Yeutter `Astonished. at WTO Withdrawal Advocates

March 31 , 2000

Former U.S. Trade Representative and Agriculture Secretary Clayton Yeutter says he is "astonished" that anyone "would seriously advocate" U.S. withdrawal from the World Trade Organization. His comments came in testimony before the House Ways and Means Committee.

"By any standard, the track record of this international organization has been outstanding," Yeutter said. "Without question a vast majority of the world's population has a higher level of living today than would have been the case had the General Agreement on Tariffs and Trade not been created and had its impact not been extended via the WTO."

Most member nations suggest that the United States has thrown its weight around "a bit too much" within the WTO. "I would answer them by saying, `That's the price we pay for world leadership, and we do not apologize for it.. "

The WTO "is still the most efficient, effective mechanism for opening up market opportunities throughout the world," Yeutter continued. "With only 4% of the world's population within our borders, it is patently obvious that much of our economic growth long term must come through international commerce.

"We're not paying much attention to that challenge today because of the phenomenal performance of our domestic economy over most of the past 20 years. But let's not be complacent; nothing lasts forever"

The WTO. s dispute settlement mechanism needs improvement, he added, but "it is performing much better than most people realize." Without the dispute settlement process "we'd have infinitely more difficulty fighting `rule of law. battles throughout the world."

Because international commerce has expanded dramatically in recent decades, the WTO is needed for "surveillance purposes," said Yeutter. "A vast increase in the number of contentious disputes is almost inevitable. But governments cannot take every disagreement through a formal dispute settlement process. Were they to do so, the entire process would bog down fatally. The WTO couldn't handle it, and neither could traditional diplomacy. There has to be another way."

The WTO should periodically comment formally on how well a given member nation is living up to its obligations as a signatory. "That may sometimes be embarrassing  even for the U.S.  but so be it. If such surveillance deters a WTO member from taking actions contrary to its obligations, it most likely will also preclude the need for a costly, time consuming dispute settlement proceeding.

Also, the WTO is needed for "the evaluation, oversight and, if necessary, discipline of regional free trade agreements," Yeutter said. "We've had a veritable explosion of free trade agreements in the world over the past dozen years or so. Someone needs to ... make sure that the overall advantages of each regional FTA outweigh the disadvantages. Otherwise such an agreement should be declared as violative of those nations' WTO obligations"

The United States should do "what we can to facilitate China's entry in the World Trade Organization, followed immediately by the entry of Taiwan, accompanied by the grant of permanent normal trade relations to China. The rationale for this is compelling, and nothing is to be gained by delay."