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A Powerless WTO

Traders of the Lost Ark

By Klaus Brinkbäumer

The World Trade Organization is the favorite whipping boy the antiglobalists. Far-reaching decisions about the World’s poorest are made by the richest here – behind closed doors. Yet its founding idea was one worldwide prosperity fostered by unlimited trade.

The day that shakes up the global economy, the day Boeing launches a trade war against Airbus, the day the United States files a complaint about illegal subsidies against the European Union is just another day for Moussa B. Nebie.

Moussa B. Nebie has more important issues to deal with in Geneva. He sits in his cramped, dark office on the ground floor of Louis-Dunant Way No. 7, facing a flag of Burkina Faso. He makes phone calls to officials in his home country; he has meetings with his African colleagues; and he writes reports - about cotton, not Boeing.

"Cotton is the only thing that matters to us," says Nebie, who has been Burkina Faso's ambassador to the World Trade Organization in Geneva for the past year. Burkina Faso cares about cotton, because a quarter of all its citizens - roughly three million of the West African country's residents - depend solely on cotton production and trade for their livelihoods. For them, it is a question of stark survival. But thanks to the agricultural lobby in America's southern states - which supported the Bush administration in the 2004 presidential election - a few thousand cotton farmers in Texas and Arkansas now receive subsidies of more than $3 billion a year. And because farmers in the United States receive subsidies, prices are falling and countries like Burkina Faso cannot export their most important product. From the losers' perspective, the global economy is desperately cruel.

The United States and Europe talk a lot about open markets, but they mean other countries' markets, not their own, says ambassador Nebie. "It's access they want," says Nebie. Europe and the United States want to keep other countries at arm's length so as to protect their own farmers. "Liberalization has to mean the same thing for everyone," says Nebie. That's why he tries to keep his coalition of the weak - the cotton coalition of Mali, Chad, Benin, and Burkina Faso - from falling apart. Nebie smiles, and his secretary serves Granini, a German multi-fruit drink - no deposit, no return. "We're not the ones who are blocking things," Nebie says. "But we will stop any consensus in the World Trade Organization that does not take the interests of our farmers into consideration."

The theory of the global economy seems quite simple. World trade helps fight poverty, because open borders and the dropping of tariffs benefit everyone. So world trade is a kind of game in which all nations can be the winners. This is the theory underlying the WTO. It is also the organization's religion, a creed formulated on the banks of Lake Geneva looking out towards Europe's highest peak, Montblanc.

The reality is more sobering: Burkina Faso head-to-head with the United States. In the real world, a delegate like Nebie has to prevent his country from making one of Geneva's black lists, those long secret registers of people who dared to inconvenience the United States. He has to make sure that no American official makes a call to Ouagadougou, his capital, to say - regretfully, of course - that the delegate for Burkina Faso is a bad envoy and should be recalled to prevent damaging relations between the two countries.

The global economy is just not that simple. It is a game of feints and traps, of threats and inducements, a game with false bottoms and ever-shifting alliances. And the playing field, or the battleground, is a square, gray building with a red and green roof and a courtyard. On its northern side is an annex, another squarish building with a second courtyard. Here on the lakefront at 154, Rue de Lausanne, in the four-story William Rappard Center, is the control center of globalization: the office of the WTO secretariat.

The WTO likes to see itself as the United Nations of Trade. All 148 members, from Lesotho to the United States, have one vote each, and all decisions must be made unanimously. Viewed charitably, the WTO is the ultimate democracy, an organization committed to human rights and the environment, striving to create a fair world order where hunger no longer exists. WTO documents contain an eye-popping statistic: If the world's tariffs disappeared, an additional $500 billion would immediately flow into global trade. There would be plenty of pieces from this pie for everyone.

The fact is, however, that few organizations, not even the World Bank or the International Monetary Fund, are reviled as much as the WTO. As in 1999 in Seattle, less so in Doha in 2001, but even more so in Cancún in 2003 - when the WTO's Ministerial Conference meets, hundreds of reporters head off to cover its big story: the tens of thousands of demonstrators. In the end, these conferences founder in a sea of empty words, unanswered questions and, above all, eternal conflicts between rich and poor, North and South. That's why the enemies of the WTO see it more as the opposite of the United Nations, as the United States of Capitalism: hegemonic, aggressive, and dogmatic.

The truth, of course, lies somewhere in between. On the one hand, the WTO cannot be as noble as its proponents say. Why, otherwise, would so many African delegates in Geneva say they have rarely heard anything more oxymoronic than the marriage of the words "global economy" and "democracy"? On the other hand, as even those who don't automatically condemn anyone uttering the word "globalization" will surely understand, the WTO lacks the teeth needed to make it the Satan of the modern world. It is not a company and it is not a political party. It is merely a sort of agency. In fact, it is really only an agreement. Founded in 1995 as the successor to the General Agreement on Tariffs and Trade (GATT), the World Trade Organization should really be called the World Trade Agreement.

The WTO does not actually exist as an organization, because everything devolves into 148 parts and its members make all the decisions. The director general barely has any authority and certainly no real powers. His control stops at the staff in his secretariat and they are supposed to be a purely neutral bureaucracy. The people at the WTO often ask, "What staff?" They find it funny because the WTO has a miserably small staff (608, many of them translators) and no budget to speak of (110 million a year) - at least compared with the United Nations, the World Bank or the International Monetary Fund, which alone has 2,700 employees.

The WTO moves slowly because the people in Hall D can argue for three hours over whether to change the word "should" on page 4 to "must" or "could." The founding treaty of the organization itself is a tome of 27,000 pages. Yet the rules that the Geneva-based body sends sailing out into the world shape our lives: They regulate labor markets, imports and exports, and they deal with agriculture, textiles, services and patents. They have an impact on our income and tax levels, and they determine which goods we may buy and how expensive they are. Somewhere, buried deep in these regulations, we might even discover who is going to win the trade war in a few years' time, Boeing or Airbus, the United States or Europe. So what really happens on the Geneva battleground?

"There is not a single person in this building who understands everything we do," says Keith Rockwell; it is all simply too much and too complex. "But we all know we are important. We offer the rules of trade and commerce and the platform on which disputes can be settled. The world needs these rules. If it did not have them, we would have the law of the jungle." Keith Rockwell, a preacher's son who was born in Boston in 1958 and grew up in New England and New York, is the voice of the WTO, its spokesman. He is a man with largish ears, green eyes, round glasses, and a perpetual smile. The dark side of globalization? Beer without Germany's stringent purity regulations. The problems of being a diplomat? When his son flies home to New York and is asked by U.S. customs officials who his favorite football player is, he responds, "Zinedine Zidane."

Rockwell chats on, painting a rosy picture of his employer. Rockwell has two windows looking out onto the lake - a privilege of seniority. Even a country like Saint Lucia, humiliated in a legendary banana war fought over the Europeans' subsidies to their former colonies, "could block a whole agenda with its veto. And that is pure democracy," he enthuses. And on the recent election of Pascal Lamy as director general: "Proof of how well we function," Rockwell says.

He is right about that. The previous time, six years earlier, the Americans and Europeans had favored a New Zealander, Mike Moore - with Japan and Australia supporting Thailand's Supachai Panitchpakdi. The WTO was leaderless for three months before Thailand's foreign minister, Surin Pitsuwan, and U.S. Secretary of State Madeleine Albright picked up their phones. Pitsuwan: "Rather than a director general for four years, why don't we consider six years, split between the two of them?" Albright: "Sounds interesting."

That is how the leaders of the world of politics haggle over the conductor who will orchestrate the world of business. They haggle because it is all about winning and losing, pride and humiliation. Make a concession here, and you can expect something in return there. The WTO is the bazaar where the First World does business with all the other worlds. Thus six years lapsed with weak directors who were lame ducks even before they took office. There were no losers. Except perhaps the two winners of the vote.

That is how it works in an organization where everybody talks endlessly about the big picture and then rushes off to see what's in it for them. For this election, there were four candidates, strict rules and clear agreements upfront. A commission traveled around the globe to gauge the international mood, and as agreed, one candidate after another voluntarily withdrew, leaving only the individual favored by the majority. Pascal Lamy, who began his term on September 1, even has prospects of being re-elected in four years' time. Delighted, the WTO officials took the search committee's secret documents to the Canadian Embassy and put them through the shredder. (They don't have one of their own). "It has been a wonderful election," says Rockwell. "It means we are able to deliver when we need to deliver."

Hold on. You have a new boss - that's all well and good. But at the next Ministerial Conference, in Hong Kong in December, the WTO could fall apart again over its unresolved disputes. Where does this optimism come from? "Well," explains Rockwell, "to a certain extent they pay me to be optimistic."

Anyone who walks through these corridors, takes a seat in the cafeteria downstairs, outside with the smokers, or in the fourth floor dining room over a steak and a glass of rosé, anyone who walks into the conference rooms, where countries sit next to one another and drinks are forbidden, anyone who spends a few days in this environment can see how the organization works. It's a collection of highly intelligent, well-educated people, most of them workaholics. As in many other international organizations, many of its members are the children of diplomats who have grown up everywhere and nowhere. Most are bilingual, at least. They have a master's in economics or a law degree. They take what they do very seriously and they are experts in their fields. They are clever, quick-witted and sharp. The dark side of this environment: Many people at the WTO are divorced or separated, perhaps because the job drains their energy and keeps them awake at night. It is a bit like the United Nations, only less exciting because here everything revolves around money and power, not around building a better world. Although, in theory it's about that, too.

"The challenge is translating what is theoretically desirable into laws," says Alexander Keck, Room No. 2077, job description "Counselor, Economic Research and Statistics Division." There are 26 divisions on planet WTO, and the most envied are those that settle conflicts, because they are in contact with actual earthlings. After all, the WTO is not just the government of the global economy; it is also the high court of trade disputes. The arbitration procedures, the organization's so-called panels, are the only international court to which even the United States submits. May American beef, "Gen-Food," as the Europeans call it, be exported to the European Union? Should drug companies in the First World be allowed to protect their patents in a way that prevents Third World patients from receiving drugs to fight AIDS? Should Europeans and Americans be allowed to advance globalization just as long as they can sell sewing machines, looms and knowledge to China? And then to seal their borders when Chinese cloth and apparel exports rise by 80 percent - as they did in the first quarter of 2005? Well, they are allowed to seal them a little, because China had to accept numerous conditions in order to become a WTO member. But they shouldn't get carried away. "We play by your rules, and when we win, you want to change them," said a Chinese official, anonymous like so many diplomats here in Geneva the moment things get awkward.