Battle Over Trade in Seattle

Trade and its critics

The range of opponents spanned political spectrum: anti-Vietnam activists of the Sixties, Seventies' hippies, greens of the Eighties, organized labour, anti-immigrant bigots, anarcho-nihilists and professional, special interest protestors of the Nineties. All were united in the belief the world would be better off if the average person had less choice. And that by restricting choice they would be able to impose their ideology on consumers.

The contradictory positions of these groups would be amusing if it were not for the dangerous fallout of such positions. For instance, when employment is running at almost
100 percent in the United States, US industry wants more immigrant labour force, organized labour marched through Seattle demanding protection for jobs that most Americans refuse to take.

One longshoreman from California, who came with his wife to express his solidarity, said he earned $100,000 per annum. In countries where there is no trade, his counterparts would be lucky to get 2 percent of that. There was a young man kicking a Nike sign at a store front. The shoes he wore were Nikes. One young lady broke into a downtown shop and emptied shelves on the street, all the while speaking on a cell phone.

A lot of the protestors wore ski and gas masks in expectation of police tear gas shells. It seemed they were intent on stirring up trouble. None were in the mood to discuss or debate, only chanting slogans. The few who engaged in dialogue quickly had the prevailing fallacies and misconceptions about trade, about WTO, and about the world outside exposed.

The protestors spoke of the need to democratize the WTO, failing to recognize the legitimacy of the many democracies who are WTO members. Some Indian activists wanted to enlist the "non-democratic" WTO to help push the process of decentralization and devolution in India.

Many were angry the WTO undermined national sovereignty. They were aggrieved the dispute settlement body of WTO had ruled against the US when it sought to penalize foreign shrimp farmers who did not install turtle exclusion devices. Clearly, sovereignty was something not possessed by other nations, only the US. They saw the WTO's job to be imposing US standards on others.

The level of concern about food security for the poor in the developing countries in Seattle's streets was startling. But the road to hell is often paved with good intentions. In countries like India, the farmers carry a twin burden of draconian domestic regulations and zero access to international markets. It should surprise no one that having been forced to sell their produce at below market prices, the farmers in these countries have little incentive to invest more in agriculture. The attempt to demonize biotechnology and genetic engineering reflects the true agenda of many of the activists: imposing a personalized Luddite vision on the rest of the humanity.

If the WTO agreed to this agenda, one can be sure these self-anointed champions of mankind would become fervent WTO supporters. Choice is anathema to these activists. They accuse firms of manipulating the WTO and subverting national sovereignty. They are guilty of a worse crime - subverting consumer sovereignty by ramming their own agenda down the consumers' throat.

In their desire for control without mandate, and power without responsibility, these anti-trade advocates ignore one of the most empirically sound facts of economic. Namely, free trade induces competition in the marketplace. This competitive environment forces manufacturers to improve the quality and lower the price of their products. Improved productivity helps labour by increasing wages and lowering consumer prices. Improvements in environment and social conditions are like any value-added product. As consumers move up the economic ladder, they are better placed to afford these amenities.

Indian officials were rarely visible. India gave the impression it was unwilling to build coalitions on the basis of issues. For instance, the Cairns group, a mix of rich and poor nations who support freer trade in agriculture, could not understand why India refused to cooperate even informally with them.

Amid the melee, there were groups that fought to keep free trade at the top of the agenda. The International Consumers for Civil Society, which believes free trade benefits consumers, were urged along by economists like Jagdish Bhagwati and Deepak Lal. ICCS members took to the streets, debating protesters on issues ranging from trade and food security to environment and labour standards. Farmers for Abundance, a group of US farmers, academics and opinion makers focussed on the benefits of technology and increased farm production. Sadly no one from India's agriculture sector was there to join hands with them.

If Seattle had freed up trade, it would have promoted economic growth and in turn helped improve environmental and social conditions in poorer countries. By stalling the trade talks, the activists exposed their role in perpetuating poverty, sustaining inequity, endangering the environment, particularly in the developing countries. The NGOs role in such regressive action can hardly be ignored any more. It is time for NGOs in India to decide whether they can afford to blindly ignore the neo-colonial ideas of environmental and labour activists from the first world.

Seattle demonstrated that unless there is an internal desire for economic change within each country, the WTO ends up as a favourite whipping boy. And without liberalization, countries like India may not even be able to take advantage of the free trade regime. The evidence is clear: countries that liberalized their economies and opted for open trade have prospered. The WTO can at best be a catalyst for change. Time to stop making it a scapegoat for our own domestic follies.

(The author is founding member, Liberty Institute, New Delhi.)

Copyright 1999.