So, how do we get out of this mess?
From rioters in the streets to negotiators in meeting rooms divided on an agenda for the next round of trade liberalization talks, the Seattle meeting of the
World Trade Organization
has been nothing short of a debacle. The protests have had an impact on public opinion. According to recent polls, support for trade liberalization has declined in the U.S. Meanwhile, the effort by the U.S. and other industrialized nations to include discussions on labor and environmental issues in the WTO, and thereby address some of the protesters' concerns, is generating strong resistance by developing countries, threatening future global-trade talks.
While it is unclear if the cause of free trade has suffered irreparable harm this week, there can be no doubt that governments around the world must come to grips with the dissatisfaction expressed by the WTO's opponents. In fact, virtually everyone at the WTO is saying something along those lines, starting with WTO Director General Michael Moore. But how exactly can that be accomplished?
At first glance, the goals of the protesters and those of the WTO and its members are at cross-purposes. While the protesters represent a wide variety of backgrounds and views, from unions who want to protect jobs to environmentalists who want to protect endangered species, they all seem to be skeptical that free trade and the free market are the best way to raise living standards and create a better world. The pro-trade crowd believes the opposite.
There are ways to bridge the two sides. We can all start by accepting a basic proposition that free trade and globalization have been a tremendous force for good in the world, creating higher standards of living and greater prosperity, and that retreating from globalization would be an economic disaster for the world. However, we should also accept that the market is not perfect and globalization has created undeniable social and environmental problems that need to be addressed. They must be addressed because they are important issues and because support for globalization will decline further if we don't.
Even if we accept that proposition, however, the issue gets tricky.
The basic problem is one of where and when to use trade sanctions. Labor groups want members of the WTO to be able to impose trade sanctions on countries that are not abiding by internationally recognized labor standards. Developing nations believe that such sanctions are simply protectionist devices by industrialized nations to deny the developing world its advantage of a low-wage work force. Environmental groups want members to be able to impose sanctions on countries that do not pursue certain environmental goals.
Sanctions are the stick approach. While there are times when sanctions will be necessary in labor and environmental issues, I suggest the WTO adopt the carrot approach.
For example, the industrialized world should target international debt relief to those countries that liberalize trade and agree to use the freed-up resources to address social conditions and raise environmental standards. With respect to labor issues, the WTO should cooperate much more closely with the
in providing assistance to workers in developing countries who are dislocated on account of trade liberalization policies. The U.S. has a similar program, and it has been very successful in providing assistance and training to workers who lose their jobs as a result of competition from the
North American Free Trade Agreement
On the environmental side, international environmental organizations should be strengthened so that more multilateral environmental agreements can be negotiated. The U.S. infuriates developing countries when it tries to impose environmental goals on other countries that do not directly impact the U.S. environment. That problem can be addressed by international agreements, such as the global ban on ivory trade or whaling, two trade restrictions which, not surprisingly, have not been challenged in the WTO. For its part, the WTO should clarify that multilateral environmental agreements can not be challenged in the WTO.
Give the protesters their due: They have raised some legitimate criticisms about the WTO -- for example, no one can seriously defend the WTO's secrecy -- and about globalization in general. Some of their complaints are not so legitimate. For example, it is simply not true that the U.S. weakened the
Clean Air Act
as a result of a WTO challenge. However, I believe pro-trade advocates ignore the protesters at their peril, especially if the result of the ruckus in Seattle is a reversal in globalization.
David Kurapka wrote speeches for Treasury Secretary Robert Rubin from 1996 until 1999. Before that, he was U.S. Trade Representative Mickey Kantor's speechwriter from 1993 to 1996. Kurapka writes from Oakland, Calif.
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