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World Trade Organization important to citizens of city and state

Tuesday, May 11, 1999

By RAYMOND J. WALDMANN
SPECIAL TO THE POST-INTELLIGENCER

Why should the people of Seattle and Washington state care whether the World Trade Organization meets in Seattle later this year?

What is the news about Seattle having prevailed over some 40 other U.S. cities to host the historic event?

And why has President Clinton invited trade ministers of the 134 member countries to have the first WTO ministerial meeting in the United States in the 50-year history of the General Agreement on Tariffs and Trade (GATT) and the WTO?

The answer is simple: Because trade matters to the U.S. economy, to Washington state and to Seattle and because the WTO matters to trade.

The Geneva-based WTO is the only global body dedicated to developing international trade rules. From the U.S. perspective, the WTO is our voice and vote for dealing with trade issues. The WTO provides the rules-based system of international trade on which we rely. Members negotiate agreements ensuring that:

  • Countries may not raise their tariffs or other border taxes whenever they feel like it, and thereby exclude American products from their markets;

  • Countries may not impose unjustified technical barriers such as inspection requirements on U.S. wheat, apples and other agricultural products just to protect their home markets, nor may they favor products from specific countries;

  • Countries may not allow or encourage piracy of intellectual property, thereby protecting our software and computers, books and films, CDs and tapes;

  • Countries are restricted from violating the rules on subsidies and export assistance, and flooding the world with government-subsidized products whose prices we could not match.

    Trade is not a panacea for the political, economic and social problems of the world. But it is a force for peace and cross-cultural contact. Countries are less likely to go to war against their trading partners than they are against strangers. The WTO furthers the process of protecting against commercial skirmishes and potential trade wars by forging agreement among nations on trade protocols.

    Without the WTO, trade would be too dangerous a proposition for countries to leave to their trade ministries, and eventually trade disputes could become national security issues. A non-WTO world would more closely resemble the international economy before World War II, where countries used trade as tools of foreign policy, and international commerce was a pawn of aggressor states. As Franklin D. Roosevelt's former secretary of state Cordell Hull said, "When goods do not cross borders, armies do."

    Fortunately we do not live in that world.

    Indeed, if the WTO didn't exist, we would have to create it. And that is precisely what the United States and 22 other countries did in 1948.

    Today, 134 members of the WTO are dedicated to preventing trade conflicts from getting out of hand. By nature, the wheels of international law move slowly, but the WTO patiently and continuously improves its rules and institutions in order to make the world a better place. Through successive rounds of trade talks going back to 1949, the GATT and its successor the WTO have reduced tariffs on goods from industrial countries from an average of more than 40 percent in 1948 to today's 3.9 percent. As a result, trade has exploded; today it is 26 times the volume of 1949.

    Through GATT and WTO, countries have tackled and solved some of the thorniest problems of trade, and have settled hundreds of trade disputes. The WTO has already:

  • Dramatically reduced tariffs and other barriers to trade, so that today's exporters and consumers are able to shop for the best deals almost anywhere in the world;

  • Solved more than 100 trade disputes in the past four years between countries before they got out of hand and turned into bitter trade wars;

  • Made great strides in clarifying the rules of the road so that every country is aware of its rights and obligations;

  • Established basic criteria for the protection of intellectual property and investments made in foreign countries;

  • Established appropriate penalties for countries violating the pre-determined trade norms. It tries to make sure countries don't violate those norms, but if they do, it provides appropriate penalties;

  • Opened up a new dialogue on transparency within the WTO, and on environmental and human rights concerns.

    As we enter a new era of high-tech global trade, there is every reason to expect the WTO will continue its efficient work improving the standards of living for all.

    Let's welcome the WTO to Seattle and be thankful that the U.S. government and the WTO have chosen to kick off the next round of trade talks, the "Seattle" round, in our city.


    Raymond J. Waldmann is vice president for International Relations at The Boeing Co. and serves as chairman of the Washington Council on International Trade.

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