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The Tear Gas Ministerial

Trade talks without tear gas

by Peter Costantini

Seattle - January 17, 2000

As the stun grenades boomed and the tear gas billowed over demonstrators and riot police on Pike Street last November 30, World Trade Organization director-general Mike Moore's words of November 3 sounded increasingly sensible: "I urge you to remember that trade is not the end: it is a means to progress …"

Since its 1995 founding, the WTO has consistently tried to enshrine trade as an end. But it has overreached. Its insistence on commerce über alles has alienated a lot of people, from the 40,000 workers, environmentalists and students who thronged the streets of Seattle that day to the Third World diplomats who bitterly rejected the back-room arm-twisting of Moore and U.S. officials during the Seattle Ministerial, torpedoing their proposed new round of trade negotiations.

Even The Economist, that British bastion of laissez-faire, chimed in: "A balance sometimes has to be struck between free trade and such other legitimate aims as protecting the environment. … [G]overnments need to find a way of agreeing when curbs on trade can be an acceptable way to pursue a greater good."

The anger expressed in Seattle was not about trade: it was about democracy and transparency. It swelled from the veiled efforts of the most powerful nations and corporations to use trade agreements as a crowbar to wrench open markets and batter down laws that protect citizens.

Opinion polls in the U.S. have confirmed that overwhelming majorities believe that consumer, workplace and environmental protections should take priority over unfettered trade. Across the Atlantic, when the European Parliament voted unanimously to exclude hormone-treated beef—regardless of what country produced it—yet the WTO imposed sanctions against this purported trade barrier, European citizens naturally got irritable.

On the other side of the global divide, when developing countries tried to comply with trade rules that they were excluded from making, only to find that the industrialized countries had little interest in implementing their side of the bargain, something had to give here too.

Differences have surfaced within the opposition on the reformability of the WTO, and whether or not it should enforce labor or environmental standards. These are often grounded in desires for economic development in the South and determination to preserve democratic gains in the North.

Malaysian economist Martin Khor calls the WTO as "an institution dominated and controlled by the big powers" and suggests finding better forums for improving worldwide labor and environmental standards. Others propose that WTO and other trade programs build in economic incentives to help poor and developing countries comply with trade-related environmental, public health, and labor standards.

Internationally, trade union confederations are divided on whether the WTO or the United Nations' International Labor Organization (ILO) should be the primary international forum on workers' rights. In any case, urges Filipino analyst Walden Bello, U.S. labor should reach out to workers in poor countries and put substantial resources behind helping them organize.

Still, most of the protesters in the streets and recalcitrant officials in the Convention Center converged in opposition to a new round of trade negotiations and support for a re-evaluation of the WTO's effects to date.

Even if no new round is held, though, the WTO status quo is too damaging to be allowed to stand. The existing agreements contain a number of concealed weapons—provisions and interpretations that prevent nations from enforcing their own laws to protect the public good.

First, the WTO agreements forbid trade restrictions based on how a good is produced, even if the process damages people or the environment. Dispute settlement panels have interpreted sections of the General Agreement on Tariffs and Trade (GATT), the main treaty enforced by the WTO, to exclude restrictions on trade based on production and processing methods.

Furthermore, any national regulations in these areas must use the "least trade restrictive" alternative, as opposed to the most effective solution. These requirements have enabled the WTO to overturn democratically mandated laws against production methods that harm endangered species, use unsafe chemicals, and violate human rights.

Second, the WTO can force nations to accept public health and environmental standards lower than their own. For example, nations that don't allow a given additive in food imports must prove to the WTO that it is dangerous, whereas in most countries the producer must show that it is safe. These provisions turn common sense on its head. They also contradict the Precautionary Principle of the Rio Declaration on Environment and Development, which holds that when there is any doubt, standards should err on the side of caution.

Third, the WTO has increasingly dragged areas of the global commons into the realm of markets. The Agreement on Trade-Related Intellectual Property Rights (TRIPS), enforced by the WTO, has effectively turned some kinds of seeds and life forms into commodities that can be controlled for profit, to the great harm of many small farmers and consumers. It has also prevented poor countries from cheaply producing drugs to combat AIDS. Other efforts are attempting to bring fresh water, education and health care under the purview of the WTO, wrenching control over them away from local governments.

The most dangerous heat in the WTO's hidden arsenal, however, is its dispute-settlement procedure. Under the pre-1995 GATT, trade issues had to be resolved by a consensus of signatory nations, which meant in practice that countries gradually negotiated settlements and no solution could be coercively imposed.

In contrast, the WTO dispute-resolution process is binding and decisions can be enforced by significant economic penalties. Panels composed of trade lawyers and officials are appointed without safeguards against conflict of interest. They meet in secret, excluding input from citizen groups, in contrast with bodies like the World Court or the United Nations.

The record of the last five years is clear: nearly all of the rulings of WTO dispute-resolution panels have disemboweled democratic restrictions on trade, effectively lowering environmental, consumer protection, and human and labor rights standards. Even when reasonable standards were applied equally to all domestic and foreign producers, the WTO has repeatedly struck them down as trade barriers, imperiling hard-won gains in these areas. As long as the WTO works this way, powerful nations and corporations will use it to steamroller the shelters that citizens have built against the stormy side effects of market forces.

At the final plenary of the ministerial on December 3, Mike Moore had dark bags under his eyes and seemed a little punch-drunk. As he ended his speech, he chuckled ruefully to himself at the irony of his words: "Oh, if only the whole world could be like Seattle. But it's not. That's why they want to be members of the WTO."

No amount of commodity exports, though, will turn Managua or Luanda into the Emerald City. In the real world, there are losers in this game—less-skilled workers and poorer countries. According to the United Nations Conference on Trade and Development (UNCTAD): "In almost all developing countries that have undertaken rapid trade liberalization, wage inequality has increased, most often in the context of declining industrial employment of unskilled workers and large absolute falls in their real wages."

UNCTAD and the United Nations Development Programme offer more practical approaches to development that emphasize diversifying the productive base and focusing on education, health and human resources. Even the World Bank has proposed a new "global strategic framework for development," which places more emphasis on good government and strong public institutions.

It's true, though, that most people around our blue-green orb want the same things that sent the demonstrators into the streets of Seattle: decent work that allows them to provide for their families, a clean environment, healthy food and affordable medical care, respect for their human rights.

If the WTO continues to trash decades of progress in these areas, it doesn't deserve to survive. World trade thrived for many years without its services and would continue to flourish in its absence. Most international commerce is not controversial, and disputes could again be handled as they were under the pre-1994 GATT, by patient negotiation.

In the global economy, trade has its own momentum: it will expand regardless of the rules because it is in the interests of the powerful corporations and governments that run the show. Environmental and consumer protections and labor and human rights, on the contrary, are fragile shields often attacked by those same power vectors.

The popular upsurge has pushed these sensitive issues onto the agenda, whether of trade negotiations or of multilateral environmental treaties and the International Labor Organization. But the debates about them must include consultations among governments and non-governmental groups from all countries, not just the rich ones. And if higher standards are adopted, rich countries must support poor countries in implementing them.

The ferment in Seattle showed that a wide variety of people, from U.S. construction workers to Indian environmentalists, can find common ground―in some encouraging new respects, perhaps it really is a small world after all. Even so, fair rules for trade must still respect its breadth and diversity.

If the trade-meisters don't learn from what happened here, they had better hold their next few ministerials in places where the police know how to bust heads off-camera. Only if the WTO radically revamps its core provisions and processes from the ground up can we look forward to future trade talks without tear gas.

Peter Costantini covered the WTO Seattle Ministerial for Inter Press Service, a newswire based in Rome.