Will the World Trade Organization Benefit the Emerging Shop?
by David Welch
I recently sat down and turned on the evening news to find that there was rioting in the streets of Seattle, Washington, over an entity called the World Trade Organization. It was such a strange sight for me to witness that type of rioting on the fair streets of our country, and the sad part of it was that I knew little about the reasoning behind the anger. What is the WTO and why does it frighten so many people not just in our country, but around the globe?
In brief, the World Trade Organization (WTO), according to its definition, is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. The organization hopes, according to its website, that consumers and producers "can enjoy secure supplies and greater choice of the finished products, components, raw materials and services that they use. Producers and exporters know that foreign markets will remain open to them."
The result, it claims, is also a more prosperous, peaceful and accountable economic world. Decisions in the WTO are typically taken by consensus among all member countries and they are ratified by members’ parliaments. Trade friction is channeled into the WTO’s dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries’ trade policies conform with them.
OK, granted, this definition has been scrubbed clean as only political banter can be scrubbed. However, it still remains to wonder why an organization like this would bring about such widespread panic.
The stem of the rioting in Seattle was due in large part to a group of rebellious environmentalists. They gathered to protest the possibility that commercial interest will outweigh any environmental considerations, and that their voice will get lost in an effort to globalize trade. The protests got out of hand and although they got the exposure they wanted, I can’t imagine the riot to be a part of the plan.
Others fear that the WTO will destroy jobs and widen the gap between the rich and the poor, whereas others believe that the United States will be forced to operate under the rule of the rest of the world.
The WTO counters that all of the rules found in the WTO system are agreements resulting from negotiations among member governments, that the rules are ratified by all members’ parliaments and decisions taken in the WTO are generally made by consensus among all members. In other words, according to the organization, decisions taken in the WTO are negotiated, accountable and democratic.
What does that mean? It means that the voice of the small business, the cabinet shop, the small furniture manufacturer, gets smaller. Where I have no doubt that the big businesses of this country will be able to increase their business on a global scale, I wonder how the emerging shop competes. In our economic forecast in this issue, furniture financial analyst Jerry Epperson warns that we must keep an eye on furniture imports. He notes that imports into this country are growing at an almost alarming rate. What will the WTO do to this trend? I can’t help but feel it will feed these figures. And while the larger businesses can open up their sales to the entire globe, how does the 15-man furniture manufacturer compete with overseas companies that can offer product at lower prices thanks to lower labor costs. When I see that the WTO will take issues like these under consideration, and put in place the proper measures to insure that domestic business succeeds first, then I can support the efforts of the World Trade Organization.
David Welch
Phone: 800-633-5953
Fax: 205-391-2081
e-mail: dwelch@randallpub.com
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