Former USTR Official Suggests WTO Reforms

A former negotiator on the phase one China deal, Clete Willems, said his goal in publishing a report on how to reform the World Trade Organization is to move the conversation beyond how to restore the status quo in Geneva.

“It does seem we’re still nibbling at the edges a bit,” said Willems, who worked in Geneva for the U.S. trade representative as a career official before joining the White House economic advisers' staff. Willems left the White House last year to join Akin Gump.

Willems, speaking at an Atlantic Council webinar Oct. 16 to announce the report, granted that some of his ideas would be “pretty controversial,” such as allowing plurilateral agreements in Geneva that don't give the benefits to non-participants; restructuring the Secretariat; and possibly getting rid of compliance panel arbitration, which could speed up the ability of countries to retaliate for breaches in international trade law.

Willems said the European Union and the U.S. need to find common ground on WTO reform to have a chance of getting reform through the consensus-ruled body. He said he believes that the EU might like about 75% of what he wrote, and suggested that the U.S. could compromise with the EU and drop some of its priorities for reform that the EU doesn't like.

“If we cannot get on the same page, we are sunk,” he said. “The only way that we’re ever going to effectively deal with the threat China poses is multilaterally.”

Ignacio Garcia Bercero, a chief negotiator at the European Commission and an author of his own WTO reform paper earlier this year (see 2007230051), also spoke on the webinar, and said that he agrees with “quite a few things” in Willems' paper, though not the end of compliance panel arbitration.

But, as he said in July, the problems at the WTO have to be tackled sequentially. He said the appellate body has to be re-established under new parameters before the WTO can tackle trade-distorting industrial subsidies.

He said as long as a future appellate body's rulings are still binding, and it is independent, all the rest is negotiable.

Willems said that he would like a one-year timeline from the ruling of a panel to the changing of your measure that violates standards, and that the clock would not be stopped by an appeal. If the WTO operated that way, he said, there would be fewer appeals.

Garcia Bercero said the e-commerce talks in Geneva are a very important test to see how to establish a plurilateral agreement without free riders. “Exactly how to do that is not easy,” he said.

Mark Linscott, a former trade negotiator, said he can imagine a Joe Biden administration getting the appellate body sorted out, but he thinks plurilateral agreements that exclude non-signatories from the tariff benefits will never be part of the WTO.

“I think for better or worse we’re left to bilateral, regional preferential agreements” to reduce tariffs, he said.