One of my favorite T-shirts from the ’80s featured a very large ferocious-looking dog and the slogan that is the title of this column: “Lead, Follow, or Get out of the Way.” That is appropriate advice for the Biden administration regarding the World Trade Organization (WTO). Ambassador Tai is on a bit of a roll—she gave an important speech on China at CSIS on October 4 and then gave another one in Geneva on the WTO on October 14.
The latter is noteworthy because it is the first time a U.S. trade representative has shown up in Geneva since 2015, the Trump administration having had little use for the WTO, but, like her China speech, it represents a triumph of slogans over substance. She wants reforms at the WTO so that trade becomes a force for good—“a race to the top” rather than the bottom, which is straight out of the administration’s 2020 campaign playbook. Unfortunately, she offered little explanation of what that means or how specifically to achieve it beyond a goal to create a “more flexible WTO, change the way we approach problems collectively, improve transparency and inclusiveness, and restore the deliberative function of the organization.”
Transparency and inclusiveness have been popular terms with this administration. They seem to believe that bringing more people into the process and being more open about it will produce better policies. That may be true for a country trying to develop a policy, but it may not be the solution to the WTO’s problems. It is a consensus-based organization, and the failure to reach agreements is because the people already there can’t agree. It is hard to see how adding more voices will lead to more consensus. We may get a lesson on this in Glasgow when the United Nations Climate Change Conference (COP26) convenes at the end of this month. Climate debates have featured increasingly active and vigorous interventions by nongovernmental organizations and civil society groups—precisely the people the Biden administration wants to include in trade policy formation. We will soon see if their presence and activism in Glasgow lead to better results. I’m not betting on it.
Ambassador Tai’s comments, in Geneva and elsewhere, on dispute resolution reform echoed those of the Trump administration: countries are using litigation as a substitute for negotiation, and the Appellate Body went off the rails in a fit of judicial activism that took its decisions beyond the text of the Uruguay Round agreement. I think she is right about that, although I can’t help noting the irony of a Democratic administration complaining about judicial activism.
Unfortunately, once again she did not offer any path for resolving the issue. The United States continues to block Appellate Body appointments without offering any specific reform proposals of its own. Hopefully, they are “under review” and will emerge shortly. (I continue to believe that this is a people problem, not a process problem, and the most direct solution is to restart the appointments process, insist on candidates that will commit to adhere strictly to the Uruguay Round agreement, and veto those that will not.) The result of our block, however, is that, despite our support for the WTO, we are the ones undermining it without providing any path out of the swamp.
You can see a similar approach on some of the issues currently under negotiation. On the vaccine waiver issue, the United States took a progressive stand (which I think was a mistake) but has done little since then to bring the parties together beyond exhortations. Likewise, on fisheries, aside from a proposal to add a forced labor provision—a good idea but not central to the core issues—we do not seem to be demonstrating any leadership.
To be fair, overt U.S. leadership can be a double-edged sword. It is often simultaneously demanded by other countries and then rejected when it appears. Over the years, our negotiators have learned that a public U.S. proposal can be the kiss of death, and it is often more effective to “lead” through other countries—a modern version of the old cliché that it is surprising how much you can accomplish if you don’t care who gets the credit.
Nevertheless, we are at a point where the organization finds itself in a difficult position—few recent accomplishments to its credit, fraught negotiations as the date for the Ministerial Conference gets ever closer, a broken dispute settlement system—which is leading to declining confidence in the WTO and demands for the larger economies to step up and break the log jams. The United States is far from the biggest obstacle to accomplishing anything (India, I’m looking at you), but on countless occasions its leadership has been instrumental in bringing negotiations to successful conclusions. The lessons from history are that general statements of support are nice but don’t do the job, that U.S. leadership can be decisive in bringing issues to resolution, and that my T-shirt was right—the United States should lead, follow, or get out of the way.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
To read the full commentary from the Center for Strategic and International Studies, please click here.