THE WTO FIASCO IN SEATTLE
Dec. 6, 1999

Sylvia knew the meeting of the World Trade Organization was in trouble when she learned that a few witches from San Francisco would be joining the motley group of anti-WTO protesters in Seattle. What possible recourse, Sylvia reckoned, did ordinary mortals, especially the craven minions of WTO, have against the powers of witchcraft?

Not much, as it turned out.

The WTO meeting, marked by disarray from the very beginning, ended on Dec. 3rd with practically nothing to show for it. As WTO foes protested vociferously outside the meeting venue, bringing unwanted attention to latte-drenched Seattle, the 135 member countries failed repeatedly to arrive at an agreement to further liberalize trade.

What exactly was the meeting supposed to achieve, wondered Sylvia, and why did it fail?

The meeting's goal was a modest one--to launch a new round of trade negotiations. The U.S. delegation even had a name picked for it, one they felt would confer immortality (of a more pleasing nature) on their fearless leader: The Clinton Round. The Seattle meeting would only set an agenda for the palaver that followed.

But the agenda foundered amidst a welter of contentious disputes. Among them:

Labor and environmental standards:

The U.S. sought to link labor rights and environmental standards to the trade agreement. In a move that took even his delegation by surprise, President Clinton proposed that trade sanctions be used against countries that failed to "protect" their workers--by denying them the right to form unions, for instance.

The response from the developing countries: An emphatic "No!" Imposing stringent standards, they argued, will stifle economic development and impoverish their workers--and in any case, why bring up the issue of labor rights now when workers in developing countries have already made tremendous strides? They smell insidious protectionism at work: Higher labor and environmental standards in the developing world would lead to higher prices for their goods making them less competitive in world markets, including the U.S.

Agriculture:

The U.S. and developing countries found the Europeans to be implacably opposed to eliminating farm subsidies. Such subsidies, by encouraging European farmers to produce more output, cause lower world prices for grains, thereby adversely affecting export prospects for farmers in the U.S. and developing countries.

Protecting favored industries:

The U.S. found itself alone in its defense of the use of anti-dumping duties. Commonly used to protect domestic steel companies from foreign competition, anti-dumping duties are imposed on foreign firms who allegedly sell ("dump") goods in the U.S. at prices that are below production costs. Japan, Korea, Brazil and other developing countries vehemently decry the U.S. practice.

The trade delegates labored mightily to reach an agreement, but to no avail. Finally, late in the night on the final day of the talks, U.S. Trade Representative Charlene Barshefsky conceded that the group would need more time to "find a creative means to finish this job." She is right. They could not even agree on the name of the new round: While the Americans had their hearts set on the Clinton Round, others had already started referring to it as the Millenium Round.

Given the inauspicious beginning, thought Sylvia wryly, Clinton may not have much reason to be displeased.

Does the fiasco in Seattle herald the end of trade liberalization, wondered Sylvia? Actually no, it means that the talks now move to the WTO headquarters in Geneva--where the fun starts all over again.

Calm has returned to Seattle. The globalization foes--the labor unions, the environmentalists, the witches--they have all packed their bags and gone. The witches, presumed Sylvia, must have departed on their broomsticks...