For decades, the United States and our allies have championed clear and equally enforced rules that made global trade transparent and predictable. That commitment created global prosperity and lifted billions of people out of poverty. Today, the United States is backsliding on rule-of-law trade principles that made our country a beacon of confidence, freedom, and success.
Both this administration and its predecessor have embraced a “might makes right” approach to global trade, using national security as a pretext for protecting certain economic sectors from competition. Tariffs imposed in 2018 on imports of steel and aluminum are an illuminating example. Nominally addressing China’s flooding of global markets, these tariffs impacted not just our adversaries but some of our closest NATO allies, along with U.S. businesses consuming steel and aluminum. It is absurd to suggest that imports from our allies are a national security threat, but that is exactly what the Biden administration is arguing, with potentially dire consequences.
After the tariffs went into effect in 2018, China and multiple U.S. allies challenged them in dispute settlement claims at the World Trade Organization (WTO). In response, the U.S. effectively argued that the WTO dispute settlement system, which Washington itself helped established, has no authority to judge national security trade measures imposed by the U.S. or presumably any other country.
Unsurprisingly, the dispute settlement panels established by the WTO’s Dispute Settlement Body did not agree. Late last year, these panels ruled against the United States in four cases. The response from the Office of the United States Trade Representative was apoplectic. USTR wrote that the WTO had no authority over these cases and that the United States would not comply with the panel recommendations to eliminate the tariffs. More, U.S. Trade Representative Katherine Tai said publicly in December 2022 that the WTO was on “thin ice.” Her remarks made it abundantly clear that for this administration, “national security interests” — however they define it — will trump international trade law.
In making these claims, USTR is relying on a now-familiar stalling tactic: appealing cases to the defunct WTO Appellate Body. This arm of the WTO has not adjudicated a single appeal for the past five years. It gets worse. Based on statements by U.S. Ambassador to the WTO, Maria Pagán, the U.S. is now seeking a new interpretation of “essential security interests” that would allow our trade leaders to continue citing “national security” as a pretext for any protectionist barriers — to the detriment of allies and adversaries alike.
The U.S. and other WTO members must take a step back and toss this “might makes right” practice into the dustbin of history. Sticking with such practices risks our relationships with trusted allies and isolates the U.S. at precisely the wrong time.
The stakes are clear: our behavior on the global stage risks the future of a functional WTO. Recent actions make clear that the Biden administration is playing with fire in its efforts to bully the WTO into compliance with an agenda driven by domestic politics. If the rhetoric spins out of control and prompts this administration — or a future one — to withdraw from the WTO, the consequences would be dire. We’d see high U.S. tariff barriers for all countries, making everyday goods more expensive for Americans. That would certainly come paired with high barriers to U.S. exports, a knife to the gut of efforts to make American businesses competitive in markets around the world.
If the U.S. — the greatest champion of the rule of law and the international trading system — decides that exercising its strength is preferable to upholding the rule of law, we will see a downward spiral into global trade chaos. Rather than accepting WTO provisions, countries would instead look to bilateral and regional trade agreements. In some cases, those would exclude environmental and worker protections, the opposite of what the Biden administration claims to want. More, in a time of growing geopolitical conflict, some countries may decide force is easier than extended litigation.
It is essential that the Biden administration pledges to uphold its commitment to the rule of law. That means lowering the rhetorical temperature and providing more clarity and reason in our approach to the WTO. The administration should prioritize working collaboratively with allies to modernize the WTO dispute settlement system and negotiate new WTO agreements that prevent and eliminate tariff and non-tariff barriers to trade. That may mean that the U.S. doesn’t always get its way — but it’s an approach that will heal fractures in our global system and chart a more prosperous and certain future for our children and grandchildren.
Ed Brzytwa is the vice president of international trade at the Consumer Technology Association (CTA).
