The WTO… Maybe.

by Kevin Jon Heller

Do you like The Onion? Are you a big fan — or big critic — of the World Trade Organization? If so, here is the website for you. Perusing the site is a surreal experience; it seems so real, yet something is just a bit off…

Exhibit 1, the current headline story:

Historic Complaint For “History’s Biggest Subsidy”

Six developing nations have lodged a complaint against the US, calling the Iraq War “history’s biggest illegal trade subsidy” and “market distortion on a gargantuan scale.” “In a free market, companies like Halliburton and Exxon should be funding their own market expansion projects instead of depending on their government for help,” said a spokesperson for the consortium.

A good point, but there can’t really be such a WTO complaint… can there?

Exhibit 2: the headline “Coca-Cola enters the world policy stage with its novel approach to thirst.” Click on “more” and you come to a site that looks and feels like Coca-Cola — and even links to real Coca-Cola information. But here is the company’s welcome statement:

The Coca-Cola Company exists solely to benefit those whom it touches. The Company is proud to produce the vast bulk of the world’s mighty torrent of industrial syrups and concentrates. Ours is the lifeblood of 400 drink brands! The nexus of the Company’s power lies in Atlanta, Georgia, whence it radiates into two hundred democracies, principalities, and other entities worldwide.

Fact? Fiction? You be the judge.

20 Responses

  1. I really like the Dow “Acceptable Risk” calculator… I’m betting fiction.

  2. It is a hoax site, which was prominently featured in the documentary The Yes Men. Check out the doc. It is highly amusing.

  3. written by and for people who don’t understand basic economics, business or law. with that caveat, yes, it’s quite well done.

  4. Dear wto lawyer,

    you oversee the fact that most people actually do not understand economics, business, and law. Do not write them off.

    Or maybe it is written for those who understand not only economics, business, and law but also the fact that life is also about something else than those. I look forward yor reply to my commen to Patrick’s comment to the posting on Vietnam’s green light to acceed the WTO agreements.

  5. The core principle of the WTO is non-discrimination (against foreign producers, and among different foreign producers). That’s not hard to understand. Yet people like the Yes Men seem unaware of this. I can’t imagine that they want more discrimination; I can only assume they don’t understand what the WTO is and does. Sure, at the margins there are many controversial issues the WTO addresses. But doesn’t everyone agree that the goal fighting discrimination is a good one?

  6. Development, more than non-discrimination, is the ultimate goal. Non-discrimination is the way to get there, according to economists. On that I think everyone agrees. But the WTO focuses on economic development, while I think we should look rather at human development (for a definition, check the UNDP website). To foster human development in certain countries you need to push them a little bit to try harder (see Vietnam’s case in posting above). In that case, “economic discrimination” might be a good way to ensure that “discrimination on the basis of gender, race, age, religion, political opinions etc.” does not continue unabated. Do you agree?

  7. I doubt that “economic discrimination” is often a good way to prevent those other forms of discrimination. But even if it were, the use of “economic discrimination” is pretty rare. The bulk of the “economic discrimination” that occurs is just protectionism. That’s what we need to prevent, and that’s what the WTO tries to limit, to promote economic growth. Again, I wonder if the street protesters (and the Yes Men) are aware of this.

  8. That’s the snag. How can we have a system that discriminates between those who respect human rights and those who do not (or between those who do not and those who do try) and gives MFN treatment only to the former, but at the same time does not provide alibis to goverments for abject protectionism?

    The economists’ and WTO answer so far is: it can’t be done, thus indiscriminate MFN and everyone inside the WTO is a lesser evil. I say: are we sure we thought hard an long about this? Is there really no way? In doubt, I’d discriminate. I think we can afford several billions of $ lost in trade to make sure states respect human rights today, not tomorrow when they are rich (if ever they do get rich and provided wealth ensures respect of human rights).

  9. I have a number of concerns with your proposal. Let me focus on one. If we are to discriminate against those we believe violate human rights, won’t we all be discriminating against each other? The EU will discriminate against the U.S. because of the use of the death penalty; the U.S. will discriminate against the EU because they discourage certain religions (e.g. trying to ban muslim veils); Saudi Arabia will discriminate against the west for being heathens; everyone will discriminate against China; China will get pissed and discriminate against everyone else; and so on.

    But aside from that, my earlier point is that virtually all existing discrimination (e.g. high tariffs) is about protectionism, not promoting human rights. So, let’s get rid of it — it lowers economic welfare.

  10. Come on. You are embracing relativism here. We all violate human rights, there are really no saints. Bull. There are various sins. Some are mortal other are venial.

    You do know, as much as I do and everyone who you and I respect, who the violators are. Don’t make me list all of them here: Myanmar, Zimbabwe, Cuba, North Korea, Sudan, Uzbekistan, Belarus are surely in the top tier and unfrtunately we could go on. Can we exclude them? What do we lose from keeping them out of the WTO? Then I’d keep out Russia, China, Vietnam, Saudi Arabia, Iran, Syria, Lybia, etc. Here we lose much more $, but I am ready to take the pain. It is the morally decent thing to do.

    Or do you want to tell me that these have a record of compliance with human rights the same as Japan, the United States, or Italy? Are you saying that because the US has death penalty, Japan has obvious problems of racial discrimination and xenophobia, and Italy cannot give a decent trial to someone within a reasonable time, these countries are on the same level as those I mentioned?

    Compliance with human rights is not a subjective issue. It is a very objective fact, as the dozens of bodies existing that monitor compliance with human rights obligations can attest. They do it objectively, not arbitrarily.

    Thus, we can objectively tell who the baddies are, and we can keep them out. Better, we ought to keep them out. Besides, it just so happens than most of money and trade is to be made between the good ones, not the baddies. That’s very convenient. How much do we lose fom not giving Iran the MFN treatment anyway? Free trade only for those who play by the human rights rule. All others outside in the cold until they wise up (and, of course, if any WTO member slips back, it is out as well).

    Utopia? No, it is entirely possible. After all isn’t that the recipe of the European Union?

    Unfortunately, that’s not the way things at the WTO go. Too bad. I put all my hopes on the next organization that will replace the WTO the day the WTO bogs down for good because of consensual decision making. Maybe in my lifetime.

  11. Of course I’m not saying all countries are equal. Rather, I’m saying all countries believe they are equal (or close, anyway). Thus, if one starts down the road of trade sanctions for all perceived human rights violations, others will follow (the views of international bodies notwithstanding).

    Again, my point is this: The main goal of the WTO is to limit protectionism. Unless you think protectionism is good policy, you should support at least that part of the WTO. People like the Yes Men seem unaware that this is what the WTO does.

  12. Also, it sounds like you might have more countries and people outside the system than inside, which makes me wonder how effective it will be to have a segregated system of “virtuous” states and “sinners.” Some day, the “sinners” might have more wealth and we will be the ones begging to join!

  13. So, the bottom line is: since discrimination is an indiscriminate (excuse the punt) weapon, let’s all do business freely with each other, everyone from North Korea to Sweden.

    All the rest is a second-best to the lowering of trade barriers and increase in trade revenue, and thus, it is not worth trying. Correct?

    Well, you want to have the sinners inside the temple, but it looks like the merchants got there first….;-)

  14. Dear WTO lawyer,

    I am most thoroughly enjoying our discussion and I am grateful to you for hanging on. I hope I am not abusing of your patience. But, please, if you have time I would like to hear from you on one specific thing.

    Why is the EC model not good for the WTO? Afterall, both have at their core the same goals and assumptions (non-discrimination, reduction of barriers, economic growth). However, historically the members of the Community have used the lure of the benefits of membership to their club to make sure new members conform also to certain shared values (democracy and human rights). It worked with Spain, Portugal and Greece. It worked with the former socialist contries to the east. It is working with Serbia and Croatia. It might even work with Russia (well, that might be too big but it is worth trying).

    Why can’t the WTO do the same, instead of opening the doors indiscriminately to everyone who knocks? Why can’t the WTO also have values to defend besides the bottom line? Why can’t we ask applicants to get their judiciary straight, besides their tariff tables? Why must the WTO be different from the EC?

  15. To me, efforts to reduce protectionism are clearly beneficial. On the other hand, trying to make other countries conform to our notions of what are “human rights” is fraught with peril. That’s why I prefer to separate the two.

    As for the EC analogy, the EC is made up of states with largely shared values. Thus, it does not ask too much to encourage certain countries to try to conform to certain principles. On the other hand, the world as a whole is much different. Compare the United States to China; the UK to Saudi Arabia; Japan to Uganda; Pakistan to South Korea. There are vast differences in culture, beliefs, history, etc. How can we hope to establish a uniform set of “rights” except for the most obvious things (e.g. no slavery)? The EC is a form of supra-national government; I don’t think the world is ready for something similar on a global scale.

    In these circumstances, it seems to me the best solution might be to let them all in, so as to “corrupt” them with our democratic capitalist system.

  16. Here’s an example of the problem: Should we have only let Saudi Arabia in to the WTO if they legalized gay marriage? Not going to work, IMHO.

  17. It seems that your problem is, at the end of the day, that you do not think there is such a thing as universal human rights, while I do.

    We do have a universal understanding of human rights. It is in the 1948 Universal Declaration. It is specific enough in many cases no to leave much room for discussion or hair-splitting.

    I would be happy to settle even on the no-slavery rule as a precondition to membership, if you think that’s all we can globally agree on. Hence, Niger out, but also another dozen of countries, if you look at UN reports.

    If they are in you do not “corrupt them with our democratic capitalistic system”. You just make them richer so that they have more resources to continue abusing their own population (the Gulf countries or Singapore are a good example of how democracy and wealth do not go hand in hand).

    You say “first get rich and then you’ll comply with HR”. I say “first you comply with HR and then I let you get rich”.

  18. You caught me. I’m pretty skeptical that there are “universal” human rights. If they were really universal, why would we need to enforce them? Everyone should be complying already!

    Finally, I’m not sure it’s really in our power to “let” them get rich. Saudi Arabia is already rich because they found some oil. China is on its way to being rich because they are smart and hard-working. If I were Russia, for example, and the WTO Members said “improve your rights record, or you’re not getting in,” I’d say “fine, we’ll stay out.” There are benefits to joining, but I’m not sure it’s as crucial to development as people think.

  19. By the way, this discussion got started with Vietnam. Can you give me an example of something specific you would have them do before they can join the WTO?

  20. Multi-party free elections, this would already solve much.

    If the communist party does not want to let the grip on power I suggest: closing all re-education camps (where people are tortured and killed); restricting death penalty only to serious crimes (right now it is 23 crimes some of which are ideological, look we do not even have to ask them to abolish it); stop controlling and harrassing clergy (buddhist and catholic); cessation of persecution of ethnic minorities (e.g., the Degards/Montagnards); abolishion of administrative detention (now up to 2 years), etc. etc. Is that specific enough?

    There is a new tread above (go back to the main page and scroll up) we can continue the discussion there as this tread is disappearing into the blogosphere oblivion…

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