WTO continues tradition of all talk and no action

By Gwynne Dyer

LONDON (JP): Two weeks ago it was the Asia Pacific Economic Conference (APEC, also known as the American Plan for European Collapse), meeting in Manila and plotting to freeze the Europeans out a Pacific Rim common market.

This week it's NATO (the Nervous And Timorous Organization) meeting in Brussels to issue invitations to a few select countries in Eastern Europe to join the Western alliance -- and to freeze the Russians out. Meanwhile, the heads of government of the EU (European Unlikelihood) are meeting in Dublin at the week- end to decide if they will let in a few more countries than NATO (though again, Russia should not hold its breath).

But those shindigs are transparent and straight-forward compared to the 128-country meeting going on in Singapore all this week. It's about world trade, and it's meeting just two years after the General Agreement to Talk and Talk (GATT) -- more formally known as the General Agreement on Trade and Tariffs -- was finally replaced by a new and allegedly more effective organization.

The GATT's successor is officially called the World Trade Organization (WTO), but it's more like the Worthless Talk Organization. "If I told them the truth, they would have laughed," said WTO head Renato Ruggiero recently, after a group of corporate officials asked him when the WTO will act on easing foreign investment rules in developing nations. That's exactly the kind of thing the WTO just cannot do, though it's what it was meant to do.

In the 18 months since the WTO went into full-scale operation, its 400 employees have accomplished little beyond settling a handful of minor trade disputes. The United States, for example, has been told to lift its quota on imports of panties and athletic supporters from Costa Rica. But Washington looks likely to win its protest against the European Union's banana import policy. (The wicked EU favors bananas from Africa and the Caribbean over those grown by U.S. companies in Central America).

That is important stuff if you happen to make your living in bananas or panties, and it is encouraging that the United States, despite its deeply ingrained unilateralist reflexes, is actually obeying the decisions of the new WTO dispute-settlement authority. But this won't set hearts aflame with idealism.

Which brings us to this week's Singapore meeting of the WTO, where ideals and principles are being wielded like clubs. To listen to some Western members, you'd think that the WTO's real purpose had been to put the workers into power. And to listen to some major Third World members, you'd think that the WTO was an imperialist plot to re-colonize the developing countries.

"We believe strongly that increased trade and the economic growth it brings should also engender greater respect for basic human rights," said U.S. delegation head Charlene Barshefsky, for all the world as though economic growth automatically led to broader workers' rights back home in the U.S.

In Singapore, however, the U.S. is pushing hard to get the conference to adopt a 'core labor standards proposal banning child labor, eliminating sweat shops, and raising workers' health and safety standards across the Third World. Moreover, it wants to use the new trade rules as a lever against those who fail to obey.

This arouses intense suspicion among Third World delegates, who see it as simply a Western plot to raise the prices of Third World exports. "Any attempt by the WTO to overstep the legitimate boundaries of trade and invade the domestic production system is bound to create serious problems," said India's Commerce Minister B.B. Ramaiah, denouncing 'core labor standards' as merely the mask for a plan to undermine the competitive advantages that developing countries enjoy because their labor is cheaper.

And meanwhile the United States, which already gets 50 percent of the world's telecommunications revenues, is pushing hard for an Information Technology Agreement that will remove official tariffs and controls in the world's remaining markets.

Half the time the delegates to the meeting sound sanctimonious, and the rest of the time they are warning that the skies will fall if they don't get their way. But there is much less to this sound and fury than meets the eye. The Law of Mixed Motives reigns unchallenged at Singapore, though nobody dares admit it.

Major Western powers are genuinely concerned that some of what they import from the Third World is produced by badly exploited people -- but they also know that international rules to curb that abuse would cost Third World exporters much of their cost advantage, even for non-sweated labor. And they would not mind that result.

As for the Third World's representatives, even as they wrap themselves in nationalist rhetoric to fend off the challenge, they know that this is a problem that must be addressed. In the end, perhaps years hence, it will be.

It will happen because the world is getting more sensitive on these issues, and also because so many people in both the old industrialized countries and the industrializing ones are making money out of the trade. They don't want to kill the goose that lays the golden eggs, so there will eventually be a livable compromise on global labor standards. But it's not going to happen this year.