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What the WTO holds in store
Reviewed by Kamal Siddiqi  

As much of the developing world takes up the issue of opposing the World Trade Organization, there are many in Pakistan who have been swept up in the anti-WTO sentiment that prevails. At the same time, there is a much larger number in the country who are having sleepless nights on account of the free trade regime that will come into force in parts of the world by next year. Many Pakistani businessmen are still trying to understand all what WTO stands for and what this will mean once the WTO-invoked international trading system comes into force.

Even the Pakistan government is trying to look ahead and seriously chalk out a plan of action as the WTO regime will have a direct impact on the balance of trade in the coming few years.

The common thread in all these is the predicament that they face. This is the absence of literature by an independent expert from the developing world written in a clear and concise manner that explains in some detail this new global trading system, its history as well as what it stands for. Now we have a book that seems to fill that vacuum and explains to us the intricacies of the WTO in a somewhat clear manner.

Surendra Bhandari, a lecturer at a university in Nepal as well as the director of the Kathmandu-based Interdisciplinary Study Centre, has explored the new world trading system. But his view is one of an academic. He writes in detail about the WTO as a catalyst to a rule based international trading system bringing global peace, prosperity and proper equity distribution.

Bhandari works on trying to expose and weed out, in his words, the bane of protectionism, unilateralism and monopolization of the international trade and markets. The book explores the controversy behind the conclusion of the WTO in its historical perspective. It is primarily written from the developing countries' point of view, it takes into account other economic events like the birth of UNCTAD, the Generalized System of Preferences, and the growing importance of developing countries in world trade.

Bhandari argues that the major challenge posed to developing countries and least developing countries (LDC's) is no more the extraneous one. The major problem is caused by their own structure and system of government and administration. In this, the author recognizes the WTO as "both opportunity and risk" to developing countries, particularly to the LDC's.

The contents of this book include the basic information about the WTO, the dispute settlement mechanism of the WTO and its reform from the GATT doctrine, the question of harmonization or diversity, developing countries and their role in the WTO and the Singapore ministerial conference.

The book is very contemporary and relevant in the present scenario of liberalization and globalization. The WTO, with its 132 members, is the strongest multilateral trading organization ever to have taken shape. It has taken almost 50 years for such an organization to have been born, after the International Trade Organization, the progenitor of the GATT, failed to take off in 1947. Interestingly, Pakistan was one of the signatories to the ITO.

What is significant is that the ITO had strong support from developing countries, in contrast to the WTO, which has been negotiated mainly at the instance of developed countries under the aegis of GATT at its Uruguay round of multilateral trade negotiations.

Recently, the WTO round of talks that opened in Cancun created some fireworks as developing nations took on the might of the developed world, particularly the European Union, in a bid to level the playing field for international trade.

The previous round of talks at Doha in 2001 have been termed the development round, as these talks addressed some of the major trading obstacles placed by the rich countries in trading with the poor and developing countries. This theme was expected to be pursued at Cancun.

The conventional wisdom that preceded this round of talks was that if the rich countries are able to level the trading field for their poor trading partners, the resulting benefit to the poor countries would mean a reduction in their dependence on aid that is doled out to them each year.

This is what Bhandari also argues in his book. However, the major point of contention in the Cancun round of talks was the subsidies given by the European Union and the United States to its farmers and the high tariff walls that have been set up to protect their agricultural sector.

The World Bank has estimated that some $300 billion a year is spent by the US and the EU in subsidizing their farmers. The other issues that need to be tackled include the resistance of the developed world to value added items as these seem to attract higher tariffs than more basic ones.

This is a disincentive for developing countries wishing to move up in the production chain. The absence of financing for developing countries has to be looked into as this gives producers in developed countries an unfair advantage.

This is the imperfect world that Bhandari says will change once the WTO comes into force. He illustrates in his book by way of examples and references the objectives and agreements that are in place to make this happen. In the chapter on developing countries and globalization, Bhandari says that globalization is conceptualized as a world society, which procures two dimensional change in international relations. They are, one, institutionalization of trans-border relations and two diffusion of actors. The world society requires a new culture, a new political vision and new institutions based on globalization.

Throughout his book, the author remains optimistic of the effects of WTO and argues that the problem lies not in the idea but in the way it is being implemented. He points out that the WTO is considered as a significant step drowning out the developing countries from the paradoxical rapture of "no rule situation" on access to the international market, ensuring their comparative advantages and better competitive environment.

In this regard, the dispute resolution system is one of the important efforts to face up to the intricate problems associated with interdependent international economic activity.

In conclusion, it can be said that the book is a good read for anyone wanting to better understand the workings of the WTO and the trade regime, along with the history of this arrangement and how it was brought about. It can also serve as a ready reference to interested quarters in Pakistan and elsewhere considering the amount of information that the author has systematically given in the publication.;

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