SOYOUWANNA KNOW ABOUT THE WTO?

The civil disobedience that greeted the World Trade Organization (WTO) Summit in Seattle last December was on a scale unseen since the Vietnam War protests, and it was no less disruptive. The talks faltered after four days, with member states failing to agree on basics such as trade liberalization and leadership of the organization.

Implicit in the massive street protests was the question, "Is being in favor of global free trade compatible with having a social conscience?" To the demonstrators, ranging from unionized longshoremen to anarchists, from tree-hugging environmentalists to Pat Buchanan isolationists, the clear answer to this question was "no." Other than their strong distrust of the WTO, the demonstrators shared little common ground. Which leads one to wonder how the WTO became a lightning rod to so many disparate groups of people. Read on, as SoYouWanna explores the history of this controversial organization, and the fierce debate surrounding its economic policies.

1. LEARN SOME BACKGROUND ON THE WTO

Headquartered in Geneva, the WTO is a baby among intergovernmental organizations. It was created in 1994 to succeed the General Agreement on Tariffs and Trade (GATT), which dates back to 1948. After World War II, many nations thought it would be a good idea to create an international system based on rules, not brute force. Along with the United Nations, GATT was intended to preserve stability and help speed the world's economic recovery. The idea was that if nations negotiated trade rules together they would be less inclined to escalate trade hostilities by, say, bombing the other nation's major port city.

GATT member states learned to see their best interest was in submitting to the multilateral trade obligations. To that extent, the formalities of GATT prepared states for membership in the WTO. For instance, GATT allowed a state to retaliate legitimately in limited measure whenever another member persisted in breaching one of GATT's rules. States really liked this feature since it acknowledged their power to act. At the same time, since they could only act within the constraints of GATT rules, it gratified their desire to be seen as one of the world's law-abiding nations.

The retaliation feature was retained in the Final Act, the 550-page document governing the WTO. Signed in Marrakesh in 1994, the Final Act was the culmination of seven years of trade talks known as the Uruguay Round (there have been eight such "rounds" in GATT's history). Much of the Final Act covers traditional items of trade such as textiles and agricultural products. Befitting this era of globalization it also reaches new forms of commerce, many of which fall under the rubrics of "intellectual property" and "services." Services account for the majority of economic activity in developed countries (seventy percent in the U.S.). The Final Act's most touted provision is its Dispute Resolution Mechanism, the exact nature of which we'll discuss below in the pro and con sections.

Membership in the WTO is broadly inclusive. There are now 136 members and thirty more-most notably China--are currently petitioning for accession to the WTO. Members are separately categorized according to their level of economic development. Twenty-nine states are called Least Developed Countries (LDCs). These are nations such as Chad, Myanmar and Haiti. The rest are called Developing or Developed countries, depending on how they label themselves. To become a member, a state needs the approval of two-thirds of member states. WTO membership is not generally extended unless member states are convinced that the applicant is committed to free trade market reforms.

At the time of this writing, the WTO is considering China's case for membership. With the Clinton administration strongly behind it, it looks likely (just think how many potential Chinese consumers of our movies and software there are). Critics say that a nation with such a rotten record on human rights and the environment doesn't belong in the WTO. They want to condition WTO membership on political liberalization just as much as on market liberalization. Other commentators say that autocratic regimes are likelier to democratize if they are brought within the WTO fold.

So much for the WTO's background, let's get started on the arguments.