Three months after the failure of the WTO meeting in Seattle the dust is finally settling. The press behaved as if it hadn't had a good demo to report since the Vietnam war and the diplomats and politicians became uncharacteristically skittish after a march or two and the unerring capacity of the American police to overdo things.
Look no further than the statements produced by the UN Trade and Development (UNCTAD) meeting in Bangkok two weeks ago. This body, which now exists as a sort of Third World counterweight to the mighty WTO, enables developing countries both to chew the cud and gain a modicum of diplomatic and media attention for their own concerns without being drowned out by the agenda of the industrialized countries.
Nevertheless, they used their once-in-four years opportunity not to denounce the WTO and all its works but to assert they still prize the value of global trade talks.
Jacob Zuma, South Africa's deputy president, was forceful: "A delay in the WTO negotiations is a delay in solving the problems of [our] economies," he said.
In its final statement, UNCTAD went on the record as "strongly commending open trade and economic integrity as the path for future development and ways of bridging the north-south divide," reported the Financial Times. And Mike Moore, the director-general of the WTO who was in Bangkok for the meeting, observed afterwards: "We know now that in Seattle some countries wanted to shake the place up, not destroy the next [trade round]."
Free trade is not, by any disinterested reckoning, in retreat. The truth is tariffs are declining and trade is expanding almost everywhere. Despite all the great public rows last year about bananas, genetic modification of seeds, mad cow disease, child labour and starvation wages and the need to put the brakes on globalization, the volume of world trade continues to expand at a rapid pace. This year expansion might surpass 6 percent.
The last round of tariff cuts -- the Uruguay Round -- led to tariffs being sliced across the board on 87 percent of all merchandise trade. "Voluntary" export constraints -- a devilish system whereby low cost competition is bludgeoned by the richer trading partners to cap their exports -- that over the years has severely hindered exporters of goods from textiles to cars, have now almost disappeared.
The US used to be notorious for its double-speak, sniping at countries for not cutting tariffs while erecting all manner of restraints on items as diverse as steel, autos, machine tools and motorcycles. Yet now the US is more honest and Europe too is following suit if less fast. (Europe still penalizes the importing of Russian steel, to give one bleak example.) Both in North America and Europe importers at last are becoming as an effective lobby as exporters.
Of course, once the present economic boom starts to pale, the pressure will be on western governments to be more receptive to protectionist pressure. But this time round the developed countries have, to a large extent, locked themselves in with the new authority they have bequeathed to the WTO. Only last week the WTO flexed its muscles with its ruling that billions of dollars of tax breaks for US corporations gained by channeling exports through Caribbean off-shore subsidiaries were illegal.
The more you look at it the harder it is to pick holes in the benefits of over 50 years of hard-won freer trade. Countries that have opened their economies have enjoyed annual growth of several percentage points more than those that have remained closed. And multilateral trade liberalization schemes usually benefit poorer members more than richer -- as can be see with Portugal and Eire in the European Union and with Mexico in the North Atlantic Free Trade Area.
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