This is an excerpt from the Q & A at the Lighthizer CSIS event mentioned in the last post, relating to WTO dispute settlement. I'm just going to quote it for now, but I should have more to say later.
MR. MILLER: ...
To continue with the WTO, the United States has raised some objections to a dispute settlement understanding and the way the bodies are formed in that process. Could you tell us a little bit more about what the U.S. is trying to accomplish in terms of changing or reforming the dispute settlement body?
AMB. LIGHTHIZER: Well, I guess I would answer that in two parts. One, there are a number of issues which – on which there’s pretty broad agreement that the WTO, in dispute-settlement understanding, is deficient. I mean, there are transparency issues. There are issues with the staff. There are a whole variety of issues that we have a problem with. And I think there’s general agreement that there are problems.
But I think, even beyond that, the United States sees numerous examples where the dispute-settlement process over the years has really diminished what we bargained for or imposed obligations that we do not believe we agreed to. There have been a lot of cases in the dumping and countervailing-duty, the trade-remedies laws, where, in my opinion, the decisions are really indefensible, and even a lot of people who have much more free-trade orientation who read these question(s). And we’ve had tax laws that have been struck down. We’ve had other provisions where the WTO has taken – really, I think, took the position that they were going to strike down something they thought shouldn’t happen rather than looking at these – the GATT agreement as a contract.
So what we’ve tended to see is that Americans look at the WTO or any of these trade agreements and we say, OK, this is a contract and these are my rights. Others – Europeans, but others also – tend to think they’re sort of evolving kinds of governance. And there’s a very different idea between these two things. And I think sorting that out is what have to do.
If your appellate body or your dispute-settlement process really thinks that we’re trying to evolve into what’s good for trade, that’s one thing. If what you’re going to do is look at the exact words and say here’s what was bargained when Ambassador Hills sat down and negotiated, she had a very precise idea of what it was that the United States was giving and what it was we were getting. And anything that doesn’t enforce that in that way is troubling.
And I think that the DSU has evolved in a way that it creates new obligations and it has reduced a lot of our benefits. So coming to grips with that, both in the procedural realm but also just practically, is really what we have to worry about in the DSU. And it’s a fundamental part of the WTO. I mean, it’s a very – it raises a lot of, you know, very major issues for the WTO.
MR. MILLER: Yeah, that makes sense.
Well, on a practical level, in the last 20 years or so of dispute-settlement cases there’s two patterns that have come out. First, the big traders have a lot of cases on both sides, which is not surprising at all, and that there is – that the complainants tend to win much more than a coin toss, which says to me that there is a selection of cases that are worth the prestige of the country bringing them.
And so since the U.S. both is involved in a lot of cases and often is a respondent, how do you think that sort of the practical – the decisions on cases will affect the reform process?
AMB. LIGHTHIZER: Well, I mean, to the extent that we’re – that we’re objecting to the process, it’s because we don’t agree with the way the – in many cases the appellate body has approached this. We think the appellate body has not limited itself to precise – to precisely what’s in the agreement. So, I mean, that is the nature of our complaint.
And that’s not to say that we don’t win cases. Of course we win cases. Back when Senator Brock and I were there and there was a system, it was before 1995, before the WTO, under the GATT, and there was a system where you would bring panels and then you would have a negotiation. And, you know, trade grew and we resolved issues eventually. And, you know, it’s a system that, you know, was successful for a long period of time.
Now, under this binding dispute-settlement process, we have to figure out a way to have – from our point of view, to have it work.
