Goodbye to Seattle

India will not be sorry on the whole that the Seattle talks have collapsed. It was right to be sceptical about engaging in a new round of ...

India will not be sorry on the whole that the Seattle talks have collapsed. It was right to be sceptical about engaging in a new round of global trade negotiations at this stage. It is premature to try thrashing out a new agenda when agreements under the Uruguay round still need to be implemented fully and many distortions remain. What is more, until countries can enjoy the advantages of liberalised trade they will not find it worthwhile opening up further. Second, it was suspected that the Seattle process would be used to smuggle in extra-trade issues like labour and environmental standards which could hurt the competitiveness of developing countries. In that respect the session will be remembered as the occasion when the American gloves came off. If there is a belief that the expansion of global trade benefits all countries it was not demonstrated when America8217;s president was at one with its labour unions in wanting to shackle developing countries8217; exports.

For India it was surely an opportunity missed onsome issues such as industrial tarrifs and anti-dumping duties. However, the failure to produce a ministerial declaration on a new agenda need not co-me in the way of raising those and other issues in Geneva. Seattle would probably have been inconclusive anyway because of the lack of preparation by the delegations and the complexity of the issues involved.

Moreover the US, determined to get end-of-century, end of the Clinton presidency results, seems to have got several things wrong. It was too preoccupied with pushing its own agenda to play the political role essential for minimising contradictions within the 135-member WTO some of which are very acute. Differences on agriculture and export subsidies between the US and Cairns group, and the European Union and Japan appeared to narrow but not enough to produce a workable text. A notable complaint from the Organisation of African States was that Africa was being completely isolated and neglected on trade issues. The most serious division and one withpossible long-term implications turned out to be the north-south divide on labour standards. Until now there has been some confusion and ambiguity on the issue among developing countries especially because of tangential attempts involving the ILO in the exercise, for example to incorporate labour standards in trade. Now, by suggesting trade sanctions against WTO members who fail to comply with whatever labour norms are eventually laid down, Bill Clinton has very probably stiffened developing country resolve to block any mention of labour standards at the door.

There will be cries of 8220;globalisation threatened8221; after Seattle fizzled out. This is alarmist. Going ahead at breakneck speed without proper preparation does more harm than a temporary lull. What would genuinely threaten globalisation is the unequal distribution of the benefits of a liberalised global trade regime between countries and within countries. That and the factors responsible for distorting open trade are issues the WTO and individualcountries should concern themselves with over the coming months.