Regional News
This is a re-posted opinion piece.
The world’s most important trade initiative can take advantage of the WTO’s openness and enforcement.
The Trans-Pacific Partnership is a tremendous opportunity to advance free trade, but getting it to the finish line will also be a challenge. The agreement could proceed more smoothly and accomplish more for the region and the world if it is placed within the enforceable framework of the World Trade Organization.
The United States and eight other Pacific Rim countries are certainly right in wanting to move beyond the WTO treaty to conclude a “state of the art” trade agreement addressing new needs and new areas in trade and investment. They are understandably frustrated by the lack of progress on the Doha Development Round. Under WTO rules, the global trade talks cannot be concluded successfully unless and until there is a consensus of all 153 WTO member countries.
However, other WTO rules offer a better way forward for TPP. In addition to fully “multilateral” agreements binding all WTO members, such as those sought in the Doha round, the WTO treaty also permits “plurilateral” agreements among some but not all members.
Such “plurilateral” agreements are open to adherence by all WTO members. So other countries along the Pacific Rim could sign on to the TPP later if they wished. Significantly, so too could other members beyond the Pacific Rim. But “plurilateral” WTO agreements commit only those WTO Members who agree to be bound by them. So other countries could choose not to sign.
The new and better rules envisaged for the TPP will be worth having only if they can be enforced. To be enforceable, any TPP concluded outside the WTO would need to establish an entirely new and untried dispute settlement system. By their terms, plurilateral agreements within the WTO can be made fully enforceable on those members who sign them in WTO dispute settlement—which is a proven forum for upholding international law, backed up by the last resort of economic sanctions against those countries that fail to fulfill their treaty commitments.
Two such “plurilateral” WTO agreements already exist, one covering government procurement, the other information technology. Although both could benefit from having more signatories, by and large they have been successful. The TPP could be the third.
For all its considerable potential, a TPP among only the handful of countries currently engaged in the TPP negotiations would not do much overall to lower barriers to trade or investment, and thus would not do much to spark economic and job growth in those countries. For example, the current eight countries negotiating with the United States account for only 6% of all U.S. trade. Adding Japan and South Korea to the mix would add to the positive impact of TPP, but why stop there?
If “state of the art” WTO-plus commitments on investment, intellectual property rights, supply chain management, regulatory coherence, subsidies, and the many other pressing issues on the ambitious TPP agenda would enhance the growth of some WTO members, why not make that opportunity available to all those WTO members willing to be bound over time by those additional commitments? Why not use the TPP as a way of strengthening and sustaining the overall world trading system by creating the critical commercial and political mass to spread such “state-of-the-art” advances on trade and investment worldwide?
Further, and not least, among the reasons for making the TPP a WTO agreement is the possibility that agreeing on a TPP outside the legal framework of the WTO could contribute to the creation of rival U.S.-led and China-led trade blocs in the trans-Pacific. The Chinese have been encouraging the development of various trade agreements through the Association of Southeast Asian Nations—which does not include the United States. The United States is pushing the TPP—which does not yet include China.
The goal should not be to create potentially opposing trade blocs in the trans-Pacific as part of a heightened regional competition between the United States and China. The goal should be to create more shared prosperity for Americans, for Chinese, and for everyone else by lowering the remaining barriers to trade and investment worldwide. This is the professed goal of all of the members of the WTO, including the United States and China.
The shared pursuit of this goal by concluding the TPP within the framework of the WTO could accomplish much more than is currently on the table. It could do much to help boost economic and job growth in the United States, in China, throughout the trans-Pacific, and throughout the world. It could also do much to bring and bind the United States and China closer together in their ever-increasing and ever more essential bilateral relationship.
Mr. Bacchus is a former U.S. congressman and a former chairman of the Appellate Body of the World Trade Organization. He chairs the global practice of the Greenberg Traurig law firm.
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By: James Bacchus
Source: The Wall Street Journal, Opinion, Nov. 13, 2011
To view the original article, click here.
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