Lessons from Seattle

Dec 24th 1999, C.P. Chandrasekhar

Last fortnight confusion ruled Seattle, the site for the third ministerial meet of the World Trade Organisation, which began without a formal opening and ended without a formal declaration. Confusion prevailed both within and outside the convention centre which was the venue for the ministerial deliberations.
 
Outside, on the streets and at the intersections, an odd combination of protestors, with widely varying and even contradictory motives, jostled with each other and the police, to demand an end to the process of liberalising trade overseen by the WTO. Dominating the demonstrations, which resulted in a cancellation of the opening ceremony, were American trade unions and western environmental groups. The unions are against freer trade because it ostensibly pits US jobs against imports, that are believed to be cheap because of poor labour standards in the developing world. The 'greens' were concerned that freer trade would only benefit the big multinationals, which, in search of profits, were not merely threatening health by genetically modifying food products, but also relocating in countries with inadequate environmental safeguards, putting at risk everything from rainforests to dolphins, sea turtles and butterflies.
 
At the fringes of the protest, however, where those who felt that WTO governance of trade was diluting national sovereignty, worsening unemployment and adding to poverty in the Third World. Unlike many of their comrades at Seattle, they believed that an emphasis on labour standards and environmental protection could be turned by the "Quad" group (US, Canada, the EU and Japan) into protectionist levers that would further widen the North-South divide.
 
Confusion, both organisational and ideological, permeated the conference venue as well. Many developing country negotiators arrived unsure of why they were there. They had started on the long road to Seattle more than a year back, with the idea that the principal task of the ministerial meet was to implement the mandate of the Uruguay Round to complete its unfinished liberalising agenda in the areas of trade in agriculture and services. Further, given the inequities arising from the experience of implementing the decisions of that Round, they wanted the WTO to start a process of reviewing, reforming and, if necessary, partially rolling-back some of the liberalisation already underway. Along the way however they were confronted by an EU suggestion, picked up and promoted by the US and other developed countries, that Seattle should serve as the launch-pad for a new round of negotiations aimed at substantially advancing the "opening up" agenda, with talk of investment agreements, competition policy, coherence and labour and environmental standards. The power of this group is such that by the time the Seattle meet began, the New York Times, for example, declared that the meet "is intended to open a new round of negotiations".
 
The EU, in fact, was completely against review and reform in the contested agricultural trade arena, standing much to lose if it was forced to cut back on agricultural support and put and end to covert and overt subsidies. Japan and South Korea had also for long held that given its "multifunctional" character, touching even on lifestyles and cultures, agriculture cannot be treated on the same footing as manufacturing and services when trade liberalisation is discussed. They felt that focusing on a new round and new areas would get the heat off their back. The European Union's Trade Commissioner Pascal Lamy, joined Clinton in using the protestors as backing for his cause, arguing that their demonstrations rendered it "even less possible" to given in to US demands to wipe out EU agricultural subsides in order to help American farmers.
 
The EU's intransigence was indeed reflective of what trade liberalisation has come to mean. It was willing to ignore the original in-built agenda of the Seattle meet to start in year 2000 negotiations in the contested areas of agriculture and services, even though these negotiations were mandated by the Uruguay Round, since they were the two areas in which the least progress towards reducing trade barriers had been made at that time. Of the two, some progress has been made in the services area in 1997. Despite this unfinished agenda and pressure from the US to open up its agricultural product markets, the EU managed to hold out because of the implicit support from Japan and South Korea and differences within the developing country camp. While there were some developing-country members of the Cairns group of agricultural exporters and some pro-market ideologues who were for agricultural trade liberalisation, there were other nations and sections worried, for valid reasons, about the impact such multilateral liberalisation can have on their farming community and their food security in the long run.

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