Jonathan D. Aronson
The collapse of the Seattle meeting of trade ministers from 135 countries in November 1999 was a shock. The five-year-old World Trade Organization suddenly gained the spotlight that it craved, but not in the way that its leaders had imagined. Public protests that linked environmentalists and labor movements in an unlikely alliance grabbed the headlines while negotiators from the United States, Europe, and the developing countries deadlocked behind closed doors.
Afterwards the press portrayed the collapse as a serious setback for trade liberalization while government officials downplayed the episode as a minor setback that delayed but did not derail the proces s.
The first section of this essay briefly (1) reviews the background of the WTO, (2) considers the objectives of the key players going into Seattle, (3) assesses the reasons for the breakdown, and (4) suggests how to proceed towards a new round of trade negotiations. The second section focuses explicitly on what needs to be accomplished to update global trade rules in light of the rise of “the New Economy” driven by new telecommunications and information technologies.
For more than half a century trade negotiators meeting under the auspices of the General Agreement on Tariffs and Trade (GATT) struggled to promote trade liberalization through a series of ever-lengthening trade rounds. Throughout, negotiators worked to lower tariffs, improve transparency, promote national treatment for goods once they cleared customs, and guarantee mostfavored-nation treatment for all members of the club.
Over time tariffs fell significantly and world trade increased dramatically. Ironically, despite all the progress towards free trade, significant trade barriers persisted and new ones, mostly non-tariff barriers, were revealed or created. GATT and its rules evolved.
Five major trends were evident. First, GATT expanded beyond tariffs and focused more of its attention on non-tariff barriers such as subsidies, standard setting, and government procurement. Second, GATT expanded its mandate to