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. Last Updated: 07/27/2016

U.S. Wins in WTO Cloud Reality




WASHINGTON -- In any other league, America's record of 22 wins and 2 defeats would leave no doubt about which team would win the trophy. But in the global arena known as the World Trade Organization, the stellar U.S. won-lost record obscures a murkier reality.


Just ask U.S. cattle ranchers. The WTO recently ruled in their favor against Europe - but lacked the leverage to pry open European markets to U.S. beef.


"We are very frustrated - but what are our options?" asked Alisa Harrison, spokeswoman for the American Cattlemen's Beef Association. The WTO, she said, "is the only game in town."


Delegates from the WTO's 135 member nations have converged on Seattle this week to try to set an economic agenda for the coming years.


On Monday, an array of special interests were due to tell WTO officials that they have failed to consider the needs of workers, the environment and the world's poorest societies in setting economic policy. Throughout the week, the WTO will be under great pressure to open up its largely secret efforts to resolve disputes between its members.


President Bill Clinton is expected to arrive Tuesday during a major protest demonstration by organized labor. By Friday, delegates from the WTO hope to announce the launch of a "millennium round" of negotiations aimed at slashing a range of trade barriers between nations.


In the welter of protests leveled at the WTO, scant attention has been paid to whether U.S. interests have profited or lost at the hands of the organization - a matter of crucial importance for many billions of dollars in global commerce and, less tangibly, for United States' stature as the world's most influential economy. A review of the record and interviews with trade experts suggest the answer is as mixed as the results of the beef case.


"The jury is still out," said Timothy Reif, trade counsel for Democrats on the House Ways and Means Committee. "There are clearly some cases where U.S. industry walked away happy, yet we've won some cases where we haven't gotten any satisfaction at all."


The United States has played the WTO game more vigorously than any other country. It has lodged 60 complaints of unfair trade against its trading partners, with the European Union second at 47, according to analysts in Geneva. Of the complaints that have been resolved, the United States has won 22 and lost 2.


Separately, the United States has been named the defendant about 14 times, leading to five U.S. losses and nine settlements.


Two of the outright U.S. losses have been major: Kodak's bid to break through Japan's web of informal trade barriers to film sales, and a high-stakes tax case that could cost U.S. companies more than $2 billion in tax benefits. And environmentalists lament losses, such as one involving clean-air regulations.


And some of the victories - notably that of the cattle ranchers - have turned out to be hollow.


For years, the European Union has prohibited the sale of U.S. beef that had been fed with growth hormones, insisting that hormones made the beef dangerous for human consumption.


The WTO finally gave the Europeans a choice: open their markets to U.S. beef or face high tariffs that would effectively block more than $100 million worth of European exports to the United States. Europe chose the high tariffs, leaving U.S. ranchers still on the outside. The WTO, which came into existence in 1994, was intended to be the first trade referee with the ability to make its findings stick. In a sharp departure from the previous approach, losing parties lost the right to block rulings, including financial sanctions - unless they were joined by a consensus of WTO members, a nearly impossible test to meet.


These powers, supported by officials in the Bush and Clinton administrations, are at the heart of charges that the WTO is a kind of world government and that WTO rulings erode the sovereign rights of nations to determine policies. They are typically exercised by three-member panels, made up of politicians, economists, lawyers and professors.


In a resounding U.S. victory, Japan in 1997 settled a U.S. complaint that it was ignoring copyrights of recorded music from the 1950s and 1960s. The case highlights a key point made by WTO advocates - that individual cases or the mere threat of cases can echo through the global economy, paying rewards that are much greater than the issue at hand. While U.S. officials said the Japanese copies were costing the recording industry $500 million a year, the settlement may have established a precedent of vastly greater value.


"It led to changes in Taiwan, Korea, Hungary and Poland," said Neil Turkewitz, a vice president of the Recording Industry Association of America. Ukraine and Russia are addressing copyright infringement, he said. The WTO challenge, he concluded, has been "tremendously successful."