Problems With Current U.S. Policy.

As the world's leading country, the U.S. sets the agenda at the WTO. Tragically, while Washington exerts its power internationally, its interests are nationally based and are largely influenced by the myopic, profit-oriented aspirations of its corporations. Eager to impose broader and deeper market openings to increase corporate profits--through transparency in government procurement, industrial tariffs, rules deregulating trade in genetically modified products, and liberalization of most services--the U.S. consistently refuses to provide the concessions to developing countries that would lead to a more balanced trading system. Washington backs up its liberalization demands with the thinly veiled (and oft-repeated) threat that protectionism will rear its ugly head in America--the world's largest market for developing country exports--if the other WTO members do not bow to U.S. demands.

Washington has also resorted to a variety of strong-arm tactics with the trade negotiators from "troublemaking" developing countries. These tactics include diplomatic pressure on recalcitrant governments and threats to cut aid. As one trade ambassador told the Financial Times, "What they are good at is exerting pressure bilaterally." One UNCTAD official privately commented that it is not merely the Quad countries (referring to the U.S., EU, Japan, and Canada) at the helm of the WTO but the Superquad--namely the United States.

The U.S. negotiating agenda at the WTO is fraught with contradictions:

Even as it promotes an ideological free trade position, Washington protects its own industries, even mature ones, when they cannot compete in the international market. This is true in textiles and footwear sectors as well as in various key agricultural products. Tariffs in some of these protected U.S. industries have remained unchanged since the 1940s. To protect its industries from foreign competition, the U.S. has repeatedly resorted to erecting antidumping duties against the industries of developing countries. Antidumping duties can be levied on a country if it is determined that the country has exported its product at lower than its domestic selling price.

Despite lobbying for policy coherence and an alignment of WTO trade rules with environment agreements, Washington has refused to make any changes in the Trade Related Intellectual Property Rights (TRIPS) agreement to reconcile it with the UN Convention on BioDiversity regarding the patenting of life forms and the protection of the traditional knowledge of communities. And when U.S. interests are threatened, Washington's stand is that WTO pacts must supersede all other agreements.

Although President Clinton and other high government officials advocate greater transparency in the WTO, U.S. trade representatives still conduct negotiations in a secretive, nontransparent manner--excluding not only civil society organizations but even many developing country delegations. Even as America professes to be an exemplary model of democracy and decries all regimes it considers undemocratic, its bullying negotiating tactics at the WTO belie its democratic pretensions.

The new WTO issues that Washington has proposed will sideline implementation matters in any new negotiations. If these new issues are accepted, they will likely result in new rules that primarily benefit developed countries (and a small handful of higher-income developing countries), further skewing the global marketplace against the South.

To placate certain citizen groups (particularly organized labor), Washington has proposed the creation of a Trade and Labor Working Group--a move opposed by developing countries. The establishment of working groups, such as the current ones addressing transparency in government procurement, investment, and competition policy, is usually the first step toward opening negotiations on new issues. In lobbying to include labor standards within WTO rules, the U.S. government and its labor allies have apparently lost sight of the way labor standards in the U.S. have steadily improved in concert with the country's economic development. Developing countries object to linking social issues such as environment and labor standards to the trade-related enforcement mechanisms of the WTO. Concerns about social conditions in developing countries would be better received by the South if Washington and U.S. nongovernmental organizations would express their support for the South's negotiating position--namely, that the international trading system must serve the overall development needs of the world's poorer nations.

Key Problems

* Washington's international leadership is driven by its own national interests, particularly the profit motives of its corporations.

* Despite promoting an ideological free trade agenda, the U.S. protects certain of its own industries.

* Rather than putting labor issues on the WTO agenda, Washington could more genuinely manifest its concern for the well-being of developing countries by ensuring that the South's development needs are prioritized at the WTO.

Aileen Kwa, Focus on the Global South