From Bananas to Buttons, New Trade Rules Kick In
JUST down the hill from the Byzantine office complex built after World War I to house US President Woodrow Wilson's failed League of Nations, a bold new experiment in global government is being launched.Skip to next paragraph
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The World Trade Organization quietly opened for business here on Jan. 31.
Supporters say the WTO, with 76 members and 16 states close to joining, will be able to erase national borders to increase the flow of goods and services, ease racial and class tensions, and even avoid wars.
But the WTO's mission -- opening up dozens of markets and exposing millions of workers to foreign competition -- may be more difficult than expected. And whether WTO's ''nameless, faceless bureaucrats'' (as one United States politician called them) can be effective global governors will be determined in the first year.
The stakes, supporters say, are big.
''Trade has caused in the past more division and war than anything else,'' outgoing WTO Director-General Peter Sutherland said in an interview.
''We have seen how the development of trade links of a profound kind in the case of the European Union, for example, have transformed relations between peoples,'' Mr. Sutherland added. ''There is [also] the opportunity of removing a lot of racial barriers through the greater communication which comes through trade.''
The first tiptoe toward world trade was taken with the creation of the General Agreement on Tariffs and Trade shortly after World War II, when tariffs left over from the Great Depression were prohibitively high.
After decades of revisions to GATT, the latest 1993 accord that created the WTO is the most powerful yet: More than 120 countries agreed to lower their tariffs by an average of one-third. Agricultural tariffs are dealt with for the first time, as is intellectual property. And the newly created WTO has the sanction power, on paper, to make countries accept its rulings.
Remembering the little guy
Supporters say the significance of the WTO is often lost in the haze of economic statistics that confuse both expert and average observers.
A majority of the world's nations -- including the most powerful states in the world -- are agreeing to stick with the decisions of an impartial panel of experts chosen by the WTO's dispute-resolution board.
There is no loaded UN Security Council dominated by the United States and its European allies in the WTO -- for now. The US might theoretically have to knuckle under to a request from tiny Costa Rica, for example, if the dispute-resolution board says so.
If the US decides not to play along, the WTO is in trouble, say WTO officials. ''If the first dispute involves the US, and it loses, and then the US doesn't implement [the decision], what kind of precedent does that set?'' asks a WTO staffer. ''GATT is ruled by consensus, and it's a fragile body.''
But Sutherland predicts that WTO will work because it has to. Free trade is being accepted by rich nations because they see it as the only way to boost their own prosperity while stemming a flood of illegal immigration from poor countries.
''I'm saying that you can have migration or you can have trade,'' Sutherland warned. ''Whether we're talking about Central and Eastern Europe or Latin America or whatever, you have to give the safety valve of opportunity.''
The WTO is off to a rough start, however. A group that must make its decisions by consensus is already experiencing infighting.
The search for Sutherland's successor as director- general of the WTO is deadlocked, and the former Irish bank president who guided the new pact through its final, difficult stages is to leave March 15.