The Arts

The trashing of WTO by 50,000-strong protesters in Seattle intensifies the raging dispute over the future direction of free trade.

The 4,000-strong jamboree of delegates, bureaucrats and journalists from the World Trade Organisation's (WTO) 135-member countries must have wondered why they came to Seattle. Backed up by years of preparation and discussions the delegations were witness to the humbling of the trade body, which many argue is perhaps the world's most powerful organisation. On the streets of the Emerald City the delegates were threatened by an assortment of radical activists and protectionists. Inside the official venue, US President Bill Clinton and the European Union's representative Pascal Lamy were pandering to those demonstrating outside.

WTO MYTHS

MYTH 1: WTO forces governments to cut down subsidies for farmers' fertilisers, water and power.

Reality: WTO does set an upper limit for subsidies, but India's fall well below it. Besides, the government is anyway trying to reduce subsidies.

MYTH 2: GATT will raise prices of essential drugs.

Reality: Pre-WTO Indian patents depended not on the design of a drug but on the process by which it was made. So companies devised alternative processes to make drugs still under patent outside India. WTO forces India to adopt product patent and extend the period of patent from seven to 20 years. On an average, prices will increase by 15-20 per cent.

MYTH 3: The agreement will lead to phasing out of ration shops.

Reality: WTO's objection is only to subsidies to farmers, not on subsidies to consumers.

On the opening day of the WTO's third ministerial meeting, the official delegates were confronted by more than 50,000 trade unionists, environmentalists, feminists, farmers and students who marched into the centre of the city demanding that the WTO be shut down. Frustrated delegates were stranded on the streets outside, and the morning's opening ceremonies were finally abandoned as a number of important personalities, including UN Secretary-General Kofi Annan, US Secretary of State Madeline Albright and US Trade Representative Charlene Barshefsky were trapped outside. Annan and Albright had to eventually leave Seattle without making a speech. The Indian delegation made it through safely only by way of an inside door linking the Sheraton Hotel directly to the convention centre.

With violent images from Seattle being flashed around the world, Clinton and the US delegation at the ministerial meeting were faced with a massive public-relations debacle. The demonstrations not only embarrassed the US in its role as host country, but the images of violent public dissent have also dented the credibility of its negotiators, who do not appear to have the support of their own people. Observers have noted the irony that such strong opposition to globalisation should have emerged from within the US which has for half a century led the ideological crusade for market reforms and free trade around the world.

Protesters thronging Seattle -- home to Microsoft, Boeing and Starbucks Coffee -- were complaining against what they called the ugly side of free trade, which the WTO is so vigorously promoting. They charged developing countries like India with social dumping -- competing in the developed markets through low-cost products produced by denying their workers "basic rights and decent conditions". But developing countries allege the charge is guided more by self-interest than self-righteousness. To expect trade, and trade alone, to equalise the living standards of the developed and developing countries is nothing but hypocrisy, driven by the fear of losing jobs in the face of cheaper imports from poor countries.

INDIA'S CORE CONCERNS

1: Fair implementation of the past WTO agreements.
2: No linkage of environment with trade issues.
3: Special treatment to developing countries on some specific WTO commitments.
4: Easier movement of software professionals and freer exports of products like textile and leather to developed countries.

But this being an election year in the US, President Clinton tried to lend a friendly ear to these concerns, even as he exalted the virtues of free trade and a strong WTO. In anticipation of the protests in Seattle, Clinton as far back as April had dispatched Commerce Secretary Richard Daley on a 20-city tour to promote his trade agenda around the country and build public support. But after six months on the road, Daley was forced to concede defeat as each one was hounded by anti-WTO protesters.

In Seattle, both Clinton and Barshefsky tried to wriggle out of their embarrassment by using the demonstrations to their tactical advantage. In his speech at Seattle on December 1, Clinton declared his support for many demonstrators' concerns over labour and environmental standards. "I'm glad they showed up," he said. "We need to bring them under our tent." Developing countries were naturally wary of these moves and suspect that the Seattle protests were being cynically used by Clinton to justify the introduction of new trade barriers under the guise of bowing to public pressure.

The Indian delegation headed by Industry and Commerce Minister Murasoli Maran took a strong stance against the introduction of environmental, labour and other "non-trade" items. In a hard-hitting speech on Tuesday, Maran rejected the inclusion of these items as "beyond the competence of the multilateral trading system" and liable to "open the floodgates of protectionism". In the complex and multi-cornered negotiations, Maran had earlier declared that India would not attempt to project itself as the leader of the developing countries -- a reversal of the position advanced by his predecessor Ramakrishna Hegde -- but would work only in its own self interest to get the best deal possible. Maran's meetings with the South African and EU ministers fuelled speculation that issue-based alliances and trade-offs are being struck with these countries.

The negotiations in Seattle took place in five working groups devoted to specific areas. These were: agriculture, market access (mainly tariff reduction), implementation of earlier agreements, issues related to the WTO's Singapore summit (mainly competition policy and government procurement), and systemic issues like scope for greater transparency in the WTO's functioning through participation of NGOs. However, the overall success of the talks hinged on some resolution of the giant US-EU dispute on agriculture. While the first day of negotiations were badly affected by the protests, the second day saw a frustrating deadlock on virtually every major issue. For over a decade now the EU is resisting pressure from the US, Australia and New Zealand to surrender its farm shelters and subsidies.

In a way the WTO's goals for Seattle were modest. It just wanted to figure out what it should spend the next few years negotiating. Before the conference began the WTO had received 220 negotiating proposals, all sent under the assumption that Seattle would lead to a new round of trade negotiations. But a new round will not be started without agreement between the EU and the US. The difficulty is both want liberalisation of other countries' barriers without liberalising their own economies in a significant way. The EU wants the broadest possible agenda, largely to avoid too heavy a focus on its Achilles heel, agriculture. Meanwhile, the US is promoting a narrower agenda, with a focus on liberalisation of agriculture, services, and freedom for e-commerce. But even the US and the EU cannot start a round without developing country participation.

India had two primary objectives in the talks -- to gain some forward movement on the implementation of existing agreements, and to see that non-trade issues do not creep in. The pressure from the developed world has been to link the implementation issue to the launch of an entirely new round of negotiations.
N.K. Singh, the principal secretary to the prime minister and a key member of the Indian delegation confirmed that he felt cautiously optimistic on both issues. "India is well placed for success on both issues," he said, largely because of a consensus that exists among other developing countries. He expressed some concern though that the failure of the US and the EU to make progress on agriculture could overshadow the overall success of the talks. That will be history repeating itself.

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