World Trade Organization: A World Government?

THE BALTIMORE SUN

Washington. -- Unhappily for President Clinton, American history from the days when he was a child is repeating itself -- almost exactly. A fight waged with real bitterness in the late 1940s and early 1950s is warming up again in Congress, exposing anew the deep fear that grips some Americans anytime they contemplate being ruled by a world government run by foreigners.

This time, the fight focuses on the proposed World Trade Organization (WTO), a would-be super government agency that is supposed to be able to settle global trade disputes more efficiently. It was designed to replace a weaker free-trade mechanism that was to be temporary when set up in 1947 but that has lasted close to a half-century.

As the WTO conflict intensifies on Capitol Hill, it threatens to erase Mr. Clinton's last chance this year for a spectacular victory on his legislative agenda.

He and his aides had hoped that a new global trade treaty -- the opaquely named "Uruguay Round" treaty -- would whisk through Congress this fall, lifting the president's spirits (and his poll numbers) just as last year's enactment of the North American Free Trade Agreement did.

The fate of the whole Uruguay Round of world trade reforms hangs, in significant part, on the Clinton administration's ability to sell the World Trade Organization to an increasingly skeptical Congress.

The name Uruguay Round comes from the South American country where the seven-year negotiations that produced a vast new free-trade pact began. It was signed last December but awaits formal approval by the United States and the other 116 signers before it can take effect next July. An effort to speed up the ratification process seems to be faltering.

Sweeping global reforms in trade dealings to be made by the pact are estimated to add $100 billion to $200 billion a year to U.S. economic output and income, once those reforms take full effect -- projection that has won the Uruguay Round many admirers, especially among business firms and business associations.

But the proposed creation of the WTO -- an idea that emerged late in the negotiations and was spurred by major U.S. trading partners who have grown resentful of what they consider excessive "unilateral" trade decision-making by America -- has come to dominate the debate on the treaty's fate.

WTO, if it comes into being, would be an unusually powerful compact of 117 nations organized on the one-nation, one-vote idea.

Its very form is the nub of the complaint against it: If the United States joins -- and there won't be a WTO otherwise -- it would lack veto power or weighted votes in the global organization. This country has never before been willing to go without those self-protective backstops.

Dispute-settling panels of the WTO apparently could demand the relaxation of U.S. laws or official regulations that were found to impede other nations' trading with the United States. Some WTO critics contend that the treaty would give Congress and state legislatures the unattractive choice of relaxing or repealing U.S. laws or inviting retaliation from other nations.

The proposed creation of a WTO with just that sort of no-veto decision-making power apparently was an essential condition for acceptance of the vast trade-freeing reforms included in the treaty.

Earlier this year, it did not appear that the WTO was going to be a significant problem for the Clinton administration in getting the treaty through Congress, and the prospect of a major political victory for the president this fall loomed.

That outlook, of course, has unsettled some of the president's most ardent adversaries. The conservative Coalitions for America has chastised key Republicans for embracing the new treaty and especially its provision for the WTO. It would be "a stupid mistake," said the Coalitions in July, if GOP leaders assist Mr. Clinton on the treaty "and give him momentum going into November."

The Coalitions added to their complaint what the organization's leaders clearly thought was the clincher: "Grass-roots America is deeply suspicious of this step toward one world government. You will deeply regret any part in making this a reality."

The Senate's most conservative member, Republican Jesse Helms of North Carolina, has railed against WTO: "I confess to unalterable opposition to world government -- always have and always will. . . . I think it would be fair to describe the new World Trade Organization as a United Nations for world trade, combined with a world court."

Other conservative critics have coined the phrase "trade uber alles" to describe what they consider WTO's real goal: Trade promotion will trump any contrary law of any nation or any U.S. state, including laws designed to protect public safety and the environment.

But conservatives are not alone in joining the fight against WTO. Harvard law professor Laurence H. Tribe -- as predictably liberal as Mr. Helms is conservative -- has warned the Senate in a widely circulated letter that the new legal regime "would entail a significant shift of sovereignty from state and local governments" to WTO. Mr. Tribe's letter made a point of stressing his support for last year's NAFTA treaty and for free trade in general.

Consumer advocate Ralph Nader, who generally holds economic and legal views that are totally alien to those of the Wall Street Journal editorial page, was given space on that page this month for an anti-WTO article headlined "WTO Means Rule by Unaccountable Tribunals." Mr. Nader's Public Citizen Congress Watch project has been the key research organization behind the WTO opposition.

Some of the opposition at times seems to have a desperate quality to it, because Congress will have no way to modify WTO, once consideration of the new treaty gets under way on Capitol Hill. The timing depends primarily upon White House wishes.

Under the unusual procedures that will govern Congress' action on the Uruguay Round proposals, debate will be severely limited, and the ratifying document must be approved or rejected in one shot; it needs only a simple majority vote of approval in each house of Congress.

Thus, part of the debate has shifted from the treaty's provisions to the question of whether the accord should be subjected to unlimited Senate debate, with a two-thirds Senate vote required for approval -- a prospect that gives the Clinton administration apoplexy.

And, lately, some of the opposition has shifted to a proposal merely to put off action on the Uruguay Round until next year, on the theory that it is too complex to be acted upon in the busy, waning days of this year's session -- especially with the administration still pressing for action before recess on health care reform.

As is often the case with controversial measures in Congress, delay of this proposal seems easier to achieve than outright defeat.

Delay and deliberate inaction, in fact, were keys to the defeat of the original idea for a world trade dispute-settling mechanism -- the ill-fated International Trade Organization, direct ancestor of the WTO.

There are remarkable similarities between today's developing WTO dispute and the debate that the United States and the world went through over ITO.

Back then, the agonies of the global war and the fearsome dawning of the atomic age generated a new fascination with the idea of "world government." The theory was that national sovereignty had become too risky in a troubled world of nations which obviously had grown dependent upon each other for their very survival.

That sentiment reflected an extravagant ideal: Sovereignty was to be given up voluntarily by nations in their common interest. The then-new United Nations was regarded as a step forward, but an inadequate one, by the one-worlders.

The urgent grasping for a new community of nations, however, did bring about, in less ambitious form, not only the United Nations but also the International Monetary Fund and the World Bank. A sister organization to the IMF and the World Bank was to be the International Trade Organization, as another spinoff of the U.N.

But ITO was caught in the political backlash to the "one world" sentiment. Ultimately, the ITO was felled by fears of the kind that were bluntly expressed in a Senate floor debate in 1950 by a Nevada lawmaker, Sen. George Malone:

"The ITO is set up to include, to start with, 58 nations, with 58 votes at present. The United States would have one vote, just as would Siam [Thailand], that little nation, many of whose people live on canals, using the canals for sewage disposal, for cooking, for bathing, for fishing. One battalion of United States Marines could take over the whole nation in three or four days, and half its people would not know it. That nation has one vote in the International Trade Organization, just the same as has the United States of America."

ITO died in the U.S. Senate after languishing there for a few years. Of the 53 nations that originally supported it, only one ratified it. Well before its demise, President Harry S. Truman in 1947 had issued an order putting the United States into GATT -- the General Agreement on Tariffs and Trade, a supposedly interim free-trade organization that was set up pending creation of the ITO.

GATT, now 47 years old, is an integrated series of free-trade pacts by member nations, all designed to lower tariffs and to relax other restrictions on the free movement of commerce across borders and seas. It does its work largely by consensus: Nations cannot be bound to its proposed settlements of trade barrier conflicts.

The Clinton administration for months has been promoting the WTO as GATT's successor, a kind of GATT with teeth providing a settling mechanism that would work.

The administration, however, had little success this summer in quelling the rising fears over a possible loss of U.S. sovereignty to the WTO, so it flooded Congress with detailed answers to those fears. In a letter to every senator, Clinton trade chief Mickey Kantor wrote Aug. 22: "Like the GATT, WTO will operate by consensus. This means that our trading partners will know they cannot impose new rules on us and other big economic players without our consent. . . . No vote can force us to accept any amendment that alters our rights or obligations."

The administration, though, clearly remains worried about the lingering effect the anti-WTO rhetoric has had. That rhetoric has been harsh, indeed, sometimes closely paralleling the verbal assault of Senator Malone in 1950 against the ITO.

For example, a House Republican leader, Georgia Rep. Newt Gingrich, said on NBC-TV news last spring: "You're now about to move into a political structure with 117 individual countries in which Third World dictatorships will be a majority, literally. . . . In effect, we could be outvoted by Antigua or by Botswana or by Venezuela."

When Mr. Gingrich a few weeks later slackened his verbal assault on the WTO, he ran immediately into a sharp political complaint from conservatives. He now is said to be dangling somewhere between opposition and support of the new Uruguay Round, and even of the WTO -- if it could be altered in important respects.

Opponents of the WTO have been scrambling to find ways to make over that proposal, without scrapping the Uruguay Round treaty altogether. They have not found a way yet.

Lyle Denniston is a correspondent in the Washington bureau of The Sun.

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
67°