Nominee for Ambassador to WTO Says Appellate Body Shielded China Distortions

Maria Pagan, the nominee to lead the U.S. mission at the World Trade Organization, told Senate Finance Committee members that reforming the appellate body is a top priority because "Appellate Body overreaching has shielded China’s non-market practices and hurt the interest of U.S. workers and businesses." She said that appellate body rulings "undermined our ability to protect U.S. workers and businesses from those non-market practices."

Pagan, whose written responses to members' questions were recently published on the committee site, also said, "A WTO dispute settlement system that helps to shield China’s non-market distortions is not in the best interest of any WTO Member."

Sen. Pat Toomey, R-Pa., criticized the Section 301 tariffs on Chinese goods and asked why the problems identified with China couldn't be addressed in dispute settlement. "When it is appropriate to do so, we should continue to use WTO dispute settlement to address WTO-inconsistent measures of our trading partners -- including China." she replied. "However, even when we have secured victories in our disputes against China, we have seen that China’s follow-through was inconsistent and that it did not change the underlying policies."

Sen. John Thune, R-S.D., asked if China's self-declaration as a developing country in the WTO corrodes trust in the system.

"Yes, the United States is very concerned that China continues to seek developing country status at the WTO, including in ongoing negotiations. We have made that clear to China on several occasions, most recently during China’s October 2021 Trade Policy Review at the WTO," she said.

Addressing Chinese trade practices was also in questions posed to Chris Wilson, who has been nominated to be the first chief innovation and intellectual property negotiator. He was asked if IP will be on the menu in phase two negotiations with China. Wilson told the committee: "We do not have plans to negotiate a Phase Two Agreement. We are focusing on enforcing the terms of the Phase One Agreement while also raising with China our concerns with its state-centered and non-market trade practices that were not addressed in the Phase One deal."