Seattle puts world trade on hold globalisation the world

THEY WERE dancing late into the night outside the Westin Hotel, where the American delegation to the Seattle trade talks was staying.

The World Trade Organisation meeting finally collapsed under the weight of its own contradictions late on Friday night, and the protesters who had done so much to bring this about were jubilant. "History has been made in Seattle as the allegedly irresistible forces of corporate economic globalisation were stopped in their tracks," said Lori Wallach, director of Public Citizen's Global Trade Watch.

But the main reason for the Seattle fiasco was not the mainly white, middle-class demonstrators in their bobble hats and face paint: it was the quietly dignified men and women of the trade delegations from Africa, Asia and Latin America who reclaimed a little self-respect by standing up to the United States of America. They have less in common with the demonstrators than they think, apart from one thing: they agree that the World Trade Organisation does not work.

The meeting had become a debacle long before it was ignominiously closed down, with virtually every delegation expressing amazement at the incompetence of America's management. "Do they want this to fail?" European officials asked in stunned incomprehension as the talks failed to tackle the most important issues, and the procedure started to crack under the strain. The US had lost on many key demands, and may conceivably have decided failure was better than a bad agreement. In any case, the recriminations were already starting to fly.

The summit cost hundreds of millions, all of it wasted. Shopkeepers in Seattle lost more than $7m (pounds 4.5m) of business, and suffered further bills for damage during the demonstrations. The bill for police and security force overtime also runs into millions, as does the cost of bringing thousands of delegates and journalists halfway round the world.

The mayor and police chief of Seattle have been lambasted for their handling of security, but other reputations have suffered too. The event has crippled the political credibility of the US Trade Representative, Charlene Barshefsky, fresh from her triumph in negotiating a deal with China, while Mike Moore, the new WTO director-general, was booed and heckled. The organisation itself is badly holed below the waterline - though international summits often walk a fine line between success and failure, and are sometimes blocked by a few key demands, few, if any, have simply collapsed like this. It was "a remarkable meeting," as Mr Moore put it - "much was done," he added, in apparent contradiction of the facts.

One of the main intentions, the US said, was to heal the divide between rich and poor countries. By the end, it was turning into a pitched battle between the US and the South on a scale that has not been seen for decades. Developing nations, furious at the way they were treated by America and American demonstrators, stood firm against demands for new rules on labour standards. And they demanded new concessions to make up for the fact that they had gained too little from the last round of trade talks. " It's a great day for the developing world," said Duncan Green of the Catholic aid agency Cafod.

Most felt their views were ignored and they were marginalised. "They have been treating us like animals, keeping us out in the cold and telling us nothing," said the Egyptian trade negotiator, Munir Zahran. But while developing nations have felt this exclusion before, "the difference was that they did something about it", said Mr Green. "They wanted to put down a marker that they couldn't be used as a doormat."

The Seattle shambles was also hailed a victory by the groups which organised the demonstrations that paralysed the city for several days. But they represented very diverse interests, ranging from the environment to labour, and in fact most have lost in some way.

Those who marched to demand that labour standards be included in the WTO, including US unions, must now confront the fact that there is no chance that America will be able to resurrect this issue. Those who wanted the non-governmental organisations to get a seat at the table also lost, because the developing countries feared that more white middle-class faces would mean even less influence for them. They did not want more environmental rules, but they did want more trade access for their textiles and manufactured goods, something that would be very difficult for the unions that were out on the street.

More than the demonstrations which halted proceedings on Tuesday and brought tens of thousands of people into the street, the fundamental cause of the collapse was internal differences and clashes within the US government. President Bill Clinton, said delegates, did much to damage the meeting. Until he arrived, on Wednesday, nothing happened. He incensed delegates by ramping up US demands and then leaving again.

The White House was trying to bridge the gap between those Democrats who want to protect American industry, and the mainstream free traders. It failed very badly to do so. The baton of trade leadership may be passing to the European Union, which put on a unusual show of unity by comparison with the US. And Pascal Lamy, the EU Trade Commissioner, was one of the few people to emerge from Seattle with his credibility enhanced.

But for the moment there is a vacuum, as America struggles with its own demons. The real risk, said Mr Green, is that the short-run victory of the developing nations now turns into a rout, as America imposes unilateral rules on labour, strikes bilateral deals which divide the poor countries and fails to grant new trade access. "If the protectionists in Congress get their way, they are worse off," he said.