Information about the organization
THE 10 BENEFITS: 9. Lobbying
9.
The system shields governments from narrow interests

The GATT-WTO system which evolved in the second half of the 20th Century helps governments take a more balanced view of trade policy. Governments are better-placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy.


THE 10 BENEFITS
1. Peace
2.
Disputes
3.
Rules
4.
Cost of living
5.
Choice
6.
Incomes
7.
Growth and jobs
8.
Efficiency
9. Lobbying
10. Good government
  

See also:
The WTO in Brief
10 misunderstandings
Understanding the WTO


System helps governments strike a balance

 

 

 

 

Governments are better placed to ward off powerful lobbies

 

One of the lessons of the protectionism that dominated the early decades of the 20th Century was the damage that can be caused if narrow sectoral interests gain an unbalanced share of political influence. The result was increasingly restrictive policy which turned into a trade war that no one won and everyone lost.

Superficially, restricting imports looks like an effective way of supporting an economic sector. But it biases the economy against other sectors which shouldn’t be penalized — if you protect your clothing industry, everyone else has to pay for more expensive clothes, which puts pressure on wages in all sectors, for example.

Protectionism can also escalate as other countries retaliate by raising their own trade barriers. That’s exactly what happened in the 1920s and 30s with disastrous effects. Even the sectors demanding protection ended up losing.

Governments need to be armed against pressure from narrow interest groups, and the WTO system can help.

The GATT-WTO system covers a wide range of sectors. So, if during a GATT-WTO trade negotiation one pressure group lobbies its government to be considered as a special case in need of protection, the government can reject the protectionist pressure by arguing that it needs a broad-ranging agreement that will benefit all sectors of the economy. Governments do just that, regularly.

 
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