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Why Did Seattle Fail? Globalization and the Politics of Trade

Published online by Cambridge University Press:  28 March 2014

Nicholas Bayne
Nicholas Bayne*
Affiliation:
Visiting Fellow in the Department of International Relations, London School of Economics and Political Science
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Extract

THE THIRD MINISTERIAL MEETING OF THE WORLD TRADE ORGANIZATION (WTO), held in Seattle from 30 November to 3 December 1999, was a resounding failure. It was intended to launch a new round of multilateral trade negotiations, in succession to the Uruguay Round which had ended seven years before. But even before it could begin, the proceedings were disrupted by massive demonstrations. Central Seattle became a war zone, with tear gas and rubber bullets, and then a ghost town, with empty streets and boarded-up windows. Inside the conference hall the atmosphere was little better. The conference chair (Charlene Barshefsky, US Special Trade Representative) and the WTO Director-General (Mike Moore, new in office) were booed in open session. In the end, the ministerial meeting was suspended with nothing agreed, only an exhortation from the chair ‘to take time out’ in the hope of resolving disagreements and reconvening later.

This article looks at what went wrong and why and what will be needed in future. It contrasts the failure at Seattle with the undoubted achievements of the international trade system in the 1990s. It examines three possible causes of failure: disruption by NGOs; organizational weakness in the WTO; and errors of government. Of these three, it finds governments most to blame. Governments generally, but especially the United States and the European Union, have not grasped the full extent of the demands placed on them by the advance of globalization. Seattle was a setback but need not be a disaster – provided governments correct the errors that allowed it to happen.

Type
Original Articles
Information
Government and Opposition , Volume 35 , Issue 2 , April 2000 , pp. 131 - 151
Copyright
Copyright © Government and Opposition Ltd 2000

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References

1 This article continues the story I began in two earlier articles for Government and Opposition: ‘In the Balance: The Uruguay Round of Trade Negotiations’, 26:3 (Summer 1991), pp. 302–15; and ‘International Economic Relations After the Cold War’, 29:1 (Winter 1994), pp. 3–21.

2 The US Administration is constitutionally required to seek authority from Congress when it conducts an international trade negotiation. Since the 1970s the Administration has always sought ‘fast-track’ authority, which means Congress can vote for or against any agreement concluded, but cannot amend it.

3 Croome, John, Reshaping the World Trading System, Geneva, World Trade Organization, 1995 Google Scholar, is the official history of the Uruguay Round. Preeg, Ernest H., Traders in a Brave New World, Chicago, University of Chicago Press, 1995,Google Scholar gives a more synoptic account.

4 Jackson, John H., The World Trade Organization: Constitution and Jurisprudence, London, Royal Institute of International Affairs, 1998,Google Scholar analyses the WTO as an institution, comparing it to the old GATT

5 Governments only adopted the term in mid-decade, e.g. in the communiqué from the 1994 Naples G7 summit. Government and Opposition was earlier — its special issue on Globalization was 28:2 (Spring 1993).

6 Clinton said to WTO Ministers on 1 December: ‘The sooner the WTO opens up the process and lets people representing those who are outside in, the sooner we will see fewer demonstrations…’ He also said: ‘The WTO must make sure that open trade … respects core labour standards … the United States has proposed that the WTO create a working group on trade and labour.’ But he separately said to the Seattle Post-Intelligencer that the working group ‘should develop these core labour standards ... to be a part of every trade agreement, and ultimately I would favour a system in which sanctions would come for violating any provision of a trade agreement’. See reports in New York Times, 2 and 3 December 1999.

7 Marceau, Gabrielle and Peter, N. Pedersen set out the record of the WTO before Seattle in accommodating NGOs in ‘Is the WTO Open and Transparent?’, Journal of World Trade, 33:1 (1999), pp. 5–49 Google Scholar.

8 Clare Short, the British Secretary of State for International Development, argued publicly both before and at Seattle that some of the advice offered by NGOs to developing countries would in fact hold them back. Her speech on 3 November in London — ‘Making the Next Trade Round Work for the World’s Poor’ — is accessible on www.dfid.gov.uk; her remarks to the NGO Symposium on 29 November are on www.wto.org.

9 See Henderson, David, The MAI Affair: A Story and its Lessons, London, Royal Institute of International Affairs, 1999.Google Scholar

10 For Lamy, see Financial Times, 20 January 2000. For Byers, see his speech to the WTO plenary on 30 November, on www.wto.org, and subsequent press reporting, such as The Times, 6 December 1999.

11 Preeg, op. cit., analyses the different meetings: Geneva, pp. 33–6; Montreal, pp. 84–8; Brussels, pp. 116–22.

12 Several NGOs are also better endowed than the WTO. Mike Moore, in an aside at the NGO Symposium on 29 November, said the budget for the World-Wide Fund for Nature (WWF) was three times bigger than his own.

13 A number of countries have technical assistance programmes to help poor countries get more out of the WTO. The UK pledged £10 million for this purpose in May 1998.

14 On the 1998 Birmingham and 1999 Cologne summits, see Bayne, Nicholas, Hanging In There; the G7 and G8 Summit in Maturity and Renewal, Aldershot, Ashgate, 1999, pp. 151–67.Google Scholar

15 Financial Times, 29 and 30 June 1999.

16 The WTO permits members to retaliate against countries ‘dumping’ their products, i.e. exporting them at less than the domestic price. The rules agreed in the Uruguay Round (Preeg, op. cit. p. 196–7) leave wide national discretion. Japan and many developing countries want stricter international discipline.

17 A more radical CAP reform was watered down at the Berlin European Council, largely thanks to French President Chirac. See Financial Times, 27/28 March 1999.

18 A good statement of developing countries’ priorities is given in the Fancourt Declaration adopted by Commonwealth heads of government meeting in South Africa two weeks before Seattle. Text under ‘Documentation’ in The Round Table, No. 353, January 2000.

19 See Ricupero, Rubens, Director General of the United Nations Conference on Trade And Development (UNCTAD), in Financial Times, 6 October 1999.Google Scholar

20 The Uruguay Round textiles agreement was heavily back-loaded. Though it phased out quotas entirely over ten years ( 1995–2004), 69 per cent were still in place at the time of Seattle and 51 per cent would stay till the very last year. The agreements on trade-related intellectual property rights (TRIPS) and trade-related investment measures (TRIMS) had only five-year transition periods for most developing countries and thus applied to them from 2000. Preeg, op. cit., pp. 193–6.

21 For low-income countries as a group, trade did not increase as a proportion of GDP in 1985–94 and for 44 countries it fell. World Development Indicators 1997,Washington, World Bank, pp. 292–5 and Table 6.1, updated by World Development Indicators 1999, pp. 319–21 and Tables 6.1 and 6.2.

22 Camdessus’ speech from www.wto.org.

23 For Ruggiero at the Lyon summit, see Financial Times, 1 July 1996. Later summits made guarded references to this in their economic declarations, without clear commitments.

24 The US and Canada, having declined in February 1999 to support a new Biosafety Protocol to the UN Biodiversity Convention, proposed instead a biotechnology group in the WTO. Lamy was prepared to agree to this as part of a package which satisfied the EU on other environment issues. But the member states demurred. See Ward, Halina, ‘Trade Trouble’, The World Today, 56:1 (January 2000), pp. 24–5.Google Scholar

25 See The Economist, 22 January 2000, p. 53.

26 Sally, Razeen, ‘Globalization and Policy Response: Three Perspectives’, review article in this number of Government and Opposition, 35:2 (Spring 2000), pp. 237–53.Google Scholar

27 The TRIPS agreement involves the WTO in enforcing aspects of patent, trademark and copyright law. The Sanitary and Phyto-sanitary Agreement (SPS) creates rules for food safety based on the Codex Alimentarius. Both go outside strict trade issues and, unlike other WTO agreements, do not have the effect of encouraging liberalization. Preeg, op. cit., pp. 63–7 and 199–200; also The Economist, 15 January 2000, p. 99.