Stage set for clash of cultures in Seattle

Date: 16/09/1999

By Simon Taylor

RAINSWEPT Seattle has shot from being a sleepy provincial town to one of the trendiest cities in the US in about ten years.

George Costanza, the portly sidekick in the US comedy series Seinfeld, once described Seattle as the "pesto" of cities, capturing the city's 'flavour-of-the-month' appeal. It is not surprising, therefore, that the US is hoping that some of Seattle's magic will rub off on the next round of world trade negotiations due to be launched at the end of this year.

US chambers of commerce and trade officials are already lobbying hard for the next set of World Trade Organisation talks to be dubbed the "Seattle round", exploiting the city's 'brand image' as any multinational firm does with its products in the global market place.

Yet with under three months to go before the world's most powerful trade figures meet in the Pacific city, major differences remain over which sectors should be covered by the next push for global liberalisation.

The coming ten weeks will be filled with frantic activity as the 134 member governments of the WTO try to agree on a list of areas to be tackled which combines meaningful advances in promoting global commerce with targets which can be achieved in a reasonable time frame.

A look at the possible agenda shows there are few things which illustrate the contrasts of the modern world more starkly than the next round of trade liberalisation talks.

Negotiations will centre on some of the most advanced technologies in the industrialised world and the most primitive. Nations will lock horns over the future of holding telephone conversations over the Internet and the rights of peasant farmers who have never made a phone call to continue growing centuries old breeds of rice.

The EU and the US will fight over restrictions on downloading entire films from cyberspace, while India and Pakistan will try to defend their farmers against predatory western agribusiness firms.

Yet despite the massive gulf between the richest and the poorest countries of the world and their diverging interests, no one is trying to turn the clock back on liberalisation. Even those nations with the most minimal agenda for the next round want to consolidate what was achieved in the 1994 Uruguay Round, while the powerful industrialised countries want to push the liberalisation door wider open.

There is, nevertheless, a lingering sense that the coming round will be less ambitious than its mammoth predecessor, the Uruguay Round.

The major trading blocs with their sophisticated economies, which stand to gain the most from lowering trade barriers, are staking a great deal on the upcoming round as a way of boosting world economic growth, allowing Asia to trade its way out of the financial crisis which rocked the region two years ago.

At the same time, they realise that millions of ordinary people are sceptical about the benefits of negotiations held in secret rooms in Geneva between anonymous officials.

Cases such as the banana dispute and the hormone-treated beef row have helped the opponents of liberalisation, in Europe at least, to paint the WTO as an organisation which only serves the interests of multinational capital.

The role played by campaign groups in defeating attempts to strike a multilateral agreement on investment in the rich nations' club - the Organisation for Economic Cooperation and Development - sent an important message that the WTO has to be sold much more strongly. Hence the commitment to involve environmental and consumer groups more in the WTO's work.

Washington's unseemly fight to get the former trade unionist Mike Moore into the trade body's top job to sell the benefits of liberalisation is another example of the increased awareness of the importance of the new round's public image.

Incoming Trade Commissioner Pascal Lamy's insistence that the process of freeing up global commerce should be "controlled, steered and managed according to the concerns of EU citizens" makes a similar point.

The world's most economically powerful nations have also realised that liberalisation not only needs to be sold more strongly to their own populations, but also to the poorer countries of the earth who believe they got a raw deal out of the Uruguay Round.

This explains the repeated pledges given by the EU and the US to ensure that the world's less developed countries get special help to make use of the opportunities which liberalisation brings.

Outgoing Trade Commissioner Sir Leon Brittan has suggested that the very poorest nations should be able to export their products tariff-free. But these countries have their own wish lists for Seattle. India and Pakistan want to consolidate what was agreed in the last round before moving on to ambitious new reforms. Many developing countries would like to see new rules on anti-dumping practices, which they regard as a pernicious way for industrialised countries to exclude their exports while continuing to sing the praises of free trade.

As producers and exporters of farm goods, these countries will also be pushing the EU and US very hard to lower import barriers and allow them to take advantage of the competitive advantage that the free-market economic textbooks highlight.

They also have issues which they do not want to see making their way onto the agenda at Seattle. Discussions on linking trade to environmental criteria have already sparked major arguments between the self-styled 'green' nations of the northern hemisphere and the countries of the south which consume minimal amounts of the world's precious resources. A similar, and possibly bigger, battle is set to take place over labour standards, despite Washington's insistence on some commitments in the final deal.

So how can the competing interests of such a disparate collection of nations be resolved?

Despite the sense that a phoney war is going on, the haggling over the final outcome of the Seattle meeting has already started.

Countries and groups of countries have placed their wish lists on the table of the WTO secretariat in Geneva. At the last count, the organisation's staff had received more than 500 proposals for agenda items, although they know full well that countries will withdraw some of these as the debate intensifies in the run-up to Seattle.

The EU is planning to finalise its priorities by the time foreign ministers meet on 11 October following a series of informal get-togethers between trade ministers and their officials over the next four weeks.

Foreign ministers and their staff will also be working throughout the Seattle summit to monitor and approve what comes out in the final declaration. The European Commission will not get its negotiating mandates - precise instructions on where exactly it can give ground and where it must stand fast - until after the Seattle meeting.

Guessing the final outcome of the talks is impossible at this stage given the numerous trade-offs which will have to be made to clinch a final deal.

But it is worth making a stab at predicting the agenda which will emerge from Seattle. In addition to agriculture and services, WTO members will agree to try for easier access to government contracts and reducing trade obstacles such as cumbersome customs procedures.

The EU may have to sacrifice its desire for global investment rules in order to get competition onto the agenda. The case for commitments on labour standards will be harder to make than that for environmental protection, but may survive in a very mild form. In return, the developing countries could get the chance to talk about anti-dumping rules.

But once the ministerial cavalcades leave, the people of Seattle will go back to designing computer software at Microsoft or to devising new coffee drinks at Starbucks and wonder what all the fuss was about.

Article forms part of a survey on world trade, p13-20.