Responses to After Seattle, What's Next

November 29, 1999

Seattle. When the world trading system was created in 1947 by 23 countries, it was barely a blip on the radar screen of public consciousness. Throughout several "rounds" of trade negotiations, including the one that created the World Trade Organization (WTO) in 1995, it remained obscure.

But no longer. The 134 countries meeting in Seattle to launch a new round of trade negotiations have managed to attract the largest and most diverse set of protesters seen in many years. Large organizations with mass constituencies—trade unions, consumer groups, environmentalists—are marching side by side with grouplets promoting every conceivable cause from animal rights to Zapatistas. They blame the WTO for undermining labor standards, environmental laws, health and safety protections, and for causing many of the world's other woes.

What holds them together is not a common agenda, but the steadfast refusal of the WTO and many of its member governments to seriously consider their views. Up until now, that is. Prodded by the U.S. government and unable to ignore the growing protest, the WTO is scrambling to answer the critics and open the door—at least a crack—for dialogue.

At the first ever WTO-sponsored non-governmental organization (NGO) forum held yesterday, the WTO's affable new Director-General, Mike Moore, tried to convince a group of accredited civil society representatives that the WTO was merely carrying out the democratic will of the people in the countries that make up its membership.

"Our decisions must be made by our Member States, agreements ratified by Parliaments and every two years Ministers meet to supervise our work. There's a bit of a contradiction with people outside saying we are not democratic, when inside over 120 Ministers all elected by the people or appointed by elected Presidents, decide what we will do."

This is, of course, nonsense. Many of the WTO member governments are not even democratic. The people of Cuba, Malaysia, Egypt and many other countries—not to mention China, which will join the WTO soon—have no real say about what their ministers decide in Seattle. And since the WTO operates by consensus, these dictatorships can bloc initiatives by democratic governments in response to popular pressures. The U.S. proposal to create a WTO working group on labor rights seems likely to suffer this fate. The current structure would be comparable to having a U.S. Senate in which some senators appointed by state dictators had the power to veto decisions of the whole body.

Furthermore, the critics' main concern about democracy does not relate to the WTO itself but to WTO rulings which they claim undermine the democratic decisions of national and local governments. In response, Moore stated that the WTO "has no authority to tell countries what trade policies—or any other policies—they should adopt. It does not overrule national laws. It does not force countries to kill turtles or lower wages or employ children in factories. Put simply, the WTO is not a supranational government—and no one has any intention of making it one."

This response is disingenuous. Unlike its predecessor, the General Agreement on Tariffs and Trade (GATT), the WTO has enforcement powers to curtail what it deems to be unfair "barriers to trade." If a local government decides to ban products made with child labor or ban shrimp from countries that don't require the use of turtle-free nets, the WTO can impose compensation costs or allow trade sanctions. True, the government could still adopt the policy—but it would pay a price. The WTO is a GATT with teeth. That is why Moore's predecessor, Renato Ruggiero called the WTO a kind of embryonic world constitution. The question is whether it will bolster democratic decision-making at national and local levels, or undermine it. It has the potential to do both.

There is a third way in which the issue of democracy is raised by the WTO, and that concerns the transparency of its procedures. On this point, the critics may be making some headway. U.S. Trade Representative Charlene Barshefsky told the International Confederation of Free Trade Unions on Monday that the U.S. government would press for changes to ensure the rapid release of documents, enhance the input of citizen groups, open the way for amicus briefs in dispute settlement hearings, and open such proceedings to public observers. (Barshefsky's remarks to the International Confederation of Free Trade Unions are provided here.)

Whether the WTO will adopt these initiatives remains to be seen. Countries like Mexico and other less than democratic states object strenuously to citizen involvement. Even the NGO forum, although it was a step in the direction of listening to civil society groups, seemed strained. According to the critics, its panels were stacked with WTO supporters, and the short response time for floor discussion didn't allow for real dialogue.

Moore himself seems torn by the challenges of openness. He has done more than his predecessors to accommodate WTO critics. But he couldn't resist an attempt to marginalize them by telling the ICFTU that "some of the attacks are part of a broader assault on internationalism—on foreigners, immigration, a more pluralistic and integrated world." On another occasion he was quoted as charging the promoters of labor rights with "cultural imperialism." Perhaps he had people like Pat Buchanan in mind, but he ended up antagonizing his audience. ICFTU General Secretary Bill Jordan angrily asked Moore to "look around you—you will see cultures from all over the world represented here, all supporting labor rights."

For their part, some of the protestors may need to learn a thing or two about democracy as well. Some seem to imagine that they are speaking for "The People" a la the Sixties, who threaten to shut things down if they don't have it their way. One prominent NGO spokesman, Walden Bello, recommends that developing countries "go back to our past as self-sufficient agricultural economies," a direction which the masses of poor peasants trying to escape poverty would seem unlikely to want to follow. Others seem blind to the potential of the WTO for promoting democratic rights and seek only to abolish it.

Despite this confusion, the WTO meeting in Seattle promises to be a watershed for greater citizen influence—and ultimately greater democratization—of the world trading system.

Who are these people anyway? "Global Civil Society" and the World Trade Organization (WTO)

December 2, 1999

Seattle. The crazies got their Kristallnacht, and WTO officials got a breather, for the moment gaining the moral high ground of defending delegates' right to meet in the face of demonstrations rather than their own policies. With the media focused on the disruptions rather than the debate, it's easy to lose sight of the goals and strategies of the new political force that has helped make the WTO a household word. That would be a mistake.

Like the multinational corporations it defines as the enemy, the anti-WTO movement spans continents, forms large-scale joint ventures, conducts impressive research, orchestrates large-scale events, and – judging from the full-page ads in major newspapers – raises considerable funds. Its leaders claim credit for derailing last year's negotiations over the Multinational Agreement on Investment and for focusing unprecedented public attention on the heretofore obscure World Trade Organization. They call themselves "global civil society," and their presence and influence is growing. (A preliminary report on alternatives to economic globalization by the International Fourm on Globalization is posted here.)

In Seattle, these groups joined with more mainstream labor and environmental organizations to protest the WTO's refusal to consider their views. But aside from wanting a place at the table and demanding that the WTO review the effects of its policies before launching new trade initiatives, this coalition has less in common than meets the eye.

Many in the anti-WTO movement are furious with AFL-CIO President John Sweeney for signing a letter endorsing the Clinton administration's negotiating agenda in Seattle. At an ICFTU press conference on Monday, a representative of the World Watch Institute --in so many words, accused Sweeney of selling out. Sweeney explained that labor's support for a WTO working group on labor was only a small step in what would be a long struggle. But many in the anti-WTO movement are impatient with compromise. They want to stop the WTO, not reform it.

One fundamental disagreement is over labor's major goal of creating an enforceable worker rights mechanism inside the WTO. Such a mechanism would pressure national governments to change laws and practices that violate freedom of association and international child labor conventions. The anti-globalization movement, in contrast, is focused on stopping the WTO from undermining national and local practices. As stated by Lori Wallach, the head of the Citizens' Trade Campaign and a major player in the anti-WTO coalition, "Global labor movements now have all the enthusiasm the environmentalists did five years ago about putting standards into the WTO. I personally am very skeptical." She says that when the WTO was first established, environmentalists had hoped that the working group would help protect the environment, but have now concluded that it "has turned into a trade-dominated entity where environmental laws are studied not to safeguard them but to figure out how to get rid of them." Now, she says, "we need the WTO to be cut out of national and international environmental policies." (The Nation, Dec. 6, 1999. P. 15.)

Others in the coalition go even further. Martin Kohr of the Third World Network sides with developing country governments in opposing any of the "new issues" on the WTO agenda, including labor and environment. Some of his Third World pronouncements bear an uncanny resemblance – although from very different perspectives - to those of Jagdish Bhagwati, the ubiquitous free trade academic who seems to pop up in every forum in Seattle and who accuses President Clinton of "surrendering to public opinion" in forcing the views of self-interested U.S. unions like a "bone down the gullet of poor countries." (The AV feed for the debate and information on The Progressive Project can be accessed at http://www.progressproject.org/Speaker_Series/wto_debate.html.)

Beyond the issue of greater or lesser enforcement powers for the WTO may lie even more fundamental divisions. Some in the global civil society group seem to reject modernism in favor of a simpler, pastoral existence. Walden Bello of Focus on the Global South told a massive teach-in at Seattle's Symphony Hall that he agreed with the King of Thailand in urging a return "to our past as a self-sufficient agricultural economy." Colin Hines of a group called Protect the Local Globally advised the same teach-in crowd to "localize money – don't let it flow. Produce and trade locally. Raise taxes. Protecting and building local economies should be the goal of trade rules." Vandana Shiva of the Research Foundation for Science, Technology and Natural Resource Policy of India said during a debate in Seattle, "I want to go to my next door farmer and get my wheat ground. I want to buy my vegetables from my women friends."

Then there is the issue of the corporation itself. Most trade unionists, however much they fight with business over trade policy and workplace issues, want their companies to succeed. With the anti-globalization movement, there is cause to wonder. At the Seattle teach-in were heard comments such as these: "Corporations are trying to overthrow democracy …the death of whole cultures, the death of evolution itself, is at stake" (Randy Hayes, Rainforest Action Network). "We need to select one corporation and take it down" (Kevin Danaher, Global Exchange). "The WTO in Geneva is a secret organization unaccountable to any one except the corporate power masters who set the system up" (Ralph Nader, Public Citizen, at a press conference in Seattle on November 30, 1999.)

Perhaps it is wise not to pay too much attention to sound bites such as these, especially those delivered in a hall with 2500 enthusiastic activists. But they do give rise to questions about who these people are and what they represent, and suggest further inquiry into their views. No doubt there are many nuances and differences within the movement that need to be explored. There may be more possibilities for an on-going coalition as the movement's preliminary draft of its "Alternatives to Economic Globalization" is refined. In subsequent articles and dialogues, that is what NEIS hopes to do.

Bridging the North/South Divide -- After Seattle, What's Next

December 6, 1999

Seattle. As the World Trade Organization meeting ended in ignominious disagreement and protesters hooted their victory chants in the streets, those who had hoped to improve trade rules to promote labor rights were left wondering what to do next.

President Clinton's proposal to create a labor working group in the WTO was met by near-solid resistance from developing countries. That resistance was stiffened, administration critics were quick to charge, by Clinton's mention of trade sanctions as a way to eventually enforce labor rights.

But the "s" word merely describes what corporations already have in the WTO – a complaint mechanism by which WTO rules are enforced. The problem is that so far, the only rules allowed are those protecting business investment and intellectual property rights. The proposed labor working group would have launched a discussion about whether the rule book should be expanded. Clinton was right to suggest that it should.

Developing country delegates endlessly repeated the mantra that protectionist forces would misuse the working group to keep the low-wage South from exporting to the high-wage North. This dogma is now being echoed by the local press in those countries.

If this accusation were true, the trade unions from developing countries would have opposed the labor working group. But the issue is free labor, not cheap labor. The International Confederation of Free Trade Unions (ICFTU) went out of its way to make clear that its aim was not to artificially equalize wages or protect markets but to ensure freedom of association. As stated in an NGO forum by a representative of South Africa's COSATU union, "we want to encourage trade and investment with those who respect worker rights and democracy, not those who give away everything to corporations."

Despite these assurances, democratic governments like India and Costa Rica stood shoulder to shoulder with authoritarian nations like Egypt, Mexico, Pakistan and Hong Kong (China) to resist even the beginning of a discussion of labor rights in Seattle. This is ironic, because it is the democratic countries in the developing world who would benefit the most from trade-labor linkage. For the past ten years, they have been losing market share to the authoritarian regimes when it comes to competing for trade and investment dollars. As shown in our recent research paper entitled "Dollars and Democracy," the democratic countries' market share of developing country exports to the U.S. (excluding oil) fell from 53.4 percent in 1989 to 34.9 percent in 1998. A freedom of association rule in the WTO would allow these developing democracies to challenge unfair competition from China and other dictatorships.

The Solid South was not the only example of strange bedfellows in Seattle. The pro-free trade academic Jagdish Bhagwati told the Seattle NGO forum that the Clinton administration's labor proposal is "surrendering to public opinion at the expense of developing nations. …Unions in the US are forcing this bone down the gullet of poor countries." He believes, like business groups, that labor matters should be confined to the International Labor Organization (ILO). But so does consumer advocate Ralph Nader, whose anti-WTO coalition also claims to support developing countries. In response to a question about whether he agrees with the Chamber of Commerce that labor rights enforcement should be kept out of the World Trade Organization, Nader replied, "I believe in separating trade treaties from labor and environment treaties, so they are on an equal playing field. The WTO should stick to trade." He is concerned more about the WTO's ability to undermine good laws than its potential to improve the bad ones.

Others in the anti-WTO coalition go even further in suggesting that strengthening the WTO, even for labor rights purposes, would work against the Third World. Martin Kohr, a leading light at the anti-WTO protest and director of the Third World Network, states that "the deadlock at WTO is due to the new strength of developing countries, and we hope this deadlock continues." Walden Bellow, another featured NGO speaker in Seattle and the director of the Bangkok-based Focus on the Global South, says that "Northern NGOs have been too quick to try to use the WTO as an enforcement mechanism." He argues that "putting the determination of whether goods are being produced in socially acceptable ways in the hands of the WTO is putting it in the hands of the wrong organization. Instead, let's strengthen the ILO." The problem, of course, is that the ILO is toothless while the WTO is not.

Viewing the world in North/South terms is a deeply ingrained habit not only among governments, but among large elements of the diverse anti-WTO coalition celebrated by AFL-CIO president John Sweeney after the WTO ministers left town. His expressed hope that this coalition will be able to continue working together to advance labor's goals may be wishful thinking in the long run.

Is there any way to move away from the North/South divide towards a discussion that unites democratic countries? The way forward is to demonstrate, in deeds as well as words, that democracy and respect for worker rights carries an advantage in global competition.

One idea is to use the U.S. quota system for textiles, garments and certain other products to help the democratic countries regain market share. The administration is already experimenting with this idea by agreeing to grant additional quotas to Cambodia if it accepts an ILO monitoring body that would certify progress on enforcement of worker rights in its export processing zones. The ILO has been slow to put anything into place, but the concept sets a precedent. By expanding this type of conditionality to other countries in return for quota increases, the administration could partly make up for what it failed to deliver in Seattle (are you listening, Al Gore?).

Another strategy is to expand consumer choice. We already have country-of-origin labels on products we buy in stores. How about requiring such labels for mail-order catalogues and Internet sales as well? And to help consumers tell the good guys from the bad, it would be useful to have an annual survey that ranks each country's labor and environmental practices.

A third idea is to improve our trade preference laws under the general system of preferences. In Seattle, a major demand of the developing countries was for accelerated market access for certain products. The U.S. and EU might agree, but only for countries that are worker and environment-friendly, as measured by their willingness to put into practice the international standards which they themselves have signed. To be effective, such preferential treatment conditionality would have to be applied by both the U.S. and the EU, along with other democratic countries. (For an elaboration of this idea, see our previously posted article entitled, "Back to the Future – A New Strategy for Global worker Rights?")

But trade preferences apply only to a limited number of products. What the labor rights advocates want is a complaint procedure by which any product that is made under conditions that violate international freedom of association conventions could be threatened with tariff increases unless the offending government changes its ways. The hope is that the mere threat of such a sanction would bring about change, making actual sanctions unnecessary. But if tariffs were raised, under current WTO rules, it would be considered illegal "discrimination." Defenders of the WTO claim that countries can still choose to violate its rules as long as "compensation" is paid. But compensation to whom? According to the WTO, "compensation" means reducing tariffs for other products from the offending country. It would be better if a way could be found to use the additional tariffs to compensate the workers in the repressive country who lose their jobs through no fault of their own. Then, the only losers would be the offending governments and the corporations who take advantage of union-free outsourcing that such governments provide. The winners would be workers, North and South.

Eventually, a solution must be worked out in the WTO itself. The process of economic integration will not move forward if only business rules are globalized, while other social concerns are left to be whipsawed at the national level by roving multinational capital. No one has said it better, or indicated more clearly how the terms of the debate have unexpectedly shifted, than conservative columnist William Safire, writing in the December 6 New York Times.

Here's today's debate: Do information-age democracies use their economic muscle to bring others up to their standards of human rights? Or do the world's poor nations, allied with dictatorial giants, regional cartels and multinationals, use their political majorities in international organizations to vitiate our leverage of trade? …International trade that does not use its leverage to encourage personal freedom does not deserve the name of "free trade." We accept the burden of importing many of the world's problems; our trading partners should note that America's most rewarding export is individual liberty.