In an ironic turn of events, the erstwhile `trade unionists' of the developing world went to the Seattle Ministerial Meeting of the World Trade Organisation prepared for long hours of negotiations willing to "give and take", while the world's largest trader, the United States, chose to negotiate at the barricades, spewing populist rhetoric and braving tear gas shells!
It is a measure of how badly this strategy backfired that not only has the US Ambassador to India, Richard Celeste, rushed to the press with an article in a leading national daily on his country's commitment to the WTO process, so that wrong conclusions are not drawn by the anti-WTO enthusiasts in India, but even western diplomats from countries very close to the United States are willing to let it be known that they disapprove of President Clinton's populism and the strategy of pitting non-governmental activists against representatives of governments, mostly democratically elected ones.
While there is no doubt that President Clinton's Bolshevism was partly responsible for the collapse of the Seattle meeting, the fact is that a second factor paid an equally important role, namely the inability of the US and the European Union to arrive at an agreed position on a range of issues, particularly agricultural trade. Indeed, as in the case of the multilateral agreement on investment (MAI), trans-Atlantic differences have hobbled the progress towards the next WTO Round -- the `Millennium Round' or `Development Round' -- rather than the unwillingness of developing countries.
The public "battle at Seattle" was, of course, between the aspirations of developing countries for greater market access and the desire of workers in developed countries to prevent this fearing a loss of employment and thereby the quality of their life. But then, this has always been the battle within the multilateral trading system. At the cost of simplifying the argument it can be blandly stated that what is new is the fact that the developed and developing countries have exchanged places in the great ideological debate on the virtues of free trade. It is useful to remember that the advocates of protectionism have always come from weaker economies and those of free trade have come from the stronger economies. The history of economics stands testimony to this.
English economists advocated free trade when England was a stronger economy and at the time it was left to the Germans and Japanese to be sceptical. When Britain went into decline the advocates of free trade shifted from Oxford, Cambridge, Glasgow and London to Chicago, Boston and thereabouts. Japanese support for free trade arguments is a relatively recent phenomenon. Many East and Southeast Asian economies were protectionists till they realised that "rule-based" multilateralism is better suited. Pragmatic self-interest rather than ideology has dictated policy thinking everywhere. So it is not surprising that industrial interests even in the world's strongest economy but belonging to some of the weaker sectors of that economy should be once again talking the language of protectionism after having been advocates of free trade in the post-War period.
What should India's response be? The Union commerce minister articulated India's stance correctly and appropriately when he said that while he believed in "give and take", he would also draw a "bottom-line" on what is not negotiable at the WTO. India, like many other countries, mostly developing but also some developed, has drawn a bottom-line on linking trade policy with labour and environmental issues. There is a school of thought that believes that India must now rollback the opening it gave on trade and environment. There are others who believe we must also rollback the space we yielded on linking trade policy with intellectual property rights. Indeed, there is also a school of thought which believes India must seek a
