If world governments don't act now to lay the groundwork for global e-commerce, they could be caught in a morass of political self-interest and national regulations, warned the world's leading trade official in an exclusive Wired News interview.
"Governments are ready to negotiate because they understand very well that liberalization in this field doesn't mean giving up anything," said Renato Ruggiero, director general of the World Trade Organization.
In his three years at the helm of the WTO, Ruggiero has sealed major international agreements deregulating telecommunications and reducing tariffs on computer and communications products. The effects of the agreements, he said, are beginning to spur competition, cut consumer prices, and open the door for e-commerce.
But it is anybody's guess what will happen once more of the world's estimated 6 billion people log on, he said.
"We're giving the opportunity for every man in the world to sell his ideas or his products from his own house to everywhere in the world. It’s like a trip to outer space. You have to go there, and only when you're there can you begin to assess its impact."
Ruggiero, a former Italian diplomat, was appointed to head the WTO when it was created in 1995 to replace the 47-year-old General Agreement on Tariffs and Trade.
During its lifetime, the GATT oversaw eight multiyear negotiations that opened up international markets in everything from agriculture to services. The most recent was the Uruguay Round, completed in 1994, in which a final trade agreement was delayed for nearly two years while the United States and the European Community knocked heads over politically sensitive farm subsidies.
"When you look at the traditional trade sectors, the fight over market liberalization is horrible," Ruggiero said. "But when you are dealing with new technologies -- with the future -- there is no fight."
A team of WTO economists has estimated that by 2000, there will be more than 300 million Internet users worldwide, and electronic commerce will amount to roughly US$300 billion a year.
Ruggiero is encouraging WTO members to take advantage of the potential and develop a framework for e-commerce before political differences multiply. Indeed, he believes electronic commerce is too pressing an issue to wait for the new "Millennium Round" of trade talks expected sometime after the 2000.
Ruggiero said that by resolving disputes effectively for the first time, the WTO has kept countries from lapsing into the protectionist trade policies that caused worldwide depression during the 1930s.
Under GATT, opposing sides had to agree before trade issues could be resolved, making the dispute process toothless. Under the new dispute settlement procedure, a special panel reviews international trade spats with the authority to order national governments to change their trade policies or face official WTO sanctions.
The reform represents a radical shift in sovereignty from nation states to a global institution, a step Ruggiero believes is revolutionary.
"The WTO is the first new institution related to the needs of the 21st century. It's the first system in which we are trying to create a universal trade framework based on rules -- and not on power -- and with an enforcement capacity," he said.
In fact, national governments have continued to support freer trade, despite pressure from various nationalists and isolationists already painting the WTO as an emerging world government. "In every democracy you have to accept there are people who have a different view, and they have a right to express it," he said. "But the reality is how governments act."
Ruggiero said his task is to convince the world that globalization is not a choice but a necessity. "Self-sufficiency will never be the answer to the problems or the challenges that we face."
