Learning to Love the WTO

Marcus Noland. Foreign Affairs. Volume 78, Issue 5. September/October 1999.

Clueless in Seattle

As the WTO gears up for its biannual ministerial meeting this November in Seattle, American trade policy is adrift and under siege. From unions and corporations seeking protectionist favors to idealistic nongovernmental organizations (NGOs) battling for the environment, special interests are trying to sideline Washington and increase their own leverage within U.S. trade policy. Neuralgic American isolationism from both left and right continues to resist U.S. participation in the World Trade Organization, while traditional allies like Europe balk at what they see as America’s unilateralist arrogance in settling disputes.

Washington must revive its traditional commitment to trade liberalization across the globe. Opening new markets and slashing trade barriers should remain its top priority. The United States should vigorously support the continued liberalization of agriculture and services that began in the 1992 Uruguay Round trade negotiations and press for further tariff-slashing in manufactured goods. It should also push the WTO to rein in antidumping laws and develop a coherent antitrust policy to tackle trade disputes.

Most important, the United States must remember that the advent of the WTO has radically changed today’s trade environment. However well robust unilateral sanctions against protectionist nations may once have served American interests, the playing field has now become more level. Instead of using its economic muscle to pry open markets unilaterally, the United States now must work within multilateral institutions to advance liberal trade and rebuild trust among partners. Just as important, it must address the challenge posed by the new unilateralists in the American debate: the NGOs. Washington should adopt a multilateral strategy to accommodate the environmental and social issues encroaching on the trade debate without letting their interest-group patrons hijack the U.S. trade agenda. The best way to do this is by encouraging other international bodies to tackle the host of new issues and discourage the haphazard use of trade policy to promote these concerns. Only then can the WTO remain free to focus on liberalizing trade and settling disputes rather than, say, saving sea turtles. And the NGOs will find more appropriate forums for their agendas without distracting Washington or the WTO.

Ideally, Washington should support a two-part deal that recognizes a role for other international institutions and forswears unilateral extraterritorial action. For the first part, the United States could help establish multilateral institutions (or support existing ones) that work on environmental, labor, and human rights issues; it could also help alter WTO rules to permit certain trade restrictions as part of these new institutional enforcement mechanisms. For example, a global environmental organization (called, say, the GEO) might conclude that saving sea turtles warranted action. If a member country threatened their survival, the GEO could offer a menu of sanctions (travel and trade restrictions, embargoes, etc.) that other countries could chose to enforce without violating WTO and GEO obligations. At the same time, member countries (including the United States) would not be allowed to apply trade restrictions to support domestic laws that are not part of the global regime.

The WTO can offer several advantages for U.S. trade policy-if Washington seizes the initiative. First, it has already created an explicit regime for clarifying the rules of the game in settling trade conflicts. Although a country can still try to exploit legalistic loopholes, the WTO has proven in many cases-including the notorious transatlantic banana dispute-that it can serve as a relatively objective judge and jury. That point ties in with a second advantage: because the WTO is a genuinely multilateral body, other countries do not view it as a proxy for American interests. Hence Washington can advance its liberalization agenda and settle disputes within the WTO without sparking anti-Americanism abroad. Last, the United States should use the WTO to keep its trade policy distinct and protected from the maneuverings of domestic interest groups. Big money and hot-button issues can manipulate trade strategy at home, but their sponsors will find Geneva far more difficult to manage.

The Seattle ministerial meeting will give the United States a chance to frame the agenda for the next round of global trade negotiations. But it also poses a risk of becoming the venue for a high-visibility conflict between Washington, NGOs pressing for their own agendas, and a world generally reluctant to play by American rules. To make matters worse, Washington is suffering from a severe case of policy drift-a problem made most painfully clear in the Clinton administration’s unwillingness last spring to conclude a WTO agreement with China, which had been negotiating for 13 years to enter the organization. Intimidated by a coalition of traditional protectionists and new human-rights constituencies, the administration turned down a far-reaching Chinese offer so Clinton could avoid a fight with Congress. Although the administration has said it will continue negotiating with the Chinese and aims for a deal by November, success is by no means guaranteed.

The Protectionist Threat

One of the greatest obstacles to a liberal American trade policy is the protectionist response to the ballooning American trade deficit. Robust U.S. growth-especially relative to Asia-has driven the trade deficit to unprecedented levels. Although the rate of overall U.S. growth will probably decelerate later this year, relatively high demand for foreign goods will force the American trade deficit to expand even further. The 1998 trade deficit set a record at $248 billion and will likely exceed $300 billion in 1999. In turn, growing trade imbalances amid slowing growth could affect U.S. political responses to the global financial crisis, especially if the U.S. economy cools down enough to drive up unemployment. Past behavior suggests that the growing U. S. trade deficit will spark increasing trade-policy activism. This has already happened in the steel industry, as administration officials increasingly call on Japan and others to cut their exports of cheap steel to the United States. Although a congressional attempt to restrict steel imports failed in June, the United States is poised to slap large punitive tariffs on imports from many countries through antidumping action. And history shows that the United States pays most attention to countries running large trade surpluses with America and is more likely to retaliate against those countries than against others.

Protectionist pressures are hardly new. But in facing this challenge at home, Washington has to deal with a new institution—the WTO—that has profoundly changed the nature of trade disputes abroad. Until the WTO’s inception in 1995, the United States served as judge, jury, and prosecutor, ready to retaliate through Section 301 of the 1974 Trade Act if target countries did not submit to its demands. Washington was confident that the dysfunctional dispute-settlement system of the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), could not successfully challenge U.S. actions-given that few countries were willing to risk being cut off from lucrative U.S. markets. That began to change for good in 1995, when Japan called the U.S. bluff in the automobile dispute, refused to acquiesce to U.S. market—opening demands, and threatened to duke it out in the WTO. Since then, the WTO’s strengthened dispute-settlement mechanism has reduced America’s ability to retaliate unilaterally, but it has also provided a fairer playing field for other countries. Moreover, it demonstrated its potential for impartiality in the recent banana dispute with the European Union (EU) when it ruled in America’s favor.

New Wine, New Bottles

Rising protectionist sentiment coincides with another handicap on American trade policy: the diminishing power of the president to lead the trade agenda. True, U.S. policymakers have always contended with the demands of specific industries for protection from imports. But from the mid-1930s to the 1980s, Congress effectively delegated its role to the president on trade policy; the president negotiated trade deals and Congress approved them in full. This system of acquiescence with oversight helped curb Congress’ tendency to engage in protectionist logrolling by shielding its responsibility for outcomes in particular industries, either by subsuming tariffs into large packages or by channeling protectionist demands into bureaucracies, which used quasi-judicial remedies such as antidumping procedures.

This system began to fray in the mid-1980s under the strain of record trade deficits and growing partisan rivalries within a divided government. The system eroded further in the early 1990s with the bitter fight over the North American Free Trade Agreement (NAFTA) and the dramatic increase in new trade demands and new participants in the debate, especially unions and NGOs hostile to open trade. Today, some critics question the virtues of preferential trade agreements; others want to link trade with human or labor rights (the “social clause”), the environment, competition policy, and transborder investment. Social and environmental questions are further muddled as NGOs try to use trade restrictions to force trading partners to comply with unrelated domestic laws or international agreements. And new participants besides NGOs are jumping into the trade policy debate. In the United States, some local and state governments, as well as quasi— governmental institutions such as public pension funds, have applied economic sanctions or boycotts of their own against foreign countries.

Social and environmental protection issues emerged as hot-button political questions during the fierce debate over NAFTA and have not gone away. The original impetus for NAFTA came from Mexico in 1990, when President Carlos Salinas de Gortari sought to commit future Mexican governments to open-market economic policies. President Bush enthusiastically agreed with Salinas and proposed NAFTA to address a long-standing foreign policy problem-Mexican economic woes— while serving as a useful bargaining chip with respect to the EU in the Uruguay Round of GATT. But NAFTA generated a firestorm of opposition, especially from organized labor and NGOs. Such an agreement with a large, labor-abundant country like Mexico would have bound the United States to something approximating global free trade, and American labor unions clearly felt threatened. More broadly, an agreement with Mexico provided NAFTA opponents with an easy target, sparking latent forces of racism and chauvinism far easier to grasp than an abstract economic commitment, such as most-favored-nation treatment in GATT.

Presidential candidate Bill Clinton attempted to square the circle by rejecting the agreement negotiated by the Bush administration in favor of “NAFTA-plus,” which would have included labor and environmental provisions and a small regional development bank, to obtain the support of key Democratic constituent groups. But even with these concessions, Clinton could muster votes from only 40 percent of House Democrats when Congress voted on NAFTA in November 1993. The legislation passed only thanks to the overwhelming majority of Republicans who supported the Bush legacy. Energized by the narrow vote, anti-NAFTA NGOs quickly broadened their agenda to oppose subsequent trade legislation. The AFL-CIO mobilized on the workers’ rights issue and successfully lobbied Congress in 1997 to defeat a bill extending the president’s “fast-track” negotiating authority because it lacked strong provisions enforcing workers’ rights in any trade negotiation. (Fast-track legislation commits Congress to vote yes or no on an entire trade package without amendments, within a finite time horizon.) Another attempt to win fast-track failed in 1998. This series of defeats severely crippled the Clinton administration’s ability to act assertively in other trade venues like the Asia-Pacific Economic Cooperation forum, the Free Trade Area of the Americas initiative, and WTO negotiations. In short, the explosion of new interest groups and the success of their agendas produced an unprecedented erosion of executive power in trade policy over the past five years.

American Trade Policy as Social Work

In NAFTA’s aftermath, policymakers can no longer avoid the heated controversies over workers’ protection, human rights, and the environment. The debate should now center around a basic question: Will provisions addressing these new issues encourage improvements abroad or just promote protectionism against imports from developing countries? But NGOs have yet to propose a concrete plan to achieve progress in these areas through trade policy. In particular, they rarely ask whether America would even find willing negotiating partners on the other side of the table. Most important, it is hard to predict how such clauses might work out in practice. But the workings of the U.S. Generalized System of Preferences (GSP), which extends duty-free treatment to some imports from developing countries, might provide an answer-at least with respect to workers’ rights.

Since 1984, a GSP amendment has permitted Washington to end or suspend duty-free treatment of imports from countries that suppress workers’ rights. The AFL-CIO and human-rights NGOs have used the law’s petitioning mechanism to request formal government reviews that can ultimately end GSP privileges. Although GSP applies to only a small volume of imports, such petitioning activity is intense and even targets countries not receiving GSP treatment for their exports. Although countries with a poor record of political freedom tend to be the more likely targets, the termination of GSP privileges generally fails to promote labor rights. In other words, linking trade to social issues seems to miss its aim in improving working conditions, at least in this case.

To be sure, one cannot generalize from the experience of the GSP, since it excludes such large and sensitive sectors as textiles and apparel. The GSP also omits communist economies such as China. But if Washington applied the social clause provisions to all imports rather than to only the current modest share, the political outcome could be quite different. With far more at stake, the number of petitions would skyrocket. Instead of deciding on tariff treatment for a limited volume of trade, junior bureaucrats would arbitrate the terms of market access for a substantial share of U.S. imports. Given that these decisions would be based on nonquantifiable assessments of social conditions in trading-partner countries, the scope for the politicization of such decisions would be enormous.

Human and labor rights issues aside, other nontrade issues are hobbling U.S. trade policy. Environmental and trade concerns clash in a variety of ways. In the most simple case, imports can directly threaten the environment-for example, by bringing in non-native pests. But import restrictions in such circumstances are explicitly permitted. A more complicated matter is transborder pollution, which is more difficult and costly to solve with import restrictions, but not an important issue facing the United States. More significant are trade restrictions that force compliance with multilateral environmental agreements (MEAS) that have no direct bearing on trade. For example, the International Whaling Convention and the Montreal Convention on Chlorofluorocarbons allow trade restrictions to force compliance with whaling and atmospheric pollution agreements, respectively, even though they have no direct connection to trade. Similar tangles could easily arise if MEAs address nontrade issues such as global warming and biodiversity.

At least the MEAS are genuinely multilateral. Unilateralism is rearing its head as American import restrictions that apply U.S. domestic environmental laws to other countries grow in popularity. American protectionists wrap themselves now in a green flag. And interagency trade bodies within the government now include the Environmental Protection Agency and the National Oceanic and Atmospheric Administration, who have a say not only in environment-related trade policies but in the whole panoply of trade issues. The potential for cross-issue logrolling within the bureaucracy is quite real. To make matters worse, the Eu is also increasingly using this tactic. Two examples highlight this trend on both sides of the Atlantic: the American attempt to protect dolphins through the Marine Mammal Protection Act and the Eu ban on importing furs from animals caught in leg-hold traps. In both cases, the United States and Europe tried to use trade restrictions to discourage practices abroad that they happen to consider offensive “psychological externalities.” By their very nature, these issues are nonquantifiable, nonrational, and not particularly easy to negotiate.

In such instances, litigation has brought the United States into conflict with its international trade obligations. A lawsuit brought by the Earth Island Institute citing the Marine Mammal Protection Act ultimately led to GATT decisions in 1991 and 1993 against the United States. Four American NGOs-the Earth Island Institute, the Sierra Club, the Humane Society of the United States, and the American Society for the Prevention of Cruelty to Animals-used a 1989 amendment to the Endangered Species Protection Act to force the federal government to ban imported shrimp captured in nets that might also ensnare sea turtles; that ban ultimately provoked a successful WTO lawsuit by Malaysia, Pakistan, and Thailand against the United States in 1998. Despite NGO propaganda trumpeting victory, however, all these cases have allowed the United States to continue its normal environmental practices, effective or not, but only if it compensates the adversely affected countries by reducing American barriers to their exports or by accepting increased tariffs on U.S. exports. What the NGOs seemingly fail to understand is that the real environmental problem is not the WTO but the absence of an international agreement on sea turtles-and all the other new issues that now touch on trade. If the WTO could work effectively on its own agenda and the NGOs would separate their concerns from trade, we could get both more protected sea turtles and more open markets.

The abuse of economic sanctions to achieve foreign policy goals also muddies the U.S. trade agenda. Like trade-environment linkage, sanctions such as U.N.-sanctioned trade embargoes can work through multilateral agreements on global public goods. In the post-Cold War era, however, sanctions have become the first-resort “feel-good” policy of moral preening-and usually on an ineffective unilateral basis. A growing problem in the United States is what Clinton has described as increasingly “sanctions-happy” federal and subfederal governments. Massachusetts has ordered sanctions against companies doing business in Burma, provoking the EU and Japan to ask for a WTO investigation. Sanctions against third parties declining to participate in boycotts, like the Helms-Burton Act penalizing firms doing business in Cuba, have also proliferated. America currently imposes economic sanctions against 26 countries that together account for more than half of the world’s population.

Sanctions are seldom effective and often impose terrible costs on populations that have little control over government actions. The United States also bears hidden economic costs: sanctions have been estimated to reduce U.S. exports by $20 billion annually, costing 200,000 high-paying jobs.2 Yet the Clinton administration has remained unwilling to challenge states like Massachusetts on the basis of the federal government’s exclusive constitutional right to regulate foreign trade and conduct foreign policy. Like their environmentalist counterparts, foreign-policy do-gooders miss the basic point: their actions cripple international trade, do little or nothing to realize their policy’s good intentions, and hamper economic growth. Human rights activists would do far better to use organizations like the United Nations or international diplomacy to realize their aims.

The 1998 collapse of the Multilateral Agreement on Investment (MAI) was a sad case of a worthy agreement run aground by emotional, rather than economic, arguments. Stymied by developing-country opposition in the WTO, the industrialized countries began to negotiate a multilateral investment liberalization accord in 1995 within the Organization for Economic Cooperation and Development (OECD). They borrowed the core principles of the MAI initiative from the international trade regime: national treatment (the absence of legal discrimination between foreign and domestic firms) and most-favored-nation status. But negotiators remained divided over a wide range of issues, ultimately producing a draft text riddled with bracketed language, lengthy footnotes, and many national exceptions. In February 1997, this text was leaked to Public Citizen, a Washington-based NGO that had opposed NAFTA, the Uruguay Round, the fast-track proposal, the African Growth and Opportunity Act, and every other recent attempt to liberalize U.S. trade. With help from the Internet, a transnational coalition of NGOs made outlandish and apocalyptic claims about what was only a work in progress. Among their predictions: the MAI would overturn equal pay and affirmative action laws, end small-business support, ban corporate divestiture campaigns like those against South Africa in the 1980s or Swiss banks in the 1990s, oppose Chilean-style capital controls and U.S. environmental protection laws, and even overturn the U.S. Constitution. A diverse set of American groups, including the AFL-CIO, the Sierra Club, the Western Governors Association, and the Women’s Division of the United Methodist Church came out against the treaty-which was still being negotiated. Washington and its partners were caught flat-footed. In April 1998, the OECD announced that it would suspend the negotiations for six months, effectively killing the MAI-the first major casualty at the hands of a global coalition of NGOs.

Despite the overheated, emotional rhetoric of some NGOs, the myriad new issues do deserve attention and action on an international scale-just not through trade. As the above examples show, using trade policy to advance single-issue goals is generally ineffective. But it also misses the potential to create and build up parallel institutions that can organize international standards in, say, workers’ rights and the environment. For example, it is not difficult to imagine the establishment of something like the global environmental organization mentioned earlier, which would develop core principles and obligations, assign responsibilities for implementation, and articulate enforcement procedures beyond trade restrictions while staying consistent with suitably amended WTO rules. Meanwhile, the International Labor Organization provides a starting place for developing a truly functional multilateral labor agreement.

Last, NGOs run another risk if they push their activist agendas as trade issues. Most NGOs are based in wealthy nations, and Europe and the United States are generally far ahead of the developing world in labor and environmental standards. Not surprisingly, NGO platforms often draw suspicion from poorer trading partners, who tend to see Western idealism as a mask for protectionism. Western NGOs would do far better to work more closely with other international groups to develop multilateral institutions with carrots and sticks to encourage compliance. Otherwise, the have-nots will continue to paint labor, environmental, and human-rights agendas as a rich man’s excuse for closing off markets.

Banana Split

Until recently, the WTO did not attract much attention from Americans beyond the sovereignty-obsessed, nationalist far right and the equally paranoid NGO left, which both tap into America’s deep cultural suspicion of concentrated political power. The banana debate began changing that, and it offers hope that the WTO can serve as an honest broker for future disputes.

As everyone now knows, the United States does not produce bananas. It is home, however, to Chiquita Brands, known as much for its generous political contributions as for its catchy advertising jingle. Chiquita, which produces bananas in Latin America, has long complained that the EU import quotas discriminate by granting preferences to former French and British colonies in Africa, the Caribbean, and the Pacific-where Eu-based firms dominate distribution. The U.S. government has repeatedly backed Chiquita and its Latin American allies, winning cases against the Eu in 1993, 1994, and 1997. But after its last defeat under the new WTO dispute settlement system, the Eu refused to consult with either the United States or Latin America and instead only tinkered with its banana import regime before declaring that it had come into compliance. The United States cried foul and began to retaliate, which prompted the Eu to claim disingenuously that there was a “disagreement” as to whether the Europeans complied with WTO obligations in the first place. The Eu then asked America to go through another round of WTO dispute settlement, thereby postponing retaliation and inviting, as U.S. Trade Representative Charlene Barshefsky put it, “an endless loop of litigation.”

Finally, last March the United States threatened to slap 100 percent punitive tariffs on as much as $500 million of EU imports. The WTO ruled in favor of the U.S. move in April, allowing the United States to retaliate with tariffs on nearly $200 million of European goods. The Eu responded by asking for more time to revise its banana import regime and has since indicated that it may again appeal some parts of the ruling. But for the time being, WTO-approved sanctions remain in place.

This time around, the United States appeared to come out ahead. The banana ruling should throw cold water on isolationists calling for a U.S. withdrawal from the WTO. Still, a problem remains with the WTO’s disagreement clause, which could allow any miscreant to send its case through the infinite loop of litigation. And its dispute mechanism can be counterproductive if a country lacks the political will to adhere to a ruling or is too big to be forced into compliance. Had the WTO ruled in favor of the EU, the Europeans could have manipulated the dispute settlement, returning the world to the dysfunctional GATT system and bringing the United States into direct conflict with the WTO. One way to avoid this quagmire would be for the original, impartial WTO panel to review disputes and rule decisively whether the loser’s claim was frivolous or not. That option would at least get cases moving ahead. Alas, it would also require a formal amendment of WTO rules, which could prove a contentious, interminable process.

Another burning issue could become even more problematic than the banana wrangle: the transatlantic beef-hormone fracas. The EU has barred the import of beef from hormone-treated cattle, without scientific justification, and in effect imposed a trade restriction based on production methods rather than on the good itself Such a move could open the door to innumerable similar restrictions if the WTO allows it. Thus far, the WTO panel has issued an ambiguously worded report that could invite the same potential mess as in the banana case. And third parties, fearing unilateral U.S. attacks on their own trade practices, could side with the EU.

Another risk looms if the WTO veers away from its recent impartial approach. More adverse WTO rulings could spark American calls at the Seattle ministerial meeting to withdraw from the organization. This possibility is more than just theoretical, given that the office of the U.S. trade representative (USTR) will publish an assessment of U.S. membership in the WTO next March as the capstone of its fiveyear trade policy review. Following the report, Congress has the right to vote on ending WTO membership. Although this remains unlikely for now, growing political pressure against the WTO is certain to mount if Seattle backfires.

On a Road to Nowhere

Tragically, Washington remains ill equipped to tackle the protectionist challenge head-on. Trade policymaking has traditionally rested in the executive branch of the government with the USTR-a small and relatively weak office. Its bureaucracy is fragmented: although the USTR negotiates trade agreements, he or she plays no role in implementing them or in handling the adjustment costs that arise, which other departments cover. USTR lawyers are far more comfortable in the French-derived jargon of diplomacy than the algebraic formulations of economic theorems. Their chief economist, assisted by only two other staff members based in other organizations, lacks the resources to regularly assess industry complaints and economic implications of alternative policies. This means that the government sets priorities according to noneconomic considerations, thereby increasing the political influence of special interests. And a culture of litigation has flourished as legally enforceable trade agreements, rather than improvements in economic efficiency, become the prime objective.

Prospects for trade leadership appear bleak in Congress as well. First, the rigid committee structure of Congress-specifically the control of trade legislation by the House Ways and Means Committee and the Senate Finance Committee-cannot easily tackle cross-cutting issues like trade and the environment. Second, the fast-track debate highlighted the fact that key members with expertise in trade issues had retired, leaving behind a debate characterized by the passionate but uninformed advocacy of labor standards, the environment, and human rights. Finally, congressional voting patterns show that trade policy is for sale. Political contributions by union and business political action committees (PACS) have strongly colored votes on major trade legislation. Unions appear to be particularly effective thanks to their greater ability to deliver votes and money at election time. And without business PACS, NAFTA would not have passed in the House of Representatives. Trade policy has indeed been privatized.

In the end, however, the White House deserves the most blame. The USTR merely serves as the negotiating arm of the executive branch and is not responsible for developing any overarching trade strategy. That is the president’s job. But Clinton has been unable to secure even fast-track authority from Congress, where the debate revolved largely around social and environmental issues. One group of Democratic lawmakers would have supported fast-track authorization if their concerns about these issues had been met, while another group of Republican members of Congress would have opposed the legislation had strong language on these issues been included. Putting together a majority coalition required political commitment by Clinton. When he failed to come through, support from both parties melted away. Given the lack of a coalition of the middle, one could imagine a variety of highly partisan fast-track bills being passed, depending on the outcome of the 2000 election. But the current political polarization has made any bipartisan fast-track authorization before the elections highly unlikely.

The leadership deficit made little difference during the Cold War, when the East-West confrontation subsumed all other foreign policy questions. But today the policy vacuum and the resultant emphasis on tactics over strategy have become crippling. There is no real sense of priorities among competing claims on resources. Indeed, the last two significant accomplishments in U.S. trade policy, the creation of NAFTA and the WTO, had their origins either during the Cold War (WTO) or in its immediate aftermath (NAFTA).

Policy coherence requires political leadership to establish priorities and reconcile competing claims. The United States should respond to the changed reality of international trade by working within the WTO to further its open-market agenda. This tactic would require patience, however, and American politics dearly lacks this virtue. A wide gap looms between Western ideas about the new agenda and those of the rest of the world. Still, Washington must make the case for liberalization at home and abroad while building new forums to address growing concerns like environmental and labor standards. The other alternative-marginalizing environmentalists, human rights advocates, and the host of other pressure groups-might be better accepted in the developing world. But it would run counter to deeper trends in the developed world that do recognize environmental and social issues.

Today, the American political class cannot muster the intellectual honesty necessary to prevent narrow special-interest groups from capturing trade policy for their own ends. In such an anarchic environment, international agreements constraining the abuse of trade policy for parochial purposes are the only way to commit countries-including America-to relatively enlightened open-market policies. Seattle is a chance for the United States to save itself from the temptations of protectionism and idealistic activism. But supporters of a liberal international system will not attain their goal unless they first demonstrate the courage of their convictions.