The stakes for the World Trade Organization and President Bush’s ambitious trade policy have never been higher as the group meets this week in the Persian Gulf emirate of Qatar.
With $2 trillion in two-way trade last year, the United States has the most to gain from reaching a deal to open new negotiations on tearing down barriers to international commerce. Failure would be a blow to U.S. prestige, and a devastating setback for the WTO’s mission of encouraging freer trade.
But WTO members face even tougher hurdles to success than two years ago, when they failed to agree on new talks at a chaotic meeting in Seattle.
Then, the world’s economy was growing. Now, recession looms in the United States, Japan and Europe, dragging down growth in Third World countries.
Seattle was so open that protesters were able to wreak havoc in the streets. This time, Qatari officials have stretched a tight security net over the capital of Doha amid fears of new terrorist attacks.
And many of the disputes that divided rich and poor nations in Seattle still fester.
But the odds that the 142 members of the WTO will open trade talks have actually risen since Seattle, thanks largely to concerted cooperation between the United States and Europe.
The widespread conviction that the WTO’s mission of fostering world trade cannot survive another Seattle-like debacle has also boosted the chances in Doha, according to U.S. and foreign trade officials.
“My sense is that success is within our collective grasp, but we have a lot of work to do,” U.S. Trade Representative Robert B. Zoellick told reporters.
Mr. Zoellick, a veteran diplomat from the administration of President George H.W. Bush, has tried to turn the events of September 11 to his advantage. Building up the WTO, he said in a recent speech, is an answer to terrorists who are “masters of destruction, but failures at construction.”
Beginning tomorrow in Doha, trade ministers will try to hammer out a deal to begin the first global trade negotiations since 1986, and the first since the creation of the WTO in 1995. Countries have been edging toward each other for months during preparatory talks at WTO headquarters in Geneva, and a draft decision has been prepared.
Under heavy security amid fears of another terrorist attack, the countries will grapple in Qatar with the top U.S. priorities: how to reduce farm subsidies, open up trade in services like finance and telecommunications, and continue 50 years of reducing tariffs. The trade chiefs will also try to resolve a bitter dispute between rich and poor countries over patent rules for life-saving pharmaceuticals.
The talks, which promise sleepless nights for negotiators until their scheduled end on Tuesday, come as the world economy has stalled. Last year, international trade grew by 12 percent, but this year it will be lucky to manage 2 percent, and could very well contract, according to the WTO.
With Wall Street already jittery from the ongoing war in Afghanistan, many observers feel that a collapse of negotiations in Qatar could make a bad situation worse.
“Before September 11, the markets were cascading,” said Richard Fisher, a deputy U.S. trade representative in the Clinton administration. “A failure could trigger further selling.”
But fortune may yet smile on the WTO.
Cooperation between the United States and Europe has blossomed under Mr. Zoellick and his longtime friend, Pascal Lamy, Europe’s trade commissioner. Through long telephone conversations and weekend meetings with other trade ministers in Singapore and Mexico, the two have laid aside differences over bananas and hormone-treated beef to concentrate on the big picture at the WTO.
“This time, my judgment is that we are 80 percent there,” Mr. Lamy said. “And the EU-U.S. relationship has been crucial.”
Trade diplomats will also head to Doha without the usual worries about violent anti-globalization protesters, a presence at every international economic meeting since Seattle. Instead, anti-WTO groups will gather in smaller demonstrations around the world during the Doha meeting.
“If the WTO thought they’d shut us up by going to Qatar, they’ve got another think coming,” said Lori Wallach, director of Global Trade Watch, a group founded by consumer advocate Ralph Nader.
To get a deal in Doha, negotiators will have to navigate their way through a thicket of contentious issues and cross-cutting alliances, trade officials said.
The price of success may be vague language in the declaration issued at the meeting, said Clayton Yeutter, the Reagan administration’s trade representative and chief architect of the talks that began in 1986.
“There will be plenty of ambiguity, but that’s how deals get done,” Mr. Yeutter said.
Rich and poor countries will square off over whether to loosen rules on patents for the pharmaceuticals to meet public health emergencies like AIDS. The United States, along with Switzerland, has led the opposition to this step, advocated by Brazil, India and many African countries.
But U.S. negotiators are likely to face claims of hypocrisy in Doha since Secretary of Health and Human Services Tommy G. Thompson said he might override the patent of Bayer Corp. for its anthrax-fighting drug Cipro.
The United States has the support of rich nations like Canada and Australia and poorer nations like Brazil in seeking the elimination of Europe’s system of subsidizing agricultural exports. Mr. Lamy has rejected this demand outright, setting up an open confrontation between Europe and most of the rest of the world.
Under the rubric of protecting the environment, Europe is also seeking rules that might permit trade restrictions in the name of animal welfare or food safety.
Virtually every other country in the WTO wants to negotiate changes to the American system of penalizing imports that are “dumped” in the United States at unfairly low prices. Mr. Zoellick has not given in.