Chapter Six: World Trade Organization

I. Introduction

Note: Some parts of this chapter are adapted from texts issued by the World Trade Organization and the author gratefully acknowledges the WTO's permission to use them.

Why, out of all the global organizations described in the preceding five chapters, pick the WTO to study in more depth? Because, if it is true that trade was the engine that drove the early socialization of groups of people, then it may be through the management of trade that we can most easily govern our unruly world. This is a brave statement, and it needs to be elaborated.

An account was given at the beginning of Chapter 1 of the intimate involvement of exchange in the preservation of the web of competing groups that probably characterized early human society, and their evolution into settled societies over hundreds of thousands or even millions of years. It is no longer contentious among evolutionary biologists and anthropologists to claim that trade was at least one, if not the most important of the human activities that turned a collection of grunting, murderous apes into the highly organized societies of ancient history.

Previous chapters have traced the groupish origins of trading and markets, culminating in the mediaeval guild system, the city-states of Europe and the Hansa (see Kropotkin 1 and Benson 2). An account has also been given of the emergence of colonial trading companies and their gradual takeover by nation states in the 18th and 19th centuries, the rise of mercantilism between 1850 and 1950, which led to the erection of trade barriers, and finally the dominance of the State in economic management in the 20th century under the banner of socialism.

In the second half of the 20th century, however, as we have seen, globalization began to undermine the nation state and gave a new lease of life to independent (private) commercial law. The realisation after World War II that such important human goods as peace and trade could not be left to uncomprehending national bullies led to the creation of the United Nations, while the Bretton Woods conference resulted in the creation of the GATT (later to become the WTO) alongside the IMF and the World Bank.

The essence of the WTO is that it is a rules-based organization, equivalent to a legal arena, with the power to impose its conclusions on its members. Just as an individual in society accepts the overall benefit of the law-based polity in which she lives, even though occasionally trying to subvert or cheat it, so do all countries (160 now in the WTO) accept that its writ runs for them.

The remainder of this chapter forms a description of the origins, the working methods and the effects of the WTO. Its possible future as primus inter pares of international economic bodies is referred to frequently throughout Parts Two and Three of the book.


1 Kropotkin, P (1902) Mutual Aid, Heinemann, London

2 Benson, B (1989) The Spontaneous Evolution of Commercial Law, Southern Economic Journal, 55, pp 644-61