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Chapter: 11th Commerce : Chapter 27 : Facilitators of International Business

Criticism Against WTO

The following criticisms are levelled against WTO

Criticism Against WTO

The following criticisms are levelled against WTO

i. Free Trade Benefits Developed Countries more than Developing Countries

Developing countries need some sort of trade protection to develop their new industries. Many developed countries had once used this protection to nurture their infant industries in their development stage. In this context prevention of developing countries from defending their infant industries altogether through restriction is unfair. It is suspected to be a conspiracy to indirectly favour MNC’s.

ii. Most Favoured Nation Principles

This is the core of WTO rules. Under this rule member countries are advised not to discriminate among the home enterprises, multi-nationals  and  foreign  enterprises. In other words WTO prevents developing countries from favouring their emerging companies. This move  is  supposed  to give unfair advantage to multinational companies.

iii. Failure to Reduce Tariffs on Agriculture

WTO failed to convince the USA and European Unions to eliminate high  tariff on agriculture . In other words it defends high tariff on agriculture in USA and EU. This would undoubtedly hurt the farmers in developing countries.

iv. Neglect of Farmers Interest in Developing Countries

Developing Countries specialize in producingprimaryproducts. i.e. agricultural products. They need some sort of protection to diversify into other sectors of the economy at least in the short term. Many developed nations used this tariff protection in the process of their development . In this context WTO is criticised for being unfair and neglecting the interest of farmers in developing countries.

v. Neglect Environmental Considerations

WTO encourages import from certain countries which produce  the  product  on  a larger scale at the cost of environment. WTO pushes for achieving increase in GDP without any regard for environment. In the current environment of global warming  and ever increasing  environmental  disaster, utmost priority given by WTO on maximizing GDP at the cost of environment is misplaced.

vi. Neglect of Cultural and Social Factors

WTO is criticized for promoting the domination of multinational companies whicharefearedtoeliminatelocalenterprises from business world altogether. The growth of MNC’s is feared to ruin cultural diversity of many developing countries.

vii. Inability of People in Developing Countries to Buy Life Saving Drugs

WTO defends trade related intellectual property rights which allow the firm to protect the patent and copy right. This protection particularly in the area of manufacturing of drugs is supposed to escalate the price of essential and life saving drugs. As a result people of developing countries may not be able to buy costly drugs at affordable price.


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