Case Overview, Membership in the World Trade Organization
This document provides background information and summarizes the debate over membership in the World Trade Organization. The links to the left will lead you to public documents that we have found.
The World Trade Organization (WTO) is an international body composed of 136 countries. Another 30 countries are applicants for membership and will be admitted after the WTO determines that their markets are sufficiently open to foreign competition. The WTO provides a forum for negotiating multilateral trade agreements and it offers a conflict resolution mechanism for settling trade disputes. Every country wants to maximize its access to foreign markets so its own industries can expand. At the same time no country is eager for foreign companies to come into its own market if there is an indigenous industry producing the same kinds of goods. For the United States or any other country, more imports can mean fewer jobs for its workers. As a result there is a constant stream of disputes in the world trading system over what industries can sell what goods in which countries. Many of these conflicts come before the WTO for adjudication.
World trade has become increasingly important to the economies of the world. In the United States foreign trade accounts for nearly one-third of our Gross Domestic Product (GDP) and one-quarter of our national income. "Globalization is growing. It’s here to stay" said Congressman Sander Levin (D-MI) during the debate over the WTO in the House.
The immediate backdrop of the 2000 vote on renewing the United State’s membership in the WTO was the meeting of the WTO in Seattle in December 1999, as well as the vote in the House to normalize U.S. trade relations with China and to pave the way for its admission to the WTO. In the Seattle meeting, protestors unexpectedly disrupted the city with their trashing of several buildings downtown and their heated confrontations with the police. The protests highlighted the discomfort many Americans feel about the process of globalization. Labor unions are particularly antagonistic toward further trade liberalization. Increased trade with China is controversial because of its poor record on human rights.
Every five years the president is required to submit a report to Congress detailing the benefits (and costs) of U.S. membership in the WTO. Once that report is issued, any member of the Congress can introduce a resolution to mandate withdrawal of the U.S. from the WTO. Rep. Ron Paul (R-TX) did just that. Even though there was little demonstrable support for Paul’s resolution, the existing law on our WTO membership required that the House Ways and Means Committee consider it. Ways and Means voted 35-0 voted against Paul and, thus, to maintain our membership. Under a provision of that law, a resolution can still be brought to the floor even if it failed in committee. A vote by the entire House also went against the Paul resolution by a vote 363-56.
No significant interest group opposition emerged to fight against renewed membership in the WTO. Organized labor has not changed its mind about trade but it recognized that there was no chance membership in the WTO would be revoked. After its bruising loss on trade relations with China, it made little sense for labor to expend resources on an issue it would be beaten badly on. Since the outcome was inevitable, business undertook only a modest lobbying campaign. Business lobbying was coordinated by the U.S. Alliance for Trade Expansion, a coalition of over 500 corporations and trade associations. It was housed at the National Association of Manufacturers but was a very loose and informal coalition.
In the Congress the most conspicuous participant was Rep. Paul who played the Don Quixote role of tilting at the WTO windmill. The leader of the pro-WTO side was White House Special Trade Representative Charlene Barshefsky.
Those who favored continued membership emphasized that without the WTO, the world trading system would become chaotic. A corporate lobbyist said "The WTO may not be perfect, but without it there would be chaos." She added, "What we want in trade is a ‘rules-based society.’" Proponents emphasized this continually: an orderly trading system requires rules and some international body to mediate disputes over those rules. Trade is too important to our economy to withdraw from the WTO.
A secondary argument, used in response to charges by WTO critics, is that the United States has won 23 out the 25 cases it has brought before the WTO. Thus, the WTO can’t be working too badly if this country wins almost all the time.
Antagonism toward the WTO comes from both the right and the left. The highly conservative Rep. Paul believes that the WTO infringes on this country’s sovereignty. In his view when the WTO makes a decision involving the United States, it is taking on a lawmaking function reserved by the Constitution for the Congress. Said Paul on the floor of the House of Representatives, “No nation can maintain its sovereignty if it surrenders its authority to an international collective.” Some of the liberal members of the Congress had an unrelated reason for opposing the WTO. They regarded it as a tool to favor multinational corporations. Said Democrat William Lipinski of Illinois, “All workers will continue to suffer while corporate profits skyrocket.” Despite the passionate rhetoric none of the arguments against the WTO ever gained any real traction on Capitol Hill or outside of Washington.
Opponents of the renewed membership in the WTO faced an insurmountable obstacle in trying to pull the United States out of the world trading body. Even with the surprising vehemence of the protests against the WTO in Seattle in 1999, there was never a chance that Congress would seriously consider withdrawal from the world body. Foreign trade is critical to virtually all areas of the country and without a means of peacefully settling disputes between trading partners, trade could be damaged while conflicts dragged on or even escalated. With no practical alternative to the WTO, opponents were fighting a symbolic battle.
The House of Representatives was the primary forum where this issue was debated. There was never any significant activity in the Senate since it wasn’t required to vote on this matter. The Office of the Special Trade Representative (Charlene Barshefsky) in the White House led the administration’s efforts.
Lobbying Activities and Tactics
The U.S. Alliance for Trade Expansion reminded Congress that business was watching their actions on the WTO renewal. Most of this coalition’s efforts were aimed at mobilizing the corporations and trade associations with a stake in the world trading system. It also worked to stimulate media coverage.