Toward WTO 2000: A Seattle Odyssey

Abstract

T ministers from the 135 member countries of the World Trade Organization (WTO) reconvened in Seattle in December 1999 to assess the operation of the trading system and to initiate a comprehensive new round of multilateral trade negotiations. The meeting ended in disarray and without action on the trade agenda. The new round is in abeyance, even though new WTO negotiations on agriculture and services will get underway in 2000 as preordained in the WTO’s so-called “built-in” agenda. Anti-WTO protesters claimed credit for disrupting the Seattle meeting and blocking the launch of a new trade round. In large measure, however, the WTO meeting fell victim to serious substantive differences both among developed countries and between developed and developing countries regarding what should be on the agenda for the new WTO Round. In essence, everyone wanted to liberalize foreign trade barriers, but not their own. The major trading nations were reluctant to address their own barriers to trade in goods and services, while demanding that new talks target protectionism in the developing world. The developing countries argued that new concessions should await the fulfillment of liberalization committed during the previous Uruguay Round. Some wanted priority to be given to implementation of existing WTO accords and “traditional” trade issues such as tariffs and anti-dumping; others wanted the agenda broadened to encompass new subjects like electronic commerce and labor standards. No one wanted protracted talks like those which occurred in the previous Uruguay Round, but no one seemed able to craft a practical negotiating agenda that accommodated the diverse and often divergent interests of developed and developing countries. Some of the biggest problems, however, involved disputes among the United States, European Union, and Japan over farm subsidies, competition policy, and anti-dumping. The major trading nations did not seem to have enough support from their domestic constituencies to actively negotiate and put a deal together. In the United States, the five-year long impasse over fast-track authority inhibited discussion of possible U.S. trade reforms. In Europe, monetary union and enlargement issues already presage important economic and institutional reforms and made countries reticent to undertake new trade obligations that would entail additional adjustments, especially in agriculture. In brief, short-run political concerns now dominate the trade debate and counsel caution. Longrun benefits from prospective accords are simply too far away to hit the radar screen of elected politicians. Trade officials will need to work hard to overcome political resistance to new trade reforms, at home and abroad, so that substantive negotiations can proceed. I cannot do justice in this paper to the complexities of the problems that I have just outlined. Their implications stretch well beyond the realm of trade policy. But, I can try to offer a few insights on the value of international trade negotiations and the particular importance of proceeding promptly with a new WTO Round of multilateral trade talks. To that end, this paper addresses why new negotiations are needed, what needs to be included on the negotiating agenda, what is in it for developed and developing countries, and how the negotiations should proceed.