A high-stakes agenda

Print edition : December 11, 1999

The Seattle talks collapsed owing to a hardening of negotiating positions by governments following an attempt by President Bill Clinton to raise the stakes on implementing labour standards.

FOR President Bill Clinton, who had set great store by the Third Ministerial Conference of the World Trade Organisation in Seattle, the outcome is, in some senses, a setback. Administration officials may now try to convey the impression that all is not l ost, and that the pieces of the failed trade negotiations can be continued from where they were left off, but clearly this is not going to be easy.

United States Trade Representative Charlene Barshefsky put a gloss on it and claimed that it was best to "take a time-out" and find "creative means" to finish the job. However, a senior delegate from Thailand seemed to sum it up a lot more realistically: "It started off on the wrong foot and we scrambled to get into gear. We couldn't get the big picture."

To say that the WTO fumbled because of the street protests would be stretching facts. The protests were certainly a factor, and the delegates were shocked by the level of violence, looting and intimidation witnessed during the first two days. But the tal ks failed because these act were compounded by a host of factors and issues. The negotiating positions of governments had become entrenched and the stakes had been raised at the last minute by none other than Clinton.

After having set artificial timelines and in some instances come to Seattle without getting a firm grip on the technicalities to be sorted out, a majority of the delegates from the 135 member-countries were appalled at the way the process was unfolding a t the convention centre. Miffed at being left out of the negotiating process and concerned that the U.S., Europe and Japan were trying to hammer out deals behind the backs of the developing nations, they only hardened their stance. The African delegates were particularly incensed that they were being marginalised.

When the talks collapsed, those who had been keen on results argued that the way the meetings were structured would have to be reviewed. The developed countries perhaps believed that the select meetings in the "green rooms" would deliver results and that the agreements fashioned thus could be presented as a fait accompli to the developing nations. However, it had precisely the opposite effect.

As he does in most crisis situations, Clinton worked the telephone lines, calling a number of world leaders, including Japanese Prime Minister Keizo Obuchi. But many gaps remained and it became apparent in the last few hours that it would just not be pos sible to bury the differences and start a "millennium" round of trade negotiations.

It was not merely opposition from countries including India to the efforts by developed countries to link trade to the so-called core labour standards and environmental issues that torpedoed the talks. There was tough bargaining over various other issues - agricultural subsidies, anti-dumping measures, industrial tariffs, "multi-functionality" and the scope of a new three-year round that was to be launched in Seattle.

Some observers reasoned that it was owing to differences relating to agricultural subsidies that the meeting failed. The U.S. and the 15-member European Union were involved in a heated debate over agricultural subsidies; the E.U. was unwilling to concede ground to those who demanded a pruning of these subsidies. Japan and South Korea pushed for efforts to maintain import barriers for rice. The U.S. and the Cairns Group were opposed to the use of "multi-funtionality" in the final text: the term relates t o the concept that agriculture performs a variety of societal roles, including preserving rural culture and protecting the environment. Japan and the E.U. were keen to include this in the final statement.

The lack of transparency in the proceedings and persisting differences on agricultural issues were by no means the only hurdles. There was a widespread feeling among representatives of the developing nations that the industrialised world, particularly th e U.S. and the E.U., was trying to browbeat the Third World with tough talk on the farm trade and on the labour and environmental issues. Clinton's remark that the WTO should consider imposing sanctions on countries that did not comply with core labour s tandards strengthened suspicions about U.S. intentions, and that had a spillover effect in other areas.

In Seattle on December 2, President Bill Clinton signs an international treaty which calls for a ban on "the most flagrant forms of child abuse", including the use of child labour.-KHUE BUI/AP

THE Indian delegation led by Commerce Minister Murasoli Maran made it clear right from the start that India would not compromise on its principled refusal to discuss issues that were not directly related to trade matters - such as labour standards and th e environment. In his statement to the conference, Maran said that India was firmly committed to environmental protection and sustainable development but that it would strongly oppose any attempt to change the structure of the WTO Committee on Trade and Environment or the mandate which then could be used to legitimise unilateral trade-restrictive measures.

On the subject of labour standards and workers' rights, Maran told the Ministerial Conference: "India resolutely rejects renewed attempts to introduce these in the WTO in one form or another. Any further move will cause deep divisions and distrust that c an only harm the formation of a consensus on our future work programme." A senior Commerce Ministry official who was part of the delegation repeatedly made the point that India would not yield on this aspect. "We believe it is a Trojan horse for protecti onism and our political mandate is to oppose it," the official added.

At the end of the conference, Maran told Indian mediapersons that when the delegation came to Seattle, it expected a more positive outcome that would advance the case for a multilateral, rule-based, non-discriminatory trading system. "Significant advance s have been made. But in some areas, particularly non-trade related issues, there were wide divergences that could not be bridged," the Minister remarked.

India, said Maran, opposed the efforts to link trade to core labour standards, environmental issues, coherent global architecture, investment issues, involvement of non-governmental organisations in WTO negotiations and competition policy. "We hope that in the ensuing consultations a more constructive outcome will emerge on all issues for a balanced and equitable package," he added.

Among the developing countries, India was a major player in Seattle, but not the only major one. A few other countries in the Asia-Pacific, Africa and Latin America also protested against the manner in which non-trade issues were being brought onto or li nked to the trade agenda. A top Malaysian official said: "Cheap labour does not necessarily mean exploitation... Is it too difficult to accept that countries have different levels of development? Some countries are just not as rich as other countries."

Clinton may have wanted to make gains from the conference and add it to his list of foreign policy "successes". It is not as though he had an ambitious agenda set out at Seattle and put little on the negotiating table. The problem was that Clinton had a political agenda and he raised the stakes at the very last minute. Prior to his arrival in Seattle, where curfew was in force, in an interview to the Seattle Post-Intelligencer, Clinton used the 'S' word - sanctions. Calling for the delegates to a dopt the U.S. position for a working group on labour that would develop core labour standards which would then be part of every trade agreement, Clinton said, "... ultimately, I would favour a system in which sanctions would come for violating any provis ion of the trade agreement." The President also said that Americans should not buy products from companies that exploit workers. Senior officials scrambled to say that the President's comments were only to be seen as a "goal" and not a negotiating plank for the WTO ministerial. But the damage had been done.

Labour and environmental groups are core supporters of the Democratic Party; Clinton perhaps wanted to play to this gallery and see if he could have it both ways. Clinton reckoned that if, by talking tough on issues of agriculture and farm trade and in s peaking up for labour rights and human rights, he had got the delegates to sign on to his agenda, he would have had the labour and the environment groups on his side.

In Clinton's calculation, even if the WTO ministerial ended without an agreement, he would have had these groups on his side: to them, "no deal is better than a bad deal". The conference collapsed not so much because it was held in Seattle under siege-li ke conditions, but because it was held in a country where politicians and special interest groups have set their sights on the presidential and congressional elections due in 2000.

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