U.S. supporters of free trade have reason to rejoice about the framework agreement for further negotiation in the World Trade Organization (WTO) that was announced on July 31. The high hopes that began in Doha, Qatar in November 2001 for continued reductions in government barriers to trade were reduced to a slight glimmer after the Cancun ministerial meetings in September 2003 ended in disputes between major blocks of countries. While the framework agreement is long on skeleton and short on muscle, it provides an opportunity to address needed reforms in world trading rules.
While supporters of free trade gear up for the nitty gritty details of WTO negotiations, they also have to explain trade policy issues here at home. Our government’s continued involvement in the WTO must be reaffirmed by Congress in early 2005. Trade supporters may see this as an almost automatic move, but determined opponents of the rights of U.S. producers to sell products to consumers in other countries and U.S. consumers to buy products made in other countries will likely make a stand against continued involvement in the WTO.
Early in 2005 the President will send a recommendation to Congress that the United States continue its membership in the WTO. The Uruguay Agreement Act Congress passed in late 1994 committed the United States to the provisions of Uruguay Agreement and the World Trade Organization that was created as the successor to the General Agreement on Tariff and Trade (GATT). The Act requires that every five years the President send to Congress a recommendation to remain in the WTO.
Any member of Congress can introduce a joint resolution to deny continued involvement in the WTO. Congress is required to vote on the resolution within 90 days of receiving the recommendation from the President.
The process for the decision in 2000 to remain in the WTO gives an indication of how it will likely work in 2005. On March 2, 2000, President Clinton recommended that the United States remain a part of the WTO. A resolution to withdraw from the WTO was introduced by Congressman Ron Paul (R-TX) on March 6th. The House Ways and Means Committee, which handles trade issues in the House of Representatives, on June 8th unfavorably reported the resolution to the full House on a 35-0 vote. The House voted against the resolution on June 21.
Under the Uruguay Agreement Act, the U.S. Trade Representative (USTR) is required to report to Congress each year no later than March 1 on the actions of the WTO during the previous year. This includes the major activities and work programs, budget and personal information and actions by dispute panels. For the year in which the President is to recommend continued participation, the USTR’s report is to include an analysis of the effects of the agreement on the United States, the costs and benefits of past participation and the value of continued participation in the WTO.
Given the active negotiation process of the past year and the ongoing trade disputes with several of our major trading partners, the USTR’s report in March of 2005 will likely provide plenty of opportunity for opponents of free trade to argue their case. Supporters of free trade will need to be prepared to explain the ongoing benefits of free trade.