If the Trump administration seeks an end to binding dispute settlement procedures, it would represent a significant departure from decades of the United States leading the global charge for making dispute settlement in trade agreements binding and enforceable.
Trade agreements offer a variety of benefits, most notably tariff cuts – but only to goods that qualify. Rules of origin serve that gatekeeper function, aiming to ensure that the benefits of trade agreements go to the goods of the parties.
Americans spent 8 billion hours in 2015 sitting in traffic. Our individual productivity takes a hit, but so does the productivity of our businesses and the overall economy. In the same way, bottlenecks clearing products through customs at international borders can waste time and money and even disrupt business plans and supplier relationships.
Before there was a WTO, the United States developed the tools to take matters into its own hands, using a trade tool known as Section 301 of the Trade Act of 1974. It hasn’t been used much since 1995 when the WTO’s dispute settlement procedures came into effect, but the Trump Administration appears to be ready to dust it off to maximize leverage in its trade negotiations with China.
Governments have a responsibility to ensure the safety of their food supplies, and to protect the health of the plants and animals that supply the food system. In negotiating trade agreements, countries have sought to balance the twin objectives of protecting human, plant, and animal health and ensuring the international flow of safe food.
The U.S. Constitution guarantees that no person may be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” But what we take for granted in the United States isn’t always the case when doing business abroad.
WTO members voluntarily agreed to rules to create a more secure and predictable trading environment for their traders. By and large, members comply with these rules so that others will as well. But when one member believes that another is not complying, the WTO has procedures for settling disputes.