Clinton Urges Safety Net for World Economy

President Clinton turned up the heat Sunday on business and political leaders, urging them to emerge from their smoke-filled rooms and address the social and environmental concerns of average citizens or risk derailing the open trading system.

The warning comes as U.S. labor unions, environmentalists and advocates for the disenfranchised plan demonstrations and otherwise ratchet up opposition to a new round of World Trade Organization negotiations set to begin Nov. 30 in Seattle.

“We must strengthen safety nets so people have unemployment insurance and job training, so impoverished children are not the first and hardest-hit victims of an economic downturn,” he told top executives at the annual Asia-Pacific Economic Cooperation trade summit of Pacific Rim leaders. “We must, in short, continue our efforts to put a human face on the global economy.”

Furthermore, those who are shaping the architecture of global trade and finance--groups such as the WTO, World Bank and International Monetary Fund--should drop their veil of secrecy, he added.

“More openness, more honesty, more responsibility in our business dealings gives us a more supportive political system and, therefore, better economic results,” Clinton said.

While the president spoke globally, he was clearly thinking locally, a point reinforced by his lieutenants. “It’s pretty obvious there’s been a breakdown in [U.S.] political support.” Commerce Secretary William Daley said in a separate address. “People see layoffs, not payoffs, when it comes to trade.”

Several of Clinton’s suggestions on how to make open borders more palatable, including protecting the environment, forging global labor standards and greater energy conservation, also remain controversial among poorer nations such as Malaysia that see these as costly burdens designed to hold them back.

Rifts aside, convincing the unconvinced remains a huge challenge for rich and poor countries alike, officials here say, at a time when many small shopkeepers, farmers and hourly wage-earners believe change is leaving them behind.

“People are afraid of reforms all over the world, with globalization happening so fast,” said Philippines President Joseph Estrada, in an interview with The Times. “But I will gamble my popularity. . . . We need foreign investment and jobs so we can export products rather than our overseas workers.”

Nor are well-dressed APEC delegates, who arrive in limousines, block local traffic and feast on fancy meals, always the most convincing of messengers that the poor ultimately benefit from such policies.

One problem, experts here say, is that many people take for granted what they perceive as benefits of free trade--such as lower prices, modern technology and new industries--even as they focus on lost jobs and adjustment pains.

“You never see anyone with a placard saying, ‘I’m for free trade,’ ” said John Wood, New Zealand’s deputy secretary of trade and economics.

Furthermore, there’s no computer simulation or convincing test case that might show people what their individual lives would be like today under higher barriers and protectionist policies.

“It’s hard to see what it would be like otherwise,” said John MacFarlane, Deutsche Bank’s top officer in Japan. “There will always be critics of the process, even though it looks like it’s inevitable.”

Since the industrial revolution, nations have struggled to find a balance between economic vitality and social stability, but today the stakes are higher. “Tooth-and-claw capitalism can be not very pretty,” said Clyde Prestowitz, president of the Washington-based Economic Strategy Institute. “Now we need to modulate markets in a global economy.”

Ideally that means ensuring that all major players agree on the same basic rules. Another hurdle on the road to Seattle is whether China will be able to join the WTO by the opening meeting, after 13 years of negotiations between Washington and Beijing.

Bilateral meetings on the APEC sidelines have produced little tangible evidence that the two sides are closer together, as they continue to bicker about the terms under which China would join and how much each side would concede.

Nor did either side here set out a public timetable for accession, other than to say they hoped it would be soon. Having such an important emerging nation outside the rule-making body much longer could further strain the trading system’s credibility, experts here say.

Managing a global credibility gap might ultimately entail addressing the concerns of Andrew Barker, a New Zealand sheep farmer, and millions like him.

“Government has to do more to protect our industries,” Barker argues, standing outside the APEC venue beside a large flatbed truck and back hoe plastered with anti-free trade signs. “Everyone has to get a piece of the cake.”