Why Do Critics Argue That the WTO Is Suffering From a Crisis of Legitimacy?

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Table of Contents

Introduction
Reasons put forth for the legitimacy crisis at WTO
WTO and Legitimacy crisis
Conclusion and Recommendations
Works Cited

Introduction

The World Trade Organization (WTO) is a well known body in the business world. It is an organization that is charged with the responsibility of supervising and liberalizing international trade. It has existed for a considerable period of time, having officially started in 1995. The WTO regulates trade operations among participating nations. This is made possible through the provision of a framework that governs the negotiation and formalization of trade agreements.

There is also another critical aspect of the World Trade Organization; the provision of a dispute resolution process that is aimed at ensuring that all the participants holds fast to WTO agreements. The agreements are quite serious to a point that they are signed by the member governments’ representatives and approved by the government’s parliaments.

Over that recent past, the World Trade Organization has suffered from a crisis of legitimacy. This has been attributed to many factors. It can particularly be seen in the trade negotiation by the name Doha Development Agenda or Doha Round. The negotiation has been faced with a lot of disagreements making its future to be full of uncertainties. There has been heated debate on the World Trade Organization legitimacy.

The debate revolves upon questions that try to bring into light the function and purpose of WTO and more so, whether it meets a certain criteria or degree of legitimacy (Hoekman, Mattoo and English 24). This piece of work gives an in depth discussion of the World Trade Organization (WTO) and the crisis of legitimacy. Much emphasis will be given to the factors that surround the legitimacy crisis for instance the reasons behind it, the current situation and the way forward or recommendations.

Reasons put forth for the legitimacy crisis at WTO

There are a variety of reasons that have been identified to have been connected to the legitimacy crisis that is faced by the World Trade Organization. The major reason has however been termed as lack of political transparency and accountability. According to Keohane and Nye (280), effective politics and politicians are crucial in allowing for strong and desirable legitimacy. Politicians are needed who can link specific organizations and policies with a broader range of public issues through electoral accountability ‘ (Keohane and Nye 280).

The authors assert that legitimacy is not a simple concept and thus it should not be taken just as an element of popular autonomy and decision making governed by majority vote. There is much to this. For instance, apart from legitimacy that is gained through democratic elections, institutions are deemed to obtain legitimacy and authority as a result of their capability to deliver desirable results as well as their general ties established with other institutions.

This can be understood through checking on an organization’s checks and balances. This therefore translates that the World Trade Organization should consider all these areas in an effort to improve its situation and image among various parties (Lawrence et al 57).

Another accusation of the World Trade Organization in regard to its legitimacy position is that it has been involved in the widening of the gap that prevails between the poor and the rich. This is despite the fact that it claims to be fixing the same. Legitimacy is an element that can also be seen with respect to decision making function.

Most critics have seen the decision making system at WTO to be ineffective. To be specific, the system has been termed as too much simplified, non-inclusive as well as unrepresentative. This has led to a breakdown in the process of consensus building since there have been many active participants involved in the operations of the organization, with each having varying interests and objectives. This has in a way complicated the overall decision making process of the World Trade Organization.

This aspect is compared to the earlier regime, the GATT where the decision making was considered effective due to the fact that fewer countries were actively involved and that there were no strict rules advocating for adherence of all the nations to the results (Howse 107). To solve this problem, the decision making process should be restructured in a manner that is more accountable and transparent.

WTO and Legitimacy crisis

The World Trade organization has no been in crisis all through but rather it has been able to achieve much with respect to its main goal; ensuring that trade flows as efficiently, easily and in a predictable manner as possible at all times. The World Trade Organization has been evolved with a variety of functions and operations that are meant to make its main goal come true or rather to fulfil its tasks and responsibilities.

According to Shaffer and Meléndez-Ortiz, the World Trade organization has been able to deliver considerable global economic benefits. This has been achieved through liberalization of world trade that has in one way or the other facilitated smooth running of operations among member countries. “As the key institution for global governance of international trade, the WTO has also stabilized the rules on trade and provided an effective dispute settlement mechanism to manage trade conflicts.” (Shaffer and Meléndez-Ortiz 47).

Just as any other life issue, the World Trade Organization has not had a smooth path all through but rather, it has been faced with a lot of challenges and crisis. This has come out through various ways, the main one being its inefficiency in solving the issues contained in the Doha Round.

Other noteworthy challenges that have been identified in the course of running the World Trade Organization operations include the allegations of the rise of large developing nations for instance Brazil, China and India, the swift growth of bilateral free trade agreements as well as failure to resolve the Doha Development Agenda.

The Doha Round is however the most contentious challenge. This is because despite the efforts being put forth, there has been little progress, if any. It has been a relatively lengthy affair, consuming a lot of time and resources but unfortunately, delivering frustrating results (Stoll and Schorkopf 12).

Most of the challenges that are faced by the World Trade Organization are nonetheless associated with a changing economic environment that necessitates quick change of the organization’s operations, an aspect that is not easy since it requires critical decision making and planning as well as proper allocation of resources to the various trade operations.

This is nonetheless not a justification of the World Trade Organization’s failure since a successful organization ought to have set up strategic measures that allow adoption of the appropriate actions where need be. The challenges have played a critical role in exposing the WTO inefficiencies and hence the emergence of a lot of criticism from various angles (Rodrik 342).

The legitimacy crisis facing the world trade organization is a reality. It is a concept that has drawn a lot of attention and concern from different sources and parties. For this reason, there is a dire need for the World Trade Organization to take strategic measures aimed at improving the situation to allow for efficiency and also improve its image and regain legitimacy and public acceptance, an aspect that is incredibly essential in bringing it back to a position that is characterized by success and efficiency (Shaffer 106).

The legitimacy crisis that is facing the World Trade Organization can be best understood by looking at the different aspects that surround the operations of the organizations and what has been put forth by various individuals and groups with respect to the legitimacy crisis. Esty (7) asserts that the World Trade Organization faces a legitimacy crisis despite the fact that there was a successful initiative of a new round of bilateral and multilateral trade negotiations that was held at Doha.

“Protests continue to rock major international economic meetings and the WTO’s role in globalization is being questioned by many observers” Esty (7). This therefore shows that there is a need for WTO to re-establish its legitimacy especially in regard to free trade. The World Trade Organization should also enhance its reputation to achieve efficiency since in the modern world; there is more to success than just economic growth and development.

A good way to achieve success and regain public acceptance and legitimacy is to serve the interests of the world community in an appropriate manner. This could only be achieved through practicing or pursuing the organization’s economic goals in a manner that do not seem to concentrate much on only the economic benefits to be achieved but also on other societal need and values. These include environmental protection and conservation, public health promotion as well as strategies for poverty alleviation among others.

Another positive measure that could contribute to long term success in the Worlds Trade Organization’s processes and procedures is the establishment and implementation of an appropriate and comprehensive structure of global governance which will be capable of facilitating all the aspects that are related to trade for instance the provisions of checks and balances.

This will allow for the identification of any fault and taking of appropriate measures to avoid major damages. An effective global governance structure will also play a critical role in the reinforcement of the legitimacy associated with the process of international trade policy making. This will help in the maintenance of the concepts of accountability and transparency which will in turn enhance the various trade processes and operations for achievement of overall success (Harms 180).

Although the World Trade Organization has been continuously accused especially with regard to its legitimacy, it is deemed to be in the fore front of the economic integration process. However, the problem comes is because the organization tends to be involved with ineffective or dated actions particularly with respect to decision making. It is consequently clear that proper management of interdependence is an essential aspect that should be taken with a lot of seriousness if success is to be achieved. For this reason, there is an urgency to resolve the legitimate issues that surround the World Trade organization and its operations.

Research indicates that much of the criticism that has been laid in regard to the WTO legitimacy is baseless. However, there exist facts that support the argument especially with respect to the current and future situation of the organization that is largely influenced by globalization.

There are various legitimacy concerns. Economic integration and the process of globalization and its effects have to a large extent resulted in the legitimacy crisis faced by the World Trade Organization and other international trade related organizations. Public preference has also become an issue such that apart from concentrating on the core functions, an organization should also consider that factors that are of essence to the general public.

This includes environmental protection and poverty eradication and human rights. Distributional issue is also of great concern. The benefits that are linked with economic integration and trade liberalization are in most cases not equally distributed and hence some regions and people are favoured than others (Reinecke 174).

Irrespective of the nature of legitimacy concern raised, it is clear that there prevail a legitimacy crisis in the operations of the World Trade Organization. The legitimacy is questioned by a variety of parties each laying down its claims. For this reason, the situation of public acceptance of the authority and legitimacy as well as the decision making strategy in regard to the World Trade Organization should be taken seriously in all the countries that are involved.

Legitimacy is considered to be a relatively sophisticated concept of governance. It could be gained through various means for instance through democratic election and a majority vote or through reason and usefulness of the results that are derived from an organization’s operations.

With respect to trade relations, the decision making systems are of essence (Tully 118). As opposed to legitimacy that is derived from election of accountable officials, trade organizations mostly gain legitimacy through their activities and the value attached to them. This is a constituent of international economic management structure. The public perception in regard to trade and trade policy making policy have significantly changed.

Trade has now been considered as a process that affects various individuals and it is no longer left in the hands of the technical experts. Public attention has become of great essence in all trade issues. This calls for significant change in the operations of trade organizations in order to maintain a high level of legitimacy (Joerges and Renaud 114).

Conclusion and Recommendations

From the discussion, it is evident that the World Trade Organization has suffered from a crisis of legitimacy. This can be seen in its efforts to perform its tasks and responsibilities where in most cases, it is faced with a lot of obstacles and ends up not achieving the desired results.

Despite the legitimacy crisis, it is clear that all is not lost and there are steps that should be taken by World Trade Organization in an effort to improve its current situation and ensure that its future is brighter and desirable. All in all, WTO must be viewed as a critical element with respect to the emerging international governance system. The challenge of defining the major principles, rules and procedures that are needed for managing interdependence should be acknowledged and dealt with appropriately.

However, despite the condition facing the World Trade Organization, there are still some hopes of improvement. The World Trade Organization is capable of recuperating a broad legitimacy and public acceptance. However this will necessitate taking some efforts for instance streamlining of the trade regime’s substantive rules and procedures for effective performance (Mearsheimer 27).

The world’s complex interdependence is one major factor that has led to the legitimacy crisis that the World Trade Organization faces. For this reason, there is a need for adoption of effective decision making processes that are well understood and accepted.

Another measure that could be taken by WTO in an effort to improve its situation is broadening of its base in global governance as well as establishing a system of check and balances that are responsible for spreading authority both horizontally and vertically. This entails spreading authority across international organizations as well as global and local scales respectively (Nichols 858).

The World Trade Organization should also strengthen its legitimacy through a commitment to more transparent procedures and provision of a forum that allows for a broader global-scale political dialogue. This will significantly help in rebuilding its reputation for efficiency and effectiveness. Good governance is of optimal essence.

The WTO should also make a point of adopting rules and procedures that assist in balancing of the competing goals that are associated with aspects such as investment liberalization, trade, economic efficiency and economic integration on one side and human rights, environmental protection and equity among others on the other side.

Works Cited

Esty, Daniel. “The World Trade Organization’s Legitimacy Crisis.” Faculty Scholarship Series. 2002, Paper 433. 29 November 2011. <https://digitalcommons.law.yale.edu/fss_papers/433/>

Harms, Brian. “Holding Public Officials Accountable in the International Realm: A New Multi-Layered Strategy to Combat Corruption”, Cornell International Law Journal, 2000,.33: 159, 180-181.

Hoekman, Bernard M, Mattoo, Aaditya, and English Philip. Development, Trade, and the WTO: a Handbook, Part 1. UK: World Bank Publications, 2002. Print

Howse, Robert. “The House That Jackson Built: Restructuring the GATT System.” Michigan Law Review, 1999, 20: 107.

Joerges, Christian, and Renaud Dehousse. “Good Governance in an Integrated Market.” The Collected Courses of the Academy of European Law, 2002, Vol. XI, Book 2.

Keohane, Robert, and Nye Joseph Jr. The Club Model of Multilateral Cooperation and Problems of Democratic Legitimacy’, in Roger Porter et al. (eds.), Efficiency, Equity and Legitimacy: The Multilateral Trading System at the Millennium, Washington DC: Brookings Institution Press, 2001. Print

Lawrence, Robert et al. A Vision of the World Economy: Openness, Diversity, and Cohesion. Washington DC: Brookings Institution Press, 1996. Print

Mearsheimer, John. The False Promise of International Institutions, International Security, 1995, 19 (Winter): 3.

Nichols, Philip. “Realism, Liberalism, Values, and the World Trade Organization,” Pennsylvania Journal of International Economic Law, 1996, 17: 851, 856-860.

Reinecke, Wolfgang. Global Public Policy. Washington DC: Brookings Institution Press, 1997. Print

Rodrik, Dani. Has Globalization Gone Too Far? Washington DC: Institute for International Economics, 1997. Print

Shaffer, Gregory. Defending Interests: Public-Private Partnerships in WTO Litigation. London: Brookings Institution Press, 2003. Print

Shaffer, Gregory, and Meléndez-Ortiz Ricardo. Dispute Settlement at the WTO: The Developing Country Experience. Cambridge: Cambridge University Press, 2010. Print

Stoll, Peter-Tobias, and Schorkopf Frank. WTO: World Economic Order, World Trade Law. New York: Martinus Nijhoff Publishers, 2006. Print

Tully, Stephen. Corporations and International Lawmaking. New York: BRILL, 2007. Print

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