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December 4, 1999

NEWS ANALYSIS / THE SHIPWRECK IN SEATTLE

White House Miscalculation Led to Talks Without a Focus


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  • The Overview: Seattle Talks on Trade End With Stinging Blow to U.S.
    By DAVID E. SANGER

    SEATTLE -- In the end, there were no victors in the globalization battle of Seattle. Everyone just went home angry.

    As the negotiations to rewrite the rules of world trade for a new millennium collapsed in bitterness and discord this week, President Clinton's economic team belatedly realized the magnitude of their miscalculation about how the Seattle talks would turn out.

    They boarded planes to Washington Saturday morning fuming at nearly everyone: at developing countries like India and Brazil and Egypt that refused even to discuss workers' rights as part of the negotiations; at old allies in Europe and Japan that dug in their heels on long-running trade disputes over agriculture and steel; at Seattle's police for, in their view, wildly mishandling the chaos on the streets.

    Ministers from developing nations were equally angry -- at the United States. Once again, they said, Washington had tried to use its enormous economic power to benefit Amazon.com and Boeing and the United Steelworkers, at the expense of weaker nations.

    And while environmental activists and labor rights groups briefly exulted that their "Stop the W.T.O." marches had helped do exactly that, they are likely to be angry again, too. The ferocity of the arguments here -- both in the street and in the conference rooms -- made it abundantly clear that it would be a long time before the trade group would be empowered to impose trade sanctions against countries that allow children to work in factories, that do not protect sea turtles from fishing nets, or that clear-cut virgin forests.

    Perhaps the angriest of all were Seattle's merchants and businesses, who had spent $9 million to draw the meeting of 135 nations here and will spend far more cleaning up from the resulting rioting and lost sales. In the end the city's embattled mayor told the White House that if it really wanted to help Seattle, it would close down the conference and get out of town.

    All that anger raised an obvious question: why was everyone here to begin with?

    The administration chose a spectacularly bad moment to pick this particular fight. With the exception of agriculture, few American industries have a clear agenda for trade talks now, and many no longer believe that these long, endless "rounds" of negotiations are useful anymore. They involve too many countries, rich and poor, with radically different interests. In an age of e-mail, they move like an aging cargo ship. The co-chairman of the Seattle host committee for the talks, Bill Gates, barely even showed up -- and his office is only 12 miles away.

    Big industrial nations, particularly Japan and those in Europe, suffer from market-opening fatigue; they have had about as much as their political systems can take.

    "There was no consensus about the need for further liberalization," said Ira Shapiro, the former general counsel of the United States trade representative's office, who joined the hundreds of lawyers, corporate executives and legislators who worked the fringes of the negotiations. "The only thing that unified most of the people here was a sense of grievance that they were being treated unfairly by the global trading system."

    But it went ahead, in part because Clinton was convinced that he had one last free-trade victory left. He has never been in accord with labor unions or his own party on trade, and he thought he could convince labor leaders and environmentalists that they could gradually change the priorities of the global economy to their liking.

    The new global economy is a reality, he argued, so rather than fight it they would be wise to try to shape it, making environmental standards and workers' rights part of every future trade agreement. But after many disappointments, they doubted his sincerity, and saw ploys to rekindle support for Vice President Al Gore.

    Clinton also believed he could persuade poor or weaker nations that they could cut pollution and raise working standards without wiping out their low-cost competitive advantage.

    "I do not believe the United States has the right to ask India or Pakistan or China or any other country to give up economic growth," Clinton said here on Wednesday. "But we do have a right to say we will help you finance a different path to growth" while putting environment and labor issues "at the core of our trade concerns."

    He won over almost no one. Many nations suspected a plot to use higher labor and environmental standards to keep out their products, or at least to level the playing field by raising the costs of production in developing countries.

    And the noisy protests only hardened such views. As a result, Seattle will be remembered not for the new ground that was broken, but for the windows that were shattered. It will be the place where protesters, marching down Seattle's streets at a time of unmatched prosperity for America, argued that free trade benefits the world's largest corporations but does little for the poorest nations, the most exploited workers and the environment.

    What did the protesters want? Many were not sure. Their signs called for elimination of the trade organization. But the environmental and labor groups actually wanted a stronger institution, one that could enforce rulings that China was illegally barring unions or India was dumping too many pollutants into its rivers. Violators could face economic sanctions.

    And that suggestion, uttered by President Clinton himself in a moment of candor his aides regretted, provoked smaller and poorer nations into open rebellion.

    They envisioned an ever-more-powerful, American-dominated trade organization that would begin dictating how much they paid their workers, or what kind of fuels they could burn, or what kind of magazines and films they had to let into the country. And after all, they said, which country brings the most trade complaints before the court of the World Trade Organization? The United States, of course.

    "There's a sense you want to rig the system," a Japanese diplomat here said.

    Some of Clinton's advisers had warned him that he was asking for more than most countries would accept. Clinton's former international economic adviser, Daniel Tarullo, published an article last month arguing for "a modest trade agenda" at Seattle, and said that a formal "round" of negotiations "should probably not be held." They get too broad, too complex, too political.

    Questions of labor rights and safety go to the core of any country's political system, Tarullo said. "The real danger," he warned, is that the global trading system is becoming "identified with restricting the authority of governments to protect health, workers, environment and consumers." Or, he might have added, requiring them to impose such regulations.

    Those issues sank the Seattle talks. "They are much more politically charged now than they were a week ago." Tarullo said. And Clinton, 14 months from the end of his presidency, may have seen the passing of his last chance to make the mixture of foreign policy and foreign trade one of the bright spots of his presidential legacy.



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