Saturday, April 14, 2007

Everything you need to know about the WTO

By David Moberg

SEATTLE -- All this week, protesters will besiege the World Trade Organization with rallies, marches, teach-ins, street theater and civil disobedience as the top trade officials from its 134 member countries meet in Seattle. But while the conflict outside the meeting may be more entertaining, there is plenty of division within the group, which has become the main global body promoting and enforcing free trade rules. And some of the arguments inside the WTO mirror those being made on the streets.

The WTO is under wide-ranging attack for sins of omission and commission -- from neglecting poor countries and worker rights to endangering old forests and sea turtles and trampling on democracy. But there's serious disagreement on a wide range of issues among WTO member countries themselves. Despite months of talks at the WTO's sedate headquarters in Geneva, leaders could not agree on a pre-conference statement of intentions for a new round of negotiations to reduce tariffs and change trading rules, for instance. Now even this new round of talks -- which the big economic powers all endorse in some form -- is in jeopardy.

If the upcoming negotiations collapse, it would be a serious blow to President Clinton, who has been unable to persuade other leading heads of government to join him in Seattle to revive prospects for a new round of talks. It could, as a result, indirectly tarnish Vice President Al Gore. But Gore -- who is staying far away from Seattle -- might lose more if a new round is launched, because it would probably ignite more protest from labor, environmentalists and other constituencies that he needs.

How the WTO took center stage, igniting international protest and even influencing the American presidential elections, is a story in itself. For most of the past 50 years, international trade debates drew a yawn from the average citizen, as governments bit by bit reduced tariffs and other restrictions on international trade. But in the United States, a variety of trade-related issues -- swelling trade deficits, job losses blamed on global trade and investment, a wave of transnational corporate mergers, hot-button controversies over NAFTA and China's trading status, and anxieties about the environmental effects of free trade decisions -- have made more people edgily aware that the decisions of trade bureaucrats can hit home in surprising ways. Still other Americans look to global production and marketing as the engine of a new American century, and want the global body to rebuff the demands for restraint coming from international protesters today.

Internationally, of course, Europe, Canada and Japan hope the WTO can boost their prosperity -- and at the same time offer some protection for their national cultures against the United States' global media and entertainment empire. Developing countries have still other interests: Most feel they gained too little from past negotiations, and that the rich countries have resisted opening up their markets rapidly enough to imports of the clothes, shoes, textiles and other goods the poorer nations produce. And many, but not all, view attempts to expand Western standards of labor rights and environmentalism as a new imperialism that will retard their economic growth.

Whatever side you're on, it's clear that the rules written at the WTO are driven by strong national interests, which in turn reflect important blocs of voters and even more powerful corporate interests. The United States, for example, has given top priority to trying to keep Internet businesses as free of taxes and regulations as possible, reflecting the desire of government negotiators to protect the worldwide dominance of U.S. Internet businesses.

And while the United States purports to be a force for greater environmental sensitivity in the global trade body -- standing up for dolphins in the tuna trade debate, for instance -- the U.S. trade representative is lobbying against European Union proposals requiring manufacturers of computers and other electronic equipment sold in Europe to phase out the use of toxic chemicals and to take back discarded components for recycling. In fact, the American Electronics Association wants the United States to file a complaint about such demands under WTO.

Another big issue that will likely divide the WTO this week is agriculture. The United States and a group of leading agricultural exporting countries want Europe to eliminate massive subsidies to agriculture, and hope Japan will abandon its various means of protecting farmers. But Europe and Japan, with some support from developing countries, want the WTO to recognize farming as "multifunctional" -- producing food and fiber but also securing rural social life and the environment. Europeans are also up in arms over genetically altered food.

One issue the United States and European Union tend to agree on is the need to do more to protect worker rights. The Clinton government has long argued for some modest links between expanding trade and workers' rights, and this year the European Union -- whose members have tilted more to the center-left in recent elections -- also supports such moves. These leaders are driven more by political necessity than conviction: Increasingly they think that the global trading system as a whole will lose popular support in developed countries if it is seen as leading to third-world sweatshops and rising inequality around the world.

But many developing nations object to introducing questions about workers' rights or the environment into trade talks, saying such issues will be used by rich countries to block their exports. If China enters the WTO, it will add its substantial weight to the bloc of countries -- including Mexico, Egypt, India and Pakistan -- that already strenuously object to discussing labor rights.

There are still other divisions. Where the U.S. negotiators are focused on a few core issues such as agriculture and the Internet, the European Union wants the upcoming "millennial round" of negotiations to be more expansive, providing opportunities for wheeling and dealing on a wide range of issues, and potentially expanding WTO jurisdiction further over rules governing the rights of investors. The United States has shied away from a comprehensive discussion of investment policies, since negotiations on a multilateral agreement on investment failed last year even among the world's rich countries.

Developing nations want the next round to include an assessment of the impact of WTO rules, especially in areas such as the protection of intellectual property. While the richer countries see such rules as protection of their inventions and copyrights, the poor countries often see them as disrupting traditional agriculture (as more plants and animals are patented, for example) or interfering with efforts to provide cheap medicine (such as drugs to control AIDS in South Africa).