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Paul Knox PAUL

Hostage to the events of the week

It's a matter of interpretation

G8 a virtual affair

Silly season at the G8

A bizarre ambassador for African aid

The Irish in U.S. altruism

The wonderful world of globo-wonkery: It's all in the acronyms

It's the money, dummy

And this guy's on our side

Seattle battle a tragedy

Wednesday, December 8, 1999

The Battle in Seattle ended in an equal mixture of farce and tragedy.

The farce, predictably, arose from the symbiosis between protesters and camera. The resulting coverage conveyed the almost entirely erroneous impression that what happened on the streets influenced proceedings inside the World Trade Organization conference.

The tragedy will flow from the world community's failure to launch another multilateral trade round. Here are some of the likely results from that failure.

The European Union will continue its mountainous agricultural subsidies, thereby distorting world markets. These subsidies will embolden subsidizers elsewhere, notably in the United States, and put additional pressure on countries such as Canada to cough up more money. Canada cannot win a subsidy war with Europe and the United States.

Countries such as Canada and the United States will orient more trade policy toward regional blocs. Critics of the original Canada-U.S. free-trade deal insisted they had nothing against multilateral free trade, only bilateral or regional agreements. Well, the WTO's failure heads Canada back in that direction.

Developing countries need trade and aid, but more trade than aid. WTO failure means they will be frustrated in their attempts to raise their living standards through greater access to developed country markets. The EU and the United States continue to freeze out textiles, clothing and food products from the developing world. A new trade round might have improved those industries of developing countries.

The United States can continue its unilateral application of anti-dumping laws to the detriment of those countries that need access to that market to raise their living standards.

Canada will be allowed to impose tariffs of 200 per cent to 300 per cent on dairy and poultry products, thereby making it harder for Canadian food processors that need those products to be competitive on world markets. Canadian consumers will still be hosed. Canada also will miss a chance to forge a majority, if not a consensus, within the WTO on "cultural diversity," that is, justification for policies to protect cultural industries. The United States has successfully used the WTO against a Canadian policy it disliked (magazines) and may do so again.

Canada, with its small internal market, depends more on foreign trade than any G8 country. An open, rules-based multilateral trading system that knocks down protectionism is manifestly in Canada's interest. Such a system encourages Canadian exports, creates jobs and raises living standards.

A more open trading system, with better market access, helps raise living standards in developing countries. As any world traveller knows, concern about the environment rises with higher per-capita incomes. A strong WTO backing freer trade for developing countries would raise their environmental standards.

The WTO talks collapsed because of fundamental quarrels among the trading nations, not because of guerrilla theatre on the streets of Seattle. Television might have thought otherwise, and the demonstrators naturally insisted they had done in the WTO.

The WTO, critics alleged, is a closed shop and trade policy the prerogative of unaccountable negotiators. In Canada's case, a House of Commons committee produced a 300-page report in June based on the largest consultation it had ever held -- it heard from 85 "civil society" organizations and 64 individuals.

U.S. politics did its part, too, to block progress. President Bill Clinton, trying to shore up support for Vice-President Al Gore, made an unhelpful opening speech about labour standards that upset just about every developing country.

The WTO is not the cause of globalization and freer trade but the consequence. Since freer trade is not going away, the WTO is needed more than ever. Modified perhaps, but nonetheless needed. The Battle in Seattle foreclosed discussion about a better and stronger WTO, and was therefore a tragedy.



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