Liberalisation: from below, not from above

Found on the website of the Globalisation Institute (http://www.globalizationinstitute.org/). Critics on the world trade organisation start to emerge. In an earlier post, I already pointed at the nature of the WTO. From the beginning, the WTO was opposed by free marketeers as being an embryonal world government.

--> In a new report published by the Globalization Institute, Dr Razeen Sally - Europe's most senior trade economist - says the WTO is becoming ineffective. Hyperinflation of the membership has almost crippled decision-making. The WTO has become much too politicised, buffeted by external criticism and with deep internal fissures.

In the report, he suggests what needs to happen to the WTO to get it back on track, but also argues that instead of relying on the WTO to lower protectionism, countries should follow a Nike strategy - they should "Just Do It!" Because getting rid of tariffs is good regardless of whether other countries do the same, we should liberalize anyway. Moreover, Dr Sally points out that the big successes in free trade are already coming "from below", rather than thanks to international institutions and agreements:

"Freer trade in the early twenty-first century, and modern globalization more generally, are happening more "from below" than "from above". Their engine, now to be found in Asia, particularly in China, is bottom-up liberalisation and regulatory reform that spreads through competitive emulation, like ripples and waves across seas and oceans. This process is not driven by international institutions. The WTO and FTAs have considerable and perhaps increasing limitations. At best they can be helpful auxiliaries to national market-based reforms. But their importance should not be exaggerated."

Download the report (PDF) via title of post.