WASHINGTON — In the aftermath of the failed WTO meeting in Seattle last month, the big question is, “What now?”
What now for the WTO? What now for trade policy in the United States? What now for the momentum for more liberalized trade that seemed to be building worldwide?
I am not sure that the Seattle debacle was a defining event in trade policy in the U.S. or whether it was just a serious wakeup call for trade advocates to revamp their strategies and work to develop relationships with those groups they have regarded as enemies — labor, environmentalists and human rights advocates.
I am not sure that the Seattle debacle was a crushing blow to the Democratic Party, serious enough to kill its chances for success in the 2000 elections or whether it, too, was a wakeup call for the party to pay more attention to its allies who have real problems with trade policy.
Certainly, the momentum for trade liberalization has been slowed. After several years of strong progress by the Clinton administration in expanding the envelope in trade deal after trade deal across the globe, it hit a terrible stumbling block. I have to fault those in the administration responsible for trade on their inattention to building the coalition of support they need to execute a more liberal trade policy. There was nothing new in the political landscape they faced at Seattle. The opposition that upset their apple cart was the same opposition that forced the administration to abort legislative efforts to extend the North American Free Trade Agreement and get it started properly.
The critical mass of opposition to the Clinton administration trade policy is organized labor. The AFL-CIO, under the leadership of President John Sweeney, has made trade a priority issue and is exerting its considerable political influence to stop the new initiatives. Sweeney is still a relative newcomer in national politics, but he is quite savvy, quite effective, and prepared to put his organizational money where his mouth is. Union opposition to trade has taken a different and stronger tack under his leadership than in prior years.
In the past, labor leaders used trade for sloganeering and emotional response. They had policy positions and used trade in their analysis of Congressional voting records, but their opposition lacked substance. Under Sweeney, the homework has been done. The substantive arguments have been well honed. The strategic alliances with environmentalists, with human-rights activists and others have been cemented. The planning to exert their force was made well in advance, and Seattle happened pretty much as they wanted. They stopped the train in its tracks.
So, my analysis of Seattle is that it was an event that was bound to happen. U.S. trade officials have been trying to brush their lack of consensus on trade under the rug. And now they cannot do it any longer. There is no political consensus within the Democratic Party on trade. Without it, a Democratic administration cannot be innovative and progressive on trade matters that require Congressional approval.
This is a particular problem for U.S. President Bill Clinton. He has been so successful in his political domination of Congress — despite having to deal with Republican majorities in both houses. With his success has come a spirit of defiance from the Republicans and a desire to humble him by embarrassing him on votes he cannot win without a consensus among the Democrats. Trade is the key issue on which this situation exists, and the Republicans are anxious to use the issue to embarrass the president and the Democrats in Congress.
Whatever will happen to the WTO in the aftermath of the failed meeting in Seattle is not clear. Other trade initiatives have had bumpy starts and this could well be just another one of those incidents. We all remember the early disappointments in the Uruguay Round of GATT negotiations. It took four years to get that negotiating round started. The WTO exists. It is a fact. It will continue and the forces for expanded trade liberalization will push forward.
Clinton reflected on the meeting and suggested that the failure was essentially substantive in nature. The big boys were not together on the big issues. Here is what he said about WTO at his press conference on Dec. 8:
“The fundamental reason a new round was not launched here had, in my judgment, very little to do with my philosophy of trade. There were — the big blocs here were the Europeans and the Japanese on the one, the United States and the developing nations. We all had positions that couldn’t be reconciled. The Europeans were not prepared at this time to change their common agricultural policy, which accounts for 85 percent of the export subsidies in the world. The Japanese had their own agricultural and other issues to deal with. The United States was not prepared to change its policy on dumping . . .
“So it’s very important that you understand that there were real differences that we thought we could bridge, unrelated to labor and the environment, which we couldn’t, and which I think would have been clearer but for the backdrop of the demonstrations in Seattle over these other issues.”
Now, for the political fallout. How badly has this disruption fractured the Democratic Party and killed its chances for success in 2000?
Clearly, Seattle put the spotlight on the divisions on trade policy within the Democratic Party and embarrassed some of its leaders, particularly U.S. Vice President Al Gore. He was seen as the principal supporter of trade within the administration — a fact that labor had overlooked in their endorsement of his candidacy.
Gore’s problem is simply that union enthusiasm for Democrats, particularly him, could dim as the feeling grows that he has been working against labor’s interest, both during the Seattle trade talks and the recent decision to invite China into the WTO. Mike Mathis, government affairs director for the teamsters, cited Gore in contending that there will be a substantial problem “motivating members for a guy who pushed through NAFTA and . . . for China” in the WTO.
Gore’s salvation may be that his only opponent for the Democratic nomination, former U.S. Sen. Bill Bradley, has an almost identical position on trade. Both Gore and Bradley are proponents of free trade, although both have said they would support direct inclusion of specific language setting labor and environmental standards in future trade agreements.
Political strategists contend that the trade issue is problematic for both parties, but much more severe for the Democrats. “Both parties have these factions [opposed to international trade agreements and organizations], but it is much larger on the Democratic side,” said David Israelite, political director of the Republican National Committee. His party has come much closer to consensus in the recent Congress. The split that appeared between the “Main Street Republicans” who came to Washington as a result of the 1994 election, and the “Wall Street Republican” establishment on trade has mellowed and the Wall Streeters seem to comfortably control the issue — at least in the Congress.
Democratic free traders will try to put the best face on Seattle, they must admit that intraparty conflicts have been exacerbated.
Trade policy in the U.S. will depend a great deal on the election of 2000 — both the presidential election and the Congressional elections. And, it is my opinion that trade will not really be a big factor in decisions voters make on candidates next year.
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