All Equal under WTO?

By Dougherty, Carter | The Washington Times (Washington, DC), January 1, 2002 | Go to article overview

All Equal under WTO?


Dougherty, Carter, The Washington Times (Washington, DC)


Byline: Carter Dougherty

The rule of law has 2000 years worth of allure in the West and plenty of appeal elsewhere in the world. So, following the ravages of war, like-minded nations in North America and Europe set up the colorlessly named General Agreement on Tariffs and Trade (GATT) in 1946 to lend a predictable legal structure to international commerce and began reducing sky-high tariffs that had deepened a worldwide depression a decade earlier. But, unlike domestic laws that have police forces and judges lurking behind them, the GATT worked on the honor system, because its clients were proud sovereign nations, not citizens. If a country jacked up a tariff beyond what it had promised in negotiations, the rest of the world could blow off steam but not much else.

Until 1995. Taking the jump that the war generation did not, diplomats from all over the world set up a system of binding legal arbitration to settle trade disputes, one in which sovereign nations, looking a bit like citizens under global governance, would pay the price for breaking promises. Their baby's name had a little more jazz than its predecessor: the World Trade Organization (WTO).

In those heady times, before anti-globalization protests and deep mistrust of free trade in the United States, a grand edifice for world trade seemed possible. In the eyes of Claude E. Barfield, a scholar at the American Enterprise Institute, a Washington think tank, this dream has collided with reality after six short years. "The WTO is overextended and in danger of losing authority and legitimacy as the arbiter of trade disputes among the world's major trading nations," Mr. Barfield writes in his new book, "Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization."

But the problem goes deeper than the title suggests. Mr. Barfield is really highlighting the limits of law in an international setting. Sovereign nations, for all the talk of globalization and an interdependent world, still prefer to dance to their own tunes. The WTO system for resolving disputes that Mr. Barfield has analyzed is a legal procedure for determining whether countries have broken the commitments they made. A country that feels wronged can ask for a tribunal to hear its complaint. Losing nations must either comply with the agreement or submit to trade sanctions equal in commercial value to the violation they have committed.

Strictly speaking, the WTO system does not infringe on American sovereignty, since no WTO pronouncement can change U.S. law, still the exclusive domain of Congress. But it does dramatically restrict U.S. freedom of action by ratcheting up the pressure not to renege on past promises, no matter the whims of Congress. …

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