WTO's new chief goes into battle to defend free trade

NEWS ANALYSIS: Protests are likely to disrupt the organisation's talks in Seattle when it attempts to tackle the thorny issue of import restrictions

AS THE 20th century draws to a close, the notion of free trade - one of the key elements of the economic expansion of the past 100 years - is under attack. Adebate has started over whether trade helps or hinders the world's poorest countries.

In December the World Trade Organisation launches the Millennium Round of talks in Seattle. They are aimed at breaking down barriers to trade and building on agreements hammered out during the last talks in Uruguay.

Seattle won't know what has hit it. Mike Moore, who took over as director general of the WTO three weeks ago, will be confronted by as many as 100,000 protesters from a large coalition of aid charities and environmental groups. There are fears the talks could be disrupted by violence orchestrated by the same groups that rioted in the City of London in June. They are understood to be planning a day of protest for 30 November.

Respected organisations including ActionAid and Christian Aid will tell Mr Moore that trade liberalisation benefits transnational corporations at the expense of the underdeveloped and debt-ridden Third World. They will call for reform of the international financial architecture, pointing out that many nations have not been able to fully comply with the measures to open up trade. While they struggle to meet these new commitments they watch industrialised nations insist on their right to trade barriers and even breaching existing WTO rulings.

But they are likely to get short shrift from Mr Moore, the 50-year-old former New Zealand Labour leader and Premier. Despite his trade union and left-wing background, the former slaughterhouse worker is a keen supporter of free trade. As foreign minister in the early 1990s he battled to open up international markets to exports of agricultural products from New Zealand, which is the most globalised of the developing countries in terms of the amount of foreign direct investment into the country.

Last week he travelled to Berlin to take his message of free trade - "both sides win" - to a wider audience. He told the Debis financial services conference he was anxious to extend free trade to all areas of economic activity such as professional and business services.

After his speech, he took the opportunity to attack the opponents of the WTO and his work. "We are told to expect demonstrations and hostility but they are based on a complete misunderstanding of what the WTO is. It is not a white rich man's club," he said, adding that the protesters were "good and sincere people".

"To suggest that countries would be better off if there was less trade is a wicked deception. Perhaps in the absence of any `ism' to hate globalism is the ism that people have problems with."

He said trade liberalisation had huge benefits for developing countries as it gave them access to modern technology and allowed them to get rid of inefficient services industries that hold back economic growth.

But while the free trade language goes down well with the industrialised nations, Mr Moore knows he also has to justify his controversial appointment to the 134-strong membership of the WTO, of whom 100 are from the developing world.

His appointment was only achieved through a compromise that ended months of bitter wrangling. He won a three-year term rather than the normal four- year renewable period, and his rival for the post, Thai deputy premier Supachai Panitchpakdi, was guaranteed the subsequent three-years. As Mr Moore was backed by the United States - the bete noire of the anti-trade lobby - he is anxious to show he is not a place man for the Western world. In Berlin he did this with a toughly-worded attack on the US and the European Union, whom he accused of lecturing the Third World on trade while insisting on retaining some of their own trade barriers, especially on commercial aviation.

Mr Moore warned the two economic superpowers they must agree to greater liberalisation of air transport for both passengers and cargo as part of any new deal to free up world trade. "I hope countries will take the opportunity to free up the world's systems so that people can more cheaply visit family members and businesses can be more productive," he said.

Warming to his theme, he said this failure and the recent spats between the US and UK over issues such as hormone-treated beef and bananas, weakened their right to lecture the Third World.

"When we are looking to poor countries to stick to the rules with all the difficulties they have, it is not edifying for small struggling countries to see the bigger powerful countries fighting each other. That's not leadership."

He said the industrialised nations could not resist liberalisation when developing countries spent nine-times their budget on health services simply to finance their international debt. "I'm not impressed when the most powerful and wealthy nations say it's too hard. You can't preach the pure water of free markets when you drink subsidised wine and milk."

But with hostile demonstrators, and a large number of WTO members still distrustful of the US-backed candidate, Mr Moore may not have helped his cause in Seattle by opening up a new battle front.