Comments and Observations on the WTO Millennium Round

  
The odds were against a successful trade negotiation from the beginning. Among the factors against it were the poor track record of the Geneva negotiations during the prior year and a half; the involvement of many civil society NGOs that were mainly opposed to the WTO; the introduction of new openness into WTO deliberations at the same time that the organization has grown large and diverse; and too little political support for changes in policies that affect organized sectors such as European farmers. The Seattle meeting was neither a victory for the NGO opposition to the WTO nor merely a pause in the ongoing negotiating process, as USTR Charlene Barshefsky would have the world believe.

In spite of the self-congratulatory attitudes adopted by some NGOs, these groups do not have enough influence to stop the WTO trade talks. Their constituency is narrow and small. The antics of a sizable minority of demonstrators and the comments of others show that the radical left has sought a home in environmental organizations, trying to make this the new “religion” for true believers. They will oppose anything that contributes to the success of the free enterprise system and blame the backwardness of the developing world on free trade, capitalism and the developed countries. They want their goals, which are more extreme than those of most NGO´s, for the environment and labor conditions to take priority over trade, but it is interesting to note that the main opposition to including fair labor standards in trade policy talks came from the developing countries. The responsible leadership of the NGOs will have to come to terms with the efforts of leftist ideologues to take over some of their issues. Past history does not offer much assurance on this matter.

As the host of the meeting and with its high profile in favor of a successful outcome, the US lost some prestige and the Clinton administration is left with little hope of a major international economic achievement during its last year in office. The comments of some attendees at the meeting, who speculated that Clinton brought up labor standards to give a boost to the candidacy of Al Gore while disregarding the damage done to the WTO effort, are probably over-analytical and cynical. But there is no doubt that Clinton’s actions further complicated the job of US and other negotiators seeking a consensus in the WTO negotiations.

The lack of consensus at the WTO meeting does not mean that there will be no forward progress, but it does mean that this progress will be slow for more than a year. To get things back on track, the member countries should review ways to make the WTO machinery, especially at ministerial meetings, work better while still trying to improve its openness. The proper role of NGOs also must be determined. NGOs represent a small minority of citizens in any country. Although they may contribute valuable insights, they are not elected officials nor even answerable to governments, as are the trade bureaucrats and diplomats they so quickly criticize. Each and every country interested in an improved world trade regime needs to examine its own position and be willing to take the politically difficult decisions that will bring painful change for some but higher incomes for many.

This self examination includes all developing and developed countries. For example, Brazil criticizes the US for sugar quotas while offering hidden subsidies and debt forgiveness to its own producers who, as a result, have increased production by over 300% since the 1970s. The poorest nations need “special and differential treatment,” but they also need change. They must become competitive, challenge internal economic relations that stifle initiative and competition, and increase openness and opportunity. In the end, this will benefit them more than the increased trade.

The WTO trade negotiations for a Millennium Round failed, but as with most endeavors of this kind some gains were achieved:

• developing countries felt that their positions and interests were taken into account, albeit imperfectly and despite criticisms by African and Latin American countries

• special provisions were drafted to ensure more benefits for developing countries

• special and differential treatment for the least developed countries gained wider currency and the support of ongoing technical assistance programs

• delegations came prepared to work exceptionally hard and in good faith (although unfortunately not quite willing to make tough political decisions)

• countries now better understand each other’s positions and have identified possible areas for compromise in agriculture and services, TRIPS, TRIMS and others

• political leaders, legislators, bureaucrats, ministers, trade specialists and diverse non-governmental persons all came together as interested parties and engaged in trade negotiations

Except for returning trade talks to Geneva, what will happen now? Of course, one focus will be China and its possible membership in the WTO. Another possible development may be increased attention to regional and subregional trade arrangements, most notably Mercosur, Caricom and some of the Asian groupings. The FTAA’s ability to overcome inertia and break through to new arrangements seems less likely, but always a possibility. What does this scenario mean for future WTO negotiations? Does it imply even slower progress or could the FTAA give them a boost?