WTO and G7/8 Criticisms Flashcards
criticisms that have been made of both the WTO and the G7/8
ineffective
created by rich countries to promote their own interests
WTO: dominated by the USA
G7/8: irrelevant
WTO: ineffective
one of the biggest criticisms that have been made of both the WTO and G7/8 is that they are ultimately ineffective organisations
according to many commentators, the WTO is too powerful because it can compel sovereign states to change laws and regulations by declaring them to be in violation of free trade rules
however, the Boeing and Airbus dispute shows that powerful states can ignore the WTO, which suggests that the organisation is often ineffective
Boeing and Airbus dominate the aircraft manufacturing market for commercial planes and since 2005, there have been complaints to the WTO that Boeing has been receiving state subsidies from the US government and Airbus has been receiving subsidies from European states in contravention of WTO rules
in 2012, the WTO finally ruled the Boeing had received illegal subsidies but that Airbus had not
but the dispute still continues as the USA has claimed that the EU has not fully complied with the terms of the 2012 ruling so it will continue to subsidise Boeing as long as Airbus enjoys state support
this demonstrates that the WTO is often ineffective in resolving disputes as powerful states like the US can ignore its rulings
G7/8: ineffective
similarly, the G7/8 is also often criticised for being ineffective, especially in tackling global issues such as poverty
anti-globalisation protesters criticise the G7 for its apparent inability to effectively deal with poverty, inequality and climate change
it has cancelled much of the debt of developing countries but the gap continues to widen between them and the developed world
furthermore, despite sanctions and public condemnation by the G7, Russia continues to undermine the sovereignty of Ukraine and seems unconcerned about its exclusion from the group, probably because it continues to enjoy membership of the G20 which is now generally thought to be a more important and effective international forum
the G7’s statements also have no binding power – leaders discuss a range of issues but the resulting communiqués are merely statements of intent and so have no real power
for example, the recent commitment to decarbonisation in 2015 has no authority and so critics have argued that the G7 is little more than an expensive talk shop that fails to reach tangible solutions to real world issues
sometimes the organisation does not even talk about important issues, as in 2015 when no specific policies were agreed on vital issues such as how to confront ISIS or the Greek debt crisis
Obama simply called for members to show sufficient flexibility with Greece and no specific policy was agreed on ISIS
this all illustrates the ineffectiveness of organisations like the WTO and G7/8
created by rich countries to promote their own interests
another criticism that has been made of both the WTO and the G7 is that they are organisations created by rich countries to promote their own interests
much of WTO time is taken up by agricultural disputes between the USA, EU and Japan
among these are disputes over Europe’s Common Agricultural Policy (CAP) as nations subsidise their farming industries and give preferential treatment to banana producers in former colonies of European states
in contrast, the G7 is made up entirely of rich countries and one way that the organisation promotes its interests is by encouraging developing countries to adopt neoliberal economic policies and free trade
this opens up developing countries to TNCs which outcompete domestic industries
WTO: dominated by the USA and the EU
furthermore, the WTO can be criticised for being dominated by the USA and the EU
in particular, decision-making in the WTO is dominated by the US and the EU as through the membership of ‘the Quad’ they are able to set the agenda on Single Undertakings which have to be accepted or rejected in full
this has meant that the problems of developing countries have not been given significant weight or consideration
meanwhile, developed countries have been able to operate much more freely and at their own discretion, as seen in how many developed countries have not fully opened their markets to products from less-developed countries
for example, the US and the EU have been unwilling to reduce how strongly they protect their own agricultural and textile industries, which has disadvantaged countries like China and India who produce large quantities of these goods at a lower price than US and EU producers
essentially, this demonstrates that within the WTO, developed states benefit more and have more freedom to make their own decisions whereas developing states are often pressured into agreements
moreover, because the WTO lacks external accountability – its hearings on trade disputes are closed to the public and the media – the influence and domination of the US and the EU cannot be seen and held to account
G7/8: irrelevant
finally, the G7 can be criticised for having become irrelevant
it started as a ‘rich countries club’ to promote neoliberal economic policy, arguably to the detriment of developing countries and economies, but has declined in relevance
it was formed in the 1970s by what were then the richest countries in the world, but China and India have since broken into the top 10 of the most economically developed countries in the world but are not members of the G7
consequently, at its peak in the late 1980s, G7 members produced nearly 70% of the worlds GDP but this has since declined to under 50%
countries like China and India are instead members of the G20, an organisation that has become the key focus for dealing with the global financial crises and is moving to replace the G7
clearly, membership of the G7 is historically rooted so it does not reflect the changing nature of power in the global economy
the G7 could therefore be seen as a way in which the Global North is attempting to retain its hegemonic status by creating a barrier between it and the emerging nations, thereby reinforcing the North-South divide
there is no place at the table for China, India or Brazil so the G20 has come to be seen as a more effective tool for coordinating global governance as it is more representative and not outdated, unlike the G7
