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SAIS Review 21.1 (2001) 159-177



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The New Lobbying: Interest Groups, Governments, and the WTO in Seattle

Andreas Marschner

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The Battle of Seattle may acquire the same instructive value for future diplomats as Pearl Harbor has for military officers.

--Gary Clyde Hufbauer

Free trade proponents have suggested many labels for capturing the failure of the World Trade Organization's (WTO) Millennium Round. Some speak of a "missed opportunity"; others refer to it as "the failed Clinton Round." The only consensus reached among participants of the Third WTO Ministerial Conference in Seattle was the level of collective disappointment about the outcome of the negotiations from November 30 to December 3, 1999. The conference resulted in the suspension of talks without any agreement. To better comprehend the general dissatisfaction, it is necessary to understand the workings of the WTO and the world trading system prior to the Seattle Round as well as to discuss the responsibility governments and interest groups bear for the unfortunate outcome.

The paper is divided into four parts. After a brief situational framework of the Seattle negotiations, the second section will present an overview of the theory of the political economy of protection. The third section addresses the role of the WTO plays in furthering trade liberalization and highlights some misperceptions about the tasks of the WTO. Further, it questions whether the tendency to improve regional trade integration represents a threat to multilateral trade liberalization, and it closes with an outline of reforms needed to launch a successful Millennium Round. The final section summarizes the results and offers some concluding remarks. [End Page 159]

Background

The mood prior to the Seattle talks was anything but promising. The WTO itself was leaderless from May until September when Mike Moore took office. His deputies were appointed only a few weeks before the Seattle meeting and were unable to facilitate an agreement on an agenda among the WTO member states. Not only did the preparations for Seattle start late, but the participants found little common ground. Indeed, the inability to agree on an agenda for further negotiations was one of the main reasons for the disastrous outcome in Seattle. On the one hand, neither the European Union nor Japan were willing to meet demands from the United States, Australia, Brazil, and other leading farm-product exporters for far-reaching negotiations on agriculture. 1 Instead, the EU was pushing for a broad negotiating agenda covering issues such as investment and competition policy. On the other hand, the United States was focusing on a narrow agenda, including links between trade and labor rights, while many developing countries were unwilling to discuss an agenda for further reduction in trade barriers unless they were granted leeway in implementing previous commitments in areas such as property and customs practices. Further, the desire of the United States to include labor and environmental standards in the talks was heavily rejected by developing countries as a new attempt by the West to close off markets to developing countries' exports. The latter also expressed their dissatisfaction with the results of the Uruguay Round, since major potential benefits in textiles and agriculture remained outstanding.

Developed countries' disregard for the increased importance of developing countries in the WTO framework also contributed to the difficulties in Seattle. Under the General Agreement on Tariffs and Trade (GATT), developed countries, particularly the United States and the European Community, drove the agenda and negotiations but failed to encourage the full participation of all countries. Likewise, previous accords demanded very little of developing countries while offering them large gains through the non-discrimination principle. However, since the conclusion of the Uruguay Round, countries must participate in all of the negotiated agreements as part of a "single undertaking." With more members, a larger share in world trade, and fewer opportunities to free-ride, developing countries now have a greater stake in the world trading system and a more legitimate claim on participation in the WTO's [End Page 160] decision-making process. Neither the EU nor the United States considered this change as they prepared...

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