The World Trade Organization (WTO) uses consensus decision-making although its constitution allows for voting. A consensus is deemed to have been reached if no individual member country formally objects to a decision. This is certainly very different from full agreement on the part of all members. ‘This system makes it easier for powerful countries to overcome opposition through threats and pressures, since critical delegates need only remain silent for the ‘consensus’ decision to go through.’
Many people infer that, because a consensus is required, no agreements can be made within the WTO that would disadvantage individual countries, or result in an unfair distribution of benefits, because those who are disadvantaged would oppose them. Consensus decision-making therefore carries with it a certain legitimacy that is exploited by those who should know better. For example, Leon Brittan, an EU Trade Commissioner, ‘open the markets of the world to the domination of Anglo-Saxon multinationals and their business practices. On the contrary, whatever its imperfections, the enormous strength of the WTO is that its rules can only be agreed by consensus on a global basis and are then just as enforceable by the poor against the rich as the other way round.’ Similarly former WTO Director General Mike Moore presented the WTO as ‘built on democratic values’ that give it legitimacy: ‘No country is forced to sign our agreements. Each and every one of the WTO’s rules is negotiated by member governments and agreed by consensus.’
However, in practice, some countries exert much more power and influence than others in such agreements and small countries do not feel they can object. A Caribbean delegate claimed: ‘It requires superhuman conviction of one of the members to oppose what the major countries want.’ Larger countries are able to threaten to prevent imports from or reduce investment in a dissenting nation if they do not go along with an agreement.
The US and the EC have not only dominated GATT/WTO negotiations but set the agenda:
Most initiatives, proposals, and alternative packages that evolve into documents presented for formal approval have usually been developed first in Brussels and Washington, discussed informally by the transatlantic powers, then in increasingly larger caucuses (for example, Quad countries [US, EU, Japan and Canada], G-7, OECD)…
In other words a consensus is formed amongst the most powerful nations first and then presented to other countries as a fait a compli, a done deal. The formal WTO sessions are merely a time for speech making when ministers get the opportunity to express themselves but the real decisions are made in backrooms where many smaller, poorer countries are excluded. When developing countries object to the proposed agreements they are listened to and then ignored. They have the option of objecting to the final consensus but as a former Indian Ambassador to GATT, B. L. Das, says: ‘The immediate political cost of withholding consensus appears to them to be much heavier than the burden of these obligations in the future.’
Pressure applied to the developing country delegations include attempts to discredit negotiators back in their home capitals, threats to withdraw tariff preferences and other retaliatory measures, and promises of rewards for acceding. Developing countries that export to the EU or the US ‘fear that bilateral trade relations will be affected’ or that aid will be cut.
Time frames are also too short to allow delegations to consult with their own citizens, stakeholders, or other government ministers. Having been presented with a final text, agreed upon in back rooms by selected powerful countries, national delegates are lucky to have more than a day to consider it before the final decision is taken. They are told there is no time to make changes and that they either have to take the text or leave it.
Aileen Kwa notes in her study of Power Politics in the WTO that ‘When efficiency is prioritised before democracy, special interests can prevail over the interests of the majority. This may be the rich countries over the poor, or an elite in rich countries over the rest of their population.’
The same process is used for proposal development. This is facilitated by the fact that the higher levels of the secretariat are staffed with Europeans and North Americans. The secretariat’s bias becomes significant in its tabling of proposals and negotiating texts, the setting and promotion of meetings and agendas, the presentation of consensus views, and their selection of dispute settlement panels.
The strong countries also tend to benefit most from the disputes procedure. In its first two and half years the WTO received 100 complaints. Of these thirty four were lodged by the US and twenty one by the EC.
Trade issues have traditionally been considered to be an area that should be handled by specialist experts in trade, who make technocratic decisions, rather than elected officials accountable to the public. WTO papers are not published and trade negotiators do not discuss the likely trade offs they will have to make with citizens of their countries before they embark on the negotiations, nor are the citizens informed of the content of the negotiations and the positions taken by their negotiators.
the trade regime was operated as a tight-knit ‘club’…For a long period of time, the trade regime’s clubbishness, low profile, and obscure workings were seen as a virtue. A clique of committed economists and diplomats and a small Secretariat in Geneva toiled quietly in pursuit of a vision of open markets… The closed and secretive nature of the regime isolated – and insulated – the trade policymaking process from day-to-day politics, keeping at bay the protectionist interests that are active in many countries.
However, the political nature of trade rules is now very evident, even though the process of making the rules continues to be undemocratic, and the bullying tactics of the large economic powers acting on behalf of transnational corporations have increased.