Three-thousand trade officials from more than 100 countries gather here this week to try to accelerate a half-century-old trend of tying the world ever closer economically. They are expected to meet against a noisy backdrop of street protests by people who believe that the current global trading system destroys jobs and harms the environment.
The delegates to the four-day World Trade Organization meeting, which starts Tuesday, are hoping to begin a new round of negotiations aimed at lowering barriers to the exchange of goods and services between nations. Success is by no means certain. Exploratory talks toward an agenda for the meeting ended in failure last week as officials tried to nudge other countries to open their markets further, but defended their own territories.
If the meeting does reach an agreement this week, it would lead to the opening of the ninth extended round of trade liberalization talks since the end of World War II. Previous rounds have opened up national borders to the point that the world's countries sold each other more than $5.5 trillion in goods and services in 1998, up 80 percent for the decade.
As the 20th century nears its close, political leaders of every stripe and nationality have praised trade as benefiting everyone because it helps raise standards of living and employment.
Trade can "create for billions of people the conditions that allow them to work and live, and raise their families in dignity," President Clinton said recently. He plans to sound that theme again during an address Wednesday to the WTO.
Yet a mood of anxiety hangs over the conference. Trade barriers have historically helped define nationhood by protecting local companies, jobs, even ways of life. When barriers come down, a bit of what binds people together as a country can be lost.
For overt expression of these feelings, delegates from the 135-country organization would need only look to the streets of Seattle, where thousands of people were expected to turn out with protest banners. Protesters held a parade Sunday in one Seattle neighborhood and a large rally was planned for Tuesday. At least four people already have been arrested for protest activities.
AFL-CIO President John Sweeney plans to lead a march condemning the Geneva-based agency, which enforces global trade agreements, as a tool of corporations and exporter of jobs; environmental militants who think its decisions create dirty air and water have vowed to "shut down" the meeting with civil disobedience.
Among those expected to participate in the protests was James P. Hoffa, Teamsters union president. Hoffa, in an interview on "Fox Sunday News," said the union should be part of any trade talks. "We're going to put a human face on the problems with the WTO," he said. "We're going there--organized labor, the AFL-CIO, religious leaders, environmentalists--to really talk about what's wrong with the WTO: the fact that they put corporate greed, corporate profits above human rights."
The issue of human rights also struck a chord with Reform Party presidential candidate Patrick J. Buchanan, who yesterday on NBC's "Meet the Press" criticized the United States for recently agreeing to support China's efforts to join the WTO. "The deal that was cut in Beijing was a complete capitulation by the United States," he said. "In return, we got nothing in the way of human rights improvement, nothing in the way that would build-down the missiles aimed at Taiwan, nothing in the way of reduced belligerence to this country."
Commerce Secretary William Daley, also on "Meet the Press," defended U.S. efforts to bring China into the WTO. "It is in our best interests if we see a different China into the next century," he said. "A main way we can do that is to do more trade with China."
These issues are part of the paradox of a single world economy. Such an economy can generate enormous wealth, as countries specialize in products and sell to the planet at large. It can also blur distinctive food, dress and lifestyles of countries, push financial panics across borders at fiber-optic speed, and move decisions once made at home to faceless executives thousands of miles away.
With all that very much in mind, the WTO delegates were expected to press further toward economic oneness. Among the subjects posed for discussion: downsizing Europe's programs that subsidize farm exports; further opening trade in services; refining rules against the illegal practice of "dumping," or selling foreign goods at illegally low prices; keeping the Internet tariff-free, and allowing public scrutiny of WTO dispute proceedings, which now go on in closed session.
If an agreement is reached, each country would, in effect, have to trust its neighbors a bit more. At the same time, the deal would be crafted in such a way that each country would believe that it had defended its sovereign uniqueness.
That won't be easy. Militaristic terminology can slip in as trade discussions proceed. European Union trade commissioner Pascal Lamy, for example, is known to talk of his side's "offensive" moves, or demands for market opening, and "defensive" moves, or protection of Europe's own.
Could France be France without picturesque villages of farmers and grazing cows? No, suggested the French agriculture and fisheries minister, Jean-Andre Glavany, who spoke up for subsidy programs that help keep the villages in existence. "I reject the picture of France with 150,000 farmers" rather than the 700,000 it has today, he told a Washington audience this month. "I oppose the idea of vast empty tracts of land."
For similar reasons of preserving something about the home country, Canada reins in American magazines, China limits the showing of American movies and Japan restricts the eating of American rice.
"There is a widespread view abroad that globalization is being forced on the world by American corporations, that globalization is Americanization," said Clyde Prestowitz, president of a Washington think tank called the Economic Strategy Institute. "So there's a banding together to protect the national essence."
If there's a common theme to this ire, it's loss of control. People all over East Asia were furious in 1997 that their economies crashed because far-away investors got worried and pulled their money en masse from Asian financial markets. Years of gains in living standards were wiped out almost overnight by strangers.
The International Monetary Fund, the Washington-based international agency that made bail-out loans to many of the ailing countries, added to feelings of loss of sovereignty by putting conditions on its money: cuts in government spending, drastic steps to bring down inflation, ends to subsidies.
At times globalization has helped determine who those countries' leaders are. The Asian financial crisis rocked the Indonesian economy sufficiently to trigger demonstrations that brought down the 32-year rule of President Suharto.
These feelings aren't limited to developing countries. In the 1980s, Japan's battering of bedrock U.S. industries such as cars and semiconductors, followed by billion-dollar purchases of U.S. buildings, securities and companies, led to feelings that control was passing beyond American borders. What would happen, not a few talk-show pundits asked, if Japanese investors pulled out of New York markets? Today concern over Japan has waned as its economy has slipped into recession.
For now the focus of skeptics, here and abroad, is the WTO.
Ralph Nader, the abiding consumer activist, gets visibly angry when he talks about the agency, which he calls a "super-national autocratic system . . . that runs courts that would be illegal in this country." By treating trade as a virtue in itself, WTO dispute decisions often stamp on labor rights and environmental protection, he argues. The United States and other countries have been forced to soften their laws in these fields to stay on the good side of the organization, he contends.
U.S. Trade Representative Charlene Barshefsky dismisses talk of diminished sovereignty. The United States is free to ignore any WTO ruling with which it disagrees, though it would face sanctions.
Barshefsky's office estimates that 10 percent of America's jobs--12 million--depend on the nation's exports. Thus corporate America is much a part of the debate. The U.S. Chamber of Commerce and other business groups are sending their own delegations to Seattle. The Business Roundtable, a collection of large companies, is releasing a series of reports showing how important trade is in dollars and jobs in 71 congressional districts, and identifying small businesses, including skateboard makers and artists, as beneficiaries of global trade.
Similar fights play out in virtually every country. But in the end, most countries have opened their borders.
Sometimes it's because they're bullied by their trading partners or the international community. The United States has ridden herd on Japan for decades to open its markets--its farmers once campaigned for protection waving posters showing a giant wall surrounding a peaceful and productive Japan. Now rice imports, banned for years, are legal, if still controlled.
At other times countries employ what Razeen Sally, a lecturer at the London School of Economics, called "the Nike strategy--just do it." They make a calculated decision that they would benefit from opening, even if there's pain up front as local industries and farms get knocked around. China's leaders seem to have accepted this risk as they move to join the WTO.
There is a long history of this faith in open trade, proponents say. The 13 American colonies, all proud of their distinct identities, created a historic experiment in democracy; they also created one of the world's first free trade zones.
In the late 20th century, the movement has gained force. Perhaps furthest down the road is the European Union, which allows citizens to work in whichever country and has introduced a common currency in 11 countries. People gripe and complain about EU regulations, but in the end they learn to live with them.
The North American Free Trade Agreement lowered barriers between the United States, Canada and Mexico, despite concerns about the same labor and environmental issues raised in Seattle. Talks are underway for essentially uniting the Americas from top to bottom in a single free trade zone about five years from now.
Perhaps it's because nations realize they can prosper even if they give up some control. East Asia's dramatic gains in living standards in the last generation, though dented by the financial crisis, stem largely from trading with other nations.
The talks in Seattle are expected to be a new test of this search for balance.
135 Nations Work Toward One Goal -- Better Trade
Q. What is the World Trade Organization?
A. The WTO is an international agency that joins 135 countries for the stated goal of assuring the freest possible flow of trade. With headquarters on well-manicured grounds overlooking Lake Geneva in Switzerland, it's been called the ultimate capitalist club.
To get in, countries agree to follow broad principles of openness in their economies and to move away from things such as government subsidies of their export industries. No country has to be a member, but generally, nations fight to get in, as the world economy is ever more important to prosperity.
Where does the WTO's authority come from?
From the 51-year-old General Agreement on Tariffs and Trade, a document that 23 countries worked out in 1947 to liberalize trade after World War II. Many more countries signed on to it in later years. Administered with much talk, but little authority, by a bureaucracy in Geneva for decades, it was amended in 1994 to create the WTO.
How does the agency resolve trade disputes?
When a country has a trade gripe against a WTO member -- for example, a domestic law that is blocking the sale of a nation's goods -- it files a complaint in Geneva. The two countries sit down to talk, but if that doesn't work the agency convenes a "panel," essentially a tribunal of trade experts, that hears arguments, examines evidence, and considers domestic laws and some of the trade agreements that number 30,000 pages. It then issues a decision, as a court does.
Are the decisions binding?
That's a politically sensitive question. Any country can legally refuse to abide by a WTO ruling against it, but that's not the end of it. The country must negotiate compensation with the aggrieved country or absorb trade sanctions that it can levy with the WTO's approval.
This ability to say "no" allows member governments to say their sovereignty is in no way diminished. But the organization's critics say that in the real world, countries tend to bend to WTO rulings because they don't want to take the financial pain.
What are these sessions called "rounds"?
About every decade, major nations meet to agree on ways to further liberalize trade. Typically this takes several years of negotiations, a "round" of them, in which countries generally try to win new access to foreign markets while protecting their own industries. There have been eight rounds since the 1940s. Seattle is meant to be the starting point for a ninth that would last at least three years, provided an agenda can be agreed upon.
I've heard of the Tokyo Round and the Uruguay Round. What's this one going to be called?
That's a sore point for the United States, which wants it to be called the Seattle Round. But some people, the Europeans, for instance, are going with the name Millennium Round. In the world of international trade, no decision is easy.
Trade Over Time
Milestones in the International Trading System
1944: An international conference of 44 countries at Bretton Woods, N.H., agrees on a fixed-rate exchange system and lays the groundwork for the International Monetary Fund, World Bank and the General Agreement on Tariffs and Trade.
1947: The General Agreement on Tariffs and Trade is born. Initially signed by 23 countries, GATT's goal is to liberalize trade -- eliminating tariffs, subsidies, import quotas and other forms of protection.
1973-79: GATT's Tokyo Round of negotiations involved about 100 countries and continued efforts to reduce tariffs. Results included an average one-third cut in customs duties in the world's major industrial markets.
1974: The arrangement regarding international trade in textiles, also known as the Multifibre Arrangement, began in January. It sought to expand and liberalize trade in textiles while protecting some industries so as to avoid disruptive effects in individual markets and production lines.
1986-93: The Uruguay Round, possibly the most ambitious set of multilateral trade-liberalization provisions ever adopted by such diverse nations, produced agreement among 125 countries to help boost global trade. The talks included service industries as well as agriculture, textiles, research subsidies and intellectual property.
1995: Establishment of the World Trade Organization to replace GATT as a more powerful multilateral group with responsibility for implementing new trade agreements and enforcing existing pacts.
1997: WTO agreements by 40 countries on cutting customs duties on information technology products and by 69 governments on liberalizing telecommunications services. Seventy nations also agreed to open their financial services sectors, coverning more than 95 percent of trade in banking, insurance, securities and financial data.
1999: China, United States reach agreement to allow China's membership in the WTO.
SOURCES: World Trade Organization, Economic Strategy Institute, Facts on File