Upcoming WTO Talks Meet With Apathy, Anger
After facing criticism that its trade policies are fouling the environment and sending jobs abroad, the Clinton administration is now discovering that even companies most likely to benefit from open markets are indifferent--or even downright hostile--to the idea of launching a new round of global trade talks.
The main reason? Rampant prosperity. Concerns over inflation and overheated technology stocks notwithstanding, things look pretty good in America. The economy is running so strongly that companies are scrambling to fill their domestic orders and find enough supplies to keep their factories running. And even exports to hard-hit Asia are starting to recover.
That’s bad news for the supporters of the World Trade Organization, which meets in Seattle on Nov. 30 to try to launch a new round of trade talks aimed at lowering barriers to trade in agriculture products, high-tech goods and services.
Even in California, the nation’s leading exporting state, breaking down barriers overseas isn’t high on many corporate agendas, and the perceived downside of trade--from stepped-up competition south of the border to traffic congestion in the Alameda Corridor--looms larger.
“We sense in the local community a growing hostility to international trade, and it takes a whole variety of forms, from concerns about exporting good jobs to complaints about all these trucks on the freeways,” said Jack Kyser, chief economist at the Los Angeles Economic Development Corp.
Commerce Secretary Bill Daley, in town earlier this month on the last leg of a nationwide trade promotion tour, finds those attitudes shortsighted and dangerous. He said trade liberalization efforts such as the upcoming WTO talks are doomed to failure unless they gain broader support from those Americans who have benefited from this country’s expanding global ties.
“If this market starts to turn, businesses will start to wonder, ‘Why haven’t I gotten into Latin America?’ ” Daley said. “And by then it’ll be too late.”
But tell that to the Wood Molding and Millwork Producers Assn., whose 60 members are busy filling orders for domestic home builders. They haven’t given a lot of thought to the upcoming global trade talks, even though the U.S. government promises to push to get more U.S. wood and paper products into long-protected markets such as Japan.
The WTO “is just not a concern for us,” said Stan Blaine, marketing director for the Sacramento-based group. “We’re very busy with domestic production.”
Trade talks are never an easy sell, since the payoff of expanded exports or lower-cost imports is generally preceded by years of tedious, time-consuming battles that pit the special interests of one country against those of another.
The Uruguay round of trade talks lasted more than seven years. The so-called millennium round, which could be launched at this month’s meeting in Seattle, is expected to last at least three years.
Monday’s news of a landmark U.S.-China deal paving the way for the Asian giant to join the 135-member trade group as early as next year should help spark business interest in the upcoming meeting, however.
Business leaders eager to bring the world’s third-largest economy into a rules-based trading system have vowed to push Congress hard to give China permanent “normal trade relations” status in exchange for access to some of its most protected, and potentially lucrative, markets.
That status would give China the same trade benefits accorded most other U.S. trading partners.
But once the euphoria over the U.S.-China trade deal dies down, even trade-dependent U.S. companies may be reluctant to step forward to defend the WTO for fear of being labeled a “corporate bigwig” out to exploit poor children and pillage the earth.
Seattle’s civic leaders, led by Boeing and Microsoft, have had trouble getting firms from other parts of the country to pony up the $9.2 million needed to host the upcoming WTO meeting, which is expected to attract at least 5,000 WTO delegates, officials and journalists.
“There’s so much anti-trade sentiment out there, some companies may be a little leery of being associated with the WTO even though on some level they know it’s good,” acknowledged Pam Slater, the WTO specialist at the U.S. Chamber of Commerce in Washington.
The Asian financial crisis that sent the fastest-growing economies of the world into a dramatic downward spiral in 1997 also caused many U.S. firms to rethink doing business abroad. Although those economies have recovered much faster than expected, particularly South Korea, Thailand and the Philippines, there remains a wariness about venturing back onto such unpredictable terrain.
“Opportunities abroad don’t look as good as they did before,” said Ellen Frost, a former U.S. trade official now affiliated with the Institute for International Economics.
Asia’s weakened buying power and dramatic surges in exports from countries such as China have sent crop prices into the tank.
That has made farmers leery of globalization, particularly in sectors such as dairy and sugar that are likely to lose protections should agricultural export subsidies and tariffs be reduced worldwide.
“Farmers don’t think it’s the right time to go back to the negotiating table, and it’s unfortunate and ironic, given the strength of the overall economy,” said Peter Lacy, executive director of the International Policy Council on Agriculture, Food and Trade in Washington.
Edward Parolini an agriculture manager at Spreckels Sugar Co., in Tracy, Calif., isn’t afraid of competing directly against Cuban, Philippine or European sugar producers. But he is fearful that U.S. negotiators will give up domestic sugar supports while other countries continue to help their producers through hidden subsidies or quotas.
“Do we want to be fed in the U.S. by our farmers or held hostage to some other country?” he asked.
The trade-offs that accompany greater globalization also have fostered ambivalence among U.S. producers, caught between the benefits of greater access abroad and stepped-up competition at home.
California’s export-dependent cotton growers support the WTO’s efforts to end the subsidies and quotas that are partly to blame for the current depressed prices. But they worry that their major domestic customers--U.S. textile and apparel manufacturers--will go under if developing countries with lower costs succeed in getting greater access to the lucrative U.S. market.
“There has to be a balance between the interests of cotton growers and cotton consumers,” said Mark Bagby, a spokesman for Calcot, the state’s largest cotton cooperative.
Small-business owners also complain that their problems aren’t getting enough attention from U.S. trade negotiators, given their contribution to the nation’s trade picture. Small business accounted for 31% of U.S. exports in 1997, up from 26% a decade earlier.
Susan Corrales-Diaz, president and chief executive of Systems Integrated, a software firm in Orange, has had problems with a former Chinese business partner. She said the WTO needs to develop a cheaper means for small businesses to pursue complaints against foreign firms.
Another top executive of a small Southern California firm canceled her plans to attend the Seattle WTO meeting because there was no way for small firms to get their concerns to the WTO delegates huddled in closed-door meetings. “It would’ve been a waste of time,” she said.
