real losers from seattle

The real losers
AS THE dust has settled and the tear gas has dispersed, a new parlour game has taken hold. People are vying to decide who won, and who lost, from the failure of the World Trade Organisation's meeting in Seattle last weekend. Did the protestors, whether greens, trade unions or "anarchists" win? Did Bill Clinton, or Mike Moore(the head of the WTO), or big business lose? As the game is played (see pages 17~18), one group, representing more than 5 billion of the world's 6 billion people, sits bemused and befuddled, more or less ignored -just as in Seattle. These 5 billion live in the developing countries, and include the poorest of the world's poor. They are the real losers from this whole sorry episode.

Those who wish to claim to have been the winners now also claim that last weekend marked the high point of globalisation in general and freer trade in particular. On this view, globalisation will now at least be halted, but preferably even be forced into reverse. The battle to prevent this from happening needs now to begin. But as that fight takes place, it is as well to be clear about who would stand to lose most if globalisation really were to be pushed sharply backwards -or, indeed, simply if further liberalisation fails to take place. It is the developing countries. In other words, the poor.

A tragedy of (mostly) good intentions

Few of the protestors think this way. Many seem to believe that they ate on the poor's side -against big, multinational conglomerates, against exploiters, against polluters. Even the trade unions, mainly American, who lobbied successfully to persuade President Clinton to press for labour standards to become more closely tied to trade, might well argue that their dearest wish is to help the Indian child whose picture is on our cover. They want to export America's rules that protect workers against exploitation in various forms, including rules forbidding child labour. Nobly, just as they wish to spread democracy and human rights around the globe, so they wish to share their labour values with others.

Swallow, if you can, any scepticism about whether John Sweeney, head of the AFL-CIO union federation, really does have this aim in mind. Ask yourself, first of all, what the developing countries, gathered in Seattle, thought of this. They hated the idea. Partly, no doubt, because they don't like things being foisted upon them. But also because they don't think this is in their interests. In some cases, it might be right to dismiss that view: the interests of a government, and the elites that man it or control it, may well not be the same as the interest of a country's citizens. But it is not right to dismiss it in all, or even most cases.

Think above all of India, home of our cover child. The world's biggest democracy, for four decades it pursued policies of socialist anti-globalisation, shutting out trade and foreign investement as best it could. To put it mildly, this did its hundreds of millions of poor no good at all. Finally, in the past decade it has begun to embrace globalisation, gradually opening itself up to the world. Finally, its economic growth rate, and with it the welfare and prospects of the poor, has begun to pick up. The process has barely begun, but hopes are high. So India's ministers troop off to Seattle to discuss further trade liberalisation. What are they told? By some, that they are making a big mistake to want to liberalise at all. By others, that they should do so only while imposing labour rules that make their factories less viable. Oh and by the way, the United States will not budge on its protection for textiles and on its use of anti-dumping laws, and the European Union wants to carry on keeping out foreign farm products.

The Indians could be forgiven for being disillusioned. They thought, after all, that they were trying to emulate the West. And what is surprising is that this has followed two years in which the world-for which read, the developing world-had passed a stiff test of its faith in open markets. The financial crash in East Asia in 1997 and the ensuing troubles in Eastern Europe and Latin America might well have begun a backlash against globalisation. Remarkably, it didn't. The real question, it seems, is whether that backlash is going to begin in the rich, developed countries of North America and Western Europe.

If it does so, it will be a tragedy. Neither trade, nor globalisation in general, would be sufficient to give that Indian child a better life. Above all she needs education, and health, and much else. But without trade, and the faster growth it can bring, she is unlikely to get any of it. Tying trade to rules that forbid her from working will not help her either: that way lies greater poverty, not a better education.

Free trade, like freedom in general, is not a panacea. It is not likely to bring better welfare on its own. But also, it is not likely simply to enrich multinationals and destroy the planet. Trade is abour greater competition, which weakens the power of vested interests. It is about greater opportunity for millions rather than privileges for the few. It is about more countries joining the handful -Japan, South Korea, Singapore and a few more- that this century have closed the gap on the West and transformed the lives of their people. Ten years ago, when the fall of the Berlin wall signalled the failure of communism and other forms of autarkic central plannig, it looked as if a new chance had arrived for the 5 billion poor to join the world economy and improve their lives. That chance remains. It must not be thrown away, amid the debris of Seattle.