WTO can advance benefits of free trade only with clear, concise agenda, study says
Paper suggests fundamental change, specific reforms and areas to avoid for Seattle round

Supporters of free trade should abandon the "reciprocity" model of negotiations that treats trade barriers as valuable "bargaining chips" and instead pursue a course of "coordinated unilateralism," in which the benefits of open markets at home and abroad are clearly recognized, according to a new study released today by the Cato Institute.

In "Seattle and Beyond: A WTO Agenda for the New Millennium," authors Brink Lindsey, director of Cato"s Center for Trade Policy Studies; Daniel Griswold, associate director of the center; Mark Groombridge, research fellow; and Aaron Lukas, trade policy analyst, argue that the new WTO round should be seen as a "bottom-up process in which countries liberalize, not merely to gain "concessions" from other countries, but primarily to reap the economic rewards of their own liberalization."

Along with this fundamental shift in negotiating strategy, the authors discuss specific reforms in such areas as agriculture, services, nonagricultural tariffs, information technology and e-commerce, antidumping laws, intellectual property, foreign direct investment, labor, environment, and competition policy. Most notably, they argue for a dramatic change in the dispute settlement process that makes "additional liberalization, not trade sanctions, the chief enforcement mechanism for WTO rulings," adding that, "resort to trade sanctions perverts the dispute settlement into a process of raising trade barriers rather than eliminating them." Other suggested reforms include

• Continuing the reduction of trade barriers in agriculture and services begun in the Uruguay round; systematically reducing tariffs on nonagricultural goods, especially with regard to textiles; and "guaranteeing cyberspace as a duty-free zone."
  
  
• Tightening the WTO"s antidumping code so that domestic "unfair trade" laws cannot be used as "a tool for protectionism."
  
  
• Rejecting enforcement of labor and environmental standards through trade sanctions, relying instead on trade liberalization and economic development to encourage higher standards; eliminating barriers to trade in environmental goods and services; and relying on multilateral environmental agreements and the International Labor Organization to monitor international standards.

Free traders, the authors maintain, "should focus on getting the available gains as quickly as possible and fend off efforts to clog and corrupt the agenda with illiberal initiatives." On this score, they make two important suggestions: "First, the round should have a fixed deadline of no more than three years"; second, "the idea of "early harvests" of agreements prior to the ultimate deadline deserves support."

"Seattle and Beyond: A WTO Agenda for the New Millennium"