World Trade Talks: What Will The Summit Decide?

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The Independent Online
What is the World Trade Organisation?

The 135-member body established in 1995 sets the rules for global commerce. Fans of free trade say the WTO helps keep the arteries of world commerce clear and makes sure trade is conducted fairly. Opponents say it overrides national sovereignty in the interests of multinational companies, ignores the environment and tramples on human rights.

What is the WTO ministerial?

A gathering of (mainly) trade ministers to kick off a new round of world trade talks. It will last a week; the round itself will last at least three years. It will produce a treaty which each national delegation will sign and then ratify.

What was the last round?

The Uruguay Round. It kicked off in Punta del Este in Uruguay, lasted from 1986-1993 and led to the setting up of the World Trade Organisation. There have been several rounds in the last 50 years.

Why are they called `rounds'?

Perhaps because for most of the time, everything just goes round and round in little circles.

What will this one be called?

The Europeans, who want a big agenda, full of grandeur and aspiration, call it the Millennium Round. The Americans, who want a smaller-scale effort, talk of the Seattle Round.

What will this round try to do?

Improve market access for all products. Market access is the general openness of an economy to goods and services from outside.

How transparent is the WTO?

It is not. Decisions are made behind closed doors. Governments claim they will do something about it at this meeting; protesters say that is not enough.

Is free trade necessarily fair trade?

The WTO is supposed to be about promoting the circulation of goods and services with as few restrictions as possible. Free traders believe that is more efficient, and some think it promotes peace as well as prosperity. Protectionists want to put limits on trade, because they believe that that helps to safeguard jobs. Fair trade is the idea that some countries and people will sink rather than swim in free trade conditions, because they are exploited by large multinational companies.

What if the talks fail?

A trade war. No one can quite define what a trade war actually is, but it is a useful cliche.

Does promoting free trade mean removing barriers?

The most basic form of trade barrier is a tariff - a government tax on particular goods as they enter the country. One of the main efforts in Seattle will be to reduce tariffs on most goods. The United States and some rich countries want accelerated tariff liberalisation (ATL), a rapid elimination of taxes on specific products; the European Union and other countries want to look at a wide range.

What will be the hardest area?

Agriculture. The deal on farm trade was the most difficult part of the Uruguay Round, but it was the first time that agriculture was brought fully under world trade rules. Farmers globally are helped by direct support and export subsidies, while imports in most countries are limited by tariffs.

Will countries really stop protecting their farmers?

The wealthy WTO members have promised to cut back on payments to farmers that support domestic production by 20 per cent between 1995 and 2001. Poorer countries are making smaller, or no cuts. Some countries will want to cut back much further. The WTO lets countries use some payments, called "green box" policies, as much as they want as long as they do not distort trade.

Any other tricky topics?

Textiles. The developing countries, led by India, want to speed up access for their textiles to the EU and the US, partly because they think Washington and Brussels are going too slowly, partly because they fear that China will take over the markets when it enters the WTO.

What about bananas?

The EU and the US have argued about bananas for years. They will be a subject of discussion in Seattle on the side, but no breakthrough is likely.

And beef?

The EU bans the import of US beef raised with the aid of hormones - wrongly, says the WTO. Europe may offer to let in more hormone-free beef, but that will not solve the problem.

Will they be talking about the Internet?

Electronic commerce is still relatively free of trade restrictions, and the US wants to keep it that way. But there is great confusion about how to treat e-commerce. Is it about goods or services?

What about the workers?

Europe and America will both back action to make sure that the rights of workers are not damaged by world trade. They need such measures to convince unions that trade need not mean job losses. The developing countries will resist this, as they see it as thinly veiled protectionism.

And they will resist Green policies too, presumably?

Yes. Brussels and Washington want to shore up environmental protection in the WTO, but the developing countries are wary. NGOs want them to go much further.