The Wto Is an Institution That Promotes ‘free Trade’ but Not ‘fair Trade

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How this system works is that it disputes resolutions normally takes place through the follow three stages, consultation, formal litigation, and implementation. The complainant firstly would table its agenda with the defendant and they have 60 days to work out a mutually satisfied outcome which is how most cases are then resolved. If they are unable to agree mutually on the outcome, the case would proceed up to a panel proceeding which then formalizes the litigation phase.

Critics to the arrangement of DSU seems to be that it is a waste of resources for developing countries in the event that they would like to take action against developed countries through this system. Firstly developing countries lack the enforceability to deal with the potential violations due to their market size and bargaining power. Legal experience is also lacking in some cases whereby developing countries may not have sufficient experience in dealing with disputes of similar context.

Generally outcome that WTO is able to hand out in response to cases of non-compliances are usually in a form of trade retaliation by imposing discriminatory trade sanctions against the defendant country. Developing countries may fear the potential repercussion such as suspension and withdrawal of trade preference that is currently on going with developed countries. This adds to the list that it may not be very benefiting or practical to raise cases up with developed countries or to WTO for that matter. Imposition on developed countries tend to have low significant impact on them but such actions taken against them actually hurts the developing countries more. (Marc L. Busch and Eric Reinhardt, 2004)

Part of the problem is that developing countries usually are unable to get developed countries to arrive to a settlement that is substantial enough in the early stages of negotiation as compared to when the case progress up to the panel proceeding stages. Another way to look at it is that developed countries do consider the outcomes of such disputes as the bad reputation of being non-compliant might hurt them in a long run when it comes to a situation where they file a complaint against another country member.

Nonetheless, having a dispute settlement arm in WTO does have its credits in benefiting developing countries as they provide an alternative for these countries to see redress and to ensure their rights are being protected. It also shows that WTO is willing to ensure that developing countries are being protected.

- Agreement on Agriculture

Agreement on Agriculture (AoA) is one of the initiatives from WTO to increase market accessibility and reduce trade distorting agricultural subsidies from countries to establish a fair and market oriented trading platform. Developed countries were given six years to make their respective adjustments and ten years for developing countries. (WTO , n.d.)

AoA is structured based on three main pillars namely market access, domestic support and export competition with the ideal to help agriculture sectors in developing countries to overcome agricultural protectionism and to curb domestic support that is prevalent especially in developed countries. For market access, member countries are supposed to gradually reduce tariffs and import quotas and bans are to be converted to tariffs. As for domestic support, AoA has characterized government support to domestic producers to three different levels, Amber, Green and Blue Box signifying the various level of government involvement in the form of subsides and for export competition, member countries are supposed to reduce direct export subsidies. In addition, developing countries can exercise their rights to call for special and differential treatment to request for a longer adjusting period.

Even with such initiative to improve trade conditions for developing countries, AoA is criticized for being manipulative and skewed towards developed countries’ interest. It is because when developing countries opening up their markets to facilitate trade liberalization, this invited cheap, highly subsidized agriculture surplus from developed countries into their domestic markets. On the other hand, developing countries may not necessary have access to their market. This creates a cycle whereby developing countries continue to be dependent on such imports which allows developed countries to be able to monopolize and have control over international markets. (Ghosh, 2013) As the nature of agriculture belongs to small scale farmers in developing countries, they are not in a position to compete internationally against bigger players from the developed countries where they are able to provide subsidies to their producers.

Subsidies that are restricted initially are being channeled into areas that are approved for government involvement which are deem as non-distorting (Blue and Green box).This creates an uneven competition and creates a huge threat to their livelihoods as business sustainability are being questioned.

Due to the existing low tariffs that are imposed, developed countries typically US and EU are able to continue sell products that are less than its production cost and there are no significant increase in agriculture exports from developing countries. And because of the policies of AoA, support from the government to aid domestic producers in developing countries reduces gradually and instead of being achieve food security, AoA has actually cause developing countries to be less independent and have to rely on developed countries for imports on food producers instead.

- Multi Fibre Agreement and WTO Agreement on textile and clothing (developed)

The Multi Fibre Agreement was in use from 1974-2004 to control and limit the amount of textile products that are exported to developed countries. The nature of the industry is known to be labor intensive and low skilled. Since given these factors, it happens to fall within the scope of developing countries where they have the conditions to achieve comparative advantages as compared to developed countries as they are able to product these goods at a lower cost.

This is where the MFA comes into play to ensure that developed countries such as US and EU countries are able to safeguard their domestic industries. A quota was then set to regulate trade of textile and clothing. On the other hand, with MFA implementation and quota limits, it allow exporting countries to create employment opportunities however these jobs usually have a short lifespan due to the fact that importing countries tend to switch their sourcing vendors to avoid the quota restrictions. Exploitation and labor violation might also occur as these industries

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