Question

The Role of World Trade Organization (WTO)

Please, discuss briefly the key pros and cons for a small country considering to join the WTO! As we know – after joining the EU (a customs union) Latvia is represented in the WTO by EU representatives (rather than Latvian ones). What is your evaluation of this situation?

Answer 1

Small country considering to join the World Trade Organization

Pros

• Means for increasing smaller countries' bargaining power, in negotiations with larger trading partners
• WTO underlines the need for considerations for small countries
• These countries are weaker without WTO giving them a stronger voice in negotiations, and, decision making
• Makes power countries play by the rules
• There are exceptions, flexibilities & delays
• All countries are equal; these countries would have been powerless to act without powerless trading partners
• officials trained to work more effectively in the system
• Vulnerable, not able to deal with economic, and, environmental shocks - hurricanes, and, tsunamis
• Raises income, and, reduces the cost of living

Cons

• Tool for powerful lobbies
• May destroy jobs due to economic dislocation
• Small countries do not have large markets to offer in negotiations
• It may exacerbate global warming, and, increase inefficient trading
• Not invited to all meetings, too poor to defend themselves