Argument for the Debate against Globalization

There is much concern with developing countries in terms of globalization and its role in deploying inequality. At this point, we will have to make the point against joining the WTO: globalization poses developing countries under the pressure of increased income inequality leading to failure of establishing stable currency exchange. To enlarge on this, two remarks should be made. First, one should admit that globalization is a tendency that fosters economic integration not only in relation to goods and services, but also in the context of creating information, concepts, and innovation. On the one hand, this process should create immense benefits for Newland’s developing economy. On the other hand, our developing economy does not have enough potential to realize these benefits without involving tremendous offsetting costs. Second point is that inequality cannot be regarded as an absolutely negative phenomenon because some types of inequality can have healthy consequences for increasing motivation and competition among the individuals. Birdsall (1999) refers to this term as a constructive inequality. However, the current case is more associated with destructive inequality because it reflects persistent and deep discrepancies among individuals in accessing the assets for generating income.

Within the above-presented context, the inequality undermines the economic prosperity by reducing the motivation for individuals to increase their performance and productivity. Newland’s industrial sector is not developed enough to compete with other industries and capture leading international market niches. According to Birdsall (1999), “trade liberalization leads to growing wage gaps between the educated and uneducated, not only in OECD countries but in the developing countries” (n. p.). The connection created between technological advancement and market globalization leads to increased demand for skilled labor, which is impossible to ensure due to the educational challenges in the developing countries.

The second argument focuses on the concept of competition, which has been briefly discussed above. Although the WTO agreement does not have tangible influence on judicial system in Newland, there are cases testifying to the negative consequences of competition. In particular, Xuto (n. d.) discusses the case with Thailand that carried out tuna export to the EC. In particular, Thailand as a third largest producer of fish had no doubt concerning its competitiveness and equal access to the European and global market. However, while African, Caribbean, and Pacific regions enjoyed zero tariffs, Thailand had to face a 24 % tariff to act internationally. Similar constraints were encountered by Brazil known as the leading exporter of agro-industrial products (Da Motta Veiga n. d.). In particular, the case study illustrates that export activities for developing countries at a global level constitute a significant challenge. Therefore, toys and steel industry is not an option for Newland either because these products will not be able to compete with other leading producers in the field.

The third argument concerns the reputation and privilege of our developing economy in the context of other powerful states engaged into free trade. The point is that joining the WTO would imply developing a strong and powerful framework that would allow the country to maintain its reputation in terms of financial stability and competitiveness. In case Newland government fails to enter the market successfully, it can take risk of receiving bad reputation that can long be preserved among other economies. As a result, the reputation and future of international relations are at stake. The case with Argentina and other developing countries proves the WTO law fails to support the ‘newcomers’ and encourage them to establish international relations (Tussie and Delich n. d.). Once Newland government strives to conclude the agreement with the organization, it should expect the WTO to grant them with equal privileges in terms of tariff, as well as guarantee compensation in case of failure.

Although WTO law does not have a direct impact on Court’s system, Di Gianni and Antonini remark “the WTO agreements are not, in principle, among the rules in the light of which the Court is to review the legality of measures adopted by Community institutions” (p. 777). However, there are two exceptions to the issue. First, the direct impact is acknowledged in case the Community plans to implement a specific obligation in the context WTO agreement or in case Community measures relate specifically to the accurate provisions of the WTO. These exceptions have been enacted by the EC Court, but there is no guarantee that this provision will be taken into consideration as soon as Newland’s Court is concerned. The challenges of acting within the WTO agreement are brightly exemplified in the case with Malawi (Kandiero n. d.). In particular, being an open economy, the country has failed to improve its economic situation due to the unfavorable geographic conditions.

Although there are a great number of opportunities for economic growth and development, the above-presented examples and case studies demonstrate that the concept of sovereignty, as well as free trade, are not available for developing economies. In particular, it can be a risky business for Newland to enter the global market due to the market inequality, rigid completion, and insufficient economic and trade potential.

Reference List

Birdsall, N 1999, Globalization and the Developing Countries: The Inequality Risk. International Trade Center, Washington, Web.

Da Motta Veiga, P n. d., ‘Brazil and the G-20 Group of Developing Countries’, Managing the Challenges of WTO Participation: Case Study 7, Web. 

Di Gianni, F, and Antonini, R 2006, ‘DSB Decisions and Direct Effect of WTO Law: Should the EC Courts be More Flexible When the Flexibility of the WTO System has Come to an End’, Kluwer Law International. vol. 40, no. 4, 777-793.

Kandiero, T n. d. ‘Malawi in the Multilateral Trading System’, Managing the Challenges of WTO Participation: Case Study 23, Web.

Tussie, D and Delich V n. d., ‘Dispute Settlement between Developing Countries: Argentina and Chilean Price Bands’, Managing the Challenges of WTO Participation: Case Study 1. Web.

Xuto, N n. d., ‘Thailand: Conciliating a Dispute on Tuna Exports to the EC’, Managing the Challenges of WTO Participation: Case Study 40, Web.