[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

Brazil won a major WTO case in 2004 against U.S. cotton subsidies. That decision
is under appeal; if the United States loses the appeal and then fails to remove its
subsidies to cotton farmers, Brazil will be able to retaliate against U.S. exports to Brazil.
The Doha Round began in 2001 and almost collapsed in 2003 when delegates from
developing nations walked out in protest over the subsidies that developed nations
such as the United States and members of the European Union provide to their farmers.
The European Union has agreed in principle to eliminate exports subsidies on
farm products; the United States has not yet made a similar commitment.
THE GROWING PROTEST AGAINST THE WTO
In December 1999, the WTO held a meeting in Seattle to launch a new round of trade
negotiations. But thousands of protesters—some violent—dominated the stage.
What brought on such a vehement reaction? Old-fashioned protectionist sentiment
played a role, but there were other important factors.
Some WTO critics believed that the agenda in previous rounds of trade negotiations
had been set by the more advanced industrial countries—to further their
interests—and that the outcomes reflected their economic power. Not only had they
gained the lion’s share of the benefits, but they had done so at the expense of some
poorer countries. The World Bank estimated that after the round of trade negotiations
concluded in 1994, the poorest region in the world, sub-Saharan Africa, was
actually worse off. While poorer countries were forced to cut their tariffs against
goods produced in the more advanced industrial countries, the more advanced industrial
countries continued to protect their agricultural sectors. While financial services
had been opened up, industries that relied more heavily on unskilled workers,
such as the construction and maritime industries, remained closed.
Thousands of protesters converged in Seattle to protest the WTO conference held there in
December 1999.
446 ∂ CHAPTER 19 INTERNATIONAL TRADE AND TRADE POLICY