One motive underlying the WTO's foundation in 1995 was to expand the liberalization process beyond the cross-border trade in goods alone. International business not only involves physical products but also services, capital, and intellectual property. Supporters of free trade were looking to add these aspects to the policy areas that are subject to global governance. The problem is that each penetrates national economies to a different extent, and therefore provokes a different level of resistance.

One tool that the WTO and other intergovernmental organizations use to implement an agenda is the ‘round’ system. This starts with the identification of a policy goal (i.e. lower trade barriers). Officials working behind the scenes then negotiate a broad framework of agreement. Finally, the document is publicly debated and hopefully ratified by political leaders, usually trade ministers. Many older industrialized countries tried this approach in 2001 when the WTO organized ministerial-level meetings at Doha, Qatar. Their goal was to introduce several policy frameworks: GATS; TRIMs; and TRIPs. The proposals were not entirely new, however, having been rejected at an earlier meeting in Singapore by the WTO’s poorer member states. When the WTO raised them again and neither side changed position, the liberalization process ground to a halt.

The main criticism of the WTO was that it had turned into a tool for wealthy members alone. This argument was based on the WTO allowing Japan, the USA, and Europe to protect domestic agriculture while pushing a Doha agenda that advanced their interests alone. For instance, many developing countries that had opened their product markets to international trade continued to protect their banking sectors. GATS would have made this impossible and opened the way for Western MNEs to acquire local banks. TRIMs would have prevented government procurement projects from offering national companies preferential treatment, even though this is an important driver in many poor countries’ development processes. Lastly, TRIPS seemed specifically designed to stop Indian and Brazilian pharmaceutical companies from taking market share away from Western MNEs. An intergovernmental organization that fights for some members but not others is destined to fail (Wilkinson 2006). The WTO organized other meetings to try to repair Doha (Cancun 2003, Hong Kong 2005, and Potsdam 2007) but by 2011 commentators were pointing out that given fundamental differences in developed and developing countries’ policies regarding import tariffs on manufactured goods, a decade of negotiations seem to ‘have sharpened divisions, not smoothed them’ (Economist 2011). The experience has been a lesson in the limitations of global governance.


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