US aims to open up markets and charm the NGOs

Martin Khor


Developing countries, watch out! The world's strongest economy, the United States, is going on a "very aggressive" campaign to open up the markets of other countries for its corporations. Developing countries will not be given concessions in their having to strictly adhere to their commitments in the World Trade organisation. Meanwhile, shaken by the public backlash against globalisation, the US will also lead a "charm offensive" to win over the non-governmental organisations. These emerged at a press conference given by the US Trade Representative after the close of the WTO Ministerial Conference last week. MARTIN KHOR reports from Geneva.


Following the WTO Ministerial Conference, the United States will likely embark on two strategies in its trade policy: a "very aggressive" market opening agenda to get its giant firms greater access to other countries; and a charm offensive to win over the increasing number of skeptics, NGOs and protestors against globalisation. 

This double-barrelled plan can be seen from a press briefing by the US Trade Representative Charlene Barshefsky held in Geneva just after the Conference, as well as from President Clinton's address commemorating the 50th anniversary of the trading system. 

"I think it is very important that the US continue its very aggressive market opening agenda," said Barshefsky at the briefing.  

"Americans tend to believe that greater market openness abroad helps to compensate for yet greater import penetration into the US, and that is the current situation." 

She was answering a question whether the recent big US trade deficit would undermine US public support for free trade. 

Barshefsky also made clear that in this aggressive market-opening agenda, concessions would not be given to developing countries, which had to meet their legal commitments according to the timetables laid out. 

She was asked by an American journalist about the US response to complaints by developing countries about the problems of implementation of the WTO agreements. 

She said most delegations recognise the importance of implementation and of ensuring the commitments made are followed through. 

"We make commitments, others make commitments, we implement, they implement. There is dispute settlement if a party fails to do what it committed." 

She said the US appreciated that implementtion can be difficult and that was why developed countries had offered technical assistance to ensure commitments can be implemented on time. "But it is the nature of this institution that we must respect timetables laid out and that countries that make commitments adhere to them." 

Following up on this, another journalist remarked that President Clinton in his speech had talked about an ever-more-open trading system and on more rapid liberalisation, but had failed to show recognition or sympathy for the problems of developing countries which had suffered negative effects from over-rapid liberalisation. 

Even the East Asian countries were in crisis due to financial liberalisation. Could not the US recognise that some of the WTO rules themselves worked against developing countries and should be reviewed, and this was needed by developing countries rather than technical aid for them to implement those rules that generated problems? 

In her reply, Barshefsky skirted the issue of the need to review the WTO rules and instead spoke of Clinton being "extremely sympathetic with and sensitive to" developing countries, giving as examples his recent Africa trip, duty-free treatment for LDCs, and debt forgiveness. 

At the same time, she said, poor policy choices have hampered growth as much as lack of preferential benefits. It was terribly important that developing countries "also embrace more market- opening policies" to attract investments and spur indigenous development. "This is essential, it is one of the lessons of the Asian crisis as well." 

Earlier, in opening remarks, Barshefsky said the WTO Conference had shwon "strong momentum for market opening reform." She indicated that in the future work of the WTO, the priority for the US was to get negotiations on agriculture and services to start on time, whilst the question of whether to have a Round was subsidiary. 

She said the US had sought a broad Ministerial Declaration in relation to the General Council's ability to examine a full range of issues and options on how to proceed. "The principle is that the built-in agenda, especially on agriculture and services, should begin on time, agriculture in 1999 and services in 2000. The preparatory work for this must be completed." 

Answering a question on agriculture, Barshefsky stressed this was a sector critical to the US. "We feel very strongly that market opening in agriculture is critical, it is a principal US objective." 

Barshefsky also took care to elaborate on the new US theme of the need for transparency and for involving civil society in the WTO.  

She made clear this was now urgently needed to counter the public's suspicions and mistrust of the WTO system, which she said was now the greatest threat to the global trade system. 

Citing Clinton's speech calling for the WTO to urgently respond to citizen demands and to create dialogue with labour, consumer and environmental interests, she said the WTO must open up to NGOs for consultation and in the dispute settlement system. She said countries during the Conference had made very explicit reference to the importance of transparency in the WTO. 

"The system must be responsive to our public," she said, adding that statements at the Conference recognised the need for greater public understanding of the role of trade in creating prosperity, and the need for global institutions to be as transparent as national ones. 

"Many leaders recognise that the rights of workers and environment must play a role," she said. "The greatest threat to the global system comes not from the difficulty of negotiations or the question of whether there should be a new Round, but from the failure of public trust and the public suspicion of the system, the public mistrust of secretive organisations." 

In reply to a question whether opening up the panel hearings would lead Washington law firms to take over the dispute settlement system, Barshefsky said the US was not proposig to open up the panels or to neglect their government-to-government nature. 

Following up on a question as to why there was scepticism and suspicion in the US towards the WTO and the UN and about economic globalisation in general, Barshefsky gave a lengthy reply, revealing the depth of the anxiety in the US administration about the public backlash against globalisation and the WTO. 

She said the current situation in the US (against globalisation) was not a temporary phenomenon. "You see this not just because of shifts in polling data, you see this now in France, in the UK, in Germany, in Italy, in Russia now, which is why reform has been very difficult. You see this in Latin America. 

"You see ordinary people who have the sense that they live in a global economy, but don't quite know how they fit, and who don't quite see how the global economy is increasing their paychecks, or is accountable for their job, and who fear the glopbal economy may be responsible for their job loss at some future point." 

She added that trade creates wealth, as over a third of US growth has come from exports. "And yet even the very workers whose wages depend on those exports fear the global economy." 

She said this was not a temporary phenomenon but had more to do with massive shifts in technology and the pace of technological change making some jobs obsolete. "So these are real phenomena that ultilately all nations will have to grapple with. " 

She said this was not an issue of whether the situation would change if the President is a Democrat or Republican, but something much more fundamental and different. This was why virtually every leader touched on these issues at the WTO Conference, and they had become the subject of discussion at the America Summit, at APEC, and the G8. 

"This is not temporary but a phenomenon we can deal with as the public becomes better educated, as countries have better safety nets for those who lose their job, better training, and greater transparency so there is not a distrust of the global economy but instead at least an acceptance of its potentially positive power." 

From this answer, it is quite clear that the US has become very concerned that public reaction against economic globalisation can increasingly pose a threat to the global trade system. However instead of examining the rules and operations of the WTO system for review and possible reform, the US approach is that there is nothing wrong with the rules (which the US insists every country has to strictly implement according to schedule, or else face a panel hearing). 

Its remedy therefore is a public relations exercise, or charm offensive, to convince the NGOs and the public that it is their perception that is misguided, and that there is nothing wrong with the system. 

As the US implements one prong of its strategy (a "very aggressive market opening agenda"), the results of this intensification of pressures on other countries to liberalise further will likely lead to even greater problems (especially in the South) of economic and social dislocation, financial instability and political upheavals. 

It would then be even more difficult for the US administration to succeed in the second prong of its strategy, of convincing the public that globalisation creates prosperity and is mainly positive, if only one were to believe in it.