Of all the media interviews President Clinton lives to regret once his term is over, few will rank as high as last week's conversation on trade with the Seattle Post Examiner. In a hotel-room conversation with the paper's Michael Paulson while anti-WTO demonstrations raged outside, Clinton casually suggested that the U.S. should ultimately impose sanctions on nations that violate a set of core labor standards.
The comment may have been the obvious palliative to throw out to the legions of labor activists — core Democratic party voters — in Seattle to protest, but it got U.S. trade negotiators in a panic. And with good reason. Within hours of the paper hitting the streets, delegations representing developing countries had dug in their heels, convinced that the world's most powerful trading nation planned to deny many of them their only competitive advantage — cheap labor. They vowed to block any progress on further trade liberalization, and claimed victory when the conference ended in failure late Friday. "Protesters weren't the key element that destroyed the Seattle talks," says TIME correspondent Andrew Zagorin. "The meeting collapsed less because of what was happening outside in the streets than because of what transpired in the negotiating hall as delegates were overwhelmed by their inability to resolve contentious issues."
Despite the best "what-the-President-meant" spin efforts of his trade negotiating team, the specter of labor conditions being used as a reason to block imports to the U.S. from developing countries prompted their leaders to block any progress. In the end, Washington was unable to win even the relatively nebulous commitment — agreed upon by its most important rival trading bloc, the European Union — to form a WTO working group on the issue of labor rights. Thus the pitfalls of an organization whose decision-making process demands absolute consensus.
It's not as if consensus was imminent before the developing countries recoiled from Clinton's comment. Deep divisions between Europe and the U.S. over issues such as agriculture subsidies gave the developing countries plenty of room to maneuver. In the end, the industrialized nations found shackled by domestic political concerns. European governments were bound by their electorates' concerns over everything from protecting the livelihood of farmers to genetically modified food as reason to fight tooth and nail against any moves to open up their produce markets. President Clinton tried at the last minute to get the G7 heads of state to come to Seattle to generate the political momentum necessary for a breakthrough, but they politely declined.
What the demonstrations did make clear was the extent to which President Clinton's own hands are tied domestically. Following on the heels of the nuclear test ban treaty debacle, the WTO failure may usher in an open season on the lame duck President's foreign policy. Clinton's defeat in Seattle will certainly embolden those congressional forces that had vowed to turn down the President's deal with China over WTO membership, putting at least a question mark over its passage in an election year. But what's bad for Bill Clinton may not be altogether bad for Al Gore, and the Seattle debacle may, in fact, work to the vice president's advantage: The Clinton administration's tough talk on labor rights won support from union leaders, and the summit's failure means there's no trade-talk framework agreement for the vice president to defend against Democratic party skeptics. U.S. trade representative Charlene Barshefsky, who chaired the Seattle talks, closed the conference Friday calling for a "time out" in the talks, and for the next year at least the principals may slow things down as U.S. elections loom.
So while all of the issues raised, and left unresolved, by Seattle suggest that future trade talks are likely to be a volatile political battlefield, backing away from forcing through a deal in the short run may be something of a political investment for Washington and its G7 allies.