The World Trade Organization is headquartered, like its predecessor, the General Agreement of Tariffs and Trades, in the placid Swiss city of Geneva. These days, however, the WTO is more often associated with Seattle, Washington, and the images that come to mind when the organization is mentioned aren’t bureaucrats, lakeside cafes and customs forms, but anarchists, tear-gas-filled streets and shattered store windows.
It has been a difficult childhood for the WTO. The organization was scarred at birth by a bruising fight over its first director general; efforts to launch a new trade round have stalled; delegates and representatives have become public enemy No. 1 for an assortment of protesters against globalization who take to the streets at every meeting of international economic institutions.
Going by appearances, the enemies of globalism are in the ascendant. The survival of the liberal, free-trade paradigm better known as the Washington consensus is by no means assured. That explains the mood in Brunei, where leaders of the Asia Pacific Economic Cooperation forum met this week to reinvigorate their group and push the integration agenda — but ever so cautiously for fear of seeming indifferent to the social costs of globalization. No wonder the statement from the ministers’ meeting supporting a new round of trade talks was sprinkled with phrases like “the importance of supporting the poor and vulnerable.” When it comes to world trade and the WTO, everyone is walking softly these days.
The irony is that the WTO’s difficulties are the product of its successes, not its failures. The WTO is a target because it is perceived to be an extremely powerful player in the global economy. The slugfest over its director general and the battle in Seattle that blocked a new round of trade talks were triggered by a recognition of that role.
Gary Sampson, who is taking a year off from the WTO to assume the chair of international economic relations at United Nations University in Tokyo, says the organization is “a victim of its own success.” Just as Willie Sutton robbed banks because “that’s where the money is,” the WTO is the focus of controversy because it is the player in the international economy.
The organization has grown steadily since the GATT opened its doors on Jan. 1, 1948. Today, 139 governments are members, and those that represent another 1.6 billion people are involved in strenuous negotiations to join. Four new members, and 18 million people, have joined the WTO this year. If the group is so unpopular, Sampson asked in a recent interview, why the clamor to join? Or, more to the point, why has no country left either the GATT or the WTO?
It’s probably because eight trade rounds have steadily expanded the WTO’s influence over the $1 billion in trade in goods and services that occurs every hour. And therein lies the problem. Sampson believes that expanding role poses a real danger for the WTO.
The perceived inability of the International Labor Organization to halt the use of child labor or slave labor has forced activists to move to other forums. Likewise, those who focus on environmental issues have grown disillusioned with the international institutions designed to tackle their concerns. In both cases, the WTO provides an inviting alternative.
“The WTO has an extraordinarily powerful dispute-settlement mechanism,” Sampson explained. “When you can’t get issues dealt with through U.N. agreements, people want to go to a WTO system that bites.”
But the failure of the U.N. organizations is the result of a lack of political will on the part of member states. Freighting the WTO with those issues merely moves the conflict to another forum. Sampson, along with others, fears that that would undo the success the WTO has had thus far. For some, such as U.N. Secretary General Kofi Annan, the solution is strengthening relevant U.N. organizations so that they can better handle the issues.
For others, the answer is building on the organization’s success. They argue that the WTO is a pillar of the world economy, and the challenge is to build on it. Add human rights, environmental standards and labor laws to change the criteria by which we evaluate the organization. Sampson is skeptical: “In that case, the WTO would become world government.”
This debate over the WTO’s identity has to be resolved before the organization can move forward. Little progress has been made in recent months — the statement from the recent APEC meeting was tepid at best — but something will be worked out. Sampson was confident. “The notion of a rules-based, multilateral trading system is not under challenge. A new round will be launched. The question is when, not whether, he said.”
And those people in the streets? Renato Ruggiero, the last head of the GATT, explained that “the WTO is a rule-based institution whose decision-making is based on consensus and whose constituency is 137 countries. Four-fifths of these are developing countries or economies in transition; China and 29 other countries representing over 1.6 billion people are waiting to join. Such an organization cannot be the enemy of the people that stood in the streets of Seattle.”
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