Spectacle of discord

The preparations for the Seattle conference had been mandated to the General Council in the Geneva Ministerial Declaration itself. Furthermore, the work programme on Singapore issues had also been built into the same declaration. The Seattle MC, which was the third one under the aegis of the WTO, was held from November 30, 1999 to December 3, 1999.

Main issues

In addition to the built-in agenda, which included issues that were agreed in the Uruguay Round such as Technical Barriers to Trade, Sanitary and Phytosanitary issues, Dispute Settlement, Review of the Textile and Clothing issues etc., there were many issues that were on the agenda at Seattle. Some of the important issues were:

* Whether and when to launch a new round of trade negotiations;

* When to begin the market access negotiations in services and agriculture, as was agreed in the Uruguay Round;

* How to address the issue of agriculture trade;

* How to address the concerns of developing countries, particularly on trade and development and capacity building;

* How to handle the Singapore issues of Investment, Trade Facilitation, Competition and Government Procurement;

* How to engage better with civil society and non-government organisations on issues such as human rights, labor rights, inequality of trade and globalisation.

There was no consensus on the above issues, when the countries went into the Seattle MC. The US was struggling with its domestic issues and the US Congress was not inclined to give the President the negotiating authority and flexibility, known as ‘fast track authority’ in US government circles. Moreover, US elections were around the corner and all statements, including that of the US President in Seattle at the time of the MC, was made with an eye to the electorate. The EC was struggling with en masse resignations of the Commission. And there was a lot of acrimony between the US and EC on issues related to agriculture trade. The Asian countries were coming out of the 1998 financial crisis, and had no appetite for any discussions on financial services. Other developing countries were unhappy about the continuing high tariffs on textiles and clothing. To top it all, the election process to the post of the Director General of WTO had divided the membership. With the US declining to support the Thailand candidate Supatchai Panitchpakadi, there was unease among developing countries. As a result of the long election process, the new DG, Mike Moore had taken over a few months before the Seattle MC and not been able to take control of the Secretariat. All in all, there was discontent all around and no one was well prepared for the Seattle MC.

Why Seattle MC broke down

Massive demonstrations, not seen since the Vietnam protest days, were led by labor unions and civil society groups who believed that free trade and globalisation were hurting workers’ rights, harming the environment and were heavily tilted in favor of developed countries. Furthermore, the protests were also against the non-transparent and non-democratic way of decision making in the WTO, particularly, the Green Room process, which allowed only the developed countries and a handful of developing countries into the room, and a draft negotiating was handed over for discussions.

There were many reasons for the Seattle MC breaking down, but the most important ones were lack of agreement on the work programme and lack of preparation. On the work programme, there were two schools: whether the work programme should be ‘minimalist’ or whether it should be ‘millennium’ round, with more issues thrown in. While developing countries were in favor of a ‘minimalist’ work programme, saying that the built-in agenda, which was already agreed in Uruguay, had enough issues to handle. The WTO was to begin negotiations in Agriculture and Services in early 2000, as was already agreed in Uruguay. Developed countries, the EC in particular, wanted more issues to be added so that there could be cross-issue trade-offs (in other words, concessions in agriculture that the EC was expected to offer could be compensated by concessions that they could receive in other areas such as Competition and Investment), and therefore wanted a ‘millennium’ round.

With massive discontent breaking out into the streets and many delegations cooped up in hotel rooms, combined with the fact of the WTO Secretariat and Members being unprepared, the Seattle MC broke down. The issues, which were the most contentious and led to the MC breaking down were:

* Intellectual property: Copyrighting of many developing country products (such as India’s turmeric) by western corporations.

* Investment: The investment issue was presented to the developing countries in a non-democratic manner. A Multilateral Accord on Investment (MAI) had been drawn up by the OECD countries in 1996, which was modified and presented as a part of the work programme of the WTO in Seattle. While the developed countries had wanted the beginning of discussions and assess how foreign direct investment could impact developing markets, the developed countries wanted a multilateral text on foreign investment and the green signal to frame rules on the same.

* Agricultural issues: The main issues were reduction of tariffs, domestic support and export subsidies. While the US wanted lower tariffs and lower domestic support, the EC wanted to continue with tariffs and domestic support on certain products. Then, there was the Cairns Group which was a combination of countries with export interests in Agriculture and wanted an even more ambitious outcome than the US. Developing countries, led by India, Indonesia and China wanted flexibility in providing domestic support for their large grain procurement programmes.

* Civil society issues: Large demonstrations were led by workers’ unions, and one of the prime targets was the shoe company NIKE. The allegation against NIKE was that it was exploiting workers in developing countries, where their shoes were manufactured by paying them very low wages. It was also taking away jobs in developed countries. Another allegation against the WTO was that globalisation and liberalisation were leading to a situation where environment protection was taking a back seat.

Conclusion

While the failure of the Seattle MC was a setback for the multilateral trade process, there was still hope because the built-in agenda was still active and negotiations on agriculture and services were set to begin in early 2000. Further, it was expected that after the 2000 US elections, a new team Trade team would come in and provide new leadership. Finally, there were enough lessons learnt from Seattle on how to involve labor unions and civil society and also make the WTO decision-making process more transparent and democratic by a more active involvement of developing countries.

The writer is Additional Chief Secretary, Department of Mass Education Extension and Library Services and Department of Cooperation, Government of West Bengal.