November 4, 1999

No. 8

Seattle and Beyond

A WTO Agenda for the New Millennium

by Brink Lindsey, Daniel T. Griswold,

Mark A. Groombridge, and Aaron Lukas

Executive Summary

reduced to 5 percent and eventually phased

Representatives of the 134 member

out. All duties on information technology

nations of the World Trade Organization

should be eliminated and international

will meet in Seattle in November 1999 to

commerce on the Internet kept duty-free.

launch the newest round of multilateral

Advanced economies must keep their

trade negotiations. The new round should

commitments to phase out all textile and

be seen as a "bottom-up" process in which

apparel quotas by 2005. WTO rules on

countries liberalize, not merely to gain

antidumping should be tightened to pre-

"concessions" from other countries, but

vent such laws from being abused for pro-

primarily to reap the economic rewards of

tectionist purposes. The WTO's dispute

their own liberalization.

settlement mechanism, although on the

The emphasis of the new round should

whole a tremendous success, is in need of

be on reducing trade barriers; the greatest

reform with respect to the enforcement of

potential for economic gains is in services

WTO rulings. Specifically, countries that

and agriculture. The United States should

refuse to implement adverse rulings should

seek the global elimination of agricultural

be required to offer offsetting liberalization

export subsidies, a drastic decline in

rather than be subject to trade-restricting

domestic price supports, and a steep cut in

sanctions.

trade barriers, especially the tariff spikes

No compelling need exists for adding

that protect certain favored farm sectors.

foreign investment and intellectual proper-

In services, which now account for almost

ty rights to the WTO agenda, given exist-

a quarter of global trade, barriers to for-

ing WTO rules and ongoing unilateral

eign competition should be lowered across

reforms. The new round of talks should

sectors, with exceptions kept to a mini-

avoid entirely competition policy and the

mum.

enforcement of environmental and labor

Trade barriers against manufactured

standards, which could threaten to over-

goods should be lowered aggressively, with

whelm the WTO administratively while

tariffs now below a 5 percent tariff rate

broadening the scope for sanctions.

reduced to zero and higher tariff spikes

Brink Lindsey is director, Daniel T. Griswold is associate director, Mark A. Groombridge

is a research fellow, and Aaron Lukas is a policy analyst at the Cato Institute's Center for

Trade Policy Studies.