For the first time since 1991, when USA became the single superpower, its hegemony was challenged in a world forum, during the recent Ministerial level conference of the World Trade Organisation (WTO) at Seattle. What happened at Seattle during the four-day event beginning on 30th November, also vindicated the analysis of our party that the correlation of world forces was not the same in 1999 as it was in 1994, when the Marakesh agreement was signed, that brought WTO into existence. It also confirmed what we had been repeatedly saying, that the less developed countries, generally speaking, are now convinced that the Marakesh agreement has damaged their trade and economy, and has taken away their option of ever getting out of the poverty trap and following a path of autonomous national development. We also said that the poor countries are now seething in anger against the global trinity of World Bank, IMF and WTO, and are now looking for an opportunity to ventilate those in an international forum. We also urged the government of India to be bold, to take an independent stand in national interest and to seek the path of self-reliance autonomous development, away from the stranglehold of rich country MNCs, that are being patronised by the global trinity.

The background

Please recall what had happened during the eight years of Uruguay Round trade negotiations. From 1986 to 1991 the poor countries offered some resistance to the introduction of TRIPs, TRIMs and GATS, as also the draft agreement on agriculture. But, after the disintegration of the Soviet Union in 1991, their opposition melted away. They were reduced to muted spectators, while the three major players in world trade arena - USA, Europe and Japan - shaped their destiny, and dutifully signed the dotted line in 1994 at Marakesh. If the Uruguay round was not over by 1991 that was because of disputes between the USA and Europe on the issue of agricultural subsidy. Throughout these eight years, the trio occasionally consulted the so-called Cairns group of well off agricultural exporters, such as Australia, Brazil and Argentina, and even one or two East Asian countries, but never the other less developed countries like India, who were kept firmly on the sideline and given no role to play in the preparation ofinternational documents that determined the course of their own development.

Whatever their number, the less developed countries counted little in global trade negotiations, because of their negligible share of world trade, India's share being a mere 0.6%. The Marakesh agreement put the rich country MNCs on the saddle, while the poor countries were asked to open up their economies for MNC exploitation. Paradoxically, despite the rhetoric of free trade, there was no reciprocal freeing of trade in the developed countries. Poor countries continued to face insurmountable difficulties in selling their products to the rich country markets.

Obstacles to third world exports were erected in the form of non-tariff barriers, such as quota restrictions on textiles, or in the name of environment or child labour deployment. The rich and poor were not playing on level-playing field. Rules, as interpreted and defined by them, discriminated against the poor country exports. The rich countries became the main players in world market on wheat, a product that they should not have produced, not to speak of exporting, going by the logic of comparative advantage and free trade, by giving enormous subsidies to their agriculturists. Their astronomical subsidies, to the tune of more than $300 billion, to agriculture was defined as good and 'not trade distorting', while the poor countries were asked to remove whatever little subsidies they were giving to their own agriculturists, on the ground that these were 'trade-distorting' and, therefore, bad. The rich countries continued to be restrictive in their import policies, and generous in protecting their own industries and agriculture by way of subsidies, while asking the poor countries to liberalise their imports , at the cost of the domestic industries. WTO was set up in 1995 with the objective of monitoring and disciplining the activities of the member countries in line with the 1994 Marakesh agreement. Those straying from the Marakesh agreement risked punishment given out by the Dispute Settlement Board (DSB) of WTO.

Preparing for the third ministerial conference of WTO: our view

It was in this global context that the third ministerial conference of WTO was being held, for four days, at Seattle, from 30th November, 1999. This followed the ones held in 1996 and 1998, to review the functioning of WTO, particularly on intellectual property rights, agriculture and services, and also to consider some new items that USA or Europe wanted to introduce, such as labour and environment standards, global rules on investment and competition policy, e-commerce, government procurement, global architecture, and the role of NGOs.

Our party saw this conference as an opportunity to mobilise the third world countries to rectify, at least partly, the damage done at Marakesh to their trade and economy. We also warned that, should the third world countries fail to unite, the rich countries would take away whatever little safeguards still existed in the Marakesh agreements. We feared that attempts would be made to bind the third world economies with more of standardised global rules, on environment, labour use, investment, and what not, in addition to those already imposed in 1994, that would operate irrespective of their history, levels of development, resource endowments and human skills.

For one full year, particularly from the time the parliament discussed and then legislated exclusive marketing rights (EMR) for patented products, our party had been warning the government, by way of speeches in the parliament, press conferences and letters to the Ministers, about the seriousness of this coming global level trade negotiations, and had been asking the government to do the necessary home work and to commit themselves to hard bargaining. We pointed out that the rich countries had been preparing for months to protect and extend their own interests and had been tapping their own enormous brain power to produce drafts that would project their own interests as global interests. Battle against such formidable enemies should not be taken casually, assuming that the government indeed possessed the political will to fight for economic sovereignty.

Such battles could not be fought by India alone. We urged the Indian government to forge trade alliances. We pointed out that while European countries had forged a Union, USA joined her neighbours to establish NAFTA, 10 East and Southeast Asian countries had ASEAN in place, as also the countries in Africa and Latin America in the form of various trade alliances, India belonged to none, and its meagre share of world trade would not count for much. On the other hand, India, given its territory, population size and natural resources, was potentially a large market, and, unlike small countries like Nepal or Sri Lanka, could play a vital role in mobilising poor countries in world trade negotiations. We reminded those who were willing to listen that the non-aligned movement began in the mid-fifties as a loose alliance of three countries, but within a few years became a mighty force. We urged the formation of South Asian Free Trade Association (SAFTA), and the use of this as a prop to forge trade relationships and common understanding with the 10 Southeast and East Asian countries that are now grouped under ASEAN, and other big countries such as South Africa, Egypt, Nigeria, Brazil, Argentina and Mexico.

Keeping all these in mind, over the past one year we had been urging the government of India to build a national consensus on India's position at the 1999 Ministerial conference. We pointed out, when Vajpayee government collapsed and the election became inevitable, that no matter what the electoral outcome was gong to be, it would be easier for the new government, whatever its composition, to go ahead with that consensus. But without such consensus, there would be hardly any time, between the formation of the new government and the Seattle conference, for adequate preparation for this highly important meet.

We also suggested that, if such consensus was not forthcoming, the government should seek a national debate, by putting forward its own position on the issues to arise at Seattle in the form of a white paper, and by asking other political forces to present their alternative views. Such national debate on the implications of this international conference and its implications for India's course of development, could have made the last electoral battle more meaningful and less of a personalised mud-slinging exercise.

But neither the government of India nor the main opposition party were willing to strive for a national consensus or to sponsor a national debate during election seeking people's mandate on the issues. Both were keen to suppress vital information and to make a deal with the rich countries and their MNCs, at the cost of national interest. This was the way Congress behaved when it was in power, and this was exactly the way BJP behaved when it took over the government at Delhi, as it was amply confirmed during discussions on patent bills in1995 and again in 1998-99.

Seattle: invitation to participate in the delegation.

It was against this background that an invitation reached the party from the new Minister of Commerce and Industry, Murasoli Maran of DMK to our party, on 25th November, 1999, asking us to send a representative who would become a member of the official Indian delegation at Seattle. Since we had been advocating for long for a national consensus on this issue of national interest, it was not possible for us to reject the invitation. At the same time, we had to ensure that our own widely known position on this issue was not compromised. The fact that the Minister was new, and did not belong to either BJP or Congress, made the task easier. Still, to maintain transparency and to avoid misunderstanding, we put our position on record on all the major issues in a letter that was hand-delivered to Mr. Maran at Seattle on 29th November, 1999.

The fact that the conference was being held at Seattle, and this city was selected out of 40 US cities on the list, was largely because this beautiful town, located on the shore of the Pacific Ocean, was also the headquarter of two of the largest MNCs of the world - Microsoft and Boeing. The Chairman of the sponsoring committee, at the Seattle end, was none other than Bill Gates, the icon of modern capitalism. The city is also one of the largest ports of USA, bringing hundreds of billions of export earnings to that country.

Protests against WTO at Seattle

From 29th November evening there were indications that the conference would not pass uneventfully. By then a large number of people, mostly very young, had poured into this city from all over USA and Europe. Though their demands varied and were often in conflict with one another, they were united in their antagonism towards WTO. The most militant amongst them strongly opposed corporate domination of the world, their ruthless exploitation of the poor countries, and the evils of modern capitalism, and were joined by students from the nearby university.

There were also those whose objective was 'protectionist', to block off third world exports in order to save US jobs, and complaining that low wages in poor countries were making their goods cheaper and posed a threat to the livelihood of US workers. Another large group consisted of environmentalists of all sorts, seeking protection of turtles, baby seals, whales, and so on. There was also a group championing the cause of human rights, and their placards reflected their concern about life in East Timor, Tibet or Cosovo. What struck the delegates was the festive nature of their protest, almost reminding one of the days of the late Sixties and the early Seventies, when USA and Europe were rocked by campus demonstrations against Vietnam war, and also their common hatred for WTO. They were chanting slogans, singing and dancing on the streets , facing police cordon.

On 30th November, the first day of the conference, thousands of demonstrators encircled the Convention Centre and the downtown hotels where the delegates were staying. The inaugural ceremony was to take place at Paramount theatre, not in the Convention Centre, heven knows why, in a large hall decorated in old European style. There was no way of knowing that an important world conference was being held in that location, as there was no banner or hoarding announcing the global meet. The only hoarding to be seen was on 'Cabaret', a musical going on in that theatre at that time. Inside the hall also everything was casual, and there was no evidence of any kind of decoration. Two banners were hastily pinned in the background, while some shabby blue clothings were used to partition off the place for the photographers. Even our SFI or DYF comrades would have organised their conferences with a great deal more thoughtfulness. The hall totally lacked the atmosphere for an international conference. As it turned out later, the organisers knew that there would be no inauguration ceremony.

Because of security reasons delegates arrived one hour earlier, at 9 in the morning. But until 11.30 nothing happened, nor would any one from a dozen standing or sitting on the dais explain, by using the public address system, why nothing was happening. We heard from the grapevine that the demonstrators were not allowing Mike Moore, Director General, and Madeline Albright, US Secretary of State who was supposed to inaugurate, to come out of the hotel. At 11.30 some one from the dais addressed from the mike, but only for a minute and only to say that the ceremony had been delayed, and not even apologising for the delay. At 12 noon, two of the protesters sneaked into the hall and the dais, and one of them, a young girl, seized the mike and suggested that, while it was uncertain when the formal ceremony would start, those assembled could engage in an informal dialogue on world trade issues. Before she could finish the sentence, the mike was switched off and she was dragged out of the hall by policemen in civilian dress. It was amply clear by then that the inaugural ceremony would not take place, and the delegates left the hall.

The conference, thus, started inauspiciously, as a superstitious person would describe it, without any inauguration ceremony, around 3 in the afternoon, at the Convention Centre, which was round the corner from the hotels where delegates were staying. Indian delegates walked 2-3 minutes to reach convention from the backside of the Sheraton Hotel, police heavily guarding the route and checked credentials, but the first working session was over by six as the fight between the protesters and the police spread to a large part of the city centre. A kind of emergency was declared, and the curfew was on from seven in the evening. The television cameras were glued to those road junctions where protesters assembled in large number, and the police, quite passive for most of the day, began throwing tear gas shells, some of which were thrown back at them by the demonstrators. Then came the police attack with heavy truncheons, followed by the firing of rubber bullets. From the 34th floor of the Sheraton Hotel, one could get a panaromic view of the fight between the protesters and the police, the latter barely able to contain them.

While this protest by the anti-WTO NGO network and environmentalists was going on, by far the largest number on the street were an orderly procession, of 20000 to 40000 according to various estimates, organised by AFL-CIO, the official trade union in USA, with the permission of the government, demanding protection of their jobs from third world exports and asking for 'labour- standard' to be imposed by WTO on the third world countries. That this demonstration had the official blessing was made clear by the comments made by the Mayor of the city, the police authorities, the TV commentators, and ultimately by President Clinton himself , differentiating between 'orderly' protesters subscribing to the democratic tradition of protest in a democracy, and 'criminals' who were out for trouble. The rubber bullets and tear gas shells were reserved for these 'criminals', while the 'orderly' protesters were praised and sympathies were expressed in support of their demands. But for a few isolated cases of arson and breaking in, where a very small number participated, who might well be agent provocateurs, the vast majority of the protesters who were branded as 'criminals' were a committed, jolly and youthful crowd, many of them flowing in from the nearby university campus, dancing and singing, forming a human chain around Convention centre and the hotels.

The Third World Protest Inside Conference

When Clinton came the following day, spoke and met delegates, had lunch with leaders of delegations, he sympathised with those seeking 'labour standard' and even threatened countries not subscribing to a 'core labour standard' with trade sanctions. 'People must be heard", he said, not recognising that had this conference been held in India there would have been a different set of protesting people, mainly indigenous agricultural and industrial producers who have been grievously hurt by competition with western MNCs because of import liberalisation or exporters who have been denied access to the rich country markets on one pretext or another. Their slogans would have been "end this double-speak on free trade and world without subsidy and protection, open rich country markets to poor country exports, and limit MNC take over of domestic economy".

Obviously Clinton was badly advised. While expressing those sympathies, he was actually not addressing WTO delegates, but voters in the USA in this election year. He also wanted to convey to the delegates the depth of feeling in the USA against third world competition based on low ages and neglect of environment, so that they would be induced to accept labour and environment standards specified by WTO. The strategy backfired, as the third world countries, united like rock despite differences on other issues, opposed those standards. They expressed the fear that those standards would act as non tariff barriers and would be used to keep the third world exports away. They questioned why issues relating to labour should be discussed in a trade forum, and recommended that it be referred to International Labour Office, the specialised agency affiliated to the United Nations that contains, along with governments, the representatives of labour and management. They asked why countries should be 'told' about 'core labour standards', rejected this invasion on economic sovereignty, and wanted to leave it to them to legislate on those. Clinton's reference to trade sanctions was deeply resented. USA imperialists were revealed as big bullies insensitive to third world needs and sentiments.

From then onwards it became extremely difficult for the conference to reach any consensus. The poor countries were by no means united on many issues, e.g., the exporters of agricultural products like Brazil, and net food importers like Sub-Saharan Africa had conflicting interests, but on this issue of 'labour standard' they were operating on the same wave length. Even India, Pakistan and Bangladesh joined hands and made common cause. Countries as diverse as Egypt, Kenya, Indonesia and Brazil blasted this attempt by USA-Europe to drive the third world exports out of the market. Even those who did not speak, such as the countries heavily indebted to IMF and World Bank and therefore vulnerable to rich country blackmail, also gave full support from behind.

As the conference proceeded, USA and Europe began lobbying very hard, mixing threats with promises, and produced one draft after another on labour issue hoping that one or the other would be acceptable to the delegates. They even tried to woe the 'least developed' 48 countries, led by Bangladesh, with large concessions, and to separate them from the 'less developed' ones. But for the first time in many years this tactic did not work. While during the latter part of the Uruguay round the poor countries were no more than mute spectators, this time their boiling anger against G7 domination found loud expression during bilateral negotiations and in plenary speeches.

By the late evening of the third day, that is 2nd December, USA made another mistake, insensitive as they had always been to poor country sentiments. In their desperation to reach an agreement, they arbitrarily formed a 'Committee of the whole" consisting of only 23 countries, and shifted its venue to the 'green room' of the Director General that could accommodate about 50, that is 2 per country, the Minister and one aide. While this 'green room' negotiation went on, from the early morning of 3rd December throughout the day, those excluded from the deliberations, more than 100 countries, mostly black, poorer and smaller, felt badly humiliated. The African countries sat together and composed a protest letter, almost threatening a boycott of the proceedings. Those lucky enough to be inside, including India, Pakistan and Bangladesh, also felt the compulsion to articulate the mood of those left outside the star chamber.

By the evening of 3rd December everything seemed to be breaking up. There was confusion all around, no one seemed to be in control. Apart from the main contradiction between the rich and the poor countries, there were serious differences between USA and Europe on the issue of agricultural subsidy, and also between USA and Japan on the issue of food security, the latter giving an astronomical 1000% support to domestic food producers to maintain food self reliance. The US Trade Representative, who was also Chairperson of the Conference, Cerlene Bershefsky, became an universal hate object by then because of her abrasive and curt behaviour towards all. Pretty as she is, and quite young at 49, she represented everything that was ugly and evil in the US imperialism. She failed to recognise that the world had changed a great deal since the Uruguay round. In the post-1995 scenario it was no longer possible for her to behave as arrogantly as her predecessor as US representative in trade negotiations, Carla Hills. Most delegates said, that though they were promised all kinds of gains from trade during the Uruguay round, the fact was that they gained very little, and in many cases lost a great deal, through liberalisation.

The third world countries could no longer be taken forgranted, as they had been in 1994-95. This created another problem for the G7 countries in relation to WTO. Though WTO is one of the global trinity now ruling the third world economy and fully shares the economic philosophy of the other two that is centered round market, there are important organisational differences between them. While IMF and World Bank virtually operate as joint stock companies with G7 countries collectively owning majority shares and voting rights, in WTO, like in the United Nations, every country, big or small, rich or poor, carries one vote. Further, by convention, WTO is expected to work by consensus, that is everyone should agree , and on each and every subject, "Nothing is agreed, until everything is agreed"- is the motto. This was put in by the rich countries so that the numerically far superior less developed countries would not be able to vote them out on any issue In 1994 , while WTO was in the process of being formed, they could have based the voting power of a country on its share of world trade in order to obtain and maintain a majority. This they did not, probably because they thought that the poor countries would remain as compliant as they had been, in the period immediately following the disintegration of the Soviet Union, for ever. Now, in 1999 December, on the eve of the beginning of a new millennium, they were caught up with a situation where it was no longer possible to arrive at a consensus, and that too on each and every point as required by WTO convention.

An inconclusive end

The last plenary session was as much a non-event as the first, ceremonial, one. By 10 p.m. on the last day, every one was in a hurry to bring down the curtain. Cerlene Berchefsky made a very brief statement, saying that the Seattle conference would have to end inconclusively, as there was no agreement. She mentioned the word , 'frozen', indicating not everything done at Seattle would be lost. She hoped that the Director General, Mike Moore, would take initiative to arrange negotiations on agriculture to begin from January, and further talks after consulting every one. She remarked that the 'sleepless at Seattle' ( the only touch of humour in an otherwise grim speech) probably sacrificed transparency by holding sessions only with 23 selected countries in 'green room' and thus leaving 100 odd country delegates to loiter outside. Her speech was followed by 2-3 minute summing up by six chairmen of various groups, and by a slightly longer speech by Director General. And then those on the dais got up, indicating the end of the conference. There was no joint declaration, no passing of resolution, and not even a vote of thanks.

A word about the Indian delegation. It was led by a Minister who did not belong to BJP, and supported by three MPs two of whom belonged to two major opposition parties ( Congress and CPI(M)) and the third to a party that supports the ruling alliance from outside (TDP). The high profile team of officials included Commerce Secretary and Secretary to the Prime Minister, and three ambassadors - to USA, to UN, and to WTO. The team, on the whole, worked well, but for one or two minor blemishes, mainly on the draft on agriculture, and remained firm in their resolve not to compromise on vital issues. The national consensus that we as a party demanded emerged, though late, at Seattle. The only major note of discord came from a section of business representatives - from Ficci, CII and Assocham- who had been repeatedly warning the delegation about the impending isolation of India for not toeing the US line and its fearful consequences.

The Seattle battle has ended in a defeat for US imperialism. Their hegemony has been effectively challenged, and their hypocrisy and double talk now stand fully exposed. But there is no room for complacency. Nothing can be more wrong than to underestimate rich country resourcefulness to fight back, nor should one forget the vulnerability of BJP, the main ruling party, and Congress, the main opposition party, to US pressure. . One battle has been won, but many more battles are to come, and the war is still on.

The Sleepless at Seattle: the first major US defeat since 1991Biplab Dasgupta

For the first time since 1991, when USA became the single superpower, its hegemony was challenged in a world forum, during the recent Ministerial level conference of the World Trade Organisation (WTO) at Seattle. What happened at Seattle during the four-day event beginning on 30th November, also vindicated the analysis of our party that the correlation of world forces was not the same in 1999 as it was in 1994, when the Marakesh agreement was signed, that brought WTO into existence. It also confirmed what we had been repeatedly saying, that the less developed countries, generally speaking, are now convinced that the Marakesh agreement has damaged their trade and economy, and has taken away their option of ever getting out of the poverty trap and following a path of autonomous national development. We also said that the poor countries are now seething in anger against the global trinity of World Bank, IMF and WTO, and are now looking for an opportunity to ventilate those in an international forum. We also urged the government of India to be bold, to take an independent stand in national interest and to seek the path of self-reliance autonomous development, away from the stranglehold of rich country MNCs, that are being patronised by the global trinity.

The background

Please recall what had happened during the eight years of Uruguay Round trade negotiations. From 1986 to 1991 the poor countries offered some resistance to the introduction of TRIPs, TRIMs and GATS, as also the draft agreement on agriculture. But, after the disintegration of the Soviet Union in 1991, their opposition melted away. They were reduced to muted spectators, while the three major players in world trade arena - USA, Europe and Japan - shaped their destiny, and dutifully signed the dotted line in 1994 at Marakesh. If the Uruguay round was not over by 1991 that was because of disputes between the USA and Europe on the issue of agricultural subsidy. Throughout these eight years, the trio occasionally consulted the so-called Cairns group of well off agricultural exporters, such as Australia, Brazil and Argentina, and even one or two East Asian countries, but never the other less developed countries like India, who were kept firmly on the sideline and given no role to play in the preparation of international documents that determined the course of their own development.

Whatever their number, the less developed countries counted little in global trade negotiations, because of their negligible share of world trade, India's s

Seattle Reports
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