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 TIME CNN/AllPolitics CNN/AllPolitics with Congressional Quarterly

The Battle In Seattle

Antiglobalization forces are threatening to turn the WTO's meeting on free trade into a free-for-all


TIME magazine

November 22, 1999
Web posted at: 1:25 p.m. EST (1825 GMT)

Trade negotiations? Oh, please--wake us when it's over. Tariffs. Subsidies. Antidumping measures. Multilateral investment agreements. The eyes glaze over. Even free trade's First Cheerleader, Bill Clinton, confesses that most people think the World Trade Organization is "some rich guys' club where people get in, talk in funny language and make a bunch of rules that help the people that already have and stick it to the people that have not."


So why is it that tens of thousands of demonstrators from around the globe will make chilly, rainy Seattle a hot town next week--the scene of marches, teach-ins, street theater and uncivil disobedience? This vintage '60s protest fest is prompted, incongruously, by the first American gathering of the WTO, a sober, 135-nation group that sets the rules for international commerce. Thousands of trade ministers, politicians and their staffs will hunker down by Puget Sound to launch a new multiyear round of wrangling over how to promote exports--and, as much as possible, avoid one another's imports.

The Geneva-based WTO is both traffic cop and top court of the global economy. And as shown by China's bid for admission last week, the organization seems about to extend its gospel of no-pain, no-gain capitalism across the planet. The WTO's 36,000 pages of regulations reach into far-flung crannies of human existence. Can Malaysian fishermen export their shrimp to the U.S. even if their nets lack escape hatches for endangered turtles? Yes. Can Massachusetts refuse to buy products from companies that do business in Myanmar? No. Do American corporations get an illegal export subsidy by setting up legal offshore tax shelters? Yes. Can the French block our hormone-fed beef? No. Rule breakers are punished--in France's case by a hike in the tariffs on Roquefort cheese, among other goodies.

In the abstract, free trade is feel-good fellowship. Trash the tariffs and, globally, consumers profit from lower prices. Political enemies turn into economic friends--who trades together plays together. In the half-century since the WTO's predecessor, the General Agreement on Tariffs and Trade, was founded with 23 members, worldwide trade has expanded some 15-fold, to $6.5 trillion. As the world's largest exporter and importer, the U.S. owes nearly a third of its economic growth in the past decade to trade. "Cooperation is not a choice," says Mike Moore, the onetime meatpacker and New Zealand Prime Minister who heads the WTO. "It is indispensable to survival."

But as global economic integration, led by multinational companies, gathers momentum, a popular backlash is building. Protesters aren't against trade, but they want corporation-friendly rules to include social concerns--the environment, labor rights, Third World poverty. And they want it now. More than 775 nongovernment organizations have registered with the WTO, bringing some 2,100 observers. "The WTO is an octopus with an arm into every little crevice of democracy," says Lori Wallach, director of Public Citizen's Global Trade Watch lobby. "It trumps domestic laws and international treaties and imposes one-size-fits-all rules."

If the Seattle host committee, chaired by Microsoft CEO Bill Gates and Boeing CEO Philip Condit, fears that protests can overshadow the event, trade diplomats are even more concerned that the negotiations themselves could implode. As of late last week, the agenda had yet to be set, despite marathon discussions in Geneva. That will put even more pressure on the delegates in Seattle, working within shouting distance of protesters. Says Canadian Trade Minister Pierre Pettigrew: "I'm preoccupied by the zoo Seattle might be turned into."

There are too many conflicting goals and alliances to count. Developing countries grouse that they are opening their markets but with little benefit. They want more time to comply with rules on financial services and intellectual property, the latter jealously guarded by U.S. multinationals. Third World ministers also argue that richer countries have an obligation to import more, particularly in the wake of the Asian crisis of 1997, which devastated countries from Thailand to Peru.

The Europeans will be mounting an all-out defense of their agricultural markets, currently protected by the European Union's devilishly complicated, reform-resistant $44 billion in farm supports. And they will fight to maintain their moratorium on the import of genetically modified crops in the face of U.S. and Canadian opposition (see page 49). European Union trade commissioner Pascal Lamy is also standing up for what he calls "specific traits of European civilization--the insistence on high-quality foodstuffs, cultural identity in a world without barriers and a reluctance to see some activities reduced to a commercial footing." In other words, protection against too many Disney movies, Pizza Huts and American bankers.

The U.S. agenda has something to annoy everyone. Particularly irksome to Asians is American insistence on reducing tariffs on e-commerce, biotechnology and financial services--industries in which the U.S. clearly leads--and at the same time enforcing anti-dumping legislation on steel imports. Says Chau Tak-hay, Hong Kong's Secretary for Trade and Industry: "The U.S. is single-mindedly pursuing its own narrow agenda while showing little interest in others' needs."

Lined up against all sides is a guerrilla network of activists that has been empowered by the very same forces that drive economic globalization: technology, the Internet and lowered barriers--hence costs--to international travel. Groups such as Kenya's Consumers' Information Network, Ecuador's Accion Ecologica and Trinidad and Tobago's Caribbean Association for Feminist Research and Action are linked through scores of websites, list servers and discussion groups to U.S., European and Asian counterparts. Last week five aids activists chained themselves to the balcony of U.S. Trade Representative Charlene Barshefsky's office, protesting WTO patent rules that have made AIDS medicine expensive for poor countries.

In the U.S., the "Mobilization Against Globalization" is stoked by labor unions, who have angrily watched jobs migrate to Mexico and other low-wage countries, spurred by falling tariffs for foreign-made goods. Bowing partly to such concerns, Congress has twice refused to give President Clinton expedited trade-negotiating authority, thus defeating efforts to expand the North American Free Trade Agreement.

Their argument couched in moral terms, the unions are allied with U.S. environmental, human-rights and consumer activists in an effort to make social policy through trade. On Nov. 30, the first day of WTO deliberations, the AFL-CIO plans a rally in Seattle led by 900 Boeing machinists, whose employer is one of the world's top exporters. Union delegations representing everyone from teachers to teamsters are flocking in from 25 states and 143 nations. Dockworkers plan to shut down the port. Even the Wobblies are roused. The Puget Sound chapter of Industrial Workers of the World is orchestrating a student walkout. "In the early '80s, we gave up wages and benefits to be more globally competitive," says David Reid, 42, who nonetheless lost his job as a crane driver at Kaiser Aluminum. He has taken a course in civil disobedience to prepare for the protest. "It clicked," he says. "I am not a victim if I can organize."

The antiglobalist message resonates across a broad swath of ideology, from the isolationist Buchananite right to a kaleidoscope of left-wing groups. "The WTO has brought about a harmonic convergence," said John Sellers, director of the Ruckus Society, as he trained a group of Berkeley students for civil disobedience last month. Forest activists, who have polished their skills blocking the logging of redwoods, will target U.S. efforts to slash worldwide tariffs on paper and pulp products.

At the very least, it could be good theater. Earlier this month, U.S. Labor Secretary Alexis Herman, in Seattle to drum up support for free trade, was picketed by steelworkers, antinuclear activists, Free Burma advocates--and Anne Kirkham, 26, of the Bicycle Alliance of Washington. "I'm a bicycle activist, but it's all one big thing--globalism, urban sprawl, pollution," she explained. "It's about corporate greed."

Police have little to fear from the 240 Humane Society activists, dressed in turtle costumes, set to protest the WTO's shrimp-export decision. Nor are they worried about the human chain of hand-holding clergy and parishioners who will surround the delegates' reception Monday to plead for Third World debt relief. But scores of "radical jeerleaders" are practicing their choreographed cheers in church basements: "Smash the state/ Let's liberate!" Four Molotov cocktails were lobbed into an empty Gap store in downtown Seattle this month, Gap being a focus of antisweatshop protests. No wonder the city has budgeted $6 million for police overtime and is stockpiling tear gas. "If there are rowdy guests, we plan to treat them that way," says Seattle Mayor Paul Schell.

While the protesters take to the streets, corporate lobbyists will be taking to the halls. The Idaho Barley Commission has registered, as have the German Bar Association and the Automotive Component Manufacturers Association of India. Many are baffled by the uproar. "As somebody who protested against Vietnam, I'm not sure what everyone is so cranked up about," says Procter & Gamble lobbyist Scott Miller, chairman of the U.S. Alliance for Trade Expansion. "We've had eight years of amazing prosperity." U.S. business is more concerned about opening up what some call the European trade cartel than it is about the Administration's overtures to citizen groups. "Environment and labor standards won't be tied to trade even if the U.S. stands on its head and spits wooden nickels," says Thomas Donohue, president of the U.S. Chamber of Commerce. "The Chamber won't let it happen, and the rest of the world won't let it happen."

He's right. Although the U.S. wields a big stick, the WTO operates by consensus. The largest bloc, made up of 77 developing countries, stands virtually united against efforts by wealthier countries to influence environmental and labor laws in developing countries. As for human rights: "There's an Asian consensus that human rights should not be linked to trade," says economist M.G. Quibria of the Asian Development Bank in Manila. In the view of developing countries, trade-pact clauses involving labor and the environment amount to backdoor protectionism.

That makes it awkward for many U.S. protesters, who say they are out to help the Third World, not just clean up the planet, end child labor and promote human rights. Venezuela and Brazil successfully challenged as discriminatory a U.S. law that set stringent environmental regulations for refineries that make gasoline for export. Four Asian countries--Malaysia, India, Pakistan and Thailand--were the challengers to the U.S. effort to ban shrimp caught in nets without turtle escape hatches. "If you want to put turtles ahead of Indian poverty, go ahead!" said Columbia University economist Jagdish Bhagwati in a debate. "But why not go out and buy these $15 nets at Wal-Mart and give them to the fishermen?"

For years, the cold war afforded political cover for free trade. Who could oppose economic freedom as it cleared a pathway for democracy? But as the threat of communism receded, the public began to focus on market globalization as the root of many evils. Is big better? Is small still beautiful? The underlying principle of the global economy is that each country should manufacture and freely export the goods it can make at a comparative advantage--read cheaply--over other countries. If this means paying slave wages and leveling the rainforest, so be it.

Despite the economic upturn, this ethic of survival of the fittest has spawned widespread anxiety in rich countries and poor countries alike. In Washington State 3 out of 4 jobs may be linked to exports--in theory creating a pro-trade constituency--but from software coders to apple pickers, there is a sense that their jobs could migrate tomorrow. "Many people see only layoffs," laments Commerce Secretary William Daley, who has been dogged by protesters. "They don't see the payoffs of this open-trading system."

Many, like Daley, would argue that peace and prosperity can flourish only if trade barriers are torn down. U.N. Secretary-General Kofi Annan acknowledged in a speech that "the trading system is one of the great success stories of the past half-century." At the same time, he added, with a quarter of the globe's population mired in poverty, multinational companies risk a wave of protectionism unless they commit to "global corporate citizenship" in the form of concessions to labor, human rights and environmental health.

Such is the challenge of the WTO, the newest and arguably most powerful global institution on the block. If the protests in Seattle do not degenerate into anarchic violence, and if the negotiators can somehow put aside their cantankerous brinkmanship, a new dialogue is likely to be opened on--naive as it may sound--how to make the world a better place. --With reporting by Hannah Beech/Hong Kong, Steven Frank/Toronto and James L. Graff/Brussels


Headquarters: Geneva Membership: 135 countries History: Successor to the General Agreement on Tariffs and Trade formed in 1947. Once limited to goods, the WTO's purview has been extended to include intellectual property and trade in services. The organization's task is to administer and enforce the trade agreements made by member nations, ensuring freer flow of goods and services. Its rulings are law among members.


THE PLAYERS: Europe and Japan vs. the U.S. and the Third World THE ISSUE: European and Japanese farmers are swaddled in subsidies. The U.S. and the Third World want access to those markets. Europe and Japan say the U.S. also aids farmers; they oppose the U.S.'s genetically modified food. THE LIKELY OUTCOME: Look for subsidies to subside but healthy-food fears to grow.

THE PLAYERS: The U.S. and the European Union vs. the Third World THE ISSUE: Low-cost Third World labor, which threatens jobs here. The U.S. proposes a WTO study group on labor issues. Some European Union countries are supportive. Developing nations don't want outside interference in their labor markets. THE LIKELY OUTCOME: Don't expect much progress here.

THE PLAYERS: The U.S. and E.U. vs. the Third World THE ISSUE: The U.S. and E.U. want to enforce environmental pacts--such as a treaty restricting endangered-species trade--without WTO challenge. But the U.S. seeks to slash wood tariffs, thus increasing deforestation. Third World opposes "enviro" restrictions. THE LIKELY OUTCOME: Progress may come on less controversial issues, such as fishing subsidies.

THE PLAYERS: The U.S. vs. everyone else THE ISSUE: The U.S. wants to slash barriers to several key industries, including health care, banking, education, insurance and e-commerce. But a huge battle looms. THE LIKELY OUTCOME: WTO members have already agreed to negotiate over services. The U.S. will drive hard to get some concessions from the global trade community.

THE PLAYERS: U.S. vs. Japan and the Third World THE ISSUE: U.S. laws block countries from "dumping" subsidized products--steel, semiconductors, textiles--on the American market. Third World nations say the laws are protectionist and U.S. should import more. THE LIKELY OUTCOME: With an election year coming and so many jobs at stake, the U.S. will not give ground.


Cover Date: November 29, 1999

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