Expectations Run High at Birth of World Trade Group
MOROCCO'S King Hassan II is considered an enigmatic leader whose every act has some hidden meaning, so one might wonder what signal he was sending by offering a dazzling fireworks display to delegates from around the world attending the General Agreement on Tariffs and Trade (GATT) meeting here.
Perhaps it was the king's way of acknowledging that the World Trade Organization (WTO), to be born when 124 countries sign the Uruguay Round accord today, already looks set for fireworks.
In addition to implementing the hundreds of pages of complex trade rules, the WTO will oversee creation of a new multilateral system for dispute settlement. Add to that a mandate to develop a work program on the environmental impact of trade liberalization, plus some countries' vows to see the WTO address global labor standards and workers' rights, and you've got a controversial agenda.
But that's not all. India, supported by developing nations and nongovernmental groups, wants the WTO to take up unfair trade practices by multinational corporations that restrict competition. Indian Commerce Minister Pranab Mukherjee also says the WTO must begin to address the issue of the free movement of the world's workers - a question sure to send shivers through the ranks of Western delegations. For its part, Japan says the WTO should study the effect of regional trade areas - such as the North American Free Trade Agreement and the European Economic Area - on multilateralism.
Agreement too ambitious?
Countries may be counting too much on the new WTO to solve problems where other international bodies have failed, observers say. In January the WTO is to replace and augment the GATT, which has sponsored periodic tariff-reduction and trade-liberalizing negotiations since World War II. Maamoun Abdel-Fattah, Egyptian minister to GATT, is concerned that ``There's a clear danger that the WTO is overloaded before it even exists.''
Reflecting a developing-world point of view, the Egyptian says ``Unfortunately, the environment is in'' the WTO's work program. ``Socially no one can say `no' to the environment,'' he says, but he explains the fear that developed countries will use the issue to restrict less-advanced countries' exports. ``And international environmental standards would be very expensive for us to apply,'' he adds. ``Who is going to pay?''
International environment advocacy groups say the developing world's skepticism is understandable. ``Historically, the rich have used trade rules to keep down the poor, so the fears are justified,'' says Colin Hynes, Greenpeace representative at the meeting.
The WTO has to develop the means, he says, to guarantee the technology transfers the developing world needs to clean up its environment. In addition, it must develop trade policies that favor ``sustainable development'' over a current ``use and abuse'' approach to natural resources. And methods must be found, he adds, to ensure that those who benefit from the developing world's products - primarily companies and consumers in the developed world - pay for new requirements placed on poorer regions.
For their part, GATT officials are wary of a too-close association between the two issues that would favor protectionism. ``There's an enormous babble at the moment on trade and environment,'' says Richard Eglin, GATT's trade and environment director. Neither GATT nor the WTO, he says, is the forum for settling the issue.
Reduced farm subsidies
Pointing to hundreds of billions of dollars in reduced farm subsidies wealthy nations will be allowed for fertilizer-intensive agriculture, Mr. Eglin adds: ``There's an area where good trade policy and good environmental policy work hand in hand.''
Another sign that the WTO's so-called ``new agenda'' promises royal fireworks comes from nongovernmental groups, which often work together but don't see eye-to-eye on some controversial issues.
At a press conference sponsored by several developing-world advocacy groups, one warned against a ``collective impoverishment'' of all workers if companies use low-wage countries to bring down costs, while another encouraged the location of manufacturing in the developing world as one clear way of raising living standards.