According to studies by Cali and te Velde, (2008, p. 1-8), the WTO initiative of aid for trade has increase the scope of trade and the funding quantities over years. Their study also found that aid for trade any within the WTO member states, which includes Global South that is the focus of this study just need sound management. If that was the case, member states stand to gain from better trade policies and organization in the sector of Aid for Trade vs. Trade Development as shown in appendix I. (Cali & te Velde, 2008, p. 2)
Member states also stand to benefit from high standards with better access to export markets in the trade facilitation category as shown in appendix I. The population in the Global South nations who are members of WTO stand to benefit from better information and infrastructure in the trade related adjustment and infrastructure area respectively (te Velde, 2008). Finally, the aid for trade initiative by WTO will enable the people to overcome government shortcomings in terms of governance and institutions. (Cali & te Velde, 2008, p. 2). Bourguignon and Sundberg (2007) and Burnside & Dollar, (2000, p.
847-868) did empirical studies on the effectiveness of $1 dollar aid to the trade efforts amongst the WTO member states. They discovered that this was not a very feasible study due to various mechanisms that countries operate. They cited that many member countries have bureaucratic system, poor service policies and corruption that make this effect not to be felt even though the WTO trade for fund could have been disbursed to the Global South nation for example. This is part of the problem for accessing literature in this area of study. Doucouliagos and Paldam, (2007, pp. 316-321.
) set to investigate the effect of the WTO aid on the prosperity and growth of nations ( Rajan & Subramanian, 2007), including the Global South. With data collected from 1984 -2006, the empirical study revealed that there is an insignificant impact. Not surprising again was the missing data on effect of aid for trade in boosting nation’s trade and growth. (Hansen & Tarp, 2001) Following the above note very successful studies on aid for trade, Cali and te Velde, (2008, p. 1-8), carried out an empirical study on the impact of sum of trade related aid to key trade associated results from aid for trade.
This empirical study covered cost of doing trade within the WTO membership and export volumes. This study was keen on the impact of aid to the produced volumes and its relations to the multilateral trade with various factors held constant. Data from cost of investing was availed from the World Bank (World Bank, 2008). This data is very detailed and was captured from various customs bodies. The study also dwelt on the efficiency of processing of export goods after import. (Cali & te Velde, 2008, p. 4). This stage of study was significant in outlining the competitiveness of the countries operations.
From the study, Djankov et al. (2006) summarised that the product trade depreciates by 1% for every day it is held at local customs. Yet one of the WTO aims is to facilitate quicker multilateral trade to minimize cost of trade. From the 144 membership in WTO, 120 countries were included in the study. The study revealed that there is 1. 5% saving in trading cost for every 10% additional aids for trade. This study, in otherwise favours trade policies and regulations to other comparative parameters in the previous studies. (Cali & te Velde, 2008, p. 4)
In terms of actual funding to the Least Developed Countries that stand to benefit from the WTO Aid for trade, the financial information is rather sad. As of March 2008, the committed funds by donor were an impressive $ 172. 84 Million; but the actual funds received by trustees stood at $91. 84 million; Available funds for approval stood at $85. 15 million; Approved allocations stood at $ 13. 52 million; Approved funds for project stood at $ 11. 02 million; Approved fund fees and corporate budget stood at $ 2. 5 million. (South Centre Global Governance Programme for Development, 2008, p.
11) This declining trend implies that the donor confidence in the WTO is low. Second, the bureaucratic levels to the approval of the funds have been deliberately put to buy time for the donors to keep observing the progress of the WTO. The next level of analysis and evaluation will move from the boardrooms where aids and funds are discussed and approved diminishingly to the actual day to day benefits of the WTO on the ground. As is widely know The Via Campesina has been far the most active critical body of the WTO’s performance.
The problems started after the Uruguay Round where the WTO arm twisted many governments to abandon agricultural policies and let these to be run by WTO policies. At this meeting WTO assured the whole member group that there would be improved market access, local support and subsidies for exports. They WTO also vowed that poverty in the rural side of the Global South would be a thing of the past. (Via Campesina 1993a, 1993b, 1996a, 1996b, 1996c, 1998, 1999, and 2000b). The Via Campesina evaluation of the true picture on the ground was one of policy crisis.
The promised liberalization was leading agriculture in the wrong direction. Most of the global diversity in the Global South was going to destruction, the ecosystem culture was threatened and environment was degrading rather fast. The food and agricultural economies were unduly flooded with activities that were and the gap between the rich and the poor was worsening. (Via Campesina 1993a, 1993b, 1996a, 1996b, 1996c, 1998, 1999, and 2000b). WTO has also been very rigid in their dialogue with other NGOs and Via Campecina led a huge campaign against their dictatorship style of leadership dubbed, “WTO—Shrink or Sink!
The Turn Around Agenda” (Nicholson 2002). WTO yielded to the pressure but only for semantics. This poor style of leadership has been the basis of many conferences and agrarian demonstrations from over 1500 NGO and 90 nations. The Civil Society Organizations (CSO) evaluates the WTO policies as failed in many areas. The CSO noted that WTO expansion was stagnating. They CSO was concerned that the WTO policies did not respect human rights and biodiversity and encouraged erosion of social services that were well in place earlier on. (Oloka-Onyango & Udagama, 2000).
CSO was unhappy that WTO was encouraging patent rights that were preventing basic necessities like medicine from reaching the poor people in the Global South. WTO was also encouraging human cloning patents which was unacceptable. (Nicholson 2002) The CSO evaluated WTO as uncaring about food security and sovereignty. The WTO liberalisation of Trade Related Investment Measures was proving detrimental. CSO observed that WTO was giving some key member special treatment and the others from the Third World and Global South differential treatment.
CSO observed that WTO was not considering social rights a priority and environment as degrading due to their policies. WTO also failed to make democratic decision and the dispute settlement procedures are very draconian and hopeless to the Global South nations. (Nicholson 2002) Via Campesina noted that WTO policies had contributed to serious failures in international food security. This observation was made because the key polices were the bigger nations. This is the point where there sense of responsibility is lost by WTO. (Via Campesina 1998).
One of the earlier biggest demonstrations involved 50,000 people in Seattle. (Nicholson 2002) The media such as The Economist have also evaluated the performance of WTO and noted that their credibility is wanting. This was in the backdrop of the remaining membership of 135 by 1999 demanding for democracy. (The Economist, 1999, p. 17-18). The prolonged protest about the leadership of WTO led to unusual coalitions who would under normal circumstances never come together. The dismal performance of WTO in the Global South does not usually wait for the international conference.
Dissatisfied anti-liberalization protest are a common site globally, albeit led by the agrarian sector. Nationally, there have been demonstrations in Taiwan whose governments decision to be a signatory of WTO led to a near collapse of their pork and poultyry market due to reduced prices and profits. (WTO News 1998, p. 1) In South Korea demonstrating farmers against WTO are a common occurrence. (Agence France Press 2001b). In China, millions of farmers were up in arms against the WTO policies that led to lower product prices and unemployment barely two months after China become a WTO member.
(O’Neill 2002). WTO efforts in the Global South have been slowed down somewhat in the recent past due to security concerns. The rise in issues such as terrorism has slowed the passage of goods across borders. The bigger markets have put up more stringent check on incoming goods as an assurance of fewer risks. (“Trade Facilitation from selected landlocked countries in Asia. ” 2005, p. 9). This heightened security status has often delayed trade or caused untold loses to various economies.
The smaller countries who really could have benefited from a well led WTO are at more risk because they often fail to demonstrate to the bigger countries of trade destination that the security check at the country of origin are safe and reliable. (UNECE 2003) In the current world, many trading nations are preferring the use of modern logistics and operational systems to clear goods at import. However the smaller countries especially in the Global South have not been able to instil this enterprise equipment. Therefore the process of clearing goods is very slow as was even noted earlier.
Most bigger member nations in the WTO prefer to trade with countries that already have the e-commerce systsms in place. This has dealt a blow to the WTO initiative of liberalizing trade globally within the membership. (“Trade Facilitation from selected landlocked countries in Asia. ” 2005, p. 9) WTO efforts in the Global South have been dealt a big blow by the emergence of regional trading blocks. Due to more agreeable leadership, trading blocs such as FTA involving Australia and Singapore; The Pacific Agreement on Closer Economic Relations ; and The Agreement on the Southern Asian Free Trade Area among others.
This loss of membership has been occasioned by the WTO not living to its promised deadlines for implementation of beneficial policies. The APEC as an example is much disciplined in such outlines. APEC has also got more democratic provisions which are good in the eye of the public and member states. Other Global South trading blocs that have lessened the influence of WTO in their regions are the Asian Development Bank; Economic Cooperation Organization and South Asia Association for Regional Cooperation. (“Trade Facilitation from selected landlocked countries in Asia. ” 2005, p. 10)