New Op-ed: It’s Time to Exit Relics of Globalism Like the WTO
The CCP virus pandemic has added urgency to a long-overdue reassessment of the assumptions underlying the post-World War II “international rules-based order.”
To be clear, “international rules-based order” is a euphemism for globalism, and globalism has taken a beating these past few months.
We’ve seen how the true cost of doing business with China is a very high price indeed. We’ve seen how an economy reliant on global supply chains and just-in-time inventory management is a fragile one, and we’ve seen how the Chinese Communist Party is not the benign force we expected it to be when we welcomed it into “the family of trading nations.”
The pandemic has exposed the flaws in the globalization project the elites have been pursuing for the past 70 years.
The World Trade Organization is a cornerstone of that project and, like the World Heath Organization, its sister in the globalist pantheon, the WTO is now under fire in Washington.
“The global economic system as we know it is a relic; it requires reform, top to bottom. We should begin with one of its leading institutions, the World Trade Organization. We should abolish it,” Senator Josh Hawley (R-Mo.) writes in the New York Times. Tell us how you really feel, senator!
Our membership in the WTO must be renewed every five years, and the junior senator from the Show-Me state wants to let it lapse.
Not a moment too soon. This is one product that has outlived its sell-by date.
The World Trade Organization was born after the Berlin Wall fell. Gone were the days of a trade and military alliance of Western industrial democracies—the free world standing against a Communist bloc. In the new post-Cold War world order, goods and capital would flow freely in a global economy of universal prosperity and democracy.
Though the WTO was born in 1995, it’s conception dates to 1947. That’s when the State Department sought to create an international trade organization “to bring about world peace . . . and prevent World War III.”
A California congressman at the time described Washington’s negotiators as “boatloads of smug diplomats, all wise economists, experts, theorists, specialists and whatnots eager to barter away the little factory in Wichita, the little shop in Keokuk.”
While they failed in ’47, they kept the dream alive over the decades. “What’s good for the global economy” replaced “what’s good for America” as the guiding principle for Washington’s trade negotiators, diplomats, and strategists.
The “experts” pursued their plan without debate or congressional vote. No one came right out and told the American people their nation and system of government were being replaced.
As Richard Gardner, the man who served as Bill Clinton’s ambassador to Spain explained, “The ‘house of world order’ will have to be built from the bottom up. . . . An end-run about national sovereignty, eroding it piece by piece, will accomplish much more than a frontal assault.”
Strobe Talbott served in Bill Clinton’s State Department when the WTO was founded. He described “The Birth of the Global Nation” in Time magazine in 1992: “Countries are . . . artificial and temporary. . . . Within the next hundred years . . . nationhood as we know it will be obsolete; all states will recognize a single, global authority. A phrase briefly fashionable in the mid-20th century—“citizen of the world”—will have assumed real meaning by the end of the 21st.”
Long before the pandemic exposed the follies and fallacies of the globalist project, before it showed us how, when push comes to shove, national governments will always put their own interests first, administrations on both sides of the aisle had problems with the WTO.
One of those problems involves its appellate body—judges who interpret WTO rules and settle disputes among members. Yet the WTO doesn’t follow its own rules.
Article 17.5 of the WTO rules says cases that come before the organization—disputes between nations over unfair trade practices—must be settled within 90 days. In reality, cases drag on for years, during which time the victims go bankrupt while awaiting justice.
The rules also say judges cannot be affiliated with any government. Yet in a recent case involving paper imports, none of the judges met the WTO’s criteria, and one was actually an official of the Chinese government. The judges, not surprisingly, ruled against the United States.
U.S. Trade Representative Robert Lighthizer blasted the ruling as “the latest example of judicial activism” by the WTO aimed at undermining U.S. trade laws.
And when the WTO isn’t flouting its own rules, it’s making up new ones.
We thought we signed a contract when we joined the WTO, but it’s a contract with terms that keep changing. We put our country at the mercy of an entity with rules and authority that are constantly growing.
Past administrations both Democratic and Republican objected to WTO judges creating obligations to which the United States never agreed.
The Trump Administration, fed up with U.S. complaints falling on deaf ears, stopped approving new judges and froze the appeals “courts” process. In response, WTO bureaucrats went ahead and created a new judicial body outside the agreed-upon rules—and it is using American taxpayer dollars to fund its operation.
The WTO’s various power grabs threaten American sovereignty.
The Article XXI rule, the national security exception, reads: “Nothing in this Agreement shall be construed . . . to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests.”
That’s what the United States signed and we take its meaning to be absolutely clear: We can take actions based on what we consider to be in our national security interest and the WTO can’t stop us.
President Trump determined the national security interests of the United States require us to be self-sufficient in producing steel and aluminum. To that end, he imposed tariffs to stop China and other countries from dumping their metals and driving American producers out of business.
But the Eurocrats in Geneva believe it’s up to their unelected “judges,” not the elected government of the United States, to decide what’s in America’s national security interest, no matter what Article XXI says.
Steven Vaughn served as counsel to the office of the United States Trade Representative. He says there’s a fundamental problem with the WTO when we can read the same text and come to opposite conclusions.
“Somebody misunderstood what we all agreed to. We were told we had not given up any of our sovereignty,” Vaughn says. “If we’re this far apart just in terms of the basic concept, what is the point of trying to paper over them.”
How can you even talk about reform with an organization that doesn’t agree on the meaning of “cases will be settled within 90 days”? What good is rewriting rules for an outfit that doesn’t follow rules?
Why bother to remain in the WTO?
It has done nothing to stop the greatest threat to world trade today: Communist China’s beggar-thy-neighbor predatory trade practices.
China supports its export industries with subsidies, tax breaks, export rebates, low-cost loans, and cheap inputs including a militarized workforce. The WTO has allowed Beijing to maintain its trade barriers even as we lowered ours. It requires the United States to treat repressive regimes that use forced labor the same as our democratic allies.
President Clinton’s Deputy Secretary of State Strobe Talbott saw the WTO, the International Monetary Fund, and the World Bank as “protoministries of trade, finance, and development for a united world.”
The WTO was part of a bold experiment to build a borderless, post-national world.
We can now say with certainty the experiment failed.
It’s time to take back control of our destiny, leave the WTO, and rebuild America.
Curtis Ellis is the Senior Policy Director for America First Policies.