Here are some exchanges from a House Ways & Means Committee hearing last week between members of Congress and U.S. Trade Rep. Katherine Tai about the state of WTO dispute settlement reform. Are there any definitive answers in here as to where things are going and when they will get there? Perhaps not! Nevertheless, people may want to scrutinize her words closely to see if they can learn anything.
Rep. Schweikert:
The constant conversation you and I've had is, the speed, the efficiency, the fairness of the adjudication process, WTO dispute resolution. Tell me where we're at.Tai:
I'm delighted, Mr. Schweikert, and I know that you do like the technical aspects of all that we do. And that's demonstrated by your question about the WTO. Let me talk about the dispute settlement system at the WTO first, put it in the context that the dispute settlement system doesn't exist in a vacuum, that it is part of the larger WTO institution that we value very, very much for what it stands for, for how it brings together 164 economies in the world and provides us with a forum for dealing with each other and being able to communicate with each other and to resolve the disputes that we have when they come up. So the reform of the WTO dispute settlement system is tied to the consensus at the WTO that the entire WTO ought to be reformed to reflect the economy that we're living in today. And also to be able to keep up with the changes in our economy since the WTO was established almost 30 years ago. So on WTO reform, probably, because I also want to make very clear, the United States and our team at the mission to the WTO in Geneva is engaging across the board. We have a special responsibility in dispute settlement, but we are engaging at the committee level. We are bringing written proposals every meeting. We're also leaning in on how to make this a more functional negotiating forum
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On dispute settlement, what we are doing is, we are seeking a system that is singularly focused on helping two parties resolve a trade dispute. To be a dispute settlement system, as the system was intended. Dispute settlement has evolved into an avenue for judicial rulemaking. It has become synonymous with litigation, very expensive and time consuming litigation, ... , and it allows countries to seek through litigation what they could not accomplish by negotiation. So the results have significantly damaged US interests through an interpretation that, for example, shields China's non market practices and undermines our ability to defend US workers and businesses. You may also be aware of the recent national security decisions that have come out of the WTO system that are deeply concerning to us and to our national security sovereignty. We are engaging on a reform process that requires 164 economies and members of the WTO to agree and this is not about us dictating the terms, it is about us being very honest about what our interests are, what we need the dispute settlement system to do for us, but also to craft a renewed and better dispute settlement system with our partners at the WTO.
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Rep. Beyer:
I really also appreciate your commitment to the WTO and the belief that it can be a real force for good. And without the WTO its a state of nature. And the work he did in the last ministerial meeting, crucial wins on fisheries and COVID-19 vaccines, illustrates that despite the challenges, the WTO actually can work under the right conditions. To that end, a little concern we're sending mixed messages on our support for the WTO and our commitment to abide by its decisions and rules, even if we don't like the outcome of individual cases. I know you've worked hard on reform. Could you update us on your progress in this area?
Tai:
I'd be delighted to. In fact, we're doing so much work on reform, it is a little frustrating for me that not more people know about it, because the issues can get technical and all of this is happening in Geneva which is far away from Washington, DC. I know how much you care about it. Whether it's on the committee processes, whether it's on the negotiation function, or dispute settlement, my team shows up to every meeting with new ideas. Our motto is to reform by doing and to put ourselves out there as a model for reform, to not just talk about it, but to behave in the way that we would like for members to behave, which is to be very, very engaged with the WTO and see it as being there to serve our interests and our needs. And not something that we go on autopilot about and and forget about. So on dispute settlement, we are on phase three of work in terms of driving an interest based negotiation conversation, an inclusive process that brings in all of the WTO members, with the goal in mind that for real reform and change to happen at the WTO, we can't dictate that change. It's got to be negotiated and accepted by everyone. That's just an example. But I would be delighted to facilitate a follow up for you and any others on the committee to learn more about what we're doing.
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Rep. Moore:
With regards to the WTO arbitration dispute, now there's serious national national security implications here. I've taken note of a series of these concerning developments from the WTO related to our national security by the challenge by China to the US export controls on semiconductors and multiple other WTO rulings against the United States. The WTO has no authority in matters of national security, and members on this committee stand firmly behind USTR's rejection of their flawed conclusions. Could you update the Committee on just any any more context on how you're thinking about this and other disputes related to national security?
Tai:
Certainly, I think this gets to an area where I think Congressman Beyer mentioned a little bit, feeling like I've sent mixed messages. Look, you can be strong on this principle that national security decisions taken by governments in their sovereign authority shouldn't be subject to WTO panels, picking them apart from a trade perspective, and at the same time be for the reform of the WTO including its dispute settlement system. So again, you know, I want to credit my WTO Ambassador Ambassador Maria Pagan for carrying the flag, being very strong on our position with respect to where the WTO and its jurisdiction should properly be, while leaning into a reform program on how to make the WTO work better for us, certainly, and for all of its membership.
