Tai Says US Will Engage on WTO Reform, Calls for Forced Labor to Be Covered in Fisheries Agreement

U.S. Trade Representative Katherine Tai called on the World Trade Organization to conclude the fisheries subsidies agreement, and said that discussions in Geneva about how to revive the Appellate Body should instead focus on what could incentivize countries to reach an agreement before years and years of litigation.

She said that the Airbus-Boeing dispute distorted the development of the dispute settlement system in the WTO. "We invoked and exhausted every procedure available," she said in a speech in Geneva. "With the benefit of hindsight, we can now ask: is a system that requires 16 years to find a solution 'fully functioning'? ... Reforming dispute settlement is not about restoring the Appellate Body for its own sake, or going back to the way it used to be."

Tai was asked to predict when the U.S. might stop blocking appointments to the Appellate Body, and instead she responded that delegations should be both talking to and listening to each other, with the goal of how to create more opportunities for countries to come together to solve the problem that led to the dispute. After all, after all the rulings, the idea is not to have permanent tariffs to compensate the wronged country for the trade losses. "The point is not to punish each other. The point at the end of all of this is to create the condition for two members to come together to find an accommodation," she said.

Richard Baldwin, professor of international economics at the Graduate Institute of International and Development Studies in Geneva, interviewed Tai after her speech, and asked, with all the Biden administration is trying to do at home, does it have the bandwidth to also advance WTO reform.

"Well, I’m here," Tai said, adding, "Absolutely, I don’t think anybody considers that this administration lacks ambition."

On the fisheries subsidies, she said the U.S. wants to continue working with other countries "to bridge existing gaps in the negotiations." She said the U.S. has proposed options for developing countries, but said that any agreement "must establish effective disciplines that promote sustainability.

"It must also address the prevalence of forced labor on fishing vessels." She said she hopes all countries would agree to that plank.

The WTO has also been arguing about whether there should be a broader exception to intellectual property protections for COVID-19 vaccines, known as the TRIPS Waiver. In her speech, Tai said, "The TRIPS Council discussions have not been easy, and Members are still divided on this issue. The discussions make certain governments and stakeholders uncomfortable. But we must confront our discomfort if we are going to prove that, during a pandemic, it is not business as usual in Geneva."

In response to a question from the audience after the speech, she said that just because her office has not been vocal about the issue since it said in May that it supported changes to the TRIPS Waiver for the vaccine, that doesn't mean that the issue has been dropped. "From the outside it might look like silence, but I want everyone to know that the Biden administration’s endorsement of the TRIPS waiver… is about our commitment to the global COVID response and the need to address what we are hearing from so many WTO members, [which] is that we need more production of vaccines, and we need more equitable distribution of vaccines."

Tai ended her speech on a more optimistic note than is usually heard from Washington about the WTO. "WTO Members are capable of forging consensus on difficult, complicated issues," she said. "It’s never been easy, but we’ve done it before. And we can do it again."