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US Trade Representative Robert Lighthizer at a cabinet meeting, October 21, 2019

US Trade Representative: WTO Overreach Counterproductive

Feb. 14, 2020
The WTO Appellate Court has made it more difficult for the US to conduct fair trade, not less, says the USTR

The United States Trade Representative’s office issued a report February 11 that says the appellate body of the WTO, a group of seven people tasked with issuing appeals on WTO legal findings, actually breaks WTO rules and makes it difficult for member countries like the US to conduct fair trade.

The 176-page report details instances where the USTR says the appellate body broke WTO rules by overstepping its authority: ruling on issues it doesn’t have jurisdiction over, issuing directions it doesn’t have the authority to issue, and interpreting WTO agreements between countries in ways that member companies didn’t anticipate.

“Unfortunately, the conduct of the Appellate Body has converted the WTO from a forum for discussion and negotiation into a forum for litigation,” said Ambassador Robert Lighthizer in a statement accompanying the report. He said that a “reassessment” of the WTO is necessary in order to establish “a trade agenda that benefits all Americans.”

According to the report’s introduction, it is the first “comprehensive study of the Appellate Body’s failure to comply with WTO rules,” and it contains a long list of misdeeds and oversteps allegedly committed by the body. The report says that the appellate body “consistently breached” appeal-completion deadlines; attempted to discern disagreements of facts when its mandate restricts it to legal issues; and attempted to direct how other bodies in the WTO operate, among other oversteps.

The report is not the first complaint lodged against the trade organization by the United States. An appendix to the report contains records of U.S. officials questioning the power of the appellate body dating to the second Bush administration. In 2013, the US Trade Representative’s office said that the WTO’s ruling on American duties on Indian steel involved “highly troubling legal interpretations” of WTO rules.

The Trump administration has been more aggressive: while on the campaign trail, President Donald Trump threatened to pull the United States out of the WTO entirely, and since December 2019 the United States has blocked the reappointment of judges to the appellate body in question, effectively crippling it for the time being.

The report notes that it does not provide a solution for the many problems it lists: “The United States is publishing this Report … to examine and explain the problem, not dictate solutions.” And until the dispute on the power of the WTO’s appellate body is settled with the United States, state-to-state trade deals like the phase one China deal and the USMCA might take precedence instead.

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