THEATER IN THE ROUND

THEATER IN THE ROUND

espite some continued violent protests against the World Trade Organization, police in Seattle appear to have regained control of the streets around the convention center. That's the good news from a meeting that so far has had precious little to celebrate.

President Clinton rightfully condemned the violence fomented by anarchists, but he failed to criticize the deliberate misrepresentation of the WTO's work by labor and environmental groups. Nor did he help matters by pressing his case for a link between trade agreements and labor standards - a link that's anathema to developing nations.Under these circumstances, it will be remarkable if the meeting produces much of substance. Nonetheless, the trade ministers assembled in Seattle must make the most of the opportunity to show what market-opening agreements can do, and in the process belie the false claims made by the protesters.

It's worth remembering why the WTO is in Seattle in the first place. The goal was to launch a new round of negotiations that will take up the unfinished business of the Uruguay Round, which itself contributed greatly to the world economy. They arrived with a built-in agenda aimed at opening markets for agriculture and services. They also face a long list of potential market-opening efforts in areas ranging from intellectual property rights to government procurement and electronic commerce, among others.

The built-in agenda is the core of the effort, comprising the sectors with the greatest potential gains. It is here that negotiators must focus their efforts, notwithstanding the distractions around them, because the challenges are as great as the potential rewards.

Consider just one part of that agenda, the services talks. This is a bulging portfolio of negotiations in different industries, from finance and telecommunications to transportation and distribution, health, legal services, education, audio-visual, tourism, construction, engineering, express delivery and architecture, among others.

The WTO has identified at least 21 different service industries to include in the negotiations. Each of these, in turn, is divided into subcategories. The distribution sector, for example, includes commission agents' services, wholesale trade, retailing and franchising.

If and when trade officials ever get down to hard bargaining, they will face issues that are complex and often quite different from one service industry to the next. Services are delivered in a variety of ways. In some cases they are supplied across borders, as in international phone calls; in other cases, buyers, such as tourists, make use of services in the foreign country; and in still other cases, companies set up branches to offer services abroad.

In each case negotiators will wrestle with questions of market access, proper regulatory supervision, transparency of rules and fair treatment. In some sectors, that will be very tricky indeed: In financial services, for example, governments will claim rights to impede access by foreign firms to protect the integrity of their payment systems. It will fall to negotiators to separate out legitimate fiduciary concerns from thinly veiled protectionism.

Contrary to the message on the banners and placards, opening services markets will benefit all national economies. That happy circumstance arises from the special nature of service industries, which support other sectors, helping entire economies function better.

For example, a competitive transport and distribution industry enables manufacturers to run just-in-time production plants. A well-run financial industry ensures that capital will flow to its most productive uses and at competitive rates. The same holds for telecommunications, accounting, legal services and other industries.

These industries also are engines of growth in their own right. In the United States alone, according to the U.S. Trade Representative, service industries generate nearly 100 million jobs and $6 trillion of national output. That's 70 percent of the U.S. Gross Domestic Product.

With expanded access to world markets for service providers in all WTO member nations, that engine of growth can be expected to race even faster, creating jobs for efficient service providers and improving living standards.

Under the circumstances, it is more than a little strange that protesters have linked their efforts to block the WTO with a campaign to save jobs. It's now up to the WTO to show up the fiction behind this week's street theater.