Trade ministers from around the world tonight broke off efforts to launch a new round of negotiations toward opening international markets, after deadlocking over a wide range of issues, including farm subsidies, protection against illegally priced imports and labor rights in the world trading system.
Ministers had hoped the World Trade Organization meeting would continue a process that since World War II has tied the world ever-closer together economically. Plans call for discussions to resume early next year, but only if there has been sufficient give among the various sides to warrant that.
The breakdown is a major set-back for President Clinton, who has stressed the importance of increasing trade in economic growth and spent a day and a half in Seattle during the talks to show support for them. In the last day, he telephoned leaders of Japan and the European Union to press them for a deal.
The four-day meeting had drawn extraordinary street protests from labor unions and a wide range of activist groups that contend the WTO and the world trading system it oversees benefits only the rich and harms the environment. Tonight, these groups' leaders were quick to take credit for the failure of the talks. "History has been made in Seattle," said Lori Wallach of Global Trade Watch, part of the Ralph Nader consumer groups. "The allegedly inevitable force of globalization has met the immovable object of grass-roots democracy."
"The WTO will never be the same again," said Friends of the Earth, an environmental group.
But WTO officials and business leaders said it was simply a matter of having too little time to deal with too many countries and too many contentious issues. "Trade is one of the hardest thing to keep a box score on," said Scott Miller, head of the alliance of U.S. business organizations organizing support for the Seattle round of trade talks. "It moves in fits and starts. Things break off and start again."
Miller said the failure to reach agreement disproves the contention of critics that the WTO is an unresponsive, undemocratic institution. "What you have here is not a corporate conspiracy, but 110 sovereign governments that couldn't find enough common interests."
Gene Sperling, President Clinton's chief economic adviser, said that traditional ways of reaching decisions in trade talks of this sort -- getting a small number of countries in a room and reaching a deal -- hadn't worked this time, given the WTO's growth to 135 member nations. Going forward with it would have created a "negative dynamic. So, Sperling said, "a collective judgment was made that it was better to freeze in the progress and give countries and the WTO a time-out."
Farm trade was perhaps the biggest issue standing in the way of a deal, which would have laid out subjects to be negotiated over the coming three years. The United States pressed Europe to agree to "eliminate" its huge export subsidy program; Europe was willing to scale it back, but refused to end it altogether, arguing that it supports a rural way of life on the continent.
"Agriculture tends to raise more blood pressure at home than any other sector of the economy," said Dan Glickman, the U.S. Secretary of Agriculture, several hour before the talks broke down.
In the final hours, delegates were also far apart on a wide range of other issues.
The United States was pressing to form a WTO "working group" that would begin writing labor rights into the law of the world trading system. President Clinton had infuriated many delegations from developing countries with a newspaper interview this week in which he said he foresaw a future system in which countries violating international labor standards would face sanctions.
After two days of trying to play down the significance of the comment, White House aides took a different tack today, acknowledging that the president had not chosen his words wisely. "He was just talking off the top of his head," said one aide familiar with the interview and the effort to smooth the feathers it ruffled. "We know what his intent was, and it wasn't that."
Conference leaders had been exploring way for a compromise that would water down the U.S. proposal, but developing countries remained adamantly against the idea, saying it would be used to keep their goods out of the markets of industrialized countries.
Clinton had proposed putting labor on the table, in a limited way, after the AFL-CIO and various activist groups spoke up against the WTO in the months leading up to the meeting, saying that it ought to build in ways to protect workers rights.
Anger had meanwhile appeared among Latin American and Caribbean delegations, which felt they were not being consulted as a deal was crafted over their heads and that there were not enough benefits for their countries. "As long as due respect to the procedures and conditions of transparency . . . do not exist, we will not join the consensus to meet the objectives of this ministerial conference," a statement issued today by a group of the governments said.
Trade talks are often subject to last-minute brinkmanship as countries seek last-minute deals and many officials expressed confidence that in the end, a deal would come together.
Speaking several hours before the breakdown, Sperling described the mood as "crunch time, now or never negotiations." He and U.S. Trade Representative Charlene Barshefsky staged a flurry of private and group talks with other delegations hoping to achieve a lineup of trade-offs in which everyone would feel they had gained something.
Talks had continued through the night on Thursday night. This morning delegates ate breakfast and prepared to go at it some more. "There is still a long way to go," a visibly fatigued European Union trade commissioner Pascal Lamy said this morning.
Tentative agreement was reached during the talks on various issue, including an extension of a moratorium on taxes on electronic commerce. The sides also agreed that the TO would shed a bit of the secrecy of its operations and publish documents related to its dispute-settling courts in a timely way.
The delegates' goal was a communique that would create the framework for three years of further negotiations. It would in essence have put the world on course toward further integrating its economy by removing rules and laws that make it harder to sell across borders. In theory, the talks could have made it easier for Great Plains wheat farmers to sell into Europe, for online shoppers in Australia to place electronic orders in France.
Officially, the Geneva-based WTO, which was set up in 1995 to monitor global trade agreements and resolve disputes, is a consensus-based organization in which every country's approval will be needed to proceed with a new "round" of negotiations. In real life, the big economic powers often have the last say on what emerges, but resistance from small countries can help ruin deals.
The citizens of Seattle, meanwhile, took the first tentative steps to returning to normal after four days of unrest in the streets, though hundreds of police officers in riot gear and national guardsmen still patrolled every part of downtown, and protesters took to the streets again with banners and bullhorns to denounce the world trade group in a peaceful march.
Downtown merchants also began removing sheets of plywood from their scarred storefronts, and for the first time in several days residents trickled in for holiday shopping. "I think people need to reclaim their city," said shopkeeper Elizabeth Price.
Downtown business leaders concluded that they suffered more than $2.5 million in property damage and lost more than $9 million in sales amid the protests and police crackdown this week. Many residents who got trapped in the conflict are also furious with city leaders.
Mayor Paul Schell and Police Chief Norm Stamper issued another defense of their tactics today. Schell, who on Thursday apologized on live television to residents who had been injured or struck with tear gas during street clashes between police and demonstrators, shifted his tone. "People may have taken my apology as a statement that police overreacted," Schell said during a midday briefing with reporters. "That is not the case . . . these tactics were unavoidable and appropriate."
Stamper said some demonstrators were caught with fire-starting Molotov cocktails and smoke grenades, and have pelted officers in some locations with rocks and bottles. To disperse some protest crowds, Seattle police have used tear gas, pepper spray and rubber bullets. But residents and protest leaders are accusing them of using those weapons indiscriminately, and without provocation. A few community leaders are even calling for Stamper's resignation or firing. Meanwhile, some local law enforcement leaders are denouncing Schell for not showing more support to officers.
Staff writers Rene Sanchez and Charles Babington contributed to this report.