Trade Talks Doomed by Competing Interests
For the WWEMA representatives and other non-protesters who participated in the recent World Trade Organization (WTO) Ministerial in Seattle, the global trade talks provided little to celebrate in the way of upbeat news or substantive achievements. Rather than forging the course of globalization into the new millennium, the much anticipated gathering of trade negotiators from around the world will be remembered instead by images of police in riot gear, vandalized storefronts and teargas. For advocates of free trade and open markets, the event will be viewed as a major setback and a lost opportunity to abolish trade distorting policies.
The WTO?s failure to achieve any measurable degree of success cannot be blamed entirely on the disruptive efforts of the labor unions and environmentalists or on the myriad of other interests represented on the streets of Seattle. In fact, the outcome of the talks may have been doomed long before they began. In recent years, as more and more countries and issues are drawn into the WTO, the process of establishing a viable rules-based system for global trade poses an increasingly daunting challenge.
Just two decades ago, trade negotiations within the WTO?s predecessor, the General Agreement on Trade and Tariffs (GATT), typically involved 30 to 40 countries and dealt primarily with how to incorporate subsidies, anti-dumping and technical standards into the rules of the system. Now, the WTO has 135 members, 80 percent of which are developing or transition economies, and the current list of issues they are striving to address also includes environmental policy, labor standards, competition law, culture, development policy, financial instability, investment and e-commerce.
The task of seeking agreement among so many member economies on so many issues is further aggravated by the attitude of developing countries within the WTO that the organization is dominated by a few major powers, namely the U.S., the European Union and Japan.
The collapse of the WTO Ministerial is likely to have several indirect consequences, one of which is recognizing the need for a global institution to regulate and enforce environmental standards. Whereas most public and private sector groups concerned with environmental protection somehow expect the WTO to act as the guardian of the global environment, it is important to remember that the WTO is, first and foremost, a trade organization. In its current form, it does not have the wherewithal to establish environmental regulations nor the resources to serve as a global enforcer of such regulations.
The inability to achieve significant progress on environmental issues in Seattle will likely underscore the need to create a separate institution similar to the International Labor Organization that could work in cooperation with the WTO to oversee compliance with environmental standards among the world?s trading partners.
Yet another indirect outcome of the failed talks in Seattle may be a renewed emphasis on the negotiation of bilateral and/or regional trade agreements. In retrospect, the WTO Ministerial proved to be an unwieldy forum that sought to address an overly ambitious agenda of complex trade related issues.
As a result of the organization?s failure to achieve a consensus in Seattle, developed economies may be more likely than ever to embrace the alternative of establishing regional alliances for which there is a greater likelihood of negotiating reduced trade barriers while simultaneously incorporating environmental values and labor standards. Clearly, the ratification of the U.S. trade deal with China and the advancement of negotiations in conjunction with the Free Trade Agreement of the Americas are of much greater importance now than they were prior to the breakdown of talks in Seattle.
Possibly the most significant impact of the WTO Ministerial is that it will serve as a wake-up call to corporate leaders of the urgent need to educate and inform the public of the benefits of free trade. The protests in Seattle revealed once again how much better the anti-trade forces are at rallying support for their cause than are their pro-trade counterparts.
For politicians and CEO?s alike, the demonstrations provided ample proof that the foes of globalization should not be underestimated. Thus far, attempts by the business community to refute protectionist points of view and convince the public of the undeniable merits of trade have been drowned out by the voices of anti-trade. Now, more than ever, is the time for America?s corporate leaders to respond to the misinformation, misconceptions and false arguments being spread by anti-trade advocates. If the upcoming vote on China?s entry into the WTO is to have any chance of gaining Congressional approval, an aggressive campaign to dispel the myths of ?globalphobia? is essential.
The environmental industry, for its part, is in a unique position to promote the win-win benefits of trade liberalization. Advancing free trade in environmental goods and services achieves the dual goal of contributing to economic growth while improving the environment and encouraging sustainable development. Let?s get our industry on the bandwagon and let Congress and the American public know that free trade within the proper regulatory framework is in everyone?s best interests.