Seattle is world's last chance for mature trade deal

Starting a new trade round may be the only way to prevent the Uruguay one unravelling

NO ONE who was involved in the last round of world trade negotiations can feel the heart lift at the prospect of another.

The seven-year Uruguay round staggered from one near-death experience to another, and it was only saved by a happy coincidence of political aspirations. That will be hard to find at this month's launch of the next round in Seattle.

Early in 1993 the British Prime Minister convinced the newly-elected President Bill Clinton that if the Uruguay round foundered, Mr Clinton's first big international outing - to the World Economic Summit in Japan - would be an embarrassing failure. Sir Leon Brittan, as European trade commissioner, likewise persuaded the Japanese summit hosts of the risk that they would be blamed for the flop. Chancellor Helmut Kohl improved his transatlantic relationship by sitting on the recalcitrant French.

So, on a summer night in Tokyo, the leading world economic powers clinched a deal to cut outstanding tariffs on manufactured goods. Much else followed - on services, intellectual property, network industries and a new World Trade Organisation (WTO) to settle disputes. But it was the Tokyo summit that gave a new trade treaty critical mass.

The same fear of embarrassment may help to concentrate minds before the Seattle meeting gets under way. But they are leaving it awfully late. In Geneva, the WTO's home town, the so-called "groundwork" looks like the kind of roadworks where a punctured gas main is followed by a burst water pipe, and the hole gets bigger with every extra engineer who turns up.

The Seattle agenda, or "ministerial document", is not merely unfinished, but it is impossible to fill up from the conflicting wish lists of the WTO's 135 members. Meanwhile, the inability of the United States and Europe to resolve their nursery squabble over bananas - an issue of no major economic significance to either party - bodes ill for the prospects of the transatlantic consensus needed to get a new round spinning.

Sooner or later, one must hope, the grown-ups will wake up to the realities. But the politics have changed for the worse. America' trade deficit is huge. President Clinton is on the way out, and Al Gore does not want to upset his support in the trade unions. And the US Congress has turned sufficiently hostile towards trade liberalisation to refuse the President "fast-track" authority, which means that he cannot cut international deals, anyway.

In Europe, Chancellor Gerhard Schroder of Germany has no authority to spare, while Brussels is holding its finger in the dyke of farm protection. In 2003 the transatlantic "peace clause" expires, and the European Commission is determined not to give any ground in advance. What the Americans call Europe's ABA agenda - "anything but agriculture" - makes low-cost farm producers furious.

So the United States is not prepared to listen to Europe's (sensible) arguments to include competition policy and more investment rules. Instead the Americans are pushing for the inclusion of "human rights", which has made developing countries furious. They rightly see this as an excuse for shutting out imports from countries that do not have rich-world employment laws.

It is beginning to look as if the round game - a kind of protectionists' strip poker that has brought down trade barriers since the General Agreement on Tariffs and Trade (GATT) was signed in 1947 - is becoming unplayable.

But the trouble is deeper than that. Free trade itself is losing popular support, ironically, from many of those it is supposed to help. Globalisation has become a dirty word to interest groups across the political spectrum, who will be putting Seattle under siege.

The WTO is the victim of its own success. Agreement to give it powers lacked by its predecessor - the GATT - crept in at the very end of the last round. They have been used to full capacity; nearly 200 disputes have been brought to the WTO, whose panels have established its independence by finding against the US, Europe and Japan in turn.

All these big economic beasts have, so far, felt obliged to recognise the WTO's authority by changing trading practices. Not always by as much as was needed - bananas again - but no one has so far felt that it would be politically correct just to say no.

Paradoxically, however, it is this very enthusiasm for taking one's case to the WTO that has been making the organisation unpopular. The WTO has been drawn into many disputes in which it now stands accused of ignoring environmental dangers and social consequences. At Seattle the WTO will be urged (and not just by the banner-wavers outside) to develop the "new trade agenda" and come up with rules for these aspects as well. But this way danger lies.

Governments see the WTO as an arbitrator of what happens at frontiers, not as a global government entitled to invade their domestic domains. Of course, that distinction has long gone in practice, as trade negotiators spend their time arguing about internal "non-tariff barriers". But the further trade regulators are drawn into health, social and environmental issues, the wider their challenge to national governments.

Already we hear echoes of the common British complaint about the European Union; that WTO members thought they were signing up to a common market, not a federal system of government. And if the European Commission cannot get members to accept decisions on beef, what chance does the WTO have of getting controversial judgements to stick?

So the organisation is wary of extra responsibility. Avoiding it, however, is easier said than done. Disputes frequently involve a regulation seen by one side as interference with trade, but by the other as a health measure, a means of conserving the dolphin population or a sanction against the exploitation of children. What WTO members must try to do is to drive different horses for different courses; negotiate environmental or labour rules in international bodies designed for these purposes, and refrain from using the WTO to achieve what they want in non-economic fields.

There is still plenty of old-style work to be done; wearing away at tariffs, and persuading countries to turn hidden barriers into tariffs which are at least capable of being worn down.

Starting a new round may be the only way of preventing the previous one from unravelling. So there will be a necessary conspiracy to pretend that the Seattle launch has been another triumph. An awful lot will no doubt be dropped into the tray marked "future work programme", but it will prove hard for America's trading partners to reject its basic market access wish-list outright.

If hopes of a rich early harvest are fading, the three-year time-limit proposed for this round should be retained - in theory, anyway. In truth, however, the only really significant effect of the launch deadline has been to revive negotiations to get China into the WTO. Opening up the world's largest potential market would be a much more spectacular triumph for Mr Clinton than the launch of a new round. But the two are linked. All sorts of transition arrangements are used to fudge new members into the club, but somewhere, sometime, the principle of equal treatment has to be accepted.

The WTO cannot move much faster than its slowest member without snapping the elastic of consensus. And it is very clear how little ground behind its frontiers the Chinese government is prepared to concede to the authority of theWorld Trade Organisation.

PROMOTED VIDEO
News
ebooksNow available in paperback
Arts and Entertainment
Johnny Depp no longer cares if people criticise his movie flops
films
Arts and Entertainment
All in a day's work: the players in the forthcoming 'Posh People: Inside Tatler'
TVGrace Dent thinks we should learn to 'hug a Hooray Henry', because poshness is an accident of birth
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
art

Presents unwrapped, turkey gobbled... it's time to relax

Arts and Entertainment
Convicted art fraudster John Myatt
art

News
The two-year-old said she cut off her fringe because it was getting in her eyes
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Austen Lloyd: Company Secretary

Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

Citifocus Ltd: German Speaking Client Specialist

£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

Citifocus Ltd: Performance & Risk Oversight

£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game