Seattleite describes ins, outs of global talks

Among this city's many ties to trade, here's one you might not know: Rufus Yerxa, a Seattle native, is one of four deputy-director generals at the World Trade Organization in Geneva.

In July, Yerxa's boss, Director-General Pascal Lamy, halted a five-year round of talks aimed at reducing global-trade barriers.

Yerxa, 55, was in town last week to explain that move, and what it might take to get the talks going again. Here are edited excerpts.

Q: The last time WTO officials came to Seattle, in 1999, it sparked riots. What brings you here?

A: I'm the ranking American in the WTO, so part of my job is to keep in touch with people in the U.S., to interpret and understand what's going on here on trade issues, and to try to explain to Americans why it's relevant to producers, consumers, growers.

Q: Many think of the WTO [with an annual budget of $140 million] as a vast global organization. Is it?

A: Total size is about 800 people. Over half are administrative people, interpreters and translators, and another 150 are basically support staff. So you're left with around 250 professionals — economists, lawyers, statisticians. For an organization of 150 member countries, it's an extremely small organization.

Q: The WTO doesn't set trade policy, does it?

A: No, because it does not have the power of initiative. The agreements are negotiated by the members. The staff end up drafting a lot of stuff, but only as a result of a process among our members. The director-general really doesn't have many express powers. He can facilitate negotiations, he chairs the negotiations.

Q: He can suspend them, too...

A: I'll get back to that in a minute. He really only has the power of persuasion. He can only fill the gaps between the members if they ask him to act as an intermediary to bridge their differences.

Q: Lamy said the differences are political. What did he mean?

A: There are now some fundamental differences of position on the table among the members that can't be bridged at a technical level. They have to be decided by politicians. The gap between the members is not that big, but it's perceived as big by them. It's intractable. The gaps might only be a few billion dollars. So he's basically said there are significant signs from the key players that they're unwilling to resolve those differences.

He didn't formally impose a suspension, he simply announced that it was his judgment that that's what the members wanted to do. And nobody disagreed with him. I think it was going to happen anyway.

Q: How will talks restart?

A: The question becomes, how do we get back to the table and how do we get a deal? To restart talks, the same thing has to happen. It has to come from the membership.

Q: Let's talk about the key issue — agricultural talks — where there's a big gap in political will.

A: There are lots of other areas where the members are not in agreement. But none of them are viewed as able to make or break a deal. The sense is, if the agriculture deal gets put together, they'll find a solution on the other issues.

Developing countries have a confidence issue. It's highly unlikely that many of them will be willing to move very far in other sectors, such as industrial products and services, if there's not a decent deal on agriculture. It's also important to developed countries as well.

Q: How could things move forward?

A: Sometimes countries can do things over a longer period than they can't do over a shorter period.

So transitions would be one solution to this, and we haven't really gotten to the point of talking about this. People are so focused on the basic numbers fight that they haven't really talked about how long the transition would take.

The key antagonists have not gotten to a point where they are willing to say to the chairman, "You go ahead and propose solutions to our differences." So they either have to negotiate and show political will and solve this thing, or they have to say we can't resolve our differences, you put a text on the table. They haven't done either yet.

Q: U.S. trade-promotion authority [which lets the president put trade deals to Congress for a simple up-or-down vote, without amendments] expires mid-next year. Are we talking months or years to restart talks?

A: We have a window of opportunity between now and next spring. If we don't get a big breakthrough by then and finish the deal in 2007, we could be off for some time — 2009 or 2010, which is not a pretty prospect for the institution.

Q: Hasn't the timetable always been ambitious? The previous Uruguay Round took nine years.

A: This round is deeper, the cuts are deeper.

We're talking about formula cuts that would result in overall tariff cuts of 50 percent worldwide on agriculture and other sensitive products.

Instead of cutting the low-hanging fruit, we're picking the stuff that's much higher up.

Q: Is it realistic?

A: In order to get consensus among 150 countries on something like this, you have to have trends that are moving in the right direction in governments and publics around the world.

As opposed to the end of the Uruguay round, where we saw a lot of enthusiasm for market-oriented liberalization, we seem less enthusiasm for it now, or questioning of it.

Q: What's next?

A: Low-temperature activity, nondetectable activity. Not a lot high-level meetings where ministers are running out giving press conferences.

I think we learned that trade ministerial meetings are not the best way to negotiate. They put everybody in an uncomfortable environment.

You can use a mundane body like the General Council to make the same decisions.

Q: How does this compare to the Uruguay Round?

A: We had a phase just like this. We had a very contentious ministerial meeting, in Brussels in 1990, European farmers parading in the street, all that sort of thing.

We had a breakdown, a lot of blaming going on, suspension of the negotiations. Eventually, the director-general put out a text, about a year after the breakdown.

We negotiated for two more years after that. But it served as a basis for the final deal.

In some ways, that's an inevitable part of negotiating.

You have a breakdown and then people start to change expectations and agree.

Alwyn Scott: 206-464-3329 or ascott@seattletimes.com