The dramatic events of the recent WTO meeting in Seattle have focused a great deal of attention on regional and international trade and encouraged us to think more about the increasingly complex politics of international trade. Culture, environmental concerns, labor and other social issues are back on the center stage in North America.  As part of its continuing "Crossing Borders" project, the Canadian Studies Program invited a distinguished panel to explore these issues. All interested parties were encouraged to attend and to participate in the discussion.

The symposium was organized by Michael K. Hawes, visiting Fulbright Professor at Berkeley, and Rita Ross, Vice-Chair and Academic Coordinator of the Canadian Studies Program. The symposium was made possible by the generous support of the Government of Canada.

PARTICIPANTS
Symposium, 3-5 pm:
MICHAEL K. HAWES (Department of Political Studies, Queen's University; J. William Fulbright Distinguished Professor in Canadian-American Relations,
Canadian Studies Program, U.C. Berkeley) Moderator & Panelist: "After Seattle: Politics and International Trade"
VINOD K. AGGARWAL (Political Science/Haas School of Business; Director of the APEC Study Center U.C. Berkeley)  "The Changing Role of Business
and the Business of the State"
MICHAEL CLOUGH (Institute of International Studies, U.C. Berkeley) "Seattle, NAFTA and the Globalization of Culture"
JOHN D. WIRTH (Department of History, Stanford University & President, North American Institute) "Seattle, the Environment and the North-South
Debate"
Keynote dinner, 6:30 pm Dinner (by invitation only) International House
Speaker: WILLIAM A. DYMOND (Director-General, Policy Planning Secretariat, Department of Foreign Affairs and International Trade Canada)
 

I           GENERAL INTRODUCTION (Michael K. Hawes, The J. William Fulbright Distinguished Chair in Canadian-American Relations & The John A. Sproul Senior Research Fellow in Canadian Studies at Berkeley)

Today's session deals with the broad issue of trade and politics, a matter of considerable importance for an overachieving, middle-sized, trade-dependent country like Canada. Moreover, it is a country that relies heavily on foreign trade in general and on the United States in particular for its economic well-being and for consistently keeping it at the top of the United Nation's human development index. Further, it is a country that has long seen itself as a champion of internationalism and a friend to virtually all multilateral activity. When it comes to global affairs, we are joiners. We join everything!  And, while it would be nice to think that this predisposition reflects an unselfish interest in creating a genuinely global society, or that it is driven exclusively by some profound moral imperative, the truth is that Canada's commitment to a multilateralist foreign policy (and its more recent continental variant) has been a winning strategy for Canada and a practical necessity for Canadians!

Apropos of all of this, the debacle surrounding the recent WTO ministerial meeting in Seattle (what some have been calling "the rumble in Seattle") has special significance for Canada and has caused many Canadians and their government(s) to take a sober second look at what has been a very successful foreign policy strategy and a deep-seated commitment to internationalism -- especially given the foreign minister's abiding commitment to civil society issues.

Ironically, at least on the surface, there could have been no better place to inaugurate the so-called "millennium round" of trade liberalization than Seattle. This city is (was?), after all, supposed to be the gateway to the global world. According to its own public relations director, it is "the Emerald City" . home to the ubiquitous Starbucks, home to Boeing, ground zero for the Microsoft revolution, and the home of the "Microserfs" -- the new, cosmopolitan, Gap-clad, efficiency-conscious citizens of the world. When the WTO, Charlene Barchevsky, and the city elders agreed that Seattle would host the WTO ministerial meeting in 1999, optimism was running very high. But, by the end (after the complete failure to agree on an agenda for the meetings, after thousands of demonstrators had wrecked havoc on the city, after the demonstrations had gone terribly wrong, and after the city had gone so far as to cancel its official millennium celebrations, it was clear that not everyone was keen on the so-called "new world order".  Politics, it would seem, still matters!

What we would like to do here today is address  a few of the key issue areas (business, the state, civil society, culture and the environment) and talk a little about how this affects Canada and the Canadian-American relationship.

 I           THE RUMBLE IN SEATTLE: THE STORY IN BRIEF
 Geneva, 24 Nov 1999.   After nearly fifteen months of preparations, trade diplomats at the WTO abandoned their efforts to agree on a draft declaration and on an "agenda" to launch negotiations at the 3rd Ministerial meeting of the WTO in Seattle. The meetings were scheduled to begin on the 30 of November.  While agriculture and the implementation process were at the heart of the differences between the industrialized countries, it proved difficult to arrive at any kind of a consensus before the meetings began. In addition to conflict within the developed world, the rift between them and developing countries made it virtually impossible to come to a pre-summit agreement - even on the agenda.

With a cloud already hovering over the meetings, and a group of protesters threatening to hold massive demonstrations in Seattle, things did not look good. And, indeed, the Seattle meetings went terribly wrong right from the start. On the 29th, at the first official WTO event, which was a NGO symposium with some carefully chosen lead speakers ((UK Development Minister Claire Short, free trader Jagdish Bhagwati, USTR Charlene Barshefsky, and others) protestors surrounded the conference centre and set the stage for what would become a national (and international) fiasco. A broken latch over a door led to a bomb scare, the entire building had to be evacuated, search dogs were brought in, and the tone was set, long before the conference area was once again declared safe.
November 30th, 1999.  Demonstrations planned to coincide with the ceremonial opening day of the 3rd Ministerial were upstaged by less peaceful demonstrators who 'invaded' the Paramount Theatre venue of the "ceremonial". This group 'occupied' the theatre and were able to use its facilities to "dialogue" with the delegates. Others blocked the streets and surrounded some hotels in an attempt to prevent ministers and dignitaries from going to the opening - UN Secretary-General Kofi Annan being among them.

 Early on the police established a very visible presence, throwing up barricades on the roads to separate the protestors from the delegates and others going to the conference. There were reports of some of the demonstrators being "roughed up". In relatively short order, a group of some 100 protesters appeared, in masks and black clothing, took to the streets -- breaking shop windows, looting, and engaging in general mayhem.

 For the next two days the organized protestors took control of the streets. The police responded with the use of tear gas and pepper spray, and the city council declared curfew in an attempt to regain control over the streets. Before long, the National Guard was called in and a siege mentality pervaded the streets.

In the end, little substantive progress was made at the conference, the media images left Americans with a view of the WTO which was both startling and troublesome and, everyone, at least in this country, knew what the WTO was (or what they now perceived it to be).

 II         POLITICS & TRADE
Why the WTO?  The WTO, as we all now know, is an international organization that focuses on the progressive liberalization of trade (MFN and NT), is not responsible to any government and is not democratically elected in any way. It simply grew out of the GATT. Its 134 member countries (excluding China, Vietnam and Cuba) signed a treaty. The simplest explanation has to do with the fact that "progressive" forces see the WTO (along with the IMF and the IBRD) as both symbol and substance of 'globalization'.

This view reflects a general sense that the market (as represented by unelected, largely foreign, pro-big business bureaucrats or, in this case, "euro-crats") was coming to challenge the state (as understood as various elements of civil society). In many ways, it is the classic "efficiency versus equity" argument. Big business (the WTO's primary constituent, or so it would seem) cared little for social issues, for the environment, for culture, or for national identity. The WTO became, at least to the protesters, and, to some extent, to American television viewers, the harbinger of a world without social conscience. and the seamy side of the new world order.

Why Now?   First, it is critical to keep in mind that this is not a new phenomenon. Trade has been at the center of various national debates for all of this century, and before. The ITO (the original Bretton Woods trade organ) was not ratified by the US Senate in the mid-1940's as it was "too political" . The GATT, a short-term, stop-gap measure, was adopted in 1947. The WTO emerged in 1995. It is still a relatively young organization and it clearly represents or is symbolic of "the new global order".

In Canada we are extremely conscious of the politics of trade and how it can occupy the front pages of newspapers and key spot on the evening news. This was driven home forcefully by the CUFTA debate in late 1980s and, to a lesser extent, by the NAFTA debate in early 1990s.

There seems to be some real confusion about why now?  The United States is in the midst of its most impressive period of economic growth -- ever! The other principal developed market economies are also doing very well. And, despite the setbacks experienced in Mexico in 1994 and the East Asia region in the late 1990s, the emerging economies continue to demonstrate strong growth and stable political development. However, some people are very concerned about the market, about the so-called new economic realities, about the instability and volatility that caused the recent crisis in East Asia (not to mention the various failures in Russia, Eastern Europe, Brazil, and elsewhere) and about the potential for even more dislocation.

What happened in Seattle would have been difficult to predict. It was not clear until about a week before that the meeting was doomed to fail; nor was it clear that the parallel meetings, lead by some of the key anti-globalization groups, would lead to such spectacular public demonstrations and riots.  And, to be sure, it was not clear how much press the whole thing would get. Overnight, the WTO became a household word in America . and, not a very nice word!

What Next? The question of what comes next depends, of course, on where you stand. Some of the protesters in Seattle are members of what could loosely be called "the resistance movement" and want the WTO (and the IMF) abolished. Others, that we could call reformers, want the WTO transformed into some kind of democratic organization. They want "core labor rights", environmental protection, and something akin to what the European Union has included in the so-called Social Contract. They are calling at the least, for a "social clause" to be integrated into the WTO's mandate and expressed in its practices.

Still others, mainly national governments and proponents of the status quo, want the WTO to push ahead with the liberalization effort, in spite of, or maybe because of, the protests. In fact, this group has been arguing that it is precisely the undemocratic nature of the WTO that frees it from the divisive domestic politics that too often hamstrings national governments.  For its part, the organization itself will have to deal with the following issues:
1,  should it rethink the liberalization agenda;
2,  how can the failure of Seattle be addressed;
3,  is it possible to address the discrepancy between 1st world and 3rd world positions; and,
4,  how can the 'implementation issues" be addressed?

III        WHY THIS MATTERS SO MUCH FOR CANADA?
 We should keep in mind that while the official Canadian position is clearly pro-WTO, and pro-trade liberalization, there is considerable potential for that position to soften. Canada is a country long committed to the widest possible interpretation of social justice and the collective good and occupies a somewhat more liberal position on the political spectrum than the United States. Finding an appropriate role for civil society is a key issue for the Foreign Minister, and, as might be expected, NGOs are seen to be of  increasing importance.

The key to Canada's position, however, lies in the success of the CUFTA and the NAFTA and the tremendous importance of Canada's trading relationship with the United States. There has been a steady increase in economic convergence in the Canadian - American relationship, and, for that matter, in North America more generally. In addition, Canada's overall economic well being is increasingly dependent on foreign trade. First, there has been a steady increase in the volume of trade from 60s to 90s (and in the US share of total trade). Secondly, there has been a marked increase in trade vulnerability in both countries, with the overall share of GNP deriving from exports rising steadily. Third, there has been a clear reorientation towards a more formal, more legal regime (CUFTA & NAFTA) and an in increasing focus on dispute settlement provisions and market management. Fourth, there has been an increase in expectations and a widening of the
terms of association (evidenced, in particular, by the labour & environment accords). In short, roughly 40% of Canadian GDP and about one in three jobs depend on our ability to sell our goods and services abroad. Between 1992 and 1996, our exports grew roughly four times faster than our GDP,  creating more than 1 million new jobs. Machinery and equipment have become the top exports, overtaking commodities, which have fallen from 60% in 1970 to 35% in 1997.

Canada and the WTO. The official position on the WTO is very positive and uncritical. It is possible to support this observation with ministerial speeches, shifting policy priorities and changing political agendas, but the bottom line is that the Canadian government has become unabashedly pro-free trade and continues to be unambiguously pro international organization.

Minister Marchi, then occupying the trade portfolio, noted in 1999 that "[a]s we look ahead to a new set of negotiations at the WTO, [there are be] six areas that will be crucial in framing the debate: assessing where we have come from; recognizing the new dynamic that all trade is now local; promoting Canadian values abroad; addressing the need for further negotiations; deciding how these negotiations should proceed and what they should cover; opening up the process."  The position articulated by Mr. Marchi has simply not changed.

IV        TRUTH & CONSEQUENCES: REGIONAL TRADING ARRANGEMENTS  & CIVIL SOCIETY
 My view on these matters is relatively straightforward. First, Canada cannot afford to be too sanguine about trade. Second, trade liberalization is necessary for Canada, and good for everyone. An ongoing commitment to sharpening the focus of the rules and ensuring compliance is essential to the continued success of the WTO. However, Canadian values must be met in the process.

At the domestic level in Canada, this means, inter alia, that a frank and open debate has to happen. On other hand, it strikes me that nothing is so new here  -- the state is not about to collapse, democracy has not been fully suspended, immigration does not represent anywhere near the kind of threat that some would suggest, the third world should (and will) make some of their own mistakes, we must try not to be too patriarchal, and, no matter what, the organization has value.

Last updated 06/04/03: rr