Tai Says WTO Needs 'Tough Love' to Reform Dispute Settlement
U.S. Trade Representative Katherine Tai, when asked about the U.S. views on reviving dispute settlement at the World Trade Organization, said that countries need to reflect on how the previous system provided incentives for the U.S. and EU to "continue fighting for almost 20 years about state support for Boeing and Airbus, caused us to fight with each other, and pick at each other while the PRC [People's Republic of China] built up its own large civil aircraft industry under our noses."
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Tai, who was speaking at an Atlantic Council event on U.S.-EU trade relations, said, "We are entirely committed to the reform and the tough love it’s going to take to reinforce the WTO, and its role in the world economy." But, she said, the U.S. wants to make sure that the new dispute settlement system "doesn’t just become a giant litigation forum that you throw money and lawyers at to make a point against each other, to levy tariffs on each other, but how it can be a dispute settlement function that actually helps you resolve disputes with your friends and your competitors." She said the system needs to "prevent this ossification and political retrenchment that we have seen with our friends in the EU." She said there have been many disputes between the U.S. and the EU "that have prevented us from coming together and working on the things that really matter."
Both Tai and U.S. Ambassador to the EU Mark Gitenstein argued that the old model of globalization led to the rise of populists, and that populists in many countries have an authoritarian streak that endangers democracy. Gitenstein said that he hears in both Brussels and Washington that the old orthodoxy about free trade must change.
Tai said that unfettered globalization created a "very unsustainable pathway on a geopolitical, geostrategic level as well as on a human and a planetary level."
Tai quoted her counterpart in the EU, Valdis Dombrovskis, who said what was at stake in cooperation between the U.S. and the EU was the fate of the free world. "It’s really so important to find a way to turn down the temperature between the United States and the EU … and really focus on the fact that we have shared challenges, and we have a lot of shared and common values and principles," she added.