World Trade Organisation
The World Trade Organization (WTO) is an international organization which oversees a large number of agreements defining the “rules of trade” between its member states (WTO, 2004a). The WTO is the successor to the General Agreement on Tariffs and Trade, and operates with the broad goal of reducing or abolishing international trade barriers.
The WTO has two basic functions: as a negotiating forum for discussions of new and existing trade rules, and as a trade dispute settlement body.
Where most international organizations operate on a one country, one vote or even a weighted voting basis, many WTO decisions, such as adopting agreements (and revisions to them) are determined by consensus. This does not necessarily mean that unanimity is found: only that no Member finds a decision so unacceptable that they must insist on their objection. Voting is only employed as a fall-back mechanism or in special cases.
The advantage of consensus is that it encourages efforts to find the most widely acceptable decision. Main disadvantages include large time requirements and many rounds of negotiation to develop a consensus decision, and the tendency for final agreements to use ambiguous language on contentious points that makes future interpretation of treaties difficult. Richard Steinberg (2002) argues that although the WTO’s consensus governance model provides law-based initial bargaining, trading rounds close through power-based bargaining favouring Europe and the United States, and may not lead to Pareto improvement. The most notable recent failures of consensus, at the Ministerial meetings at Seattle (1999) and CancÃºn (2003), were due to the refusal of some developing countries to accept proposed decisions.
The WTO began the current round of negotiations, the Doha round, at the Fourth Ministerial Conference in Doha, Qatar in November 2001 (WTO, 2004d). The talks have been highly contentious and agreement has not been reached, despite continuing talks in Cancun, Geneva, and Paris.
Like most other international organizations, the WTO has no significant power to enforce the decisions it makes when a member brings a complaint against another. If decisions of its Dispute Settlement Body are not complied with, it may authorise “retaliatory measures” on the part of the complaining member, but no other enforcement action is available. This means that economically powerful states like the United States can essentially ignore rulings against them from complaints brought by the economically weak, as the latter states simply do not have the power to hurt US trade enough to force the US to change its position. This has been the case, for example, with the March 2005 Appellate Body ruling in case DS 267 declaring US cotton subsidies illegal.