Emad Mekay

WASHINGTON, May 17 2005 (IPS) — U.S. officials and companies are rallying around the World Trade Organisation (WTO), against reviews critical of the 10-year-old body’s record of helping developing nations reap the rewards of liberalised global commerce.

Withdrawing from the WTO ”would bring certain closure of markets to those American workers and farmers dependent on continued trade liberalization and would ignite persistent trade conflicts that would distort the global economy beyond anything imaginable today,” Deputy U.S. Trade Representative Peter Allgeier, told a congressional committee here Tuesday.

Allgeier was reacting to a proposal by two U.S. lawmakers that Washington pull out of the WTO, which governs trade among 149 nations, mediates trade disputes and serves as a vehicle to stimulate trade negotiations.

Representatives Bernard Sanders, an Independent from Vermont, and Ron Paul, a Texas Republican, submitted a joint resolution in March to withdraw approval of the United States from the agreement establishing the WTO. The Geneva-based body has come under heavy criticism from U.S. legislators who have described its impact as largely negative for U.S. industries and workers.

Witnesses at the hearing said it was hard to imagine how someone could want to withdraw from the organisation, adding that it has done much to boost the U. S. economy. Some, however, acknowledged some failings and said the best course was to correct them.

The WTO, in existence for some 10 years, represents ”the work of the past six decades to bring about a rules-based liberalised global trading system,” Allgeier said.

Critics also have assailed the WTO for what they have termed its at-best-mixed record of helping developing countries benefit from open trade.

”The WTO is not equally successful at all (of its) diverse tasks,” says a new report from the Kenan Institute of Private Enterprise at the University of North Carolina.

The report was issued Monday on the eve of Tuesday’s hearings, by the powerful Ways and Means Committee of the U.S. House of Representatives, to review how membership in the WTO affects the United States.

The Kenan Institute report also says that although the Geneva-based WTO has helped improve the rule of law internationally and encouraged more countries to adopt transparent market-based trade, it still failed on many counts.

The main argument against the organisation is that agricultural subsidies and tariffs negotiated under its rules remain high despite U.S. and European Union (EU) reform proposals, the report says. Developing nations generally regard those proposals as too little and too superficial to address their concerns that cheap Western goods are being dumped on world markets at the expense of the developing world’s farm sector.

The report faults the WTO for not being a successful venue for negotiations. ”It has been stuck in idle as a vehicle for trade negotiations,” the document says.

Nor does the organisation appear to be inclusive. The report says that the WTO’s members have not done enough to help developing countries participate in the trade regime and benefit from trade liberalisation.

This is largely because the WTO has had a hard time disciplining members including the United States and the EU that maintain trade distorting policies including subsidies that may hurt the poor at home and in the developing world.

Even though the United States has litigated more disputes than any other country and won most of them, it has not complied with dispute settlement decisions against it.

Last week, the United States, fearful of a surge in Chinese imports, said it was imposing temporary quotas on certain cotton shirts, cotton trousers, and underwear exports from China, a move seen in developing nations as against WTO rules.

Immediately after the decision, a Chinese commerce ministry official was quoted in news reports as saying that the U.S. decision violated the WTO agreement on textiles and apparel and would ”severely jeopardise the multilateral trade system.”

On Tuesday, Allgeier denied that the decision meant that Washington was turning its back on the system or the WTO.

U.S. businesses, which stand to further benefit from market-opening measures under the multilateral trade system, also have resisted criticism of the organisation and rebuffed congressional calls for a withdrawal from the WTO.

Dwight ”Dyke” Messinger, testifying on behalf of the powerful industry lobby group the National Association of Manufacturers, said the resolution to withdraw from the WTO must be ”opposed vigorously by the administration and Congress.”

”I am not a trade lawyer. I am a businessman,” he said. ”I can tell you that because of the rules-based trading system, barriers have been coming down over the years.”

”However, my company still faces tariffs and trade barriers that are much too high in too many countries. We could sell more to our existing customers if the costs of trade were cheaper, and if other countries did not throw up one barrier after another,” he said.

U.S. corporations argue that United States has benefited greatly as a result of the WTO rules.

U.S. manufacturing and agricultural exports have grown strongly during the past 10 years. Between 1994 and 2004, they were up 65 percent and 38 percent, respectively, according to the USTR.

U.S. exports of high technology products grew by 67 percent during the past 10 years and accounted for one-quarter of total goods exports.

Backing for the WTO also came from the American Farm Bureau Federation and from another powerful business group, the Coalition of Services Industries.

”All members of the global trading system have a stake in the future of the WTO and the Doha Round, but it is the U.S. that stands to gain the most and we must therefore continue to participate actively and vigorously in the WTO,” said Norman Sorensen, chairman of Coalition of Services Industries

WTO countries are currently participating in the ninth round of negotiations, called the Doha Development Round, which was launched in Doha, Qatar, in November 2001. The Doha agenda opens for negotiations areas like agriculture, industrial market access, services, trade facilitation, and WTO rules.

The WTO has been gaining in membership over the past few years as the United States spearheaded an effort to promote multilateral global trade. Membership has risen to 149 with key entrants including China, Jordan, Cambodia, and several former Soviet Republics.

Negotiations toward entry into the WTO are ongoing for more than 25 countries including Russia, Vietnam, Iraq, Ukraine, Saudi Arabia, and Afghanistan.