Overreach of WTO Highlighted by Potential Conflicts with Candidates’ Non-Trade Proposals
By Public Citizen's Global Trade Watch
Implementation of a dozen of the key domestic non-trade policies to lower health care costs or reduce carbon emissions proposed by the current presidential candidates will require modifications to the expansive rules of the World Trade Organization (WTO). Many WTO rules have little or nothing to do with international trade, yet WTO signatory countries are required to “ensure the conformity of its laws, regulations and administrative procedures with its [WTO] obligations.”
Domestic policies that extend beyond the WTO constraints are subject to challenge by other WTO signatory countries – often at the behest of their affected industries – before WTO tribunals. The tribunals, which operate behind closed doors and are composed of trade experts even when a case concerns health care or environmental policy, are empowered to order countries to eliminate or alter domestic policies that violate WTO rules. A country that fails to comply is subject to trade sanctions until it changes its laws. Of the 137 cases decided to date at the WTO, challenges to domestic laws have been successful nearly 90 percent of the time, with countries moving to alter their laws as ordered except in a single instance, where a country instead chose to pay indefinite trade sanctions to keep its policy in place.
This purpose of this report is to identify what aspects of the WTO a future president must renegotiate to create the policy space necessary for implementation of key domestic policy proposals at the center of their campaigns. As described in this report, it is not possible to “work around” the WTO rules in addressing certain health care and climate challenges, because the scope of the constraints that WTO rules impose on signatory countries’ non-trade policies is so broad.