WTO’s Dispute Resolution and the Environmental Kuznets Curve (EKC)

1. Provide a concise description of the WTO’s dispute resolution mechanism (list 4 items). List three (3) answers provided by WTO defenders against the charge that the organization is not democratic. What is your take on the democratic character (or not) of the WTO’s dispute resolution mechanism? How was foreign aid defined in this class and what kind of monetary arrangements does it entail? Summarize the “two gap” model along with the role it entails for experts and foreign donors. According to the “odious debt” doctrine, what makes a debt “odious”? WTO’s Dispute Resolution WTO’s dispute resolution process involves consultation of the affected parties and third parties towards achieving an amicable solution. The process can be summarized using major items. v  Informal consultations: it is the first step where the parties are invited for consultations.  v  Investigative panel: the second step taken when the first step fails. The complaining party requests an appointment of a three-member panel. v  Report and recommendations: the panel collects both oral and written submissions from the parties, after which it issues its report and recommendations regarding the issue. v  Appellate review: in the event that a party is not satisfied with the panel’s recommendations, they may seek an appellate review with respect to the law and legal interpretations of the panel. Democratic Nature of WTO The three arguments that defenders of the WTO give for accusations of the entity not being democratic include: 1)      The WTO has no powers to impose anything on anybody. 2)      The WTO only advocates for freer trade through advocating for environmental standards. There are no legal or economic conflicts between these trade and the environmental standards, and hence any actions that the WTO undertakes are designed to protect the ecosystem. 3)      Thirdly, the WTO makes decisions based on the votes cast by representatives of all countries around the world. Therefore, with all members having equal powers, it is impossible to claim that the entity is undemocratic in its decisions. My take on the democratic nature of the WTO is that, indeed, the WTO is undemocratic. Any system that advances the interests of a specific nation or group of nations at the expense of the others is undemocratic. As Griswold (2000) posits, the WTO serves America’s national interests, and any agreements signed on trade are designed to lower the trade barriers for the US. Consequently, the US is able to access foreign markets more easily, which ultimately benefits its consumers and businesses. Thus, poor nations that go against the WTO agreement are likely to suffer from sanctions, but the US and other rich countries may not suffer from the sanctions. Foreign Trade Foreign aid is the assistance that governments or international institutions give to the needy nations for the benefit of their citizens. The aid varies in nature and can be fiscal, financial, or humanitarian. This aid takes various forms, including military aid, humanitarian assistance, multilateral aid, and disbursements. Two Gap Model The two-gap model is a study of the gap between a nation’s provision of resources and its absorptive capacity. This model operates on the assumption that most developing nations either face a shortage of domestic savings or suffer from foreign exchange constraints to finance and need capital and intermediate products. Therefore, experts and foreign donors use this assumption to determine the amount of aid to give to a specific country. Odious Debt Odious debt refers to all the debts that a predecessor state contracts with the aim of achieving specific objectives that are contrary to the interests of the successor nation. The doctrine of this debt is that the national debt that a despotic regime incurs should not be enforceable. Instead, such debts are personal debts of the regime rather than debts of the state. Therefore, a debt becomes odious if it is not meant to serve the goals of a nation. 2. Draw and give a brief explanation of the Environmental Kuznets Curve (EKC). What is the main hypothesis behind it? List three (3) possible explanations for it. What is your take on the EKC? What is the “Race to the Bottom” (RB) argument? What are the key points made against it by its critics? What is your take on this concept? Environmental Kuznets Curve (EKC) The EKC refers to a hypothetical relationship...