The Global Trading System

Abstract

Dr Dilip K. Das was educated at the Graduate Institute for International Studies, University of Geneva. He has published extensively on international trade, international finance, and globalization related issues. His most recent books are The Global Trading System at Crossroads: A Post-Seattle Perspective (London and New York: Routledge 2001) and An International Finance Reader (forthcoming 2003).THE SEATTLE MINISTERIALThe principal objective of this article is to give a succinct account of how the global trading system reacted to the well publicized failure at Seattle and the measures it took in various areas during the interim period between the third ministerial conference of the World Trade Organization (WTO) in Seattle in 1999 and the fourth ministerial in Doha, Qatar, in November 2001. Despite, and because of, Seattle a good deal of progress was made during the period, particularly on issues of interest to the developing economies. As the ground to be covered is large, an attempt has been made to deal with the major developments in all of the principal areas, ending with the relevant decisions at Doha, although space constraints preclude exhaustive analysis. The principal sources of material and statistics on various developments in the global trading system and their sequences are WTO publications issued during the interim period and just before the fourth ministerial conference.Disagreements among countries on trade issues, never uncommon, took on a calamitous dimension in 1999 at Seattle,(1) although seeds of discord had existed well before that meeting began. Deep divisions existed along North-South, North-North, and East-West axes, but much of the division of opinion was so complex that it could not be subdivided along any of the conventional axes. Numerous contentious issues that had persisted between major trading economies and country groups were enough to bedevil the preparations for the third ministerial. There was a general belief, however, that these fissures could be narrowed during the Seattle meeting. In addition, the WTO system had a certain proclivity to function in a non-transparent manner. This tendency was a relic of the General Agreement on Tariffs and Trade (GATT) era. Lack of transparency had enormous cost in international negotiations in which 135 country delegations were involved. Hindsight reveals that some of the largest trading countries and country groups tried to manipulate the WTO system, which in turn led to aggravation of mutual distrust and erosion of the credibility of the system. The socalled 'Green Room' consultation process,(2) which had worked well during the GATT era, was found wanting when such a large number of member country delegations were involved.A structural issue came to the surface in Seattle with the presence of a large number of developing countries. Sixty-five developing economies had participated in the negotiations that had led to the formation of the WTO; by November 1999, there were more than 100. Their number reflected strength. A small number of newly industrialized economies (NIEs) were successful traders. Growth and expanding trade had made them more important in the WTO scheme of things. Many developing country members were not satisfied with their past role of sitting on the sidelines; they wanted a larger part in defining the Seattle agenda. The decision-making process of the WTO had not sufficiently evolved to accommodate this new situation.Add to this the growing international backlash against globalization, which was more than an economic or trade issue, an inapt chairperson of the Committee of the Whole,(3) a new and inexperienced director-general of the WTO, and inadequate preparations for the ministerial conference by the WTO secretariat, and it is little wonder then that a new round of multilateral trade negotiations (MTNs) could not be launched in Seattle.(4)Failure at Seattle was a serious setback to the global trading system. …