US Trade Representative Katherine Tai signals shift on WTO dispute resolution system


The US Trade Representative Katherine Tai on Thursday (14 October 2021) signaled a shift in Washington’s stance on the World Trade Organization’s dispute resolution process, saying the US wanted to thaw relations with the global trade body. “We all recognize the importance of the WTO, and we all want it to succeed,” Tai said in a speech before The Geneva Institute’s Geneva Trade Platform.

Under then-president Donald Trump, the United States brought the WTO’s dispute settlement system to a grinding halt in December 2019 by blocking the appointment of new judges to the key Appellate Body.

Tai, appointed by Trump’s successor Joe Biden, indicated Washington is looking to boost ties and improve how trade conflicts are settled by the WTO. “We believe we may succeed in reforming the negotiating pillar if we create a more flexible WTO, change the way we approach problems collectively, improve transparency and inclusiveness and restore the deliberative function of the organisation,” she said.

“Let’s not prejudge what a reformed system looks like. The most important thing is to engage in this conversation and actually bring the entire membership together because there is a feeling of malaise around here,” Tai later told journalists. The body’s seven-member Appellate Body can uphold, modify or reverse the initial findings of a WTO dispute panel.

The US criticism of the WTO’s processes predates Trump, although he raised hostilities to new levels. While Washington has won most of its cases before the WTO, Trump’s administration accused the body of exceeding its powers with judgments viewed as violating national sovereignty. Tai said the dispute settlement process “has become synonymous with litigation — litigation that is prolonged, expensive, and contentious.”

Reform, revitalize

WTO chief Ngozi Okonjo-Iweala hopes to resolve the problem before the next ministerial conference in Geneva beginning on November 30. In a speech in Washington, she welcomed Tai’s comments “strongly supporting the need for WTO to reform.” She acknowledged that the global trading system needs agreement “on a process for reforming and revitalizing the dispute settlement function.” Okonjo-Iweala has identified key priorities include capping subsidies to prevent overfishing as well as waiving intellectual property rights for Covid-19 vaccines. Tai seemed optimistic about finding agreement on some outstanding issues.

“The WTO can show that it is capable of effectively addressing a global challenge like Covid-19, and helping the world build back better. There are several trade and health proposals that should be able to achieve consensus in the next month and a half,” said Tai. She added that Washington supports waiving vaccine patents, which many developing countries want to see although rich states are not unanimously in favour.

Tai stressed her appreciation of the WTO’s importance and underlined “the United States’ continued commitment” to the body. “WTO Members are capable of forging consensus on difficult, complicated issues. It’s never been easy, but we’ve done it before. And we can do it again,” she said.


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