The protesters were mainly groups opposed to one or more effects of global free trade. They demanded that as the international community moved towards new treaties, extra provisions be added in response to their concerns. The environmentalists were making the point that by spurring industrial development in other countries, greater environmental degradation would result. They wanted trade rules to include strict environmental standards. The American labour unionists were concerned that manufacturing jobs in the US would be lost as companies moved their operations to third-world countries where not only were wages much lower, but employee-protection laws were non-existent. They wanted minimum labour standards added to any treaties. Countries that failed to meet these standards would then be deprived of trade benefits.

Most governments were generally not in favour of adding these complex rules to free trade. From experience they knew that providing so many loopholes would be too tempting to many countries (including themselves). Future governments would use these loopholes as excuses to escape their market-opening obligations, under the guise of pollution concerns in Latvia or worker-treatment issues in Ghana.

American domestic politics then delivered the coup de grâce. President Clinton, unwilling to antagonise the environmentalists and unionists, whose support for Vice-President Al Gore would be crucial to his chances at the Nov 2000 presidential election, mumbled something about how he agreed that such issues should have a place in the WTO agenda. Since such a position was anathema to most other governments, no agreement could possibly be reached at that conference, and everyone went home empty-handed.

The debacle in Seattle highlighted, in my view, two major issues that has gone unaddressed so far in the WTO process. The first is this: while negotiations have been government to government, which of course is the way it should technically be, governments and media seem not to have convinced people at large of the benefits of free trade. They may not be carrying their constituencies with them even as they negotiate on behalf of their peoples. The second comes out of this: because governments and media are not in a dialogue with their own citizens about the benefits (and downside) of free trade, some genuine concerns about the effects of free trade are being ignored, and this may boomerang on us a few decades hence.

The WTO process appears to the layman as an exercise in diplomacy, something hammered out by government experts and ministers in secrecy. The outcome of it however, can have profound effects on his job and future prospects. Yet he is never consulted before or during the process; seldom are the issues, pros and cons, explained to him. The free trade objective is driven by economic planners in government or academia, usually supported by top business leaders. They see the macro benefit in terms of lower tariffs, bigger markets, lessening of petty national rules, and a few percentage points increase in GNP growth. Statistically.

In polities where governments do not have to win votes, such as China, leaders may get away with it. Beijing negotiated in secrecy with US Trade Negotiator Charlene Barshefsky, and when finally an agreement was cobbled, then announced it with the sketchiest details, but programmed self-congratulation. Through the government-controlled press, the average consumer is led to believe he will get cheaper goods in the shops (but I can tell you it isn't so simple). Meanwhile, the worker in the state-owned factory hears rumours that he's going to lose his job as a result of WTO (actually he's going to be laid off anyway because these behemoths are largely broke). But whether they are happy or not with what they think is going to happen is not something they can express to anyone in charge.

Not yet, at least. Frustrations can be vented in many other ways and other times. The Chinese government is nervously aware of the risk of social chaos that will result if they restructure their bankrupt Stalinist industries too quickly. Mass unemployment and mass internal migration can so destabilise a country, a government may fall.

In democracies too, protesters can take governments by surprise, as in Seattle, and disrupt the best of plans, including political succession.

We're just making it harder to implement any WTO accords if governments and the media fail to educate and dialogue with people beforehand. Even after signing any agreed treaties, governments still need to pass domestic laws and amend internal regulations to bring them in line with new international obligations. At every stage, demonstrations can result. Earlier this year, we saw on television Thai farmers camping out for months in front of the Thai Parliament building over some grievance. French farmers regularly blockade roads over one thing or another. And when was it that Manila shut down in angry protest for a few days when the government wanted to reduce petrol subsidies?

The primary mode of dialogue with and among citizenry is through the media. Unfortunately, almost everywhere, the media either does the government's bidding, or else is too concerned about circulation and market share. In the former case, if the government doesn't think it necessary to discuss free trade issues with its population, then neither does the media. In the latter, the emphasis is to carry event-related stories that have "news value", to boost circulation. Bomb destroys apartment block in Volgograd; Cuban boy plucked from the high seas; crown princess speculated to be pregnant; Indian Airlines plane hijacked to Taleban-controlled Afghanistan -- these and more fill our pages.

Almost everywhere, the media does a poor job of reporting on trends and processes. It fails in its responsibility to enlighten and educate, and to offer channels for debate. The drive towards free trade is one of the major global processes this half-century, affecting billions of people's livelihoods and hopes for future economic security. Yet, because the story is complex and undramatic, and the average person's attention span is said to be short, it gets low priority.

It is important to air the issues. I don't give high marks for what has been presented so far. The "in-a-nutshell" is too often put forward in place of intelligent examination. The "in-a-nutshell" is that free trade boosts economic growth, and while there may be some adjustments to be made, overall, everybody, in countries rich and poor, will eventually be better off.

Actually, I don't think it's going to be so neat. As anyone will spot, it all depends on what we mean by "some adjustments" and "eventually".

We must take into account the starting circumstances. The world is emerging (with the exception of the United States and a few other countries) from a model of socialist and welfare states, most with protected economies. Free trade will expose their inefficient industries to the cold wind of global competition. When a country has no natural advantage in a particular industry, it is hard to see how that industry will survive. It makes no economic sense for Malaysia to manufacture cars -- it can only do so behind high tariff walls to keep out other makes; it's almost crazy for Japan to grow apples -- and its export markets for Fuji apples are rapidly being seized by cheaper Chinese Fuji apples.

Millions of workers from disadvantaged industries from countries East, West, North and South, will have their job prospects severely dimmed. Of course, the theory goes that other industries, for which a country has a natural advantage, or is efficient in, will boom with expanding markets abroad. Over time, workers will shift into these prospering industries. It will not only be a sideways shift, but there will be an overall rise in living standards worldwide as human resources everywhere are utilised in a more efficient manner, doing the things they do best.

But look at the micro level, and it's a very uneven picture. The "shift" is not easy for the individual to accomplish. The satanic steel mills of China may have to close. As we move into the electronic age, modern steel mills use computer controls and far fewer workers. In any case, miniaturisation of all sorts of goods means that demand for zillions of tons of steel will evaporate. At the same time however, service industries in China will boom, as people have more disposable income and want a better quality of life, not just more commodities. But how is the laid-off surly burly steelworker ever going to become a convention organiser or hairstylist?

As Europe found over the last few decades, structural unemployment is a significant outcome of economic restructuring. Millions who used to work in the sunset industries might never find employment again, because they have no skills for the sunrise industries.

The "shift" the economists talk about may well be a generational shift. The surly burly steelworker's daughter may work in a factory sewing jeans for the American market, while his son may be hired by a software giant to write Chinese-language versions of their programs. Decades hence, they may both be immeasurably better off than they ever imagined. But in the meantime, the pain for the steelworker will not only be real, but longlasting.

I read an article recently about how, through 20 years of restructuring in Britain, income disparities widened significantly, even as GNP rose. The well-off and already-advantaged did much better in open markets than the disadvantaged.

This is not to argue that economies should remain closed. It's a false solution. Look at the poverty in Russia, India or China from decades of socialism and autarky. Look at the misery in Burma and Vietnam. Free trade proponents rightly argue that the example of China, where in the last 15 - 20 years, hundreds of millions have been lifted out of dire poverty through reform and partial opening of markets to the outside world, is undeniable testimony to the benefits over the medium and long term. 

But governments answer to people, not to statistics. Governments are expected to put in place social support systems to mitigate the pain of adjustment. It is not obvious that people prefer breakneck dog-eat-dog economic growth over slower growth with better welfare systems. In other words, the victory of American-style capitalism is not inevitable; its current triumphalism may be premature. It may, in a few decades, be seen as a sure path to social disaster. As it is, some people observe that the crime rates and destitution seen in the uglier parts of the US are a harbinger of things to come.

Welfare state systems require huge public resources. Its underlying principle is a transfer of wealth from the better-off to the poorer-off to address a matter of conscience, and also because social harmony (therefore better investment climate) and equality of opportunity for all (therefore larger talent pool) are economic advantages in themselves. However, the inescapable fact is that welfare and social support systems are expensive: subsidising medical care for those who aren't well off, setting up retraining schemes for the jobless, improving the education system so that the next generation will truly benefit from global markets, starting up public works projects, e.g. constructing new airports, railways, irrigation networks or cheap housing, in order to generate employment, and also to add to the economic momentum.

Where are all these state resources going to come from if import duties must be slashed? And if, as we liberalise services (in the name of free trade in services), companies and financial services can move their profits around to low-tax countries? Meanwhile, the Americans insist to the world that e-commerce must remain tax-free. As more transactions move to the internet, is that the end of VAT?

Don't you think all these need to be discussed? And notice too, I have kept environmental issues, labour standards, saving dolphins and sea turtles, or food safety issues out of the discussion so far. Just sticking to narrow trade and economic issues is troubling enough. Yet, as soon as calm was restored to Seattle's streets, the issues of free trade largely disappeared from our media.

© Yawning Bread