Protests Aside, the Real Drama at the World Trade Organization Is on the Inside - TheStreet

Protests Aside, the Real Drama at the World Trade Organization Is on the Inside

Although there promises to be some serious street theater outside the global trade talks in Seattle, the fights inside the organization could be just as contentious.
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For several weeks, the major news in the trade world has been the anticipation of protests at the

Seattle World Trade Organization Ministerial

in November, when the next round of global trade negotiations is launched. A wide variety of labor, environmental and consumer groups are planning large-scale protests of the street-theater variety. Expect people to chain themselves to doors, rappel down buildings, and find various other creative ways to disrupt the meetings and get themselves arrested.

But now, it's starting to look like the fights inside the WTO are going to be as contentious as the protests outside.

This week, the WTO members are meeting in Geneva to begin hashing out an agenda for the next round. Remember, this is just to decide what will be negotiated, not the negotiations themselves. The members can't even decide what to call the next round -- the

Millennium Round

or the

Seattle Round

seem to be the two favorites.

The fight over the agenda reveals how some of the battles in the round will shape up and how difficult this round will be.

For example, let's take a look at the U.S. proposal, which was laid out on Wednesday by

President Clinton

in a speech before the

Democratic Leadership Council

at a conference on the politics of globalization.

The U.S. wants the next round to focus on five key areas:

  • Agriculture: The U.S. wants to eliminate agricultural subsidies, reduce tariffs and ensure market access for goods produced by biotechnology. This makes sense from a U.S. standpoint since we have already basically eliminated our agricultural subsidies, already have low agricultural tariffs and lead the world in biotech. The Europeans, however, will fight this one tooth and nail. Eighty-five percent of global spending on agricultural subsidies occurs in the European Union. The trade skirmishes with the U.S. this year over the EU's policy of purchasing bananas from former colonies and their refusal to import beef treated with growth hormones demonstrate their obstinacy on this issue. Watch for an alliance between the U.S. and developing nations to put pressure on the Europeans. But with the current pro-farmer protectionist climate in Europe, I don't see how they will bend.
  • Expanded access for goods and services: The U.S. wants to reduce tariffs and trade barriers in a range of sectors including chemicals, energy products, medical and scientific equipment, as well as to open new opportunities for U.S. service providers in areas such as finance, telecommunications and construction. But many developing countries are still trying to implement their commitments from the last round -- the Uruguay Round -- which concluded in 1994. They are actually pressing to delay those old commitments, and will fight against new ones.
  • Electronic commerce: The U.S. is pressing to extend the 1998 moratorium on taxation on Internet commerce. Until recently, this looked to be relatively noncontroversial. However, developing nations are now trying to quash any effort to make the moratorium permanent as they examine the impact of Internet commerce on their economies. (In other words, until they figure out whether or not they can get some serious tax revenues out of it.)
  • Initiatives on labor and the environment: The U.S. is seeking to form a working group in the WTO on labor issues to ensure that WTO members observe "internationally recognized core labor standards" in WTO parlance. The U.S. also wants to expand the scope of the WTO's Trade and Environment Committee to study the impact of new trade agreements on the environment and eliminate all tariffs on environmental products to encourage greater usage, particularly in the developing world. The problem here is that these initiatives do not go far enough to satisfy anti-WTO protestors, but go way too far for developing countries who fear they will lose their competitive advantage.
  • Letting in new members to the WTO: Thirty-three economies, mostly those transitioning to market-based systems such as Lithuania, are seeking membership in the WTO. Of course, the most important of the WTO wannabes is China and the prospects for China's admittance by November are now very remote.

Meanwhile, many countries are eager for the agenda to include U.S-style antidumping laws, which the rest of the world views as pure protectionism. With the domestic pressures in the U.S. to keep antidumping laws, don't look for the obvious compromise -- the U.S. gets rid of the antidumping laws and the EU eliminates agricultural subsidies -- to occur.

One thing is certain: Nothing is likely to be decided soon. The Uruguay Round took eight years to complete. The one before that -- the

Tokyo Round

-- took 10 years. And both of those took place without protesting rappellers.

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., to which he is glad to have returned.