Restoring Sanity

William Alan Reinsch

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June 24, 2019Last week I wrote about multilateralism versus bilateralism. Subsequently, I was taken to task by one of my readers (it’s always nice to find out there are some) for criticizing the administration’s assault on the World Trade Organization’s (WTO) Appellate Body without offering any alternative. That was a fair point, as I was clearly guilty of something I complain about frequently: attacking someone else’s position without coming up with a better alternative. Today, I will attempt to make amends, which requires a short trip into the weeds.

First, we should be clear about what is going on. On one level, the administration is objecting to the way the WTO’s Appellate Body has been conducting its business. Some of its objections are procedural: ignoring time limits on finishing reports or allowing Appellate Body members whose terms have expired to continue working on cases. Other objections are philosophical, namely that the Appellate Body has not practiced judicial restraint, has overreached its Uruguay Round mandate, and has attempted to effectively make new law through its decisions rather than simply sticking to the text of the Uruguay Round agreement. I agree with these concerns as do many in the Washington legal community. The disagreement, as often occurs with this administration, is not over the diagnosis but over the prescription.

The administration’s response to the above state of affairs has been to object to new appointments to the Appellate Body. The result of this approach will be that on December 11, when two of the remaining three members’ terms expire, it will no longer have enough members to conduct appeals and will effectively go out of business. While this tactic has succeeded in persuading other nations to take our concerns seriously, if its purpose was to force them to come around to our way of thinking, so far it has only persuaded them to propose compromises, which the administration has either rejected as insufficient or ignored. The administration has yet to offer anything of its own as an alternative beyond total surrender. The net result at this point is that, regardless of our intent, the Appellate Body is set to go out of business in December. So, noble goal, but the tactics do not accomplish it and leave everyone worse off in the process.

The administration’s response to that will be that we are better off, not worse, because we will not have to suffer the consequences of bad decisions. In fact, we won’t have to put up with the consequences of any decisions, since filing an appeal will simply stop a case in its tracks. So, if we win, the other side can appeal and prevent the decision from being adopted, and when we lose, we can do the same thing. Since we have been winning more than we have been losing lately, it is hard to see this as a good outcome in the short term.

In the long term, the administration’s strategy is even more pernicious because it is an attack on multilateralism and the limited surrender of sovereignty that goes along with it. The president has been clear that he is a bilateralist and not a multilateralist. He practices negotiation by leverage and believes that works best with one adversary rather than many. He may see the WTO as a useful tool for advancing our interests, but there is no basic belief that it is necessary or important. It is also for conservatives an infringement on sovereignty—it limits us from doing whatever we want and subjects us to arbitration from independent parties that might not find in our favor.

That is where I part company. I confess to being a confirmed multilateralist. The world of might makes right is long gone—and should be, in view of what it accomplished in the first half of the last century. We now live in a globally integrated world where everything is connected, and the big problems, like climate change, overfishing, pollution, and epidemics, require cooperation to be solved. Each nation only working to advance its narrow interests guarantees that conflict will continue and that the big problems will only get worse. Cooperation, however, requires compromise, something this administration is not very good at.

The Appellate Body issue by itself may be small cheese, but our tactics toward fixing it betray the administration's contempt for the organization and its disinterest in using the multilateral process to solve bigger problems. As my colleague and the other Trade Guy, Scott Miller, says about the WTO, you may not care much about it now, but you'll miss it when it's gone. So, my "solution" to the Appellate Body problem is to stop complaining about it, select the proposal that comes closest to our objectives—probably the Brazilian one, which addresses many of the U.S. concerns—and promptly begin negotiations on it so we can put this issue behind us before December 11 and move on to other measures to support the WTO.