The WTO has taken over from the International Monetary Fund as the institution good people love to hate. The Great Satan of globalisation. But it will be a desperate tragedy for the vast number of people living in poverty in this world if this week's meeting fails. The campaigners and demonstrators with - mostly - the best of intentions will do terrible harm to those they claim to help if they establish the idea that trade is bad. Trade is not just the best way, but the only path out of poverty for a developing country. More trade liberalisation is essential.
It is easy to see how the "trade is bad" notion got off the ground. Start with the WTO's name. "World" is a lot more arrogant than "International" and "Organisation" is a definite no-no across a key swathe of the political spectrum. "Trade" isn't great either - it conjures up beef and bananas, and is all to do with the numbers always stacking up in favour of the Americans. A name something like "One Planet" would be better, if a bit Star Trek-like.
Sadly, however, the WTO has a lot more wrong with it than could be remedied by rebranding. To begin with, it is terribly secretive and bureaucratic, it's overrun by lawyers and is based in insular Geneva. The rich countries call the shots as they have all the lawyers, although that is changing slowly. Moreover, the WTO operates by consensus, which means that all 134 members must agree on everything. For half of this year they could not agree who should run it.
The WTO was also launched into a world that is rapidly growing more complicated. However ill-equipped, it has turned out to be the natural forum for some of these modern complexities to come to a head. Can a biotech company be allowed to patent a natural remedy? Is hormone-treated beef safe to sell to consumers? Why should a Third-World government protect a foreign company from pirate copies of its products? Any conflict across international borders will probably end up as a trade dispute.
Thank heavens for such a forum.The WTO is a bit like a sheriff in the Wild West, whose silver star meant authority only if the really tough guys agreed. But at least having a sheriff is an admission of the rule of law. The WTO has replaced the ad hoc negotiations that used to take place, where the interests of the least powerful scarcely had any consideration.
We all know that rules tend to favour the powerful, but the fact that in principle they apply to everybody does offer the powerless some protection. An organisation that enforces trade rules is not to be sniffed at when it replaces the earlier international cowboy capitalism of deals between power blocs. The WTO has several times ruled against the two biggest hoodlums, the US and the EU, and not always when they were slugging it out against each other. The Seattle meeting will be a landmark event not because of the prospect of mayhem in the streets and coffee bars, but because it will be the first time that a group of developing countries has come to the trade negotiating chamber with a co-ordinated and agreed agenda. Negotiators from the developed countries describe it as a key event in global politics. If it works this week, it will work in the IMF and United Nations in future. Ironically, for the first time the US and the EU will not be able to get their own way, at the exact moment that a large group of campaigners in the rich countries have started to accuse their own governments of an abuse of power.
Confusingly, one of the things that the developing countries are most bitterly opposed to is a US plan to impose trade sanctions on countries whose exporters do not meet certain minimum labour standards, including a ban on the use of child labour. Nobody, but nobody, believes that children ought to be at work instead of at school. The labour standards link to trade is, however, inspired by profoundly protectionist US unions.
Those high-profile American campaigns to make consumers feel warm and cosy by boycotting cheap trainers from abroad because of the atrocious conditions of the workers are a sham. Boycotts, like the new proposal to tax certain imports if Third World factories cannot meet American standards, punish people for their poverty. The developing countries know that the labour standards issue is all about protecting union jobs in developed markets, and they will not fall for it.
What the poor countries do need is more access to the rich markets and rapid growth in world trade. They need to sell more cheap clothes and food and electronic goods into the protected markets of America and Europe. They need the great powers to live up to the rules laid down when they founded the WTO five years ago.
There are many well-meaning people who challenge the suggestion that international trade is the source of economic growth. They have convinced themselves of something that is wholly wrong. Poor countries become less poor - rich, even - by exporting. Some have, in this way, transformed the living standards of their people within a generation. Study after study has shown that the developing nations as a group have not just benefited from trade, but have done so disproportionately in the sense that they have enjoyed bigger percentage increases in their GDP than the rich countries.
Ignore, though, the doubling in world GDP per head in the past half century. Suppose it is true that the result of 50 post-World War II years of trade liberalisation has been unfair. All the more reason to hope that the meeting in Seattle is a success. Nothing will change if it is not.
The signs are not good as the three-day formalities open tomorrow. Nothing has been pre-agreed, so it is up to the ministers now to horse-trade in conventional diplomatic style, ignoring the ruckus outside. A lot depends on it. For an agreement by Friday to go ahead with a new round of talks on free trade could make a fundamental difference to the livelihood of the poorest people on this one planet of ours.Reuse content