch of a new trade round, resist further trade liberalization in industrial goods, and oppose the use of trade sanctions to punish countries that fail to meet minimal labor standards.

The perception that the WTO is largely an instrument of the powerful, industrialized nations is broadly correct. To oppose it on all fronts, however, is wrong. A more sophisticated approach towards the WTO (and the North in general) is needed.

The WTO says that it is a democratic organization run on the principle of one country, one vote. Anybody who follows the WTO knows that rich countries get around this `nuisance' democratic formality by lobbying behind the scenes to fix the agenda in advance.

Despite this, constant opposition to the WTO is self-defeating. As the dispute about America's new steel tariffs illustrates, in today's globalized world a centralized trade ombudsman is vital. Eliminating the WTO would be like trying to run a modern society without a law court. While law courts are typically more lenient towards the rich and powerful, it is still better to have them than not.