Rich-Poor Tensions Divide WTO

The World Trade Organization summit that begins today was planned as a landmark moment to shape the future of the global economy along lines blessed by U.S. officials. Instead, the massive, 135-nation summit is being shaken by a deep rift between the world’s haves and have-nots.

The arrival of a Chinese delegation has cast a further spotlight on the rich-poor divide, which has dominated rhetoric from rich-country officials, and even raised the specter of an impasse before week’s end.

Poor and emerging nations complain bitterly that they have never received the promised rewards from previous trade accords and are threatening to withhold support of new U.S. initiatives. Many argue that it is time to take stock of the global economy rather than endorse new U.S. commercial initiatives, such as eliminating barriers to services, which they contend will mostly benefit the United States and Europe while doing little for the impoverished.

“There has been tremendous disillusionment,” said Martin Khor, a prominent Third World activist from Malaysia. Poor countries, he said, have not enjoyed “the promised benefits” from previous trade deals and are much more cynical about the U.S. agenda than they were in the recent past.

Enormous media attention has focused on an army of activists encamped in Seattle, which on Monday prompted scenes of riot police guarding the convention center and sporadic street demonstrations downtown, including a window-smashing episode at a McDonald’s restaurant. Security officials temporarily closed down the convention center after they discovered signs of a break-in, and that Jubilee 2000--a religious-oriented group that advocates an end to financial burdens of needy countries--planned to form a human chain around the Seattle Stadium Exhibition Center on Monday night while local officials inside wined and dined visiting delegates and the media.

For all that, the rich-poor tensions inside the summit may be even more threatening to the goals of the United States and other countries that hope to launch a major new round of trade talks this week. In the months leading up to the Seattle summit, WTO officials were unable to put together even a vague agreement on overall goals, in large part due to a backlash from the developing world.

“They [rich countries] still think the WTO is an exclusive club,” complained Federico Cuello Camilo, the Dominican Republic’s ambassador to Geneva. “They still think 20 countries can decide for the rest of us.”

Despite persistent rumors that Cuban leader Fidel Castro planned an appearance here, he announced late Monday in Havana that he isn’t coming because U.S. officials won’t let him into the country.

But the have-nots are well-represented here by China, whose representatives--while still enjoying only “observer” status--symbolized the inevitable changes of a once exclusive trading club that now numbers 135 nations, including rich and poor, high tech and low tech, which adhere to myriad economic philosophies.

The presence of China, a communist regime that is one of the world’s largest economies, inside the global trade tent adds a powerful voice to the bloc of emerging nations.

The have-nots are voicing adamant opposition to the U.S. and European push to consider how working conditions affect trade. Moreover, they are deeply suspicious of rich-country aims to consider the environmental consequences of trade, viewing such proposals as unfair and costly mandates from the outside.

In addition, they are pushing to challenge U.S. “anti-dumping” rules that are used to shield American industries from surges of exceptionally cheap imports. Emerging countries also complain that their richer counterparts have dragged their feet in getting rid of restrictions on clothing, textiles and agriculture, all of which are areas in which they are most competitive.

These grievances have emerged as a major sticking point to reaching a consensus on new talks and are placing acute pressure on U.S. and European officials to come up with new concessions.

R.C.A. Jain, an Indian agriculture official, said Monday that backsliding on market-opening commitments by the U.S. and Europe have greatly “undermined trust and confidence” in the international trading system.

Contrary to the rosy promises of earlier trade deals, the opening of trade has severely damaged some of the world’s most precarious economies, according to their representatives in Seattle. “We’re marching toward destruction,” complained a Sri Lankan official at a global agricultural seminar here.

U.S. Trade Representative Charlene Barshefsky acknowledged Monday the deep woes of many poorer nations and said the United States will endorse an initiative this week to slash the trade barriers they face to this country. At the same time, she disputed the view that market-opening deals were the villain, arguing that needy countries that have been the most open to the global economy have fared best.

“The least-developed countries, the poorest, are of greatest concern because they are falling behind,” she told reporters. Helping such nations, she added, “is very important, in and of itself--no strings attached.”

At the same time, U.S. officials have made clear that they have no desire to reopen previous agreements affecting access of clothing and textiles to the United States, or to modify American anti-dumping restrictions.

In spite of stiff resistance from the U.S. government, for example, 22 countries, largely from the developing world, have allied themselves with Japan and are pushing for modifications to the anti-dumping agreement, which allows governments to protect their industries from import surges.

The U.S. government faces strong pressure from domestic industries such as steel and apparel and textiles to maintain its anti-dumping provisions. Since 1997, the U.S. has initiated dumping investigations against 25 countries, including Mexico, Brazil, Spain, Romania and South Africa.

But many other U.S. products such as potatoes, gasoline additives, chemicals and telephone cable have been the targets of anti-dumping complaints in other countries. China is the leading target of anti-dumping measures, followed by the EU, Japan and the U.S.

“If anti-dumping is not included on the agenda, the credibility of the WTO is at stake,” said a Japanese official.

Developing countries are also suspicious of the U.S. and EU’s efforts to push faster liberalization in high-technology areas, such as a moratorium on taxes on e-commerce and lower tariffs on high-tech products, that will largely benefit firms from developed countries.