The Governance of Globalisation; Is it time for an alternative approach - Essay Example

The dominant system for world governance in the first wave of globalisation was the colonial domination of the world by European powers. In the second wave of globalisation, various international agencies were established to loosely oversee the liberalised world economic order. The important international agencies which were established to oversee the global system were the International Monetary Fund or the IMF and the General Agreement on Tariffs and Trade or GATT. The GATT was later transformed into the World Trade Organisation or the WTO, which is made up of 28 intergovernmental agreements by which member states agree to limit their sovereign right to intervene in international trade.

It was hoped that with such agencies, it will be possible to facilitate international trade and manage the international economic system. The WTO today has 144 member states and an additional 30 which are awaiting accession. The benefits that have been provided by the WTO agreements include the liberalisation of international trade, the rule of law, a procedure for the settlement of disputes, cutting of tariffs by the industrialised world and the elimination of the most favoured nation status amongst others.

These measures have considerably enhanced the volume of international trade with nearly 25% of the global output being traded. Despite the criticism levied against it, the WTO has been successful in the past 50 years to provide a mechanism to avoid protectionism and trade retaliation, with its Council having authorised retaliation through tariff increases in very few cases. Government trade policies are more stable and predictable and the international trade which is vital for global stability keeps flowing (Von Braunmohel, 2005, Chapters 1 – 2), (Strange, 2003, Complete), (Kimon, 2000, Complete), (Institute for International Economics,