Size matters. That is the lesson to be drawn from last week’s failed attempt to launch a new world trade round. Finger pointing has intensified in the wake of the breakdown in negotiations, with the United States proving the scapegoat of choice for most non-Americans (and even some Americans). That may be satisfying for many, but there is more than enough blame to go around. If there is to be another world trade round — and there are very good reasons to have one — WTO members must learn from the debacle in Seattle.
For anyone trying to make sense of those events, the critical figures have nothing to do with the number of protesters. The latter wreaked havoc on Seattle and gave their hosts a black eye. Their wanton violence complicated security but, triumphant claims notwithstanding, they had little influence on the negotiations taking place behind closed doors at the convention center.
No, the critical numbers are four and 135. The first is the number of days that trade ministers had to reach agreement on a trade agenda. It was far too little time for such an ambitious undertaking, especially after negotiators had failed to craft an agenda during preliminary talks in Geneva. After all, six years of Uruguay Round negotiations did not yield a deal on agriculture and financial services, and there has been little sign of a concerted push for compromise in the years since then. In this hothouse environment, the decision of U.S. President Bill Clinton to make a personal — make that campaign — appearance in Seattle was also a mistake. Besides distracting U.S. negotiators, his comments about labor standards — a sop to traditional Democratic Party supporters — infuriated many delegates.
The really important figure, though, is 135: the number of WTO members. The General Agreement on Tariffs and Trade, the WTO’s predecessor, was a clubby little group of 50 when it formed, and although its ranks swelled over time, it was dominated by the industrialized nations. Deals were made in back rooms, out of view of the public and many of the members.
Those days are gone. The developing world will no longer sit passively by as an expanded version of the G7 (or sometimes a subset) sets the global trade rules. These governments have become increasingly assertive and are rightfully demanding not only a place at the table but a voice in the negotiations.
The move toward greater transparency will also benefit the growing number of nongovernmental organizations clamoring for a say in WTO deliberations. As Mr. Peter Spiro notes in his article on the opposite page, their rising clout has changed the negotiating dynamic. That was a lesson the Organization for Economic Cooperation and Development learned last year, when a coalition of such groups managed to derail the Multilateral Agreement on Investment.
But it is overly simplistic to credit the NGOs and their rabble-rousing, Starbucks-shattering compatriots in the streets with wounding the WTO. Their call to introduce labor and environmental standards was challenged, not by the industrialized nations, but by the developing world. Ironically, the less-developed economies were holding to the free-trade line. They demanded unfettered access to world markets, and the reluctance of the developed world to offer it resulted in gridlock.
The failure to reach agreement is not the end of the world. The Uruguay Round suffered a false start, and it was four years before those negotiations commenced. Responsibility now rests on the shoulders of Mr. Mike Moore, director general of the WTO, who must marshal the troops and find the common ground that will allow negotiations to begin in earnest.
Some will argue that the WTO has become too big to deal with trade issues. They are wrong. The WTO has become too big to deal with trade issues as it has in the past. The organization must become more democratic. The governments that blithely espouse the benefits of free trade must match their words with deeds. They can no longer demand access to foreign markets while sealing off their own “sensitive” sectors. (Name your favorite offender here.) Trade hypocrisy may well be a thing of the past.
If all the participants are chastened — and they should be — the Seattle deadlock will have not been in vain. Trade negotiators, and the governments they represent, need a new outlook. That would be the best way to kick off a real “Millennium Round” of trade negotiations. And better still, it might actually lead to results, rather than a repeat of the shambles in Seattle.
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