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What Really Sabotaged The Seattle Trade Talks


Economic Viewpoint

What Really Sabotaged the Seattle Trade Talks

The failure of the World Trade Organization meetings in Seattle has been interpreted by the opponents of globalization as a David-and-Goliath battle, with small nongovernmental organizations (NGOs) as the victorious David and huge multinational corporations and their government champions as the vanquished Goliath. This interpretation is wrong. The meetings broke down not because the opponents of globalization protested outside in the streets. The proponents themselves were unable to reach a compromise on a negotiating agenda within the allotted time.

Behind the meetings' collapse lie three causes: the immaturity of the WTO process; the large number of participants, many of whom were new to multilateral trade talks; and the complicated nature of the trade issues under discussion. The Clinton Administration, which proposed the Seattle round in the first place, underestimated the risk that the talks would fail. Then, the Administration further weakened the odds for success. It delayed compromises on U.S. antidumping laws and textile quotas in return for concessions on trade in agriculture and services from the developing countries. And it antagonized other nations by lobbying for a multilateral process to address labor issues despite nearly unanimous opposition.NARROWER FOCUS? What are the lessons from the Seattle experience? Perhaps some cynics are right to conclude that it is foolhardy for the U.S. to host multilateral trade talks on the eve of a Presidential campaign. But there are more fundamental lessons as well. The easy issues in multilateral trade negotiations have largely been resolved. Tariffs have been slashed and quotas eliminated for most manufactured goods. Future negotiations will focus on agriculture and services, politically sensitive sectors.

More important, the global-round approach to trade talks, involving all WTO participants in a comprehensive agenda requiring bargains across several sectors, may have outlived its usefulness. Focused negotiations on trade issues in specific sectors among a smaller group of WTO members are a promising alternative. Such negotiations have produced significant agreements in information technology, telecommunications, and financial services. And the WTO's secretive ways of making decisions may be outmoded as well. To quell the growing backlash against globalization and to build public trust, the WTO must begin to make its operations more transparent.

In the end, new multilateral approaches must be found to address concerns for the environment, labor rights, and human rights. Activists have focused their sights on the WTO in part because there are no other multilateral institutions for negotiating new international agreements on such issues. But using the WTO for this purpose endangers progress on trade liberalization.NEW FORUM. In the environmental area, the global community already has some experience with multilateral treaties, including the Montreal Protocol on ozone depletion and the more recent Kyoto agreement on global warming. Moreover, the WTO charter recognizes the need to protect the global environment and the right of nations to use trade sanctions to enforce international environmental agreements. What the WTO does not allow is a nation's use of trade restrictions to enforce its own environmental laws when they have selective and discriminatory effects against foreign producers. Hence the WTO rulings against the U.S. in the notorious tuna-dolphin and shrimp-turtle cases. It is time to consider the formation of a new Global Environmental Organization to establish the principles, processes, and rules for new multilateral agreements.

The ground for such accords on labor standards is not nearly as fertile. Currently, only one labor standard, the prohibition against prison labor, is internationally recognized and enforceable under the WTO. The development of new standards under WTO auspices is staunchly opposed by most members--for good reason. There is no evidence that trade liberalization encourages a "race to the bottom" in labor standards. Indeed, the opposite is true.

Trade encourages economic development, which in turn enhances labor standards. Despite such evidence, pressures from NGOs and organized labor for international agreements on basic labor standards will only get stronger as globalization intensifies. There is need for an alternative forum for this issue. Otherwise, future trade talks could be derailed, and the biggest losers would be the very workers in whose name many of the Seattle protesters marched in the first place.By Laura D'andrea Tyson


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