December 5, 1999
Seattle Talks on Trade End With Stinging Blow to U.S.
By JOSEPH KAHN and DAVID E. SANGER
EATTLE -- President
Clinton's effort to shape an ambitious agenda to liberalize trade and
broaden the mandate of the World
Trade Organization collapsed here
Friday night, after a rebellion by
developing countries and deadlock
among America's biggest trading
partners forced the administration
to all but abandon one of its major
foreign policy goals for the end of
The collapse of the talks ended a
tumultuous week of riots on the
streets of Seattle, the arrest of more
than 600 protesters, and bitter infighting among 135 nations. They
could not agree even on whether to
discuss workers' rights and the environment in trade negotiations that
were supposed to be started here. In
the end, weary ministers headed for
the airport without even issuing a
The failure is a sharp setback, and
perhaps a fatal blow, to President
Clinton's hopes of setting in motion a
new round of trade liberalization in
his final year in office. Coming on the
heels of the Senate's rejection of the
Comprehensive Test Ban Treaty, the
collapse of trade talks also marks his
second major foreign policy defeat
since the summer.
Clinton's aides conceded that
the failure revealed that questions of
trade, labor rights and the environment had become deeply politicized
around the world -- a world in which
economic accords are the equivalent
of the arms control treaties of the
1970's and 80's.
"There was an intractability on
these issues that developed over
many months that we hoped would
melt away under the pressure of
deadline," Gene Sperling, Clinton's chief economic adviser, said at
the airport. "There comes a time in
any negotiation where you have to
say, 'It's just not going to work.' "
Clinton himself issued a statement Saturday saying he was still hopeful. "I remain optimistic that we can
use the coming months to narrow our
differences and launch a successful
new round of global trade talks," he
said. "I am determined to move forward on the path of free trade and
economic growth while ensuring a
human face is put on the global economy."
Other members of his administration, however, said this week's talks
had turned into a "fiasco" and a
"circus," with the tensions heightened by the scenes of tear gas and
protests by the tens of thousands of
demonstrators who descended on Seattle for the week to press an array
of causes -- all of them aimed at
halting or slowing the post-cold-war
march toward freer trade.
As the streets erupted and a small,
violent group of protesters wreaked
extensive damage on downtown Seattle, the talks quickly dissolved into
an airing of grievances about American power, arguments about the results of past trade accords and questions about whether the trade organization's mission of liberalizing trade
had come at too high a price for poor
nations and millions of workers.
Clinton's advisers worried
that the agenda emerging from the
talks would so outrage American labor unions that they would denounce
both the administration and Vice
President Al Gore, who needs the
unions' energetic support in his bid
for the presidential nomination.
Some feared that this agenda could
further jeopardize chances of winning Congressional approval for China's entry into the trade organization, which was negotiated in Beijing
just two and a half weeks ago.
"The only thing worse than no
agreement," one official said, "was
the agreement it looked like we
Exulting protest groups immediately claimed victory for disrupting
"Ding Dong the Round is Dead,"
one new flier from a consumer group
"When you take something as secretive and rotten as the W.T.O. and
put it in sunshine, it does not last for
long," said Lori Wallach of Public
Citizen, an American consumer organization that was active in the
Seattle protests. "We have succeeded in turning back the invasion of the
W.T.O. into domestic policy decisions."
Also among those who celebrated
the failure was John J. Sweeney, the
A.F.L.-C.I.O.'s president, who had
warned the Clinton administration
that no deal was better than a bad
deal -- one that failed to set up a
study group within the trade organization to make recommendations on
Sweeney said there was one
success this week: the protests put
globalization on the nation's public
and political agenda. "This week's
heightened scrutiny of negotiations
punctured the veil of secrecy and
insensitivity in which the W.T.O. has
shrouded itself and made it impossible for trade negotiators to paper
over differences," Sweeney said.
"The breakdown reflects the first
step in a serious coming-to-terms
with pivotal issues: accountability,
democratic procedures, workers'
and human rights, and the environment."
At a news conference, Charlene
Barshefsky, the United States trade
representative and the chairwoman
of the talks, said that it would have
been fruitless to continue the negotiations. "We could have stayed all
night, maybe for five more days, it
wouldn't have mattered," said the
normally unflappable Ms. Barshefsky.
"Governments were not ready to
take the leap," she said.
The decision to abandon the talks
came after a flurry of last-minute
phone calls from Clinton to other
world leaders, including Prime Minister Keizo Obuchi of Japan and the
president of the European Union, Romano Prodi. But that effort to break
the deadlock failed. And by 8 p.m.
here Friday, Clinton, Ms. Barshefsky, Sperling and the White
House chief of staff, John Podesta,
decided that "the patient could not
be resuscitated," according to one
senior administration official.
The failure of the Seattle talks is
the most notable setback for the
trade group, which had expanded its
reach since replacing a much weaker international trade body, called
the General Agreement on Tariffs
and Trade, in 1995.
It also is the latest in a string of
trade-related disappointments for
Clinton. After winning Congressional backing for the North American Free Trade Agreement and then
for the formation of the W.T.O. in his
first term, Clinton has repeatedly failed to garner support for his
trade initiatives. He has sought and
failed to extend Nafta to Latin American countries. Congress has also denied him expedited fast track consideration of new trade accords.
Frustrated at home, the Clinton
administration had hoped to expand
the mandate of the Geneva-based
World Trade Organization and to
push into new territory, like the environment and labor rights.
The trade group will now take up
negotiations on some narrow aspects
of agriculture and services as part of
its regular duties.
The failure of the talks will disappoint many American companies.
Agricultural companies had counted
on tariff reductions and an end to
trade-distorting subsidies to give a
big lift to exports. Electronic commerce companies had high hopes
that the trade group would extend a
moratorium on taxation of Internet
transactions well into the future. Either of those areas could be negotiated separately, outside of a huge trading round, but the prospect of
progress is uncertain.
Ms. Barshefsky and trade organization officials said the talks broke
down because the agenda grew too
unwieldy and the time too tight to
reach consensus on key issues before
a midnight deadline.
Seattle Mayor Paul Schell, whose
police force was roundly criticized
for mishandling protests early in the
week, insisted that the delegates
leave the Washington Convention
and Trade Center, their negotiating
venue, by midnight to make way for
other parties that had rented the
space beginning Saturday.
Throughout the day Friday, trade
ministers hammered out compromise draft texts on a number of
sensitive points and were expected to
produce a watered-down framework
for new negotiations that would allow
almost everyone to claim victory,
while falling far short of the Clinton
By evening, however, disagreements on agriculture, trade and investment rules and labor rights
proved overwhelming, people who
participated in the talks said. The
United States, the European Union
and Japan faced off over the elimination of subsidies for farmers and the
use of laws to prevent below-cost
dumping of goods in foreign markets.
"We would make progress, and
then the Europeans or the Japanese
would come back and start right
where we began hours before," said
one participant. "You had to conclude that the outcome they wanted
was the outcome we got: a collapse."
A Clinton administration push toward making labor rights a core part
of trade talks divided developed
countries from less developed countries, who view the issue as code for
protectionism by wealthy nations.
The talks also buckled under pressure from poorer nations -- long
junior partners at such forums --
which used the meeting to demand
equal say in all aspects of the trade
organization's work, delegates said.
The trade group, unlike some other
world bodies like the International
Monetary Fund, operates by consensus, with all countries accorded
equal votes. Wealthy nations, especially the United States, have long
set the pace and the tone of trade
"This is the first signal that things
are not as they were in the past,"
said Ibou Ndiaye, the trade minister
of Senegal. "We are stronger now."
Delegates from developing countries said that they made clear to Ms.
Barshefsky and Mike Moore, the
trade organization's director general, that they were unhappy with the
way negotiations were being handled.
Under Ms. Barshefsky's stewardship, large committees convened
early in the week gave way to smaller, closed sessions with a select
group of negotiators.
As at least six small groups were
cloistered Friday afternoon, the
scores of delegates left out of the
process began complaining. A number of countries, including a vocal
group of Caribbean nations, threatened to walk out, several people who
followed events said.
Ms. Barshefsky said she and
Moore eventually concluded that
even if closeted negotiators were
successful, nations that had not participated might fail to ratify the final
"The W.T.O. has outgrown the processes that were appropriate for an
earlier time," Ms. Barshefsky said.
"There are clearly issues of transparency that effect perceptions of
the W.T.O. by member economies
Youssef Boutros-Ghali, Egypt's
chief trade representative and a key
opponent of several American initiatives at the trade talks, said the
failure of the round amounted to a
"catharsis for the organization."
"We needed a decision to stop this
process until we can figure out how
to balance transparency and efficiency," he said.
Dan Seligman, an official with the
Sierra Club who helped organize the
Seattle protests, said he believed that
the W.T.O. was staggering under its
"The creation of the W.T.O. was an
act of pure hubris -- to promote
trade by micromanaging policies of
every government on earth," he said.
"It was only a matter of time before
that over-ambitious agenda reached
a point at which it could go no further."