World Trade Organisation
November 12, 2008

RADIO 2CBA FOCAL POINT COMMENTARY BROADCAST ON FRIDAY DECEMBER 10 1999 ON RADIO 2CBA FM.

There was chaos last week in Seattle, as the World Trade Organization tried to start a new round of negotiations. There was chaos both outside the conference centre and inside.

The demonstrators had one advantage over the governments: they knew what they wanted. They want an end to – or at least a delay – in the next round of trade negotiations.

By contrast, the governments were divided. There has been a three-way split: the European Union, US and Asian countries.

The European Union wanted to have broad-based negotiations that would extend the WTO’s role into such matters as labour and environmental standards and investment policies.

The EU did not share the demonstrators’ opposition to the WTO negotiations but it was the closest to their point of view. The demonstrators wanted to the stop the WTO’s negotiations – the EU wanted the WTO negotiations to continue but to have a greater role in human rights and environmental matters.

The US had a less ambitious agenda but it was still willing to have labour and environmental standards on the agenda. The US corporations want the WTO negotiations to go ahead to create even more trading opportunities for them.

The Asian countries were opposed to broadening the WTO agenda. First, that WTO should stick to its own area of expertise, namely, trade. It should not go into other matters, such as human rights and the environment.

Second, the UN has other bodies which deal with human rights and the environment and so they are the appropriate places to discuss these matters.

Finally, the previous round of negotiations favoured the developed Western countries. For example, developing countries lose about US$ 60 billion a year in potential exports because their farmers cannot compete with the heavily subsidized agricultural products in the US and EU countries. Therefore, more has to be done help Third World countries.

The WTO conference could not reconcile these different points of view and so it collapsed in chaos. it was also racing against the clock because the conference centre had been booked to host a conference of dentists and so the WTO had to stop on schedule.

But the WTO process will continue – albeit in a more subdued way. World trade is growing faster than national economies. In other words, countries are doing more trade with each other as the years go by – and are doing so at a faster rate than their own national economic growth.

It is very difficult to see how this growth in world trade is going to be reversed. Foreign goods are popular with consumers in developed countries such as Australia. While there is some concern about the loss of jobs (such as in the textile industries) most people in developed countries now enjoy being able to buy a larger range of goods than they could about four decades ago.

Therefore the challenge is to make sure that the world trade system works for the benefit of all – rather than to stop world trade.