As per WTO brochure, following are the 10 benefits of WTO

1. The system helps promote peace

Peace is partly an outcome of two of the most fundamental
principles of the trading system: helping trade to flow smoothly,
and providing countries with a constructive and fair outlet for
dealing with disputes over trade issues. It is also an outcome of the
international confidence and cooperation that the system creates
and reinforces. History is littered with examples of trade disputes
turning into war. One of the most vivid is the trade war of the
1930s when countries compete to raise trade barriers in order to
protect domestic producers and retaliate against each others
barriers. This worsened the Great Depression and eventually
played a part in the outbreak of World War 2. Two developments
immediately after the Second World War helped to avoid a repeat
of the pre-war trade tensions. In Europe, international cooperation
developed in coal, and in iron and steel. Globally, the General
Agreement on Tariffs and Trade GATT) was created. Both have
proved successful, so much so that they are now considerably
expandedone has become the European Union, the other the
World Trade Organization (WTO). People who are more
prosperous and contented are also less likely to fight. But that is
not all. The GATT/WT system is an important confidence builder.
The trade wars in the 1930s are proof of how protectionism can
easily plunge countries into a situation where no one wins and
everyone loses. The shortsighted protectionist view is that
defending particular sectors against imports is beneficial. But that
view ignores how other countries are going to respond. The longer
term reality is that one protectionist step by one country can easily
lead to retaliation from other countries, a loss of confidence in freer
trade, and a slide into serious economic trouble for allincluding
the sectors that were originally protected. Everyone loses. Hence
negotiations are very important that lead to agreement by
consensus, and a focus on abiding by the rules.
2. Disputes are handled constructively
There could be a down side to trade liberalization and expansion.
More trade means more opportunities for disputes to arise. Left to
them, those disputes could lead to serious conflict. But in reality, a
lot of international trade tension is reduced because countries can
turn to organizations, in particular the WTO, to settle their trade
disputes. Before World War 2 that option was not available. After
the war, the worlds community of trading nations negotiated trade
rules, which are now entrusted to the WTO. Those rules include an
obligation for members to bring their disputes to the WTO and not

to act unilaterally. When they bring disputes to the WTO, the

WTOs procedure focuses their attention on the rules. Once a
ruling has been made, countries concentrate on trying to comply
with the rules, and perhaps later renegotiating the rulesnot on
declaring war on each other. Around 300 disputes have been
brought to the WTO since it was setup in 1995. The fact that the
disputes are based on WTO agreements means that there is a clear
basis for judging who is right or wrong. Once the judgment has
been made, the agreements provide the focus for any further
actions that need to be taken. As trade expands in volume, in the
numbers of products traded, and in the numbers of countries and
companies trading, there is a greater chance that disputes will arise.
Countries in dispute always aim to conform with the agreements
The increasing number of disputes brought to GATT and its
successor, the WTO, does not reflect increasing tension in the
world. Rather, it reflects the closer economic ties throughout the
world, the GATT/WTOs expanding membership and the fact that
countries have faith in the system to solve their differences.
3. Rules make life easier for all
We being consumers pay the prices for our food and clothing,
necessities luxuries, and everything else in between, are affected by
trade policies. Decisions in the WTO are made by consensus on the
basis of negotiation by all members, and subsequent ratification by
all members parliaments. The agreements apply to Rich and poor
countries alike have an equal right to challenge each other in the
WTOs dispute settlement procedures. There are matching benefits
for larger countries. The major economic powers can use the single
forum of the WTO to negotiate with all or most of their trading
partners at the same time. This makes life much simpler for the
bigger trading countries. The alternative would be continuous and
complicated bilateral negotiations with dozens of countries
simultaneously. And each country could end up with different
conditions for trading with each of its trading partners, making life
extremely complicated for its importers and exporters. The
principle of non-discrimination built into the WTO agreements
avoids that complexity. The fact that there is a single set of rules
applying to all members greatly simplifies the entire trade regime.
And these agreed rules give governments a clearer view of which
trade policies are acceptable. The WTO cannot claim to make all
countries equal. But it does reduce some inequalities, giving
smaller countries more voice, and at the same time freeing the
major powers from the complexity of having to negotiate trade
agreements with each of their numerous trading partners. This

makes life easier for all, in several different ways. Smaller

countries can enjoy some increased bargaining power. Without a
multilateral regime such as the WTOs system, the more powerful
countries would be freer to impose their will unilaterally on their
smaller trading partners. Smaller countries would have to deal with
each of the major economic power individually, and would be
much less able to resist unwanted pressure. In addition, smaller
countries can perform more effectively if they make
4. Freer trade cuts the costs of living
The prices we pay as consumers for our food and clothing, our
necessities and luxuries, and everything else in between, are
affected by trade policies. Protectionism is expensive: it raises
prices. The WTOs global system lowers trade barriers through
negotiation and applies the principle of non-discrimination. The
result is reduced costs of production (because imports used in
production are cheaper) and reduced prices of finished goods and
services, and ultimately a lower cost of living. There are plenty of
studies showing just what the impacts of protectionism and of freer
trade are. These are just a few figures: FOOD IS CHEAPER When
you protect your agriculture, the cost of your food goes upby an
estimated $1,500 per year for a family of four in the European
Union; by the equivalent of a 51% tax on food in Japan (1995); by
$3 billion per year added to US consumers grocery bills just to
support sugar in one year (1988). Negotiating agricultural trade
reform is a complex undertaking. Governments are still debating
the roles agricultural policies play in a range of issues from food
security to environmental protection. But WTO members are now
reducing the subsidies and the trade barriers that are the worst
offenders. And in 2000, new talks started on continuing the reform
in agriculture. These have now been incorporated into a broader
work programme, the Doha Development Agenda, launched at the
fourth WTO Ministerial Conference in Doha, Qatar, in November
2001.
Import restrictions and high customs duties combined to
raise US textiles and clothing prices by 58% in the late1980s. UK
consumers pay an estimated 500 million more per year for their
clothing because of these restrictions. For Canadians the bill is
around C$780 million. For Australians it would be A$300 annually
per average family if Australian customs duties had not been
reduced in the late 1980s and early 1990s. The textiles and clothing
trade is going through a major reform by which restriction will be
eliminated on quantities of imports.

5. It provides more choice of products and qualities

This is a difficult subject to tackle in simple terms. There is strong
evidence that trade boosts economic growth, and that economic
growth means more jobs. It is also true that some jobs are lost even
when trade is expanding. But a reliable analysis of this poses at
least two problems. First, there are other factors at play. For
example, technological advance has also had a strong impact on
employment and productivity, benefiting some jobs, hurting others.
Second, while trade clearly boosts national income (and
prosperity), this is not always translated into new employment for
workers who lost their jobs as a result of competition from imports
Think also of the things people in other countries can have because
they buy exports from us and elsewhere. Look around and consider
all the things that would disappear if all our imports were taken
away from us. Imports allow us more choiceboth more goods
and services to choose from, and a wider range of qualities. Even
the quality of locally- produced goods can improve because of the
competition from imports. The wider choice isnt simply a question
of consumers buying foreign finished products. Imports are used as
materials, components and equipment for local production. This
expands the range of final products and services that are made by
domestic producers, and it increases the range of technologies they
can use. When mobile telephone equipment became available,
services sprang up even in the countries that did not make the
equipment, for example. Sometimes, the success of an imported
product or service on the domestic market can also encourage new
local producers to compete, increasing the choice of brands
available to consumers as well as increasing the range of goods and
services produced locally. If trade allows us to import more, it also
allows others to buy more of our exports. It increases our incomes,
providing us with the means of enjoying the increased choice
6. Trade raises incomes
This is a difficult subject to tackle in simple terms. There is strong
evidence that trade boosts economic growth, and that economic
growth means more jobs. It is also true that some jobs are lost even
when trade is expanding. But a reliable analysis of this poses at
least two problems. First, there are other factors at play. For
example, technological advance has also had a strong impact on
employment and productivity, benefiting some jobs, hurting others.
Second, while trade clearly boosts national income (and
prosperity), this is not always translated into new employment for
workers who lost their jobs as a result of competition from imports.
The WTOs own estimates for the impact of the 1994 Uruguay

Round trade deal were between $109 billion and $510 billion
added to world income (depending on the assumptions of the
calculations and allowing for margins of error). More recent
research has produced similar figures. Economists estimate that
cutting trade barriers in agriculture, manufacturing and services by
one third would boost the world economy by $613 billion
equivalent to adding an economy the size of Canada to the world
economy. In Europe, the EU Commission calculates that over
198993 EU incomes increased by 1.11.5% more than they would
have done without the Single Market. So trade clearly boosts
incomes. Trade also poses challenges as domestic producers face
competition from imports. But the fact that there is additional
income means that resources are available for governments to
redistribute the benefits from those who gain the mostfor
example to help companies and workers adapt by becoming more
productive and competitive in what they were already doing, or by
switching to new activities.
7. Trade stimulates economic growth
Trade clearly has the potential to create jobs. In practice there is
often factual evidence that lower trade barriers have been good for
employment. But the picture is complicated by a number of factors.
Nevertheless, the alternativeprotectionismis not the way to
tackle employment problems. This is a difficult subject to tackle in
simple terms. There is strong evidence that trade boosts economic
growth, and that economic growth means more jobs. It is also true
that some jobs are lost even when trade is expanding. But a reliable
analysis of this poses at least two problems. First, there are other
factors at play. For example, technological advance has also had a
strong impact on employment and productivity, benefiting some
jobs, hurting others. Second, while trade clearly boosts national
income (and prosperity), this is not always translated into new
employment for workers who lost their jobs as a result of
competition from imports
8. The basic principles make life more efficient
We are all consumers. The prices we pay for our food and clothing,
our necessities and luxuries, and everything else in between, are
affected by trade policies. This is a difficult subject to tackle in
simple terms. There is strong evidence that trade boosts economic
growth and that economic growth means more jobs. It is also true
that some jobs are lost even when trade is expanding. But a reliable
analysis of this poses at least two problems. First, there are other
factors at play. For example, technological advancement has also

had a strong impact on employment and productivity, benefiting

some jobs, hurting others. Second, while trade clearly boosts
national income (and prosperity), this is not always translated into
new employment for workers who lost their jobs as a result of
competition from imports
9. Governments are shielded from lobbying
We are all consumers. The prices we pay for our food and clothing,
our necessities and luxuries, and everything else in between, are
affected by trade policies. One of the lessons of the protectionism
that dominated the early decades of the 20th Century was the
damage that can be caused if narrow sectoral interests gain an
unbalanced share of political influence. The result was increasingly
restrictive policy which turned into atrade war that no one won and
everyone lost. Superficially, restricting imports looks like an
effective way of supporting an economic sector. But it biases the
economy against other sectors which shouldnt be penalizedif
you protect your clothing industry, everyone else has to pay for
more expensive clothes, which puts pressure on wages in all
sectors, for example. Protectionism can also escalate as other
countries retaliate by raising their own trade barriers. Thats
exactly what happened in the 1920s and 30s with disastrous effects.
Even the sectors demanding protection ended up losing.
Governments do just that, regularly. The GATT-WTO system
which evolved in the second half of the 20th Century helps
governments take a more balanced view of trade policy.
Governments are better placed to defend themselves against
lobbying from narrow interest groups by focusing on trade-offs that
are made in the interests of everyone in the economy. Governments
need to be armed against pressure from narrow interest groups, and
the WTO system can help. The GATT-WTO system covers a wide
range of sectors. So, if during a GATT-WTO trade negotiation one
pressure group lobbies its government to be considered as a special
case in need of protection, the government reject the protectionist
pressure by arguing that it needs a broad-ranging agreement that
will benefit all sectors of the economy. Governments do just that,
regularly
10.The system encourages good government
Under WTO rules, once a commitment has been made to liberalize
a sector of trade, it is difficult to reverse. The rules also discourage
a range of unwise policies. For businesses, that means greater
certainty and clarity about trading conditions. For governments it
can often mean good discipline. The rules include commitments
not to backslide into unwise policies. Protectionism in general is

unwise because of the damage it causes domestically and

internationally, as we have already seen. Particular types of trade
barriers cause additional damage because they provide
opportunities for corruption and other forms of bad government.
One kind of trade barrier that the WTOs rules try to tackle is the
quota, for example restricting imports or exports to no more than a
specific amount each year. Because quotas limit supply, they
artificially raise prices, creating abnormally large profits
(economists talk about quota rent). That profit can be used to
influence policies because more money is available for lobbying. It
can also provide opportunities for corruption, for example in the
allocation of quotas among traders. There are plenty of cases where
that has happened around the world. The rules reduce opportunities
for corruption In other words, quotas are a particularly bad way of
restricting trade. Governments have agreed through the WTOs
rules that their use should be discouraged. Nevertheless, quotas of
various types remain in use in most countries, and governments
argue strongly that they are needed. But they are controlled by
WTO agreements and there are commitments to reduce or
eliminate many of them, particularly in textiles. Many other areas
of the WTOs agreements can also help reduce corruption and bad
government. Transparency (such as making available to the public
all information on trade regulations), other aspects of trade
facilitation, clearer criteria for regulations dealing with the safety
and standards of products, and nondiscrimination also help by
reducing the scope for arbitrary decision making and cheating.
Quite often, governments use the WTO as a welcome external
constraint on their policies: we cant do this because it would
violate the WTO agreements.

Top Ten Reasons to Oppose the World Trade Organization

The World Trade Organization is writing a constitution for the
entire globe. The trade ministers and corporate CEOs who control the
WTO would like you to believe that its purpose is to inspire growth and
prosperity for all. In reality, the WTO has been the greatest tool for taking
democratic control of resources out of our communities and putting it into
the hands of corporations. But an international movement is growing to
oppose the corporate rule of the WTO and replace it with a democratic
global economy that benefits people and sustains the communities in
which we live.

1. The WTO Is Fundamentally Undemocratic

The policies of the WTO impact all aspects of society and the
planet, but it is not a democratic, transparent institution. The WTOs rules
are written by and for corporations with inside access to the negotiations.
For example, the U.S. Trade Representative gets heavy input for
negotiations from 17Industry Sector Advisory Committees. Citizen
input by consumer, environmental, human rights and labor organizations
is consistently ignored. Even simple requests for information are denied,
and the proceedings are held in secret. Who elected this secret global
government?
2. The WTO Will Not Make Us Safer
The WTO would like you to believe that creating a world of free trade
will promote global understanding and peace. On the contrary, the
domination of international trade by rich countries for the benefit of their
individual interests fuels anger and resentment that make us less safe. To
build real global security, we need international agreements that respect
peoples rights to democracy and trade systems that promote global
justice.
3. The WTO Tramples Labor and Human Rights
WTO rules put the rights of corporations to profit over human and
labor rights. The WTO encourages a race to the bottom in wages by
pitting workers against each other rather than promoting internationally
recognized labor standards. The WTO has ruled that it is illegal for a
government to ban a product based on the way it is produced, such as
goods produced with child labor. It has also ruled that governments
cannot take into account non commercial values such as human rights,
or the behavior of companies that do business with vicious dictatorships
such as Burma when making purchasing decisions. The WTO has more
power to punish countries that violate its rules than the United Nations
has to sanction violators of international human rights standards.
4. The WTO Would Privatize Essential Services
The WTO is seeking to force national governments to privatize essential
public services such as education, health care, energy and water so that
these sectors are open to multinational corporations. The WTOs General
Agreement on Trade in Services, or GATS, includes a list of about 160
threatened services including elder and child care, sewage, garbage, park
maintenance, telecommunications, construction, banking, insurance,
transportation, shipping, postal services, and tourism. When free trade
and corporate globalization turn public services over to private for-profit
corporations, those least able to pay for vital servicesworking class
communities and communities of colorare the ones who suffer the
most.
5. The WTO Is Destroying the Environment

The WTO is being used by corporations to dismantle hard won local and
national environmental protections, by attacking them as barriers to
trade. The very first WTO panel ruled that a provision of the U.S. Clean
Air Act, requiring both domestic and foreign producers alike to produce
cleaner gasoline, was WTO illegal. The WTO also declared illegal a
provision of the Endangered Species Act requiring shrimp sold in the
United States to be caught with an inexpensive device allowing
endangered sea turtles to escape. The WTO is now attempting to
deregulate service industries such as logging, fishing, water utilities, and
energy distribution, leading to further exploitation of natural resources.
6. The WTO is Killing People
The WTOs fierce defense of Trade Related Intellectual Property rights
(TRIPs)patents, copyrights and trademarkscomes at the expense of
health and human lives. The WTO has protected pharmaceutical
companies right to profit against governments seeking to protect their
peoples health by providing lifesaving medicines in countries in areas
like sub-Saharan Africa, where thousands die every day from HIV/AIDS.
Developing countries won an important victory in2001 when they
affirmed the right to produce generic drugs (or import them if they lacked
production capacity), so that they could provide essential lifesaving
medicines to their populations less expensively. Unfortunately, in 2003,
many new conditions were agreed to that will make it more difficult for
countries to produce those drugs. Once again, the WTO demonstrates that
it favors corporate profit over saving human lives.
7. The WTO is Increasing Inequality
Free trade is not working for the majority of the world. During the most
recent period of rapid growth in global trade and investment (1960 to
1998) inequality worsened both internationally and within countries. The
United Nations Development Program reports that the richest 20 percent
of the worlds population consume 86 percent of the worlds resources
while the poorest 80 percent consume just 14 percent. WTO rules have
hastened these trends by opening up countries to foreign investment and
thereby making it easier for production to go where the labor is cheapest
and most easily exploited and environmental costs are low.
8. The WTO is Increasing Hunger
Farmers produce enough food in the world to feed everyone yet because
of corporate control of food distribution, as many as 800 million people
worldwide suffer from chronic malnutrition. According to the Universal
Declaration of Human Rights, food is a human right. In developing
countries, as many as four out of every five people make their living from
the land. But the leading principle in the WTOs Agreement on
Agriculture is that market forces should control agricultural policies
rather than a national commitment to guarantee food security and

maintain decent family farmer incomes. WTO policies have allowed

dumping of heavily subsidized industrially produced food into poor
countries, undermining local production and increasing hunger.
9. The WTO Hurts Poor, Small Countries in Favor of Rich Powerful
Nations
The WTO supposedly operates on a consensus basis, with equal decisionmaking power for all. In reality, many important decisions get made in a
process whereby poor countries negotiators are not even invited to
closed-door meetings and then agreements are announced that poor
countries didnt even know were being discussed. Many countries do not
have enough trade personnel to participate in all the negotiations or to
even have a permanent representative at the WTO. This severely
disadvantages poor countries from representing their interests. Likewise,
many countries are too poor to defend themselves from WTO challenges
from the rich countries, and are forced to change their laws rather than
pay for their own defense.
10. The WTO Undermines Local Level Decision-Making and
National Sovereignty
The WTOs most favored nation provision requires all WTO member
countries to treat each other equally and to treat all corporations from
these countries equally regardless of their track record. Local policies
aimed at rewarding companies who hire local residents, use domestic
materials, or adopt environmentally sound practices are essentially illegal
under the WTO. Developing countries are prohibited from creating local
laws that developed countries once pursued, such as protecting new,
domestic industries until they can be internationally competitive.
Californias former Governor Gray Davis vetoed a Buy California bill
that would have granted a small preference to local businesses because it
was WTO-illegal. When the WTO was created in 1995, entire sections of
U.S. laws were rewritten. Many countries are even changing their laws
and constitutions in anticipation of potential future WTO rulings and
negotiations
11. There are Alternatives to the WTO
Citizen organizations have developed alternatives to the corporatedominated system of global economic governance. Together we can build
the political space that nurtures a democratic global economy that
promotes jobs, ensures that every person is guaranteed their human rights
to food, water, education, and health care, promotes freedom and security,
and preserves our shared environment for future generations.
12. The Tide is Turning Against Free Trade and the WTO!
International opposition to the WTO is growing. Massive protests in
Seattle of the 1999 WTO Ministerial brought over 50,000 people together
to oppose the WTOand succeeded in shutting the meeting down. In

2001, the WTO had to go to Qatar - a country that effectively lacks

freedom of speech rights - to launch a new round of negotiations. The
WTO met in Cancn, Mexico in September of 2003, and met thousands
of activists in protest. Developing countries refused to give in to the rich
countries agenda of WTO expansion and the talks
collapsed! Find out how you can help Stop the WTO!