Globalization & WTO

Globalization is defined as:

The movement of goods, services, people & information across national boundaries.
It creates, and in turn, is driven by an integrated global economy, which influences
both economic as well as social relations within & across countries.

Globalization has linkage with the ‘Washington Consensus’

Flows relating to trade, investment & other capital flows,
technology & labour are the cutting edge of Globalization
Rapid increase in trade has become the driving force in the
globalization process
In South Asia, only India seems to have been able to take
advantage of this opportunity
Focus on integrating markets w/o improving the condition of
the vast majority of South Asians
Result: the poor are being increasingly marginalized
Also inequality within & b/w countries & also b/w different
sectors
 World Trade Organization (WTO)
 A global institution that provides a solid foundation of the new
multi-lateral rule-based trading system
 Scope of its activities includes trade in goods including
agricultural commodities, services & intellectual property
 Accused of overloading agreements with a built-in agenda &
terms that are too harsh for developing economies to adhere &
adjust to
 The pace of negotiations at the WTO has been set by the
resource-rich Northern countries, leaving the rest to struggle
with the outcomes of secretive meetings
 Developed countries still pursuing protectionist policies
 Agriculture in most developed countries is sheltered behind
high tariff walls, farm subsidies (as much as $ 280 million per
annum), loan guarantees & non-tariff barriers
 GATS and TRIPS also hurt the developing countries
 WTO’s Neo-Liberalism
 Neo-liberalism’s relentless pursuit of free trade
 As an outcome of evolving neo-liberalism, the economies of
developing countries are fully exposed to the vagaries of
global competition
 In the Hong Kong (late 2005) meeting, the deadline of ending
farm subsidies has been extended till 2013
 Developing countries have been demanding elimination of all
subsidies to provide level playing field to the farmers since
the start of the Doha Round
 Developing countries lose over $ 40 billion in agricultural
export income every year because of EU and US subsidies &
protectionism
 Denial of low-cost generic versions of patented medicines
even though TRIPS does allow production & export by others
under compulsory licensing
 WTO’s Neo-Liberalism

 One drug for extreme medical stress is produced in a

neighbouring country at one-fortieth the price that it is sold at
by a multi-national in Pakistan
 GATS- the final frontier for WTO: public services have been
traditionally the responsibility of governments
 On the other hand, no real transfer of technology
 Exploitative System

Local farmers are left only with patented seeds &

inputs which the poor cannot afford. So, they join the
mass of migration to the urban areas while their land is
swallowed up by agro-business or big farmers.