A Failure to Communicate

The World Trade Organization has taken it on the chin in Seattle this week. Its ministerial meeting to launch a new round of trade talks has become the target of protest by a bewildering array, ranging from anarchists to environmental activists and labor unionists to rebels without any cause at all. Their message, largely lost in the din of street violence, was muddled, blaming free trade for ills such as poverty, unemployment, child labor and rain forest destruction.

President Clinton, in his speech to the gathering Wednesday, admitted that his administration has a job to do to sell free trade to a divided public. He has until Friday to convince the visiting trade ministers as well.

Much apprehension accompanying the growing role of trade in the global economy stems from the misunderstanding of what the WTO is all about. It is not the ogre responsible for economic, environmental and social problems, as many of the protesters argue, nor, as they illogically claim, is this organization the forum to solve such problems.

The world trading system, first created in 1947 as the General Agreement on Tariffs and Trade, or GATT, was aimed at setting trade rules and lowering national barriers to imports. It has succeeded admirably, elevating most of the 23 founding member countries to the ranks of developed countries. Import tariffs of WTO countries came down by some 90%, and trade multiplied 14-fold, making GATT the engine of global economic growth. Nearly one-third of U.S. economic expansion in the mid-1990s came from trade. Each tariff reduction amounted to a tax break for consumers, who paid less for imported goods. U.S. consumers only have to look at the labels of the products they buy to realize how much they owe to free trade.

The few rules that GATT established at the outset have become more complicated as trade has widened from energy, raw materials and finished products to services. So complicated, in fact, that most WTO members--80 of the 109 developing countries--can’t meet the standards because they either don’t have the money or the expertise to, for example, conduct sanitary tests on products.

Labor unionists and other protesters in Seattle would make the WTO system even more complicated by adding labor and environmental rules. That would, without doubt, force exclusion of most of the WTO’s developing countries from world markets, keeping them in poverty. This would appear to suit many unions and the most protected industries just fine, but it would hurt everybody else.

The best way the developing countries can improve working conditions and their environments is to grow prosperous. Free trade would help them do that; labor rules imposed by the rich countries wouldn’t.

The WTO’s meteoric rise from obscurity to villainy is partly its own fault. It operates behind closed doors in rooms filled largely with corporate executives, trade bureaucrats and politicians. No wonder the Geneva-based organization is perceived in the United States and elsewhere as an agent of big business. The WTO stands at a crossroads. To move forward it must become more democratic and open its proceedings to the public, especially those involving dispute-settlement mechanisms.

U.S. leadership was the moving force behind the eight previous trade rounds, and once again it is essential if the Seattle trade negotiations are to get off the ground. President Clinton, in Wednesday’s speech, tried to make the “basic case” for free trade to the protesters outside the assembly hall. And the same case has to be made to the WTO delegates gathered in Seattle. Unless he does so in the next two days, the talks may well fail.