Raucous WTO Meeting Ends Without Accord

After days of dodging turmoil in the streets and wrangling with one another, weary delegates abandoned hope of reaching a broad trade deal late Friday, dealing a major embarrassment to officials of the United States and the World Trade Organization.

U.S. Trade Representative Charlene Barshefsky was preparing to summon the delegates of the Geneva-based WTO to announce that the goal of launching a new round of trade negotiations in Seattle could not be reached. The contentious issues that stood in the way of agreement, such as agricultural subsidies and labor standards, will have to be considered at a session next spring in Geneva, officials said.

“There’s no agreement,” said Federico Cuello Camilo, the Dominican Republic’s ambassador to the WTO. “We’re going back to Geneva.”

The impasse became clear Friday evening when an angry group of eight Latin American trade ambassadors informed WTO Director-General Mike Moore that they had been excluded from key deliberations and would not support a deal.

Moore quickly convened a smaller meeting with the United States and a few other countries, and 45 minutes later those officials said that they had given up on reaching an accord, sources said.

Clinton administration officials had viewed the Seattle summit as an opportunity to place the White House imprint on a major new initiative for the global economy. In particular, they had hoped to dismantle Europe’s vast network of farm subsidies, tear down Japanese barriers to wood product imports and restrict government interference in such lucrative new industries as e-commerce.

Clinton, who personally visited Seattle in a bid to push the talks forward, also had sought higher labor standards and environmental protections as part of trade deals.

The WTO had vowed to wrap up talks late in the day Friday, and confusion reigned as rumors of an imminent agreement were doused by news of another key rift with the developing world.

“We are at a crisis point,” said a Caribbean delegate.

Outside the conference, activity in downtown Seattle took on a more festive holiday air following a cleanup by city officials. Though the city still reeled from the massive anti-WTO protests that shattered windows and its image, shoppers began to return to downtown stores.

While the no-protest zone being maintained around the convention center kept the small crowds of peaceful protesters at a distance Friday, a handful of environmentalists sneaked into the media center midday and launched a guerrilla protest before being hauled off by police.

There were signs of progress in some areas, but the deep divisions among rich and poor nations and among competitors in sectors like agriculture proved far tougher to bridge than observers expected.

In a possible breakthrough in agriculture, a U.S. official reported that the European Union agreed to consider eliminating export subsidies to its farmers but apparently made no commitments on a timetable. In return, U.S. officials were prepared to accept Europe’s demand for some statement affirming the rights of government to protect its farmers.

There were unconfirmed reports by environmentalists monitoring the talks that Japan had succeeded in getting forest products removed from a list of items that would face accelerated tariff liberalization.

After a sleepless night of back-to-back negotiations, Barshefsky raised the pressure early in the day by vowing to push her own version of an agreement unless delegates could cobble one together themselves.

The WTO’s own rule of consensus--in which a disparate crowd of 135 member nations must agree on the trade proposal--added further uncertainty to whether a final compromise would be reached.

“Today is the day, if we are to make it happen. There is still a long way to go,” the European Union’s chief negotiator, Trade Commissioner Pascal Lamy, told a news conference after all-night talks with the U.S. team.

Early in the day, President Clinton, hoping to head off a deal-threatening impasse over controversial U.S. anti-dumping measures, phoned Japanese Prime Minister Keizo Obuchi from the White House to try to convince him to remove the highly sensitive issue from the WTO agenda.

“They talked about how to launch the new round,” said a senior White House aide, who described the conversation as “useful and timely.”

But the dumping issue remained in limbo. Unhappy foreign delegates say U.S. stonewalling on dumping--virtually every other nation wants to review the use of anti-dumping measures that protect domestic industries--is threatening deals on an entire range of other sensitive issues such as European agriculture subsidies, labor standards and the problems of the poorest nations.

“It’s the United States versus the rest of the world,” a Japanese official told reporters.

The U.S. effort to push for the WTO to take up labor standards appeared to be on the endangered list after developing countries refused to support even a watered-down version in which the trade organization would establish a forum with other groups to study labor issues.

Clinton has called for the WTO to take labor standards in poor nations into account in trade negotiations. But developing countries that rely on cheap labor fear that would force them to improve wages and working conditions and thus lose their competitive advantage over richer nations.

Throughout the deliberations, there was a strong current of resentment from poor and emerging nations that believe they have not benefited from previous accords and have viewed the club of trading nations as dominated by the United States and Europe.

Their feelings intensified after Clinton visited the summit and urged the delegates to listen to the protesters’ genuine concerns about labor and the environment. He also told a Seattle newspaper that trade agreements should contain penalties for governments that don’t protect their workers.

Officials from some countries suggested that the U.S.-led push to highlight labor concerns, which has gained a potential ally in the high-wage European Union, could lead to a breakdown. U.S. officials scrambled to make clear that Clinton’s remarks did not constitute a negotiating demand.

“If Clinton pursues the labor issue, it may make us wonder what’s the point,” said Asmat Kamaludin, secretary-general of Malaysia’s ministry of international trade and industry. “We cannot agree to the inclusion of labor in the WTO.”

Certainly, many in Seattle will be happy to see this affair come to an end, whatever the outcome.

Action outside the ministerial meetings slowed to the point of almost disappearing Friday. A final protest march organized by labor unions went off without a hitch at midday. About 2,000 people marched peaceably through downtown.

A second “final” march was scheduled in the early evening by activists who said they wanted to show solidarity with those still in jail--an estimated 390 people out of about 600 who had been arrested.

Times staff writers Edwin Chen in Washington and Terry McDermott in Seattle contributed to this story.