"Battle In Seattle" Obscured
Purpose Of World Trade Talks

By Jose G. Peña

The highly publicized World Trade Organization negotiations which began on November 30 and ended on December 3 in Seattle, Washington, failed to accomplish much more than a lot of adverse publicity.

There is much confusion within the agricultural sector and the U.S. public, in general, over what the fuss was all about, especially as China was accepted into the WTO. We should keep in mind, however, that the negotiations did not end, only this Seattle session terminated.

In terms of world trade, WTO negotiations that encompass more than one industry are called "rounds," as in a round of talks. The talks or "rounds" can last months or years. The Uruguay Round lasted for nearly eight years. So, while the Seattle session ended on December 3, negotiations continue. U.S. officials were hoping that this round would end by 2002.

The World Trade Organization was created in 1986 by the Uruguay Round of Agreements of the General Agreement on Tariffs and Trade. These agreements were an important initial effort to reform world agricultural trade. The Millennium, or Seattle, Round of the World Trade Organization, as it was called, was considered to be critical in continuing the process of market expansion. (Even selecting a name for this "round" has been a controversial topic among the leaders and participants). A substantial number of the trade ministers of the 134 participating countries attended the conference to continue negotiations to attempt to further discipline export subsidies, examine the role of state-trading enterprises (i.e., state sponsored enterprises such as China's use of prison labor), refine trade dispute settlement processes, resolve issues related to Genetically Modified Organisms, and address a wide range of other related trade issues.

Specific goals and objectives in this round for the U.S. were eliminating export subsidies, reducing trade-distorting domestic supports, restricting the trade-distorting practices of state trading enterprises, reducing tariffs, ensuring that tariff rate quotas are used to enhance trade, and assuring adherence to proven science-based principles. Simply stated, the U.S. wants a ban on taxes on electronic commerce, a reduction in agriculture subsidies and steep tariff cuts. The European Union also wants trade tariff cuts, and in this sense supports the U.S. position, but along with Japan, the EU wants to limit agricultural liberalization.

Needless to say, since the U .S., the world's most agriculturally productive country, depends on international trade for close to half of what it produces, the U.S. agricultural sector stands to benefit substantially by a reduction of trade barriers, the establishment of standards, establishment of arbitration procedures, and the negotiation of trade treaties which move toward liberalizing trade.

Greater access to international markets is considered by many to be essential to the continued growth and prosperity of U.S. agriculture. Trade growth is especially important as U.S. farm programs change and producers become more dependent on commercial markets to maintain the size and scale of their farm and ranch operations. U.S. agriculture has undergone dramatic change in the 1990s. New trade policies under the North American Free Trade Agreement and the URA opened markets previously closed to some U.S. producers, but created additional import competition for others.

The 1996 farm bill removed part of the government safety net for some crops, leading to more dependence on markets and greater exposure to additional downside price risk. Economic and political turmoil occurred in the former Soviet Union and other regions of Central and Eastern Europe, and while China emerged as a major force in world trade, other Asian economic powerhouses faltered. These changes have had major impacts on U.S. producers, presenting new opportunities for some and new challenges for others. A sound set of international rules would reduce problems of trade-disrupting procedures such as the recent European ban on U.S. beef produced with growth hormones and crops produced with genetically modified organisms.

Demonstrators

It appears, however, that the Seattle demonstrators were far more successful in disrupting the trade negotiations than the participants of this Millennium round. The demonstrators were better organized than anyone expected. Through the use of the Internet and other highly efficient communication systems, a large group of organizations opposing the negotiations, including the environmentalists, child labor law activists, anti-communists, anti-forced labor activists and a host of other protester groups were alerted, organized and focused on a common goal — to disrupt the negotiations.

Generally speaking, the protesters want higher labor and environmental standards in poor countries, and greater protection for U.S. workers from foreign competition.

What appears ironic, however, is that while the U.S. protesters appeared to be focused on stopping perceived "wrong-doing" by large industrialized and/or centrally planned countries on either small economically developing countries or the constituents of centrally planned economies, the views of these diverse groups do not coincide. The poor countries generally do not want linking of trade and labor, linking of trade and environmental standards, and more protection for U.S. workers from foreign competition.

Since the current session ended without any significant accomplishments, everyone is now looking for a scapegoat for its failure. Some critics are pointing the finger at President Clinton while others are blaming the negotiators.

Some may remember that President Clinton's address halfway through the session included comments linking labor rights to trade sanctions and suggestions that trade sanctions might one day be used to punish developing countries with poor labor standards. Critics of the President are blaming these comments for triggering a debacle by terrifying developing countries, which stiffened their resolve not to acquiesce to U.S. demands.

(Clinton's contribution to the Seattle debacle actually began weeks before the meeting itself, when he essentially invited disaster by encouraging protestors to show up. It was vintage Clinton, "feeling the pain" of a vast array of anti-trade interests while pandering to the union bosses he and Gore had angered with their support of NAFTA and GATT. — Ed.)