Billions in Sanctions Authorized For March 1 Unless Congress Implements WTO-Ordered Change to U.S. Tax Policy; Retaliation Looms in Other WTO Rulings Against U.S. Laws
Billions in Sanctions Authorized for March 1 Unless Congress Implements WTO-Ordered Change to U.S. Tax Policy; Retaliation Looms in Other WTO Rulings Against U.S. Laws
When the GATT Uruguay Round was being negotiated in the early 1990s, many in the U.S. only saw the World Trade Organization (WTO) and its powerful new dispute settlement process as a venue for the U.S. to bring challenges against other nations. But, the growing number of WTO rulings against an array of U.S. laws – including some recent high-profile cases – has underscored what critics warned a decade ago: the WTO impedes the ability of America’s democratically-elected representatives to determine U.S. policy.
To date, the U.S. has lost more than 80% of all WTO complaints brought against its laws. Challenges against U.S. trade safeguards law at the WTO have been particularly frequent and successful. Of the 11 completed antidumping (AD)/ countervailing duty (CVD)/ surge protection cases against the U.S., the U.S. has won only two. U.S. policies ranging from tax to antidumping measures and clean air to sea turtle protections have been labeled illegal by WTO dispute settlement panels, and unfortunately the U.S. has changed domestic policies to conform to many of these rulings.
Most recently, President Bush eliminated the Section 201 safeguards for steel– just days before $2 billion of WTO-authorized trade sanctions were to kick in. That the WTO could successfully coerce the President to reverse a policy with huge consequences for a vital sector of our economy, as well as the livelihoods of thousands of hardworking citizens, should remove all doubts about the power of the WTO. The fact that many analysts interpreted the steel Section 201 tariffs as vital to President’s Bush’s reelection prospects in key swing states such as Pennsylvania, Ohio, and West Virginia makes the Bush Administration’s compliance with the WTO’s decision all the more remarkable – putting to rest the canard often repeated by WTO defenders that the body is powerless to force countries obey its directives.
As the adverse rulings pile up, many in Congress, the media and think tanks who supported the WTO’s establishment are beginning to sound like its critics: “Once tax policy is on the table, there's no end to what the WTO might meddle in” (Wall Street Journal editorial, Jan. 17, 2002). And, concerns are mounting in Congress about allowing the WTO to dictate U.S. policy. At the WTO’s Geneva headquarters in Jan. 2004, 40 countries lined up to lecture the U.S. for its failure to conform its laws to several recent WTO rulings, including:
Our escalating trade deficit, the jobless “recovery”, the hemorrhaging of U.S. professional, manufacturing and service jobs, along with record-low commodity prices and declining farm income, have placed the trade issue front and center in public opinion and in the presidential race. The nine-year record of the WTO makes clear that this version of international commercial rules is not working for America.*
The U.S. Constitution grants Congress exclusive authority to set U.S. trade policy. The U.S. Constitution also grants Congress exclusive authority to enact and amend federal legislation. Congress must staunchly protect its constitutional authority and prevent its erosion by overreaching WTO demands.
* For more details on the WTO’s record and proposals about what changes are needed, please see Public Citizen’s new book by Lori Wallach and Patrick Woodall: “Whose Trade Organization: The Comprehensive Guide to the WTO.” Or contact Public Citizen’s Global Trade Watch at 202-546-4996/ www.tradewatch.org