At an Atlantic Council event yesterday, U.S. Trade Rep. Katherine Tai talked about the ITO charter and some policy issues that did not make it into the international economic system at that time:
Tai: The original vision for trade in the Bretton Woods institutions went above and beyond the General Agreement on Tariffs and Trade, the GATT, which is what ended up making it across the finish line. The original vision to pair with the World Bank and the IMF was an international trade organization, the ITO charter, that had tariff pieces that were coupled with enforceable and meaningful worker standards based on a goal of full employment for all members, environmental equities, and also anti-monopoly provisions, to address the fact that it's not just the private sector companies that can behave as monopolies and distort economic opportunity, but entire countries. ...
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Question: ... Talk about what role trade plays in this contest of democracy and autocracy.
Tai: Here's where I'll get into a bit of diagnosis in terms of where our successes have come up short. And I think that what I would do is go back to that original vision for the ITO charter, understand that it was more than just the GATT. And imagine what would have happened if the ITO charter had made it across the finish line. Now, one historical note, the ITO charter in full didn't succeed, and it was one Senator Taft, who really put the spoke in the wheel, and it was the same Senator Taft who had rolled back a lot of the New Deal worker protections that FDR had put into place. Now what was left on the cutting room floor, the enforceable, meaningful labor standards, the environmental standards, and then also the anti-monopoly rules. So instead what you ended up with was a tariff program and a program of trade liberalization standing on its own without the safeguards addressing the interests of working people, of the planet, and of ensuring a healthy and vital amount of economic opportunity that could happen within economies and between economies.
I'm not sure what she has in mind for environmental provisions that were in the ITO charter but not the GATT, but putting that aside, it's interesting how broad a view of global governance this is. Having binding and enforceable international rules on labor, the environment, and antitrust that apply to the U.S. would be a big deal. We have some rules in these areas to a limited extent today, but they don't have much impact on U.S. policy (e.g. right to work laws), and that's by design. I have serious doubts that the U.S. government would ever agree to a set of international rules that intruded into its sovereignty/policy space in a significant way on these issues. The U.S. did agree to such rules on trade issues that focus on protectionism, but doing something similar on labor, the environment, and antitrust would be asking a lot more.
A related issue is that the U.S. government changes its view on issues such as these over time as governance shifts back and forth between the parties. As we alternate between Democrats and Republicans running things, which we will continue to do, I'm not sure it is possible to find a set of international rules on these issues that both parties could support.
