WTO: Disaster in Seattle [editorial]
A disaster on the scale of last week's ministerial meeting of the World Trade Organisation has many causes. But those most responsible are, inevitably, the US and the European Union. The WTO is not some alien monster, but their own creation.
They must now save it from the consequences of their cowardice and folly. Many things came together to produce this calamity: the irresponsibility of Bill Clinton, US president; the inexperience of Mike Moore, WTO's new director general; the lack of adequate preparation; the unwillingness of powerful members to contemplate serious liberalisation; and the unwieldiness of a meeting of 135 members.
As a result, those ranged against the WTO have taken a big step towards what some of them appear to want - replacement of the rule of law in world trade by the law of the jungle. Theirs is a victory that no responsible political leader can let stand. The only question now is how to rescue something from the ruin. There are five priorities for any post-Seattle agenda.
First, with the US now distracted by the presidential election, a heavy burden of responsibility falls on the EU. A commitment already exists to negotiate on services and agriculture, but the EU is itself the most powerful opponent of agricultural liberalisation. Since none of the arguments it presents for preserving the common agricultural policy have intellectual merit, EU leaders should welcome the opportunity at last to transform it.
Second, the EU and US must bring their own disputes to a speedy end. In the most important of these - over bananas and beef hormones - the EU has been judged in the wrong. If the EU finds it politically impossible to make its policies WTO-compatible, it must at least give adequate compensation to the aggrieved parties.
Third, WTO procedures and rules need to be re-assessed. The practice of holding biennial ministerial meetings even if there is nothing of substance to discuss should cease. WTO rules should also be changed to give greater legitimacy to its dispute settlement procedures.
Fourth, some way must be found to handle the politics of sensitive new issues, without sacrificing the WTO's central job of trade liberalisation. Labour standards, for example, are essentially a development issue. The best way forward is for this entire question to be studied by a joint working party of the International Labour Organisation, Unctad, the World Bank and the WTO.
Last but not least, governments and business must make a serious effort to reclaim, if not the streets, at least the moral high ground from the legion of the misguided and the self-interested now encamped there. It is necessary to argue, again and again, for the simple truth that trade liberalisation poses no threat to the global environment and is, in addition, an essential component in any effort to end mass destitution.
The meeting in Seattle was a calamity, but also a wake-up call. Policymakers have left the trading system in serious disarray. Whether that is this meeting's final legacy depends on how they now respond.