WTO: USTR Tai's Comments on WTO-consistency and dispute settlement
Simon Lester recently highlighted some of US Trade Representative Katherine Tai’s comments on WTO-related issues that are worth considering further. Tai said:
I really bristle at this narrative that the United States would put forward a proposal that is WTO-inconsistent, because that calls into question ... our good faith as a WTO member.
… The fact of the matter is that there is no WTO rabbi who sits and pronounces whether or not a measure that's being advanced by a WTO member is kosher or not. …
… I know that the Europeans are very, very proud of their carbon border adjustment mechanism and that it is a culmination of a lot of European based work and compromise in negotiations. But I also want to acknowledge and recognize that Europe's confidence that the CBAM is WTO consistent is indicative of the work that Europe has put in to design the system and Europe's confidence in terms of how it will defend the CBAM if challenged at the WTO, and we all know that there are members of the WTO right now who are looking at preparing to challenge the CBAM and the WTO.
… I want to emphasize and make clear that the proposals that we have on the table [on tariffs on ‘dirty’ steel] and shared with Brussels are ones that we also we have designed to withstand WTO scrutiny, that we have our reasons for believing that we have abided by the WTO rules.
… it became very clear that our levels of tolerance or our comfort level with different types of defenses are different on a Washington and Brussels basis.
First, while small, it is heartening that the US is still messaging that WTO-inconsistency is a bad thing. Although it would also seem that the US defines as ‘WTO-inconsistency’ may not be same as what you’d traditionally think that term meant.
Second, while it is true there is no ‘WTO rabbi’ who pronounces on whether a proposed measure is WTO-consistent or not, there is (was?) a highly valued dispute settlement system at the WTO that was designed to do just that. It’s possible to read these comments as part of a narrative downplaying the importance of independent adjudication to declare the law (at least outside of the disputing parties) and instead emphasising the State-made nature of international law (persistent objectors and all).
While others might see a measure as being ‘WTO-inconsistent’ if a Panel or AB rules as such, perhaps Tai is suggesting we should not be so deferential or at least that we shouldn’t be thinking there is some kind of WTO common law. And indeed, elsewhere she has said that the WTO dispute settlement system “was meant to facilitate mutually agreed solutions between Members” and that the US wants to revitalise the “agency of Members to settle their disputes”.
Third, the comparison with the EU’s CBAM is particularly interesting given how much work the EU has done to explain its thinking and justification for WTO-compatibility. While you may not agree, at least the EU’s argument is clear and has been thoroughly debated. It would be great if the US was also able to share its “reasons for believing that we have abided by the WTO rules” on things like ‘dirty’ steel tariffs rather than leave this to speculation.
Finally, tolerance and comfort can be read in a few ways. Obviously different governments and different lawyers will have different views on the law and how it applies to a measure. But tolerance can sometimes mean a willingness to live with legal arguments that you know are weaker and are less likely to be accepted. It is clear the US has different comfort around things like invoking the WTO’s Article XXI Security Exception - apparently less concerned with others not seeing this as legitimate or potentially creating systemic issues. On this, the US’s heft (and exceptionalist tendencies) gives it a comfort and tolerance on some things that is not available for others.