After Seattle Where Next For The Wto?

After Seattle Where Next For The Wto?

Simon Retallack

Simon Retallack explores what really happened at the Seattle meeting of the World Trade Organisation last December, and asks where the WTO — and its opponents — should go from here.

Late last year, on the streets and in the conference rooms of Seattle, the most north-westerly city of the USA, there was an unmistakable feeling in the air: the sensation of history being made. In Seattle, the supposedly unstoppable force of economic globalisation faced its first major setback of the post-Cold War era at the hands of an unprecedented alliance of citizens’ groups and government delegates from around the world. The principal target and casualty of their protests was the launch of a new ‘millennium’ round of trade talks by an institution that the majority of the world’s public and media had been largely unaware of until Seattle — the World Trade Organisation.

The WTO came into existence in January 1995 as a result of eight years of negotiations between 125 countries during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). It operates from Geneva, Switzerland, and has a membership of 135 countries. Its main official functions are to administer and enforce more than 20 international trade-related agreements, resolve trade disputes between states and provide a forum for global trade negotiations.

That, at least, is the formal, innocuous-sounding purpose of the WTO. But strip away the bland bureaucratic facade, and the organisation reveals a more destructive nature. The raison d’etre of the WTO is to eliminate ‘barriers to international trade’ — barriers which, according to WTO rules, include not only quotas and tariffs on products crossing national borders, but any impediments to corporate profit-making, such as national, regional or local laws protecting consumers, workers or the environment.

This agenda is forced through by tribunals made up of panels of three trade bureaucrats who have usually made legal careers representing corporate clients on trade issues. They meet in secret and have legally binding powers of enforcement, which include the ability to impose economically severe trade sanctions on offending states.

The Economist has called the WTO ‘an embryo world government’, and yet not an electorate on the planet has voted for it, nor is it in any meaningful way accountable to the public. Worse — at every opportunity during its five-year existence, the WTO has sacrificed the public interest on the altar of free trade and corporate gain.

THE WTO’S RECORD

So far, among the national laws that WTO panels have ruled against and consequently caused to be weakened are the US Clean Air Act, the US Endangered Species Act, and Japan’s pesticide residue standards for food. The WTO has also ruled against the EU’s ban on imports of potentially health-threatening hormone-treated beef, and the EU’s banana importing regime, designed to give preferential access to bananas produced by small farmers in the Caribbean. In these two cases, the WTO authorised the imposition of sanctions of $128million and $190million respectively per year until the EU implements its rulings.

Crucially, in every single one of these cases, WTO panels sided with the corporate parties involved: Venezuelan and Brazilian oil companies, Asian shrimp companies, and US fruit and beef companies respectively.

The WTO’s track record is now such that the mere threat of WTO action is usually sufficient to persuade countries to change their national laws to be ‘WTO-complaint’. Under this so-called ‘chilling-effect’, the US, for example, has succeeded in substantially weakening an EU ban on the import of fur from animals caught with cruel ‘steel jaw’ leg traps. At a sub-national level, the Governor of California recently vetoed his state’s ‘Buy Californian Act’, a bill giving locally manufactured goods a 5 per cent preference for state and local government purchases, because he said it would violate WTO rules.

All of these cases are symptomatic of far more serious, deep-seated trends that are being promoted. Environmental degradation, threats to public health, unemployment, income inequality, food insecurity, loss of cultural diversity and threats to human rights are all being exacerbated by the WTO and its agreements.

Despite the WTO’s record, the world’s two largest trading blocks intended to use the organisation’s Third Ministerial Conference in Seattle — between 30 November and 3 December 1999 — to further expand the WTO’s power.

The United States wanted the WTO to set up a working group to adopt new rules that would ensure unfettered ‘market access’ globally for genetically modified products, despite growing environmental and health concerns. Another US priority was the adoption by the WTO of an ‘Advanced Tariff Liberalisation Initiative’ which, amongst other things, would have eliminated tariffs on forestry and fish products by 2004. This would have increased global demand for these products as their cost fell. The result: increased deforestation and further depletion of the world’s already over-fished oceans.

An additional key US goal was the elimination of primarily European and Japanese agricultural tariffs and subsidies. While this could have had some positive environmental consequences, it could also have undermined small-scale, chemical-free agriculture, often dependent on subsidies and tariffs to avoid being undercut by floods of cheaper, industrially produced imports.

The American government also wanted to expand the WTO’s General Agreement on Trade in Services (GATS) to include new sectors such as health and education. This would have given foreign corporations the right to take over, own and operate publicly owned hospitals and schools within any WTO member country. Yet another US goal still was to extend the WTO’s Trade-Related Intellectual Property Rights Agreement (TRIPS) to all plant and animal parts, to enable them to be patented and controlled by corporations; depriving millions of farmers of the right to save and use their own seeds without having to pay corporations to do so. The EU’s priority, meanwhile, was to expand the WTO’s powers over investment, competition and procurement policy. The EU thereby sought to give foreign corporations the right to invest, undertake mergers or corporate takeovers, and bid for public procurement initiatives in each member country, free of any social or environmental conditions or discrimination with regard to subsidies or contr acts. The EU’s plans would have entailed, essentially, a return of the notorious Multilateral Agreement on Investment (MAI) that had been defeated by public protest in 1998.

These overwhelmingly corporate-driven agendas, moreover, were to be negotiated in secret (as has been the norm for each world trade round), without the participation or endorsement of the public, non-governmental organisations (NGOs), or, as it turned out, even the majority of the WTO’s member governments.

TAKING TO THE STREETS

Shut out of the process, alienated and disgusted by much of what was being negotiated, over 40,000 people came to Seattle to take to the historical recourse of last resort — the street. The result was the largest, most extraordinary demonstration in America since the Vietnam War, led by a rainbow coalition of labour, environmental, consumer, farming, human rights, and pro-democracy groups from around the world.

The official reaction to the protests demonstrated an authoritarian intolerance of dissent that spoke volumes about the nature of the WTO and its attitude towards ordinary people. It showed millions globally that there must be something very wrong with this institution if it needs to defend itself by firing at overwhelmingly peaceful protesters with rubber bullets, canisters of tear gas and excruciating pepper spray; charging people on horseback and with armoured cars; arresting hundreds (though not any of the 40-or-so black-hooded ‘anarchists’ causing the widely reported violence); and imposing an armed curfew over the area in which it was meeting.

The drama on the streets, meanwhile, was mirrored by what took place inside the negotiations, which, to general astonishment, suddenly collapsed in chaos, confusion and failure late on 3 December. If you believe the humiliated supporters of the WTO, this outcome was essentially the product of ‘mismanagement’, whereas the impact of the opposition of civil society was ‘minimal’.

In reality, the role of the protests was far more important. Until Seattle, trade negotiations and summits had taken place without the presence, in any significant number, of protesters, NGOs or the media. Indeed, the launch of the last world trade round in Punta del Este in Uruguay in 1986 took place ‘in the silence of public apathy,’ as Mike Moore, the WTO’s current director-general, put it. This meant that government trade officials could make deals fulfilling an essentially Western, corporate agenda and impose it on the rest of the world with impunity. In Seattle, all that changed.

THE POWER OF PROTEST AND GRASSROOTS OPPOSITION

Years of quiet educating and coalition-building on world trade issues by groups such as Public Citizen, the Third World Network, the International Forum on Globalisation and many others finally paid off at Seattle. Not only did 2,000 NGOs turn up with a veritable army of around 40,000 protesters, but an unprecedented alliance was forged between groups that represent a vast spectrum of societal concerns — including, crucially, on labour and environmental issues — united in common opposition to the WTO and its aims. They sent a direct message to the world’s governments that civil society would not tolerate a World Trade Organisation, or any new trade round that failed to address social and environmental concerns and that merely served the interests of large corporations and their shareholders.

The protesters were powerful and numerous enough not to be ignored; deriving strength not just from their numbers and diversity, but, above all, from the fact that their message resonated loudly with important electoral constituencies and the wider public. The scale and drama of the demonstrations also drew the largest media presence to any world trade meeting in history, enabling the protesters’ message to be relayed to an audience of hundreds of millions worldwide. Members of the media, many of whom were learning on the spot about the WTO for the first time themselves, also scrutinised the negotiations as they never had before. All of this made it far easier (or far more important) for governments to resist the usual pressures to conform and agree a deal at all costs; creating the conditions for the development of unbridgeable divisions among the WTO’s member governments which ultimately brought the talks to their knees.

Thus the objections of small farmers and their supporters demonstrating in Seattle, reflecting the views of powerful domestic farming constituencies, provided a serious incentive for the countries of the EU, with support from Japan and South Korea, to resist attempts by the US and the Cairns Group of 18 agricultural exporting nations to force them to eliminate agricultural subsidies and tariffs. Hence EU Trade Commissioner Pascal Lamy’s acknowledgement during the talks that: ‘What’s happening outside is having an effect on the negotiations’. The protests, he said, made it ‘even less possible’ to give in on this issue.

Similarly, the hostility of the demonstrators and the vast majority of the European public towards genetically modified food made it politically hazardous for the EU to concede to the key US demand to establish a WTO working group on biotechnology that would have made it harder for countries to limit imports of biotech products. When the EU trade commissioner indicated that he might cave in on this issue, EU environment ministers, fearing the public outcry that would result, openly objected and forced the proposal to be dropped.

The opposition of demonstrators and a large number of important US labour and environmental groups to the key EU demand to begin negotiations on a new MAI-style agreement on investment, meanwhile, made the US reluctant to concede on this issue. That further diminished the possibility of an overall deal between the US and the EU at Seattle.

THE ‘THIRD WORLD’ RESISTS

An even more significant factor in the ultimate collapse of the negotiations was the unprecedented opposition by the majority of developing countries — which make up two-thirds of the WTO’s membership — to the launch of a new round, and their demand, opposed by the US, for the revision of elements of the previous round. In unison with the protesters, many adopted the slogan ‘No new round. Turnaround’. In this, NGOs such as the Third World Network, which represents literally millions of ‘Third World’ citizens, were instrumental; briefing delegates about the likely adverse impacts on developing countries of the adoption of the new issues being pushed by developed countries, and of various existing agreements.

The US generated even more opposition from developing countries by refusing to rescind ‘anti-dumping’ legislation, which prevents the export of below-cost products to the US; refusing to implement commitments to cut quotas on imports of developing countries’ textiles; and refusing to drop its proposal for the establishment of a WTO working group to look into the protection of core labour standards. The only reason the US took such a stance on these issues was because of the vocal demand of the protesters and labour unions throughout America that jobs and labour standards should not be undermined by free trade. Too many votes were now at stake, not least for presidential candidate Al Gore, for a new trade round to be launched that failed to take into account at least some of the protesters’ concerns on these issues. As Sue Esserman, a US deputy trade representative said: ‘The clear expression of concern by ordinary workers has to be taken into consideration, and that’s exactly what we have done’.

The final straw for developing countries was the way in which they were treated during the negotiations. The WTO operated in a grossly undemocratic manner in Seattle, allowing all the key decisions to be made in so-called ‘Green Room’ meetings of around 20 countries — excluding most developing-country delegates, who were kept in the dark, misinformed, or deprived of interpreters and accurate texts. They were essentially reduced to the role of spectators, who were nonetheless expected to provide their consent to a collection of decisions that they had virtually no part in shaping and to which they were largely opposed. Such practice has long been the norm of global trade negotiations, and developing countries, in the end, have always given in. But not this time.

What made the difference in Seattle, according to several delegates, was the atmosphere of dissent generated by the demonstrators on the streets, the encouragement of NGOs in the conference hail, and the scrutinising presence of the world’s media. All of these factors gave developing countries the resolve and strength to stand firm and, for the first time, remain united in opposition to the launch of a new round.

The US hosts — unable to bridge differences by making concessions that would have infuriated the protesters and their powerful domestic constituencies, and unable to force a fait accompli upon the developing world without inciting their full fury before the world’s TV cameras — had no option but to allow the talks to collapse.

THE FALLOUT

It is no exaggeration to claim that history was made in Seattle, for the events there have already brought fundamental change. The authority and legitimacy of the WTO have been seriously undermined, as has the WTO’s guiding philosophy that people and the natural world should serve economic and corporate ends as part of an inevitable process of economic globalisation. The WTO’s members are in disarray, with the governments of the EU and the US, and of the west and the developing world, still divided by substantial differences. They are unlikely to be able to make much progress in the negotiations now under way in Geneva on services and agriculture, or even attempt to launch a new trade round until a new US president is in the White House early next year. Trade negotiators are highly aware of the fact that a second defeat on the scale of Seattle would probably be fatal for the WTO. Clearly on the defensive, they now accept that the WTO needs at least some reform and that new voices must now be heard.

Civil society, on the other hand, is stronger than ever, as is its guiding philosophy — that trade and corporate interests should be subservient to human and environmental needs. In Seattle, building on its successes against ‘fast-track’ in the US in 1997, and the MAI in 1998, civil society launched the most significant international, democratic, broad-based, grassroots challenge to global capitalism of the post-Cold War era.

It is powerful because it is more organised, united, and aware of its strength than ever before, and its message has, for the first time, reached the world’s media and, through the media, millions of people throughout the globe. It has thereby removed the keys to the WTO’s past success: ignorance and apathy. From now on, the world will be watching, making it far harder for trade ministers to strike deals that run counter to the public interest. Civil society now has a place at the top table and a voice that cannot be ignored. It has more leverage than ever.

WHERE NOW?

Civil society must now seize this unique chance, this breathing space which may last for around a year, to change the WTO and the global economy for good. It must move from opposition to proposition, demanding reform not only of the process — which clearly needs fundamental democratisation — but also the substance of the WTO and its many agreements. Civil society must make it absolutely clear that the cosmetic solutions proposed by the EU’s trade commissioner and others — a little more transparency, consultation and technical support for developing countries — are grossly insufficient.

Instead, a unifying programme for wholesale change must be developed and campaigned for that trims from the WTO every rule that threatens the ability of people — through their governments — to protect their environment, health, livelihoods, food security, cultural diversity and democratic and human rights. In order to further the ability of people to achieve these goals, the WTO must also be reformed to promote, rather than undermine, strong local economies — in other words, reversing its current role.

Developing such a programme for change will entail maintaining, strengthening and extending alliances across social sectors, across the world, through new dialogues. In particular, the developing world needs to be assured that this is in the interests of its citizens — unlike continued economic liberalisation and export-led growth.

That goal may entail rejecting the idea of using the WTO to impose global labour and environmental standards, a task, where appropriate, that is better left to the agencies of the UN by providing them with binding powers — comparable to those of the WTO — to do so.

But the WTO would still need to be reformed so that it does not undermine such standards wherever they exist. If the governments of the developing world can be persuaded on these points, civil society may well find in them powerful allies, as they too emerged strengthened from Seattle, able for the first time to exact a high price for their future co-operation. Many also share the goal of revising WTO agreements and procedures, and of resisting further WTO expansion.

If such a unifying programme for reform can be developed, civil society must then hold the governments of the US and the EU to their word. In Seattle and its aftermath, they promised to include social and environmental concerns in future deliberations: now they must deliver. And not just with regard to the WTO, but the IMF and the World Bank as well — and any other backdoor bilateral or regional attempts to fulfil similar agendas.

If they do not, they should know that they will face more opposition than ever, not least from a new generation of young people radicalised by Seattle. At each important upcoming economic event, such as the meeting of the IMF on 16 April in Washington DC, and US Congressional debates on granting China ‘Most Favoured Nation’ status as a prelude to its accession to the WTO, they will face growing resistance.

Public Citizen’s Lori Wallach argues it should be a ‘fix it or nix it’ campaign. Accordingly, if, by the time of the next WTO ministerial meeting, governments have failed to agree to the reforms demanded by civil society and are still peddling the same expansionist agenda as in Seattle, which they may well do, not only will that meeting face Seattle-scale demonstrations, but campaigns are likely to be launched to end countries’ funding and membership of the WTO.

Seattle achieved what has never been accomplished before: it exposed the world trading system to the sunlight, and as a result that system will never be the same again. How different it will be, though, depends on the ability of NGOs and citizens throughout the world to maintain sufficient pressure on their governments to make wholesale reform a political necessity. The significance of the challenge is clear. As leading Indian activist Vandana Shiva says, this is ‘the most important democratic and human rights struggle of our time.’ It will not be easy, but Seattle has created a unique and historic opportunity for real change. Now is the rime to seize it.

Simon Retallack is deputy editor of The Ecologist’s Special Issues. He was a researcher at the London-based think tank Demos and a visiting fellow at the International Forum on Globalisation in San Francisco, for which he has just edited and co-written a report on the environmental impact of globalisation.

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