WTO
WTO constrains the usage of trade policies, therefore causing the U.S to substitute for levers of influence that are not governed by institutions, altering the sites of pressure within the international system. This way, the U.S cannot do all that they want or exploit their traders as they wish. WTO’s members have a variety of alternative levers indeed. Firstly, assistance is given to the other countries in the form of grants, and subsidized loans that are the U.S turns into bilateral foreign aid to pressure their partners. Even though foreign aid’s most essential and significant goal is to ensure that there is economic growth, donors also use it to obtain political influence. Additional trade aid is made available to the states that comply with the donor’s request in this case and also withhold their assistance if the recipient ignores the request. This way, WTO allows every individual to make choices that they feel are helpful to them instead of the aids being imposed on them unwillingly, which they might be required to pay. By this, U.S actions on donating their aids to other countries are regulated, thus limiting their economic bounders.
Secondly, the unilateral preference programs act as an alternative source of political leverage, permitted in the WTO’s Enabling Clause. The specific variety of Goods on which tariffs are reduced for all countries that meet the set criteria, including the economic and political factors, is specified in the Unilateral Preference Programs. This way, the U.S works under the set rules and the specified guidelines to limit their political and economic interactions and how they engage other countries in their financial undertakings. Most of these states prefer to use the Generalized System of Preference as the most common preference program. Most developed countries, such as the EU, Japan, Canada, and the United States, can offer Generalized Systems of preference. The GSP eligibility varies from one donor to the other since they include many types of economic and political factors. Therefore if a country fails to reach the set qualifications, the tariff preference can be withdrawn at any time. This way, the WTO can regulate who is involved in the tariff preference and how they are working on it based on the set standards. For instance, revoking the GSP program may happen if the recipient country harbors terrorists, violates human rights, places undue pressure on American procedures that bring competition with the program’s goods, if the country experiences high economic growth and if it normalizes U.S property. With this, WTO can regulate the kind of states and image of the country the U.S is dealing with.
WTO has put in place so many financial restrictions, which are, in most cases, applied as leverage. For instance, direct investment into production or foreign direct investment or investment in another country is, in most cases, required by the recipient countries to bolster economic growth. Despite that in many countries consider the FDI as a tool of private economic actors, states can use it as political leverage by threatening to place a constraint on its flow unless recipients make franchises. This way, a country can enhance efficiency in the economic sector as the recipient has to act according to the set tariffs to avoid restrictions on their monetary transactions or relationships. The countries that are involved in the program are practical and efficient in their dealings, by all means, to ensure that nothing goes wrong in their international relations with the other countries. Besides, FDI is readily used as political leverage as most governments invest in their host countries themselves. Alternatively, the State can use other financial tools such as capital provision through trade agencies or development finance institutions. A state can also gain political leverage alternatively through its foreign assets treatment. Since many countries have valuable assets that they have invested in their partners’ financial institutions, it is easy for the partners to render the asserts inaccessible to attain political influence over them. This way, the country is left with no choice but, to some extent, surrender to their partners’ political power if their assets are of great value. WTO thus comes in place to ensure that this does not happen since it is a form of exploitation.
Lastly, Diplomatic levers are capable of allowing States to influence their partners. In most cases, the influence takes place in the form of punishment through maybe recalling their ambassadors, refusing to allow any participation in the international for and boycotting State’s events and conferences. This way, a country feels all alone. For instance, by fulfilling specific criteria such as political or economic reforms, states can often enter the bilateral agreement contingent or international institutions. Conditionality applied to provide membership in the EU pathway is the most well-known applied to the accession agreement. Even though the reforms have been uneven, European integration has successfully promoted Eastern Europe liberalization, as demonstrated in extensive literature. Another institution that demands many stringent reforms before entry is NATO (North Atlantic Treaty Organization), a multilateral alliance. Most important to note is that overall WTO membership results in a reduction in trade policies’ reliance as a means of coercion.