WTO: US & Mexico, New Challenges to come

             The international system presents a special scenario. A collection of more than 150 sovereign states are the main components and actors, but there is no power or institution that can enforce any treaty or law to any state. In an anarchical international system, with no power or instance that coordinates, controls, and punishes countries that don’t act according to what they had pact already or to international regulations, the WTO has  emerged as the institution trying to fulfill this vacuum of power that exists in the contemporary trading system.

             The World Trade Organization (WTO, formerly called the GATT or General Agreement on Tariffs and Trade) has a key role to play today. The WTO was created after the Second World War and its structure, objectives, and functions were determined by the specific configuration of power and interests that shaped the world trade system at the moment. Starting only as a series of conferences and rounds of negotiations worldwide where countries tried to reduce their tariffs and barriers on trade, the WTO has become today a forum where countries can solve their trading disputes, or can present complaints about the international trading system. Not only does it promote trade liberalization, the WTO is trying to become an instance of power to help resolve conflicts and promote a healthy environment for cooperation and economic growth between nations. I believe the WTO must become a neutral player in the international trade system, its task consisting on promoting free trade, and enforcing nations to comply with their agreements, and punishing those who don’t.

According to the Ricardian Theory of Comparative Advantages and Trade, countries benefit from trade, specializing in those goods in which they have a comparative advantage, exporting them, and importing goods in which they don’t have a comparative advantage. This allows society to reach higher indifference curves, and raise utility and welfare in society as a whole. Through trade, countries can raise their standards of living, so why don’t countries liberalize trade, eliminating barriers and tariffs? According to Oatley, “there are strong incentives driven by the desire to take advantage of others and in part by a desire to avoid being taken advantage of.” 

             The WTO, although in theory has a good basis, structure and mechanism for resolving disputes, the tasks it has to face are more challenging. A very popular case, involved the tuna production in Mexico. US, a country with a very socially active and participant society, giving into the demands of very highly influential organizations and NGOs, complained in the DBS that the Mexican fishing industry (focusing on the fishing of tuna in the north Atlantic waters) destroyed the oceans’ wildlife using nets that captured not only tuna but also mammals such as dolphins and whales. Mexico, instead appealed to the WTO, that the US was only enforcing such complaints because the Mexican industry was more efficient, and the US was using this as an excuse to stop the Mexican producers from gaining the US consumer market. Who is right? Can governments use this mechanism as  protectionist barriers to their domestic economy? These are the new challenges the WTO as an enforcement mechanism is now facing. This case was resolved in favor of the US, and the US was allowed to ban the import of Mexican tuna until safer nets were used in the fish industry in Mexico.