Finding WTO significance beyond the protests

While it's been lost in the anniversary hoopla, some real news was made at the WTO meeting 10 years ago, including the raising of the organization's impromptu new "flag." A reporter who was on the scene looks back.
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WTO protests in Seattle, Nov, 30, 1999

While it's been lost in the anniversary hoopla, some real news was made at the WTO meeting 10 years ago, including the raising of the organization's impromptu new "flag." A reporter who was on the scene looks back.

Editor's note: This is a corrected version of this story. An earlier version misidentified former WTO Director-General Mike Moore as being from Australia. He is from New Zealand.

Most of the attention around the 10th anniversary of the World Trade Organization'ꀙs fateful meeting in Seattle is focusing on what happened on the streets — the protests, the tear gas, the flash-bangs, the significance of the Battle in Seattle.

The protests played a role, for sure, but the deeper significance of the meeting happened behind the police lines, in the meeting halls and guarded conversations in the hallways by the delegates to the ministerial conference. That'ꀙs where I was, covering the WTO from the inside, and it is where, perhaps, the post-war structures of the economy ended, setting the stage for a troubled decade to follow, culminating in the Great Recession.

Too broad a brush? Too sweeping a generalization? Perhaps, but the impact of the meeting in Seattle can still be felt around the world.

President Obama'ꀙs recent trip to Asia is a good example. Reports from the APEC Ministerial Meeting said the president had to accept a compromise on a climate change proposal. That'ꀙs because of resistance from developing economies like India, Russia, and China. Seattle was the first time that developing countries banded together to oppose the developed economies that had dominated the WTO meetings since the end of World War II.

Obama visited China after the APEC meeting — some said much like a borrower meeting his largest banker. China has purchased more than $1 trillion in U.S. debt, which, even at current low rates, generates $10 billion to $20 billion a year in interest payments to China — enough to pay for both the Alaskan Way Viaduct and the 520 Bridge, including overruns.

On that fateful Saturday night 10 years ago when the ministerial was heading toward its final collapse I heard several times that the U.S., European Union, Japan, Canada, and Australia, or some combination, likely would get together and come up with a compromise that would rescue the meeting at the last moment. That never happened. Instead, toward midnight, Mike Moore, an affable New Zealender who was director-general of the WTO, and Charlene Barshefsky, the U.S. trade representative, finally called a meeting in the main ballroom at the Washington State Trade and Convention Center to announce that efforts to create some sort of compromise had collapsed. The differences were just too great for all 135 countries to agree on a new round of negotiations.

It was a blow for Seattle, the Clinton Administration, world trade, and the economies of the world. Seattle leaders who worked to bring the meeting to the city had hoped for the 'ꀜSeattle Round'ꀝ of negotiations to begin, forever planting Seattle in the lexicon of world trade. There had been the Tokyo Round, the Uruguay Round, so why not the Seattle Round? Instead it is remembered for the Battle in Seattle.

President Clinton had hoped the meeting would be a fitting triumph for his administration on trade. Nope. Rather, the WTO was in chaos, and instead of a round of important talks on intellectual property, labor standards, and e-commerce, countries were bitterly blaming each other for the outcome.

I don'ꀙt mean to dismiss the impact of what happened in the streets of Seattle that dramatic week. But the collapse of the meeting had more to do with internal problems in the organization than with street protests. Reports from the meeting — when delegates of the world trade group got back to the Geneva headquarters after the collapse of the ministerial in Seattle — said member countries were snapping at each other like vicious raptors. Countries were threatening each other over trade issues. Ambassadors were shouting at each other in the hallways. "Poisonous" was the word used by one observer who was there.

The organization itself was in danger of becoming the dinosaur of globalization, disappearing with only vague theories to explain its sudden demise. Not all agree, of course.

Keith Rockwell, the WTO'ꀙs chief spokesman, has a much different view of the impact of Seattle. Rockwell has been at the WTO for more than 20 years, a veteran at trying to put the best face on often difficult and complicated issues. Rockwell disagrees about the significance of events in Seattle, pointing out several other WTO meetings that failed to accomplish goals and the fact that there were violent protests in Geneva 18 months before Seattle. He said the Seattle meeting, taking place in the U.S., attracted a great deal more media.

Rockwell said the Seattle meeting was designed to launch a round, a new series of negotiations, 'ꀜand people were just not ready to do that. I would include the United States in the group that was not ready to launch the round, by the way. It was a very, very poorly organized event. We did not do a good job of preparing the work for the conference.'ꀝ

Rockwell recalled that the negotiating text was a nightmare of 'ꀜbrackets,'ꀝ or segments the WTO members did not agree on and needed to be resolved before a round could start. Another factor was that the WTO was leaderless for months leading up to the Seattle meeting; the members could not agree on a new director-general. 'ꀜFor four crucial months, we had no DG and no deputy directors-general. Moreover, the selection process was so ugly that it turned the whole atmosphere here in Geneva into one which was hostile and unproductive,'ꀝ Rockwell said.

He was diplomatic about Seattle itself. 'ꀜIt's a wonderful city, full of great people,'ꀝ Rockwell said, 'ꀜbut I think all of those involved would agree that things could have been done better.'ꀝ

The protests themselves? Leaving aside those who took part in violent protests, he had kind words for the peaceful protest, calling it a 'ꀜfundamental democratic right and all of us should extend the highest respect to those who object to any particular set of policies. Amidst the chaotic scenes, there were also some wonderful moments and some great kids in the streets. They made themselves heard and that was a good thing.'ꀝ

For Rockwell, the simple fact is 'ꀜthat our meeting would have failed wherever it had been held, because we were inadequately prepared and the meeting itself was badly run.'ꀝ

The next Ministerial Conference was held two years later in Doha, Qatar, with the negotiations named the Doha Round. One reason the round was launched in Doha was that the WTO learned from its experience in Seattle the need to involve developing countries far more. 'ꀜIt was the developing countries which drove the agenda in Doha and the result was the Doha Development Agenda — the first time an international economic negotiation was launched with development at its core,'ꀝ said Rockwell.

Even 10 years on, the events of the week still stick with me.

Walking downtown that first day, when the demonstrators were trying to keep people from getting to the meeting areas, I was full of hope. After covering Vietnam-era protests, I thought things seemed to be controlled. Strong protests, but abiding by police guidelines.

I knew of a kind of back door at the Sheraton so I was able to slip behind the lines of protesters without incident. My assignment that first morning was to cover the big convening ceremony at the Paramount Theater. Strange times as I sat in the mostly vacant theater for hours, watching as the director-general Moore paced around the stage, talked on the phone and wondered what was happening. Toward noon, with my deadline pressing, they finally gave up on holding the meeting. The Seattle Times was still an afternoon newspaper at that time and there was a chance to get a report into the 'ꀜNight Sports Final.'ꀝ That day was a black eye for the WTO, and perhaps prescient, by forcing disappointed WTO officials to scrap plans for then-U.N. Secretary-General Kofi Annan and Clinton'ꀙs secretary of state, Madeleine Albright, to address an opening session of the trade meeting at the Paramount. Most of the top officials were trapped at the Westin, unable to move to the Paramount.

After a while, police just cordoned off a large swath of downtown. It was strange to walk from the Convention Center to the Times building with no people, no cars, so quiet. Yet a few blocks away the demonstrators and police remained locked in a kind of ritual dance until the bitter end.

There were other events that continue to float up into my memory now and then as I think about those days.

About mid-week, Clinton was in town for a lavish lunch at the Four Seasons Olympic Spanish Ballroom. Press, especially we local reporters, were confined to a small balcony above the event unfolding below. A good perch to watch, as it turned out.

A widely reported event at the time was a television technician holding a white napkin in front of the podium for a light check for the bank of television cameras covering the event. When Clinton spoke, he used his well-known knack of taking something happening at the time and turning it into a humorous and effective comment. Clinton related that Moore had said during lunch the white napkin might be the new flag of the WTO. Laughter, and laughter on an international scale, as the translation of Clinton'ꀙs comment made it through the international audience. The only problem was that Moore may have been right — the white flag of surrender may truly have become the new 'ꀜflag'ꀝ of the WTO.

In his comments, Clinton himself seemed to realize something new was happening. 'ꀜFor 50 years, trade decisions were largely the province of trade ministers, heads of government, and business interests,'ꀝ he said. 'ꀜBut now, what all those people in the street tell us is that they would also like to be heard. And they're not so sure that this deal is working for them.'ꀝ

So, what to make of all this? Several thoughts.

In the late 1990s, as the WTO meeting was coming together, Asia suffered a severe financial crisis. Currencies in Asian countries plummeted and the 'ꀜtiger'ꀝ economies began to stall. I was in Taejon, Seattle'ꀙs sister city in South Korea, in the winter of 1998. It was bitterly cold and the 'ꀜcity hall'ꀝ was largely unheated except for offices and meeting rooms. There were stories of Korean families contributing family gold and jewelry to help the cause.

That was the 'ꀜgreat recession'ꀝ for Asia. Countries suffered substantial declines in their economies as their currency suffered. I checked into a hotel in Bangkok on that trip and had a huge suite in a mostly empty hotel for the equivalent of about $90 a night. So the world was primed for change. China, admitted to the WTO after some controversy at the Seattle meeting, survived the ravages of the Asian financial crisis because it pegged its currency to the dollar. Asian economies came to the WTO meeting that year chastened by the financial crisis. Trade worked, but they would need to spend more time on their domestic economies if they were to survive.

That'ꀙs what has happened. Asia today is the leader of the world in pulling out of this great recession. Kia, a Korean car barely known in 1999, now is a respected brand, mostly because Korea developed the car for domestic consumption. China is on the verge of a similar push, putting all kinds of pressure on the U.S. auto industry.

What is perhaps most striking to me is the fact that the world'ꀙs oldest economic force, agriculture, remains one today. Seattle fell apart because of differences on agriculture. The Doha Round is stalemated because of differences on agriculture.

One of my last assignments with The Times took me to Eastern Washington and a family farm near Palouse, Whitman County. Their farm may have been miles from anywhere, but it did not mean they were not connected. Most wheat grown in Washington is exported, so the family paid close attention to news about the buying intentions of Pakistan and Egypt. Agriculture and trade are often seen as cold, isolated subjects with little humanity to them. That'ꀙs not fair. The people who are involved care deeply about their mission, whether it'ꀙs wheat from the Palouse or apples from Wenatchee.

In 1995, I rode a Tokyo subway line to its end and went to the crimson-colored pillars supporting the roof of Asakusa, a Shinto temple in the old part of Tokyo. I was with Bill Bryant, then a trade consultant who had worked for years to open the Japanese market to U.S.-grown apples. Bryant, now a Seattle Port Commissioner, was returning a daruma to the temple it came from. Darumas are papier-mache faces — traditional Japanese symbols of persistence and transition — and Byrant was marking the completion of negotiations that opened the market to Washington-grown apples.

At the beginning of a project, an eye is painted on the daruma; when the project is completed, the other eye is painted on. I remember that day well because it said so much about the people who engage in trade.

But now I wonder about the WTO and the fact that it is still arguing about agriculture. The Seattle Round died that 1999 Saturday night because there was no agreement on agriculture. That how we grow food — or rather how our governments support the industry that grows it — ended discussions on other important issues like e-commerce and intellectual property.

Protestors who became the Battle in Seattle originally gathered because they wanted the WTO to be more open in trade cases brought by one country against another, especially about the environment and labor standards. That was lost in the flash-bangs in the streets.

The WTO is still relevant — talk to Boeing, Amazon, Microsoft, orchardists, and growers of wheat or timothy hay. A WTO ruling against Airbus is now part of the lobbying for the new Air Force tanker contract that Boeing desperately wants.

Rockwell, the WTO spokesman, said the WTO remains important because agreement can only be reached through a consensus of all 153 WTO member governments. 'ꀜThe larger number of countries obviously makes things more complicated but it also makes any outcome we achieve more credible and more legitimate,'ꀝ Rockwell said. 'ꀜI would argue, too, that our organization more accurately reflects the geopolitical reality of today given the huge role that Brazil, India, South Africa, Egypt, Indonesia, Chile, and others play in this organization.'ꀝ

Nonetheless, the pace seems slow and out of step with today'ꀙs world. The current Director-General Pascal Lamy, noted in a recent talk that the huge particle accelerator near WTO headquarters in Geneva was working again. 'ꀜIn the interest of coherence I guess the WTO should now follow suit and seriously move to a higher speed,'ꀝ he said.

That'ꀙs unlikely. Apparently there isn'ꀙt an 'ꀜapp'ꀝ for that.


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About the Authors & Contributors

Stephen H. Dunphy

Stephen H. Dunphy

Stephen H. Dunphy writes on business and economic issues for Crosscut. He was a business editor and columnist for a number of years at The Seattle Times.