U.S. Trade Representative Katherine Tai on Wednesday said the U.S. was prepared for serious engagement at the World Trade Organization ministerial meeting set to begin at the end of this month – and called on other members to speak candidly about the reforms they would like to see taken up by the 26-year-old institution.
“My vision for WTO reform is this: That WTO members come to Geneva or wherever it is that they might convene and bring their honest selves,” Tai said during a roundtable discussion with reporters in which she said the U.S. would bring its “best game” to the table – and urged others to do the same. “Bring your grievances. Bring your disappointments. Be honest,” she said.
She added that members must also be “prepared to fight for the vision of the WTO that you want,” noting the organization’s large membership and that “every single member has a veto.”
Overall, Tai said, the WTO “could really use an infusion of energy, dynamism, vision.”
She noted that members have a wide range of concerns about the institution – the organization’s dispute settlement system, for example, “is something that has not worked for us,” while other countries are more focused on agricultural rules, she said.
“I think that we need to be very bold here,” she added. “Just restoring the WTO to where it was four years ago, five years ago, is not actually going to bring back the energy that we need, frankly, for a world economy that is changing very quickly and that is moving further and further away from the point and the reality of where the WTO started.”
In remarks last month about the Biden administration’s vision for the WTO, Tai called for holistic, comprehensive reform. She also confirmed that the U.S. would not put forward its own Appellate Body proposal and argued instead for a process led by conversation.
Many in Geneva have urged the U.S. to outline what it wants from dispute settlement reform since the Trump administration began the block on new nominations to fill Appellate Body vacancies that led to the body’s paralysis. The U.S. has consistently said it will not do so, instead asking members to engage more fully with Washington’s critiques.
Tai on Wednesday reaffirmed the commitment to conversation and said she had articulated in her speech “what the U.S. interest is and what the interest is in trading partners and counterparts that I’ve listened to and talked to about the dispute settlement system.” An effective dispute settlement system, she said, should be “fair”; should allow for WTO members “to actually resolve a dispute” rather than to let it “string out over the course of 20 years”; and should not “just lead to the WTO granting you permission to hit each other with tariffs.”
Whether the Appellate Body “fits in and what it looks like, who is on it,” she added, “is a secondary issue.”
Tai expressed optimism about finding opportunities for “convergence” through conversation and urged openness to new thinking. “Borrow from the things that were there before but do not be afraid to introduce new ideas,” she said. “Because let me tell you, the system the way it was working before can always be improved.”
Tai noted that the U.S. also had not proposed its own version of a waiver of some WTO intellectual property obligations for vaccines and other pandemic-related products. She reaffirmed the administration’s commitment to support such a proposal from other members and to “play our role at the WTO to facilitate that text-based negotiation.” The Biden administration in May announced it would support a proposed waiver that would allow countries to forgo a swath of commitments under the Agreement on Trade-Related Aspects of Intellectual Property Rights in an effort to increase production of vaccines and other goods.
The TRIPS waiver proposal, Tai said, was “a very, very powerful message from the developing countries at the WTO that they need relief in this pandemic.” She added that the TRIPS Agreement doesn’t “give them the confidence” that they can access needed medical products.
Asked what she expects will happen on the waiver at the upcoming ministerial, which begins on Nov. 30, Tai said, “We're going to bring our best game.”
“It is time to facilitate something that is going to work and is going to be meaningful and that can be accepted by the WTO,” she added.
Tai also touched on a range of other topics during the roundtable, including ongoing talks with China about its implementation of its phase-one deal with the U.S.
Tai last month raised concerns about China’s implementation of the deal and its industrial subsidies in a call with Chinese Vice Premier Liu He.
She said on Wednesday that the U.S. was still engaging with China on those issues – and “in particular the pieces of phase one that have the clearest metrics.” She noted that China’s obligations under the deal include purchasing pledges as well as commitments on issues relating to intellectual property, sanitary and phytosanitary measures and biotechnology, among others.
According to a tracker developed by the Peterson Institute for International Economics’ Chad Bown that uses trade data to measure China’s compliance with phase-one’s purchase commitments, China has fulfilled only about 59 percent of its 2020 commitments and is on pace to fulfill only about 62 percent of its 2021 target.
“This is the commitment that we bring as an administration to the agreements that the United States enters into our trading partners," Tai said. "Which is, yes, we are holding them accountable. We're also holding ourselves accountable to these agreements to make sure that they are working for us.”
Tai did not offer details on how the U.S. could respond if China does not meet its commitments but expressed optimism that continued engagement would produce results.
“I don't want any of you to leave this room thinking that we are not getting traction with our Chinese counterparts,” she said. “We’re talking and we’re working. We don't need dads to come in,” she added, referring to President Biden and Chinese President Xi, who are expected to meet next week.
Tai declined to provide a timeline for the talks – which she described as “baseline engagement” – but said "it's not in my interest for this first step to take a very long time.”
Asked whether she was pushing for China to approve the certification of the Boeing 737 Max airliner so that it could purchase more U.S. aircraft and help meet phase-one commitments in that area, Tai said, “if you're looking at where the weaknesses might be in terms of phase one, you should expect that we’re talking through and exploring all of it.”
She also discussed talks with Japan and prospects for negotiations with other countries to try to resolve disputes over Section 232 tariffs on steel and aluminum imposed during the Trump administration.
During a meeting with Tai last week, Japanese Minister of Economy, Trade and Industry Koichi Hagiuda “strongly requested resolution” of the tariffs.
Asked if she expects to announce a deal next week during a visit to Japan, Tai noted that recently concluded talks resolving a dispute over steel and aluminum with the European Union took five and a half months and “that was with a lot of political will of both sides.”
“There are a lot of conversations that we have to have and that we want to have and we know our partners want to have” she said, referring to the steel and aluminum tariffs. “And certainly we know the interest that Japan has in jumpstarting and getting us into the conversation.”
Tai said the U.S. intends to take up “each one of these conversations with the appropriate care and attention required,” adding that those conversations must address a range of issues, including overcapacity and climate as well as “the needs of the particular partnership.” She noted that an “important part” of the discussions with the EU involved “addressing the hurt that has been there, in terms of those human connections, in terms of that relationship across the Atlantic.”
Tai declined to say she planned to raise the issue of autos – a long-running trade issue left unaddressed in the U.S.-Japan Trade Agreement signed during the Trump administration – with her Japanese counterparts. She noted, however, that the issue was a “perennial” one in U.S.-Japan trade relations and stressed that her focus “really is on the concerns that we have today” to “ensure that this partnership and our collaborations are relevant to what we need right now.” -- Margaret Spiegelman (email@example.com)