Late on the final afternoon of the World Trade Organization talks in Seattle, with hope for an agreement slipping away, chief American trade negotiator Charlene Barshefsky asked her Canadian counterpart, Pierre Pettigrew, to take the chair so she could call the White House. As he agreed to run the meeting, Pettigrew recalled later, a colleague said: "Well, you may be like the orchestra conductor on board the Titanic."
Just eight days before, Barshefsky had made a bold prediction: The Seattle talks would succeed in launching a new round of negotiations to further open global commerce, despite signs of disagreement in the preparatory rounds. "You see, everyone knows that failure is not an option."
But hours after that Titanic quip, an exhausted Barshefsky had to announce that failure in Seattle was a reality. A tumultuous week of protests and tear gas on the streets and all-night negotiations and recriminations at the conference had produced nothing.
The outcome in Seattle was quickly dubbed a fiasco, a debacle, a disaster for free trade--or a stunning victory by the activists who had come to Seattle to frustrate the negotiations. A week later American and foreign officials involved in the negotiations who were interviewed for this article agreed on two explanations for the failure: inadequate planning, and irresolvable political conflict.
The conflicts showed up in Seattle as a kind of systemic overload. As Samuel R. "Sandy" Berger, President Clinton's national security adviser, put it, the meeting was a case of "too many plugs and too few outlets"--an overload that the WTO just couldn't handle.
The planning failure was most often blamed on the Clinton administration. "There was a colossal failure to reduce the number of decisions the ministers had to make to a manageable number" before Seattle, said Calman Cohen, director of a business coalition called the Emergency Committee for American Trade. He and others said the gathering of trade ministers should have been postponed until the number of outstanding issues could be reduced.
Secretary of Commerce William Daley seemed to agree, saying in an interview last week that he was pessimistic from the beginning. "The fact that nothing was pre-cooked . . . was quite a signal," he said, referring to the absence of agreements among the key players, especially at a pre-Seattle negotiation in Geneva that had broken down in failure.
Barshefsky, fresh from the Nov. 15 triumph of talks on China's entry into the WTO, had dismissed the breakdown in Geneva: "I'm not in the least bit concerned."
Colleagues say that confidence is typical of Barshefsky, who has a reputation as a first-class trade lawyer and hard-nosed negotiator, but not as an accomplished politician. And according to numerous participants, politics played a critical role in Seattle.
Many foreign delegates cited American politics, particularly Clinton's decision to embrace the addition of labor and environmental standards to world trade rules. "I think President Clinton was playing to his domestic constituency," said Costa Rica's foreign trade minister, Samuel Guzowski.
But other nations had political concerns of their own. The European Union and Japan, for example, had to be seen as protecting their farmers from U.S. demands to eliminate agricultural subsidies. In fact, EU trade commissioner Pascal Lamy disappeared for six hours during the crucial last day's discussions, only to return and signal that there could be no deal on agriculture, according to Barshefsky.
A look back at the debacle in Seattle and the events leading to it shows how many strands of history, economics, politics and public opinion converged to create an impasse that caused such embarrassment for Seattle and the Clinton administration.
The mood was still hopeful when trade ministers from 20 nations gathered in late October in Lausanne, Switzerland, on the shores of Lake Geneva, to plan for Seattle. Gathered in a wood-paneled room of the luxurious Beau-Rivage Palace hotel, they used words such as "flexibility" to describe their approach. But at the end of the meeting, in the words of Sergio Marchi, Canada's ambassador to the WTO, "the flexibility . . . never really arrived."
Some American officials, particularly in the Commerce Department, had shied away from the idea of launching a big new round of trade liberalization negotiations, but the European Union insisted that this was necessary.
The Europeans wanted big negotiations on many issues in hopes of being able to trade concessions on agriculture (the European Union's policy of propping up farmers and agricultural exports is an anathema to free traders) for benefits they could trumpet to sell an overall deal to member governments. The Europeans eventually persuaded the United States to go along.
Though Barshefsky insisted in an interview that numerous understandings had been reached among the participating countries over the past year and a half, other delegations saw it differently. Hidehiro Konno, a senior Japanese trade official, recalled, for instance, "There was no consensus even on the concept of a new round." Yet WTO rules require that all agreements be reached by consensus.
The easy trade issues have already been resolved. Tariffs are already low, world trade is booming, once-closed markets are open. The remaining barriers are often subtle and deeply rooted in local politics.
The Japanese and Europeans, for example, elaborately protect their farmers, in part by denying access to foreign agricultural products. (The United States also gives extensive support to farmers, but rarely with trade restrictions.) The United States protects vulnerable industries, particularly textiles, with politically popular laws designed to prevent foreigners from undercutting American producers in the U.S. market.
After Lausanne the unresolved issues moved back to WTO headquarters in Geneva, where lower-level experts tried to make progress. They failed, and though Barshefsky dismissed this breakdown as insignificant, Lamy, the European trade commissioner, was concerned: "I fear the atmosphere might be such that we will not get to the starting blocks. . . . We might not leave Seattle with a new round."
The Japanese said last week that they thought the early signals were ominous. "It was very odd," said Konno. "The first moment we started to think of the possibility of disaster was very early, when we found out that there was no quad meeting planned by the United States." The "quad"--the United States, Japan, the European Union and Canada--had a history of plotting strategy in advance for big trade meetings, Konno said. Konno expressed surprise that a quad meeting wasn't held just before the talks were scheduled to begin. U.S. officials said other nations had scheduling conflicts.
Another complication was the leadership of the WTO. Michael Moore of New Zealand had been installed as director general in September; his key aides didn't take their places until later in the fall. Moore's selection followed months of haggling that largely paralyzed the organization, according to many officials. The United States played a heavy-handed role in Moore's selection that angered some other countries.
A more telling warning of what was in store in Seattle was probably the 200 passages enclosed in brackets in the draft 32-page text the WTO staff had prepared for the meeting in Lausanne. The brackets indicated language that had not been agreed to.
The first interested parties to reach Seattle were not delegates to the WTO, but the organizers of the protests that became the visible symbol of Seattle. Michael Dolan, coordinator of many of the protesters, set up shop early this year in an office on Fourth Street.
Dolan's operation grew out of a movement born seven years earlier, in Munich at the July 1992 meeting of the Group of Seven industrialized nations. There, a group of international activists including Dolan's boss, Lori Wallach, a trade lawyer, launched an effort to bring "sunshine" to the secretive process of negotiating international trade agreements. Wallach and Dolan work for Public Citizen, a self-described consumer lobby founded by Ralph Nader.
In an interview Wallach described a patient effort to build activist organizations in 40 countries, all motivated by the desire to show public opinion and governments that the global economic order was eroding nations' sovereignty and their citizens' freedoms. The idea was to encourage citizens to hold their trade negotiators accountable in a new way.
To do so, the groups looked for "Achilles' heels," Wallach said, sensitive issues that would create controversy and thus reduce the chances for agreement in new trade talks. For example, the European Union, she said, had such a weak spot on the issue of genetically modified foodstuffs, products that the Americans wanted the WTO to bless, but that European public opinion fervently opposed.
Wallach, Dolan and their allies promised to bring tens of thousands of protesters to Seattle. That prospect had prompted the city to make plans for what would happen outside the WTO, preparations that proved inadequate.
Seattle's political leaders, led by Mayor Paul Schell, had decided to welcome the protesters and encourage vigorous debate on world trade. (Clinton welcomed them also.) The city wasn't opposed to the protesters' plans to disrupt the city by, for example, chaining themselves together peacefully.
According to Sgt. J.D. Miller, a 15-year veteran of the Seattle police force, many members of the force knew they weren't ready. "We knew we would be in trouble" during the WTO meeting, he said in an interview last week. "There was very little doubt, because the intelligence about who was coming, and what they had the potential to do, was well known. It's embarrassing."
But Sgt. Miller said several police officers openly voiced suspicion that those "peaceful" protests could be a distraction. Before the protest, he said that a number of officers had discussed the warnings on several World Wide Web sites linked to self-proclaimed anarchists who also planned to disrupt Seattle that Tuesday would be a kind of D-Day of demonstrations. "The phrase people here kept seeing among those groups on the Internet was, 'Save it for Tuesday.' "
The Seattle police and the mayor's office had conferred beforehand with the FBI and the Secret Service, discussing what were called tabletop scenarios--various contingencies that might arise, and responses to them.
But when the discussion got to possible rioting, according to Thomas J. Pickard, deputy director of the FBI, "they said things like, 'It'll never get to that stage.' "
Delegates who stepped out of their hotels Tuesday morning, the first day of the conference, with freshly issued ID badges around their necks, soon found out otherwise. By 8:30 a.m., throngs of chanting demonstrators had taken control of the streets of downtown Seattle. With arms linked, they formed tight human chains to block all entrances to the convention center where the meeting would take place.
Downtown's usual din of traffic was banished, replaced by the beating of protesters' drums and a lone trombone's wail, by chants and '60s rock tunes at peak volumes. Riot police marched in tight phalanxes, slapping their nightsticks against the sides of their boots. The sound was like massed jackboots on pavement.
Most protesters left property alone. But a cadre of young people, many dressed in black and wearing ski masks or bandanas to hide their faces, had clearly come prepared to commit mayhem. They hurled trash cans through windows and spray-painted militant slogans on marble storefronts. A Starbucks coffee shop fell victim to their vandalism, as did a jewelry store, a park gate and a McDonald's restaurant.
Though more than 20,000 union members marched peacefully in Seattle that day, the world would see and remember the sporadic violence and the clouds of tear gas. By the end of the day, the mayor had declared an emergency, asked the governor to call up the National Guard, and imposed a curfew on downtown.
For Clinton, the Seattle meeting was potentially a big moment. Some had spoken of naming a new round of trade talks the "Clinton Round," and the United States had actively sought to host the Seattle meeting. The president addressed the gathering on Wednesday.
But the speech was overshadowed by an interview he gave to the Seattle Post-Intelligencer en route to Seattle. In it Clinton said he "ultimately" would support sanctions against countries that violate labor standards, which he wanted the WTO to add to its rules.
The interview became a sensation. "Nobody believed their eyes" when they read Clinton's comments, said Anabel Gonzalez, Costa Rica's vice minister of foreign trade. Many developing countries seized on the comments as evidence that the United States planned to impose new protectionist measures in the guise of labor standards that were actually designed to keep the poorer countries poor.
In the early hours of Friday, the Europeans and Americans briefly seemed to find common ground on the thorny agriculture subsidy issue. At 4:30 that morning, recalled Gene Sperling, director of the National Economic Council and a Seattle negotiator, "you really . . . had goose bumps. This is going to come together! This is going to happen! This is great!"
Lamy was negotiating for the Europeans at that hour. He had to report back to the trade ministers of the EU countries on the progress that had given Sperling goose bumps.
The EU commissioner disappeared for more than six hours, an absence that shocked the Americans, but also helped convince them that they would not succeed in Seattle. They concluded that Lamy had been overridden by the ministers, and the deal would not be reached.
"By 2 or 3 p.m. [Friday] I could see it wasn't going to happen," Barshefsky recounted. "People's positions were hardening. Lamy had left a functionary in his place, who just made Geneva-type speeches. I thought: We need to cut it off before countries say 'I will never do A, B, C . . .' We don't want anyone saying 'never.' "
Moore, the new director-general of the WTO, was not convinced. At first he wanted to push ahead and try to get a final agreement. But after consulting with several envoys from key countries, he decided Barshefsky was right.
At 10:30 p.m. Barshefsky formally announced that the conference would end without a result. "Governments," she said, "were just not willing to take the leap."
The United States had gone into the Seattle meetings without a thorough game plan, hoping, in Sperling's words, "that under the pressure and headlights of a global trade talk, that countries would make the necessary concessions to come to an agreement." This time, it didn't work.
Berger, Clinton's national security adviser, summarized the reasons he saw for the breakdown: The major trading blocs didn't want to compromise on the big issues; the trade ministers don't know how to deal with labor and environmental issues, although, he insisted, they will eventually have to be incorporated into the global system; the protests on the street altered the mood of the meeting and reduced the time available for negotiations.
Like other Americans and foreign delegates, he doubted the demonstrations forced the outcome. Wallach of Public Citizen saw it differently. In her view the new public involvement did make the difference, because public opinion in many countries had stiffened the resolve of their delegates to Seattle not to make compromises for the sake of an easy consensus.
Berger and other officials said they welcomed the participation of the interest groups that have become engaged in trade issues. "Democratization is a good word for it," Berger said. But it would mean further complication of trade negotiations in the future, he agreed.
In this as in other international forums, the overwhelming power of the United States seems to be a complicating factor. American officials point out how the huge trade deficit generated by America's open economy, which imports far more goods than it exports goods and services, has helped stabilize Asia and the world after the 1997 Asian economic crisis. But critical foreign countries, particularly less developed ones, freely accuse the United States of plotting new forms of protectionism.
Given all the complexities, Berger said in his White House office Thursday evening, sipping a huge glass of Diet Coke, "there probably was not as much attention focused on whether to go forward with this round as there should have been."
Berger acknowledged that Seattle was a serious setback. He said he didn't know how bad the damage would prove to be.
Barshefsky saw a silver lining: Breakdowns in earlier trade negotiations, like those with China in April, have been followed "with stronger agreements," she said.
Berger and Sperling defended the administration's efforts to broaden the trade agenda to cover concerns about the environment and labor standards, and rejected the criticisms--commonly made by governments from Tokyo to Brasilia--that U.S. domestic politics provoked those efforts and helped scuttle Seattle.
"You take on something big that has a risk element--that makes the achievement all the more significant," Sperling said, acknowledging that this time the achievement didn't materialize.
"If you don't fail sometimes," Berger said, "your sights aren't high enough."
Staff writers Doug Struck in Tokyo; Stephen Buckley in Rio de Janeiro; Serge Kovaleski in San Jose, Costa Rica; Anne Swardson in Paris; Pamela Constable in New Delhi; Steven Pearlstein in Toronto; Lorraine Adams; Charles Babington; Rene Sanchez; and special correspondent Khiota Thierren in Seattle contributed to this report.
Here are the key issues that helped deadlock talks between trade ministers at the World Trade Organization meeting in Seattle.
* The United States pushed Europe to commit to an eventual "elimination" of subsidies for farm exports.
* Europe resisted. Europe and Japan also wanted the WTO to acknowledge that "non-trade" factors -- such as protection of the environment and rural communities -- would be considered in setting farm policy.
* Japan and many other countries wanted extensive negotiations about rules against "dumping," the selling of foreign goods at illegally low prices. They contend that the rules as set by the 1986-94 "Uruguay Round" allow the United States and other countries to keep out legitimately priced goods.
* The United States said it would not agree to any talk on dumping, but would probably have settled for discussions on dumping limited to clarification of Uruguay Round rules.
* The United States sought the formation of a WTO "working group" on genetically altered goods, hoping to establish rules that would protect the trading of these goods.
* Europe resisted, arguing that the safety of the products has not been proved.
* The United States wanted to extend a moratorium on tariffs on electronic transmissions across borders and further reduce them on high-tech goods.
* General agreement was reached to extend a moratorium. But to the U.S. team's disappointment, negotiators could not agree on launching a further round of talks aimed at expanding an existing agreement that lowers tariffs on high-tech goods.
INVESTMENT & COMPETITION
* Europe wanted negotiations on harmonizing countries' rules on these issues.
* Wary of reopening an old fight, the United States opposed it, saying there was no support. Activist groups say having global rules could infringe on sovereignty by blocking such practices as setting aside contracts for minority-owned firms.
* The United States and other countries wanted the WTO to make its processes more open to the public.
* Compromise language would have allowed quicker publication of confidential documents, but not opened up the proceedings of WTO panels that judge trade disputes.
* United States wanted to create a WTO "working group" to open the question of establishing labor standards for international trade.
* Developing countries, feeling they could not meet the standards, strongly opposed it as likely to create protectionist barriers against their goods. Compromise talk focused on creating some kind of study group outside the WTO framework.
* Developing countries sought more time to implement trade law changes required by the 1986-94 Uruguay Round.
* The industrial world in general fought this request, but was likely to offer extensions to the poorest countries and technical assistance to others.