AS A DEEPLY SHAKEN World Trade Organization tried to get negotiations off the ground last week, one Indian participant stopped in the corridors of the Sheraton Hotel to argue that protesters who believe they are fighting for the rights of exploited workers in developing countries have inadvertently become “like Marie Antoinette, saying let them have cake.”

What they don’t understand, said the Indian, is that the labor and environmental standards that the US government is pushing to appease protesters will hurt small-time fishermen, carpet makers, and others in India who cannot possibly keep up with the standards of the West. “If you deprive people of their bread and butter,” he warned, “we’ll have millions of protesters instead of thousands.”

Indeed, many Indians here believe so strongly that the protests are against their interests that there is a widespread belief among them the whole affair was, in the words of Times of India‘s Priya Ranjan Dash, “being stage-managed by the Clinton administration.”

Here is the irony of the WTO standoff: In the eyes of much of the developing world, the protests—or at least how they are being used by the White House in an election year—have become a symbol of the very kind of Western domination they are fighting against.

That is not to say that everyone in the developing world is thrilled with the WTO and the free trade system it represents. Many developing countries believe they got shafted in the last round of negotiations. Delegates from developing countries came to Seattle prepared to fight for more open markets in the kind of products they make, such as agricultural goods and textiles. They also wanted longer transition periods for opening their markets to Western goods, a toughening of measures that call upon Western powers to share technology with developing countries in which they do business, and the reform of intellectual property rules that prevent them from making cheap drugs to combat AIDS and other epidemics.

For that to happen, though, what was supposed to be the WTO’s “development round” had to come off. When labor and environmental issues took center stage instead of their issues, the developing countries found themselves confronting what they perceived as yet more barriers set by the West. Hence the stage was set for the Seattle battle within the WTO.

Most people in developing countries I have talked to, both inside and outside the WTO, believe that a reformed WTO is necessary if they are to have any hope of the kind of globalization that will allow them to capture some of the developed world’s wealth. Even Martin Khor, president of the Malaysian think tank Third World Network and one of the protest movement’s most visible intellectual leaders, told me: “I am not opposed to a multilateral trading system.”

At the same time, most also recognize that free trade is a risky proposition for countries that have long relied on protectionism to nurture fragile local businesses. Intently following the WTO crisis from the southern African country of Malawi, its education minister Ken Lipenga explains how free trade can enter such an economy like a wrecking ball. Malawi, a country so poor that even construction workers go barefoot, recently lowered tariffs in order to comply with a regional agreement. The result: Several British companies who had long maintained subsidiaries in Malawi, like soap manufacturer Lever Brothers, closed up shop and started bringing products in from their larger operations elsewhere.

Lipenga and others worry that a similar phenomenon will happen on a larger scale with the WTO. Local businesses (even subsidiaries of Western multinationals) will die as markets are flooded with cheap goods. Thus, in the weeks leading up to WTO, a Ford subsidiary in India held a press conference to warn against removing tariffs in the automobile industry.

Yet the protest movement, which gives the impression that Western companies have no business in developing countries, focuses less on this basic dynamic than on the specter of Third World “sweatshops” run by greedy, environment-wrecking multinationals. And indeed, they exist. El Salvadorian union leader Manuel Vasquez came to protest events in Seattle to speak about Western-owned factories that pay workers less than $8 a day and that have doled out beatings so severe some pregnant workers have lost their babies. The American oil industry’s savaging of the Nigerian countryside is well known.

But particularly on the question of working conditions, the picture is not so simple. Probably far more typical than sweatshops are Western-owned companies offering salaries that are high by local standards but unbelievably low by American ones. While this imbalance seems inherently offensive (especially when American companies lay off workers here to chase after cheap labor), these companies provide decent jobs in countries where unemployment rates run at 30, 40, even 50 percent and where to be unemployed sometimes means going back to subsistence farming. In the very best of cases, it brings technology, energy, and a new market that will attract local entrepreneurs. A shining example is India’s billion-dollar high-tech industry that emerged after Microsoft, IBM, and other American firms laid a foundation there. That’s why Lipenga and others say, “We want foreign investment. We need it.”

To get it, developing countries recognize that what they offer is cheap labor. “That is our only weapon and we have to use it,” says Senegalese Minister of Planning Ibrahim Sall. “They [Western countries] have high technology, we have cheap labor.”

Labor and environmental standards, developing countries fear, could raise the bar to unrealistic Western expectations as a way to slow foreign investment (and save jobs in the West) as well as to block imports from struggling Third World entrepreneurs (eliminating competition for Western entrepreneurs in the same market). Hence India’s Commerce Minister Murasloi Maran labels such standards a “Trojan horse for protectionism.”

How is it that a protest movement preaching international solidarity has brought about this conflict? It seems to have been blinded by sloganeering over easy-to-hate sweatshops, as well as a couple of its factions. One is a vocal group of people devoted to “localization” rather than “globalization.” Foreign investment is definitely not emphasized in their philosophy, which urges people to grow their own food and become “self-reliant.” According to Swedish activist Helena Norberg-Hodge, who spoke at the sold-out Benaroya teach-in that started off the week, even development must be eschewed as a means of fighting off the “consumer monoculture.”

More centrally, the unions that poured the vast majority of people onto the streets last week have an obvious challenge in dealing with the issue of cheap labor. Their cruel dilemma is that what’s good for American workers is not always good for the poorest workers overseas. If AFL-CIO international affairs director Barbara Shailor is any judge, unions haven’t fully faced up to this dilemma. Shailor, who also spoke at the teach-in, used her platform to refute charges of protectionism. The country’s biggest union, she says, merely wants to insure that workers overseas have the right to organize. As if to prove her point, she shared the stage with union leaders from Africa and Brazil.

But after her speech, I asked her if that meant she would be OK with jobs going overseas if they were going to union workers, who would inevitably still earn far less than their American counterparts. Vaguely, she answered that she was not “technically equipped” to answer, but that she was sure there was a way to create a “virtuous circle” that created plenty of jobs to go around for everyone.

And maybe there is. Maybe, as one Indian suggests, workers all over the world could somehow meet and discuss solutions to their different needs. The question is, will last week’s events in Seattle help or hinder that process?