GENTECH archive


WTO -The World's Still Watching- brit pieces for Monday Dec 6

Several more pieces from the London GUARDIAN.

The first makes me smile - that the Brits, of all people, say they will
LEAD in reforms of the WTO only suggests that the third world is in for a
more subtle pillaging by Mr Greed - I'd be more impressed if the brits
were to suggest third world should develop and control a new organization
against Mr.  Greed. 

I'm thinking of the analogy of tenants uniting against landlords. It's a
way of changing the rules of class warfare.

GUARDIAN (London)               Monday December 6, 1999

Britain will lead reforms after trade talks chaos

Larry Elliott, Economics Editor

The trade and industry secretary, Stephen Byers, is to spearhead
international efforts to overhaul the World Trade Organisation in the wake
of the humiliating collapse of global liberalisation talks in Seattle.

He will use Britain's commonwealth links to forge cross-continental
alliances and demand action from the European Union to reform the battered
Geneva-based WTO.

"This has been a defining moment," Mr Byers said after the chaotic and
acrimonious scenes which culminated in the decision to put plans for fresh
free-trade talks on hold. "It won't be allowed to happen again."

As recriminations over who was to blame for the breakdown of last week's
talks began, the WTO's heavily criticised director general, Mike Moore,
was flying back to Switzerland to attempt to salvage something from the

Mr Moore, who said he had no plans to resign as the head of the body
responsible for policing global trade, has been told by ministers to work
out a way of relaunching the talks. But with an United States presidential
election looming, sources said it could be at least the spring of 2001
before negotiations resume.

The protesters who massed in the streets of Seattle and those lobbying for
reform of the WTO were jubilant at the decision to suspend talks. Barry
Coates, director of the World Development Movement, a non-governmental
organisation, said: "We need to ensure that the right lessons are learned
from Seattle. It is time to make trade rules fairer and develop
international rules that are enforceable on multinational companies."

Mr Byers, whose efforts last week to broker deals on labour standards and
give the poorest countries better access to the rich markets of developed
countries meant that he was one of the few participants to emerge with his
reputation enhanced, called for urgent modernisation of the WTO.

Britain wants a fresh mechanism to enable all countries to play a full
part in the 135-state organisation, with technical assistance to build up
the negotiating expertise of small countries.

Britain plans to use its standing with developing countries - already high
as a result of the debt-relief campaign - to build a broad-based consensus
for change. Soundings have already been taken with some of the bigger
African states, including Egypt and South Africa.

"The WTO needs to present itself in a more favourable light," Mr Byers
said. "It has got to recognise that it will be seen as a key global player
in the 21st century. It is acting like a 50s body."

The developing countries - three-quarters of the WTO's membership - were
furious at attempts by the US to strong-arm them into signing up to a
deal, amid repeated complaints that they were being excluded from the

But while they were able to sidetrack deals cooked up between Europe and
the US, the failure to launch a new round of talks meant they left Seattle
without the things they most desired, including an end to EU farm
subsidies and extra tariff reductions for the poorest countries.

A defiant Mr Moore said that much was achieved in Seattle, but that he
wanted to do more for developing countries. "My life has been based on
helping those in struggle, those who have the least. I intend to fulfil my
contract," he said.

Charlene Barshefsky, the US trade representative who chaired the talks,
said that the failure of the negotiations did not represent a victory for
last week's violent protesters. "Governments were not ready to take the
lead," she said. "We could have stayed all day, or for another five days,
but governments were not ready.

"I felt very strongly we ought to take a time out. Sometimes you need to
stop before you can make progress."

At the start of the week, there were hopes of launching the first round of
free-trade talks since 1993, with an agenda including services,
agriculture, core labour standards, cuts in tariffsTOP investment,
competition policy and better market access for poor countries.

Talks in agriculture and services will still go ahead as a result of the
agreement signed in 1993, but EU sources made it clear that progress in
reducing Europe's extensive system of farm protection would be both slow
and limited.

Mr Byers said he did not think the fiasco would lead to a new trade war.
"There is greater recognition that we all still benefit from free trade
and a rules-based system," he said. "I don't see that being thrown into

GUARDIAN (London)               Monday December 6, 1999

Collapsed talks leave delegates scrabbling for answers

Larry Elliott in Seattle

Three crucial questions were yesterday on the lips of every delegate,
lobbyist and journalist in the aftermath of the Seattle disaster for the
world trade organisation; what went wrong, who was to blame, and what
happens next?

Early candidates for the blame were the two people who tput on forced
smiles when announcing that the hopes of an 11th-hour breakthrough had
been abandoned - Mike Moore, the WTO's director-general, and Charlene
Barshefsky, the US trade representative.

Any hopes that the pair might have had of a relatively easy ride were
dispelled when one last logistical foul-up at the end of a week of
disasters left hundreds of baying hacks locked outside the final press
conference by over-zealous security guards.

For most of Friday, officials had said confidently that a deal was close
to being done. An agreement was being chiselled out on agriculture - a
perennial problem at trade talks - while there were also signs that
another potentially explosive subject, labour standards, was also being

So what happened? According to one camp, it was simply a shortage of time,
with not enough preparation having been done in advance by trade officials
in Geneva to lay the groundwork for a deal.

Informed trade sources also say Mr Moore made matters worse by sidelining
some of the WTO's more experienced bureaucrats, who might have helped
prepare a draft text. And his problems were exacerbated when the US spent
most of the period leading up to Seattle preoccupied with China's
accession to the WTO, rather than the need to prepare an agenda for a
round of trade liberalisation talks.

Moreover, an added complication was that Ms Barshefsky was wearing two
hats last week, as chair of the meeting and the head of the American
negotiating team.

As a result, there was just too much to do in Seattle and too little time
to do it. Trade ministers are used to being presented with a pre-cooked
communique when they turn up for talks, with a bit of haggling the prelude
to a last-minute agreement. That was not the case in Seattle.

The other theory was that despite everything, a deal could have been done,
but it was scuppered by the US for domestic political reasons.

One EU source said: "A deal was there for the taking had the talks gone on
until Saturday morning. But it would not have been a deal to the
Americans' liking, so they pulled the plug."

Officially, the EU was refusing to throw mud at the US. "No blame game,"
said its silky smooth trade commissioner, Pascal Lamy. Unofficially, it
was a different matter.

Mr Lamy said the reason for the breakdown was "the complexity of the
negotiations," and that "the various posturing of the actors" meant it was
impossible to get a deal. He refused to say who he thought was posturing -
he didn't need to.

Ms Barshefsky strongly denied that America had wanted the talks to
collapse. "Our goal has been the launch of a new round," she said. "There
never has been any wavering or second thoughts inconsistent with that

However, the EU sensed on Friday that the US was laying a trap by
beginning the last day of talks with a seven-hour session on agriculture.
Sources said the American side had been hoping this would prompt an EU
walk out, thereby allowing Washington to blame Brussels for the ensuing

"But we weren't falling for it," the source said, adding that the EU had
been prepared to settle on agriculture provided the rest of the package
had been acceptable. But while the EU was prepared to talk through the
night, Ms Barshefsky was not.

After telephone conversations with President Bill Clinton and discussions
with Mr Moore, she called negotiations to a sudden halt.

Stephen Byers, Britain's trade minister, was just sitting down to dinner
at 9.30pm when the news came through.

American sources said that no deal had been better than a bad deal. "This
is all about ensuring that Al Gore gets the support of the labour unions
next year," one said.

The answer to the question of what happens next is probably: "Not a lot".

In 1982, when hopes of starting a new trade round foundered, it took four
years to agree an agenda. After the collapse of talks in December 1990, it
was not until the end of 1993 that the Uruguay round staggered to a halt.

There is little sign that this hiatus will be any shorter, particularly
given that next year will see a US presidential election and that Mr Moore
only has a three-year term.

It will now be impossible to start and finish a round before he leaves the
WTO in September 2002. Those prepared to look on the bright side, such as
Mr Byers, say this may be no bad thing. It will give the WTO the chance to
reform itself. In the end, the organisation may become stronger and

"This was always going to be the first time at international level that
developing countries could articulate their concerns in a concerted
manner," Mr Byers said. "They asserted themselves. That's good, that's

GUARDIAN (London)               Monday December 6, 1999

Unless WTO cleans up its act there will be more issues for the protesters
to trade on

Larry Elliott
Thanks WTO, it's been a riot, said the sign opposite the hotel Bill stayed
in during his brief, ill-fated visit to Seattle. Within hours of the
breakdown of talks on a new trade round, the town and America was getting
back to normal. Americans were doing what they like doing best, consuming.
But if Seattle will soon get over the riots, the state of civil emergency
and the round-the-clock curfew, the same cannot be said of the World Trade

On such occasions, it is the easiest thing in the world to go into hype
overdrive, but this time it is true. The collapse of the world trade talks
will be seen as a seminal moment when the history of globalisation is
written. Things will never be quite the same again. And that can only be
welcomed, because it was abundantly clear in Seattle last week that the
system was not working.

Actually, it has been clear for some time that the system is not working.
First, there was the financial crisis of 1997, then the coalition to
oppose the multilateral agreement on investment and the stupendously
successful Jubilee 2000 campaign. Now this.

We were told at the beginning of the 1990s that we were in at the birth of
a new world order. To an extent that was true, since the collapse of
communism represented the triumph of liberal values. But it has become
clear that the liberalism on offer will have to be tempered if it is to
appeal to labour as well as capital, to poor countries as well as rich
ones, to consumers as well as companies. The century ends with the search
for a new form of global governance and a different form of political
economy. If we do not manage to find one, we could start to see tariff
walls rising.

For some of those protesting in Seattle last week, this would be no bad
thing. According to this theory, trade is bad, and the World Trade
Organisation is a global manifestation of that evil. The problems of the
world are all down to rapacious corporations and faceless international
bureaucrats. Sending the WTO packing was a blow for mankind.


So it may have been, but not for the reasons expressed by some of the
WTO's most vociferous critics. The question should not be about whether
trade is good or bad, because self-sufficiency is no more an option for
countries than it is for individuals. Most of us do better by
concentrating our efforts on the things we are good at, and using the
proceeds to buy toys for our children, and hire plumbers to put in our
central heating, than we would by trying to do everything ourselves. Trade
is normal and natural. Suggesting otherwise leads down the blind alley of
trying to argue that countries would be better off behind protective
walls. North Korea's example tends to suggest that they are not.

Nor is the idea of a WTO itself a bad idea. Having a system based on rules
is better than one in which the big countries can frighten and bully small
countries into submission. Robert Maxwell used the British libel laws in
precisely this way to keep his malfeasances out of the public eye. Few
people would suggest that this was a good thing.

Unfortunately, however, the debate about trade has become hopelessly
confused, and there was plenty of confusion in Seattle last week. Did the
protester who was filmed kicking lumps off the Nike sign while wearing
Nike shoes see the irony? Was it not strange to find groups of so-called
anarchists marching down the streets yelling "smash the state, smash the
government" and then waiting obediently for the pedestrian light to say
they could cross the road?

To be fair, things were just as messy and inchoate inside the ring of
steel. The conference centre was like a theatre of the absurd. Delegations
were prepared to spend hour after numbing hour engaged in the sort of
textual analysis that James Joyce might perhaps have found engaging but
seemed to indicate a total lack of perspective for any halfway sane
observer. There was impassioned argument about whether export subsidies or
export subsidisation should be phased out; prolonged debate about whether
the forum on labour standards should report back regularly to the WTO or
just once.

With due respect to all the delegates who burnt large quantities of
midnight oil last week, all of this missed the point. Last week's meeting
of the WTO as not about trade at all, it was about power, politics and

The real issue is about how the trading system is managed, how the rules
are written, whether it can deliver equitable outcomes. For many of the
developing countries, this was abundantly clear. There was an awful lot of
cant about inclusion and participation and transparency, but when the
chips were down the Americans resorted to the crudest form of power

The developing countries were infuriated by the way in which Bill Clinton
played to the gallery over labour standards, incensed by the way in which
they were denied a seat at the bargaining table when the key issues were
being discussed. In the end, they had the choice of blocking the round or
reluctantly putting their names to a flawed agreement.

Poor countries must never be put in this position again. What has been
happening over the past week goes well beyond tariffs and quotas; it goes
to the heart of the problem of creating a new governance that fills the
power vacuum caused by globalisation.


The need to create new forms of democracy goes back a long way. Two
centuries ago, the first industrial revolution triggered demands for a new
national polity that could help shape and moderate the effects of the
change. People affected and frightened by the impact of new forms of
industrial organisation demanded a greater say. They wanted an extension
of the franchise, curbs on the power of capital, protection from
uncertainty and insecurity. In the end, new systems were developed to
manage the change. The real problem today is that the system of governance
inherited from the era of the nation state is not up to coping with an age
of greater economic internationalisation. The global economic system is
based on the principle of laissez-faire the global governance system is
based on autocracy. This is as untenable today as it was at the time of
the Luddites and the Chartists.

One real danger from last week's fiasco is that the US - a country riddled
with isolationist and protectionist sentiment - might give up on the
multilateral trading system and start wielding the big stick instead.
Actually, this seems unlikely and in two or three years time last week's
failure may be seen as a good thing. Why? Because there is now the
opportunity to reform the WTO and make it responsive to a broader range of
concerns. Had poor countries been forced to sign up reluctantly to a
rich-country stitch up, it would have been a complete vindication of
everything the WTO's critics had been saying.

There is now time for a rethink about how trade and the trading system can
be used to reinforce debt relief as an instrument of development. There is
the chance to construct a system of global governance that takes into the
concerns of people as well as profits. If that happens, trade can be an
engine of progress. If it does not, lots of other cities will be getting
the Seattle treatment.



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