The World Trade Organization: Future Negotiations

The World Trade Organization's (WTO) Ministerial Conference, to be held in Seattle from November 30 to December 3, 1999, will launch a new round of trade negotiations. President Clinton, in his State of the Union Address on January 19, 1999, called for an ambitious round focusing on agriculture, services, industrial tariffs, intellectual property, and government procurement. He also proposed that negotiations should result in early agreements, and should be concluded in far less time than the seven years that the Uruguay Round took. The United States and the other WTO countries are beginning the process of developing goals and procedures for the negotiations. If negotiations lead to multilateral agreements that require changes in U.S. law, legislation will be needed for implementation. Foreign countries are often unwilling to negotiate unless the President has fast-track authority (which he currently does not have). Should the Congress decide to act on fast-track legislation, it can influence the negotiations through specifying the negotiating objectives, and by consulting with the Administration before and during the negotiations. A likely issue in any debate is the extent that labor and environmental questions are addressed. As of July 1999, the scope of future negotiations is still to be decided. All that is known for certain is that negotiations will include agriculture and services since the Uruguay Round Agreement clearly specified that negotiations on these issues must begin by the year 2000. Agriculture and services are seen by many policymakers as important because of remaining trade barriers; only a relatively small amount of trade liberalization occurred in the Uruguay Round. Moreover, agriculture and services trade is very important to the U.S. economy. For example, in 1997, about 20% of the value of U.S. agricultural production was exported, and the United States is the largest exporter and second largest importer of services. WTO working groups are studying the relationship between trade and investment and between trade and competition policy. Countries disagree considerably on whether or not these issues are ripe for negotiation and on the possible benefits of negotiations. The European Union supports, and the United States opposes, beginning negotiations on these issues. Developing countries generally oppose WTO discussions on foreign direct investment rules and competition policy. Including labor and environmental issues in trade agreements is highly controversial, both within the United States and among the WTO members. For example, environmentalists and labor unions argue that labor and environmental standards should be a negotiating goal for humanitarian and environmental protection reasons. Many economists and the business community maintain that a more effective way to increase standards abroad is through trade liberalization and increased economic growth abroad. The Administration supports discussions of environment and labor in the WTO, while the Congress is divided on the issue. Some other industrial countries support WTO discussions, while the developing countries are strongly opposed.