The World Trade Organization A Success Story

The World Trade Organization has been a great example of the way collective responsibility works. It has lived up to its expectations of making fair trading rules by getting countries together on an international, open forum, and letting the countries decide what is best for them. Since its birth in 1995, the World Trade Organization (WTO) has solved about three hundred disputes. These disputes have shown that the World Trade Organization really works in an unbiased way, without any external pressure, force or control. Two of the most depicting examples of the World Trade Organization’s impartial working are “Standards for Reformulated and Conventional Gasoline”, and “Import Prohibition of certain shrimp and shrimp products”, which have proven that the World Trade Organization has been a success.

One of the first disputes brought to the World Trade Organization was in 1995. The case, referred to as DS2 (“Standards for Reformulated and Conventional Gasoline”), was filed by Venezuela, along with Brazil against the United States (http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds2_e.htm). The United States had applied stricter restrictions on the chemical composition of gasoline it imported from other trading partners than on domestically refined gasoline. Venezuela filed a complaint against the double standards adopted by the United States, which were in violation of the WTO’s trade rules and trade agreements that called for fair trade. Venezuela presented its case, stating that these restrictions meant they had to use more advanced technology, which increased their cost of refining (production), making it harder for them to import their oil in the United States at a reasonable and competitive price. This, de facto, affected the sale of their gasoline as the final market price was higher than domestic US-refined gasoline. The Dispute Settlement Body, a sub-division of the WTO that handles disputes and complaints, set up a panel for this report that ruled in favor of Venezuela. It recommended the United States to either increase the restrictions on their domestically refined gasoline or to decrease the restrictions on imported gasoline. The United States exercised its right to appeal against a panel recommendation, and asked the Appellate Body, another sub-division of the WTO that hears appeals, to reconsider the findings and the recommendations of the Dispute Settlement Body in February 1996. The Appellate Body looked into the case again and upheld the panel’s decision in April 1996. The United States finally agreed to abide by the ruling. In August 1997, it reported to the Dispute Settlement Body that it had adopted their recommendation by removing the extra restrictions on the chemical composition of imported gasoline (Frost, 20). The outcome of this case set a precedent for many other cases, where it was shown that the World Trade Organization gives equal voice to every member nation, and treats it equally, without considering its economic status and level of development.

The World Trade Organization had always stood for what is right and fair. Many cases have involved the exploitation of Newly Industrialized Countries (NICs) and Low Developed Countries (LDCs) by High Developed Countries, which use their position and status unfairly. The World Trade Organization has come to the rescue of these NICs and LDCs umpteen times. It has always sided with the right party. The World Trade Organization has a long history of making rules that exhibit fairness and equality. One of the main goals of the World Trade Organization is to help in the economic development of Newly Industrialized Countries and Low Developed Countries. It has made rules that do so.

Another major example of WTO’s success in achieving its goals has been the “Import Prohibition of certain shrimp and shrimp products” dispute. Referred to as DS58, this case was filed by India, Malaysia, Pakistan, and Thailand, against the United States in October 1996 (http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm). There were also about 25-30 member nations that were third parties to it. The 4 complainants stated that the United States was being unfair by applying specific restrictions on the import of shrimp. The United States imported only that shrimp which was caught using a certain device called Turtle Excluder Device (TED) that made sure no sea turtles were caught in the process. The US followed this policy keeping in line with the world agreement over protection of endangered species, in this case the sea turtles. But the issue here was that only the US had the technology, knowledge and manufactured these Turtle Excluder Devices. Thus, the US agreed to buy the shrimp of other countries if it had been caught using TEDs bought from the US. The complainants protested that this was unfair. The buying of these TEDs increased the cost of catching shrimps and this caused higher export prices, which led to low purchase of imported shrimp in the United States. The DSB panel gave a report that keeping in view environmental concerns, asked the United States to give the technology and knowledge to manufacture these devices. The United States agreed with the recommendation and helped these countries manufacture their own Turtle Excluder Devices. This case demonstrates that the World Trade Organizing favored with the right party, even though the other party was an economic superpower. This also showed how the World Trade Organization not just cares for economical aspects of trade issues, but also for other aspects, like environmental one in this case.

The above two examples give a strong and good indication that the World Trade Organization has been able to achieve its goals of fair trade without any bias or prejudice.