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By Philippe Legrain ADD COMMENTS

Many on the left obsessively loathe the World Trade
Organisation, in the way Tory Europhobes hate the European Union. Just
as Brussels-bashers peddle lies about the EU, so Naomi Klein, Noreena
Hertz and others slander the WTO. That is a pity. The left has warmed
to the EU. Now it should reconsider its opposition to the WTO. Believe
it or not, the WTO is not against social democracy.

The
worst charges against the WTO are these four. First, that it does the
bidding of big global companies. Second, that it undermines workers’
rights and environmental protection by encouraging a "race to the
bottom" between governments competing for jobs and foreign investment.
Third, that it harms the poor. And last, that it is destroying
democracy by secretly and unaccountably imposing its writ on the world.

Undeniably, some companies have undue influence
over governments. More should be done to separate money and politics.
But companies are constrained by competition and regulation – both of
which the WTO bolsters. Freeing trade curbs domestic giants by exposing
them to foreign competition.

Take BT. For
international phone calls, where there is competition, it is just one
provider among many. For local calls, where there isn’t, it can hold
customers and the government to ransom, most recently by delaying the
roll-out of broadband internet. The only reason companies like Shell
heed protests is that they face competition: if Shell had a monopoly,
it could safely have ignored Greenpeace’s Brent Spar campaign.

Competition
is not a cure-all. Often, governments need to regulate too. And they
can. It is a terrible irony that the left has lost faith in government.
Governments are not impotent. The WTO itself is merely governments
acting together to regulate global markets. Brussels has just blocked
General Electric, the world’s biggest company, from taking over
Honeywell. Labour has imposed the utility windfall tax, introduced the
minimum wage and ramped up petrol duty.

So much
for the race to the bottom. As the fuel protests showed, the main
constraint on government is public opinion, not globalisation or
corporate power.

If globalisation is forcing
governments to slim down, how come the average tax take in rich OECD
countries has risen from 35% to 38% of GDP since 1985? Corporate taxes
are a bigger share of government revenues than 20 years ago. Surveys
show that skilled workers, good infrastructure and nearby customers
determine where companies invest far more than low taxes and
regulation.

Labour and environmental standards are
generally rising, not falling. An OECD study found that workers’ union
rights had not got significantly worse in any of 75 countries since the
early 1980s. In 17 (including Brazil, South Korea and Turkey) they had
markedly improved. The same study found that pollution havens are a
myth. If anything, competition is bidding up environmental standards.

Developing
countries are attracting investment not by lowering their standards,
but because they are making the best of their comparative advantage.
This does not spell doom for British workers. Provided people are
equipped with skills to find another job and are protected by a decent
welfare system, we can all gain from globalisation. It makes no sense
to protect yesterday’s jobs at the expense of tomorrow’s.

Nor
is it fair. How else are the poor going to get richer? It is a funny
kind of socialism that stops at national borders. Surely international
solidarity means buying t-shirts from Bangladesh as well as
demonstrating for debt relief. The fact that seamstresses in Bangladesh
are paid less than in Britain does not necessarily mean they are
exploited. They earn more than they would as farmers. And however awful
conditions in a Nike factory may be, they are usually worse in a local
sweatshop.

Poverty is terrible. But globalisation
can help. While GDP per person fell by 1% a year in the 1990s in
non-globalising developing countries, it rose by 5% a year in
globalising ones. The WTO is a friend of the poor. Its rules protect
the weak in a world of unequal power. Unlike the United Nations, WTO
rules apply to everyone – even the United States. Costa Rica challenged
US restrictions on its underwear exports at the WTO – and won. Of
course, the WTO is not perfect. But it is better than the law of the
jungle, where might equals right.

The worries
about democracy are more well-founded. Democracy remains rooted in
local communities and nation states. So it is difficult to work
together internationally – on global warming or trade, at the EU or the
WTO – without leaving voters feeling out of touch. But abolishing the
WTO is not a solution. As we learned from the 1930s,
beggar-thy-neighbour policies end up making beggars of us all. Nor are
world elections to a world parliament and a world government realistic.
Sixty million Britons would not accept 1,300m Chinese outvoting them.
So the best option is to reform the WTO.

It is
already more democratic than you think. All agreements are reached by
consensus. Every country has a veto – unlike at the UN, where only big
powers do – and WTO agreements are ratified by parliament.The
organisation is held to account mainly through government, but also
through contacts with MPs, trade unions, business and NGOs, through the
media, and through its website – on which most working documents appear
rapidly.

Even so, the WTO should be more open.
Government should develop better procedures for informing MPs and
voters about its work at the WTO and MPs could hold public hearings to
reconnect the WTO with voters. If you hate capitalism, you will
probably never support the WTO (although Fidel Castro does). But if,
like most people, you believe in markets tempered by government
intervention, you should think again about the WTO.

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