Loose ends weighing down trade table

By ROD ORAM

Between the lines

The world wasn't bothered when the previous round of global trade talks was launched 13 years ago at Punta del Este, a remote Uruguayan seaside resort lacking such items as protesters, TV cameras, faxes and out-of-town newspapers.

This time around, the eyes of the world are fixed on Seattle as trade leaders struggle to get the latest round, the ninth in 50 years, off the ground amid violent protests and entrenched government positions.

Why the stark difference?

Looked at one way, the protests and posturing are a surprise. The Uruguay Round was a success, despite taking eight years to semi-complete, leaving a fray of loose ends in areas such as agriculture.

Liberalisation triggered by the round helped double the volume of world trade in the past dozen years. Thanks to trade, 10 developing countries with a combined population of 1.5 billion have doubled their per capita income over the past 15 years.

In East Asia, the biggest trading region of the developing world, the number of poverty-stricken people has fallen from 415 million to 278 million (despite an expanding population) in the past decade. In contrast, poverty in sub-Saharan, South Asian and former Soviet Union countries - regions far less plugged into the global economic system - afflicts 837 million people, up from 693 million.

Looked at another way, the protests and posturing are no surprise. With the great benefits of trade and growth has come some collateral damage to the environment, to traditional societies and industries, to exploited workers.

But the damage is not an inescapable cost of progress. It is a side-effect usually outweighed by the benefits. Minimising the damage, though, requires big improvements in the world trading system and lots of skills on the part of developing nations as they learn to earn a decent living through trade.

Those that don't have the skills believe they have lost control of their lives to corporations and other faceless powers of globalisation. Just about every disaffected group in the world has gone to Seattle to vent its spleen on the World Trade Organisation.

The protesters are making some valid points which need to be addressed in the WTO and other global forums, as President Clinton said in his Seattle speech yesterday. The trouble is, he dumped complex and contentious issues such as environmental and labour standards on the WTO's table which was already groaning under the weight of conflicting agenda items.

Getting a draft agenda out of Seattle with which to kick off the Millennium Round is a very tall order. But "failure is unthinkable," as Mike Moore, the WTO director-general, said yesterday.

Failure could mean nothing less than the fragmentation of the global economy into trading blocs, leaving the world teetering at the top of the slippery slope of protectionism and reduced economic opportunity.