- The Washington Times - Thursday, January 2, 2003

The Bush administration outlined this week its strategy for improving dispute-settlement procedures at the World Trade Organization.
Major U.S. industries, such as steel, and the tax law here have been subject to WTO panels that can authorize sanctions amounting to billions of dollars if they find American rules inconsistent with international agreements.
Congress last year required a report on the administration's strategy in ongoing WTO negotiations that cover dispute-settlement procedures.
"The system has generally handled disputes expeditiously and with professionalism. At the same time, however, certain aspects of the dispute settlement system have raised concerns," said the report, issued this week by the Commerce Department's International Trade Administration.
The WTO is a 144-nation body that by consensus sets wide-ranging rules affecting trade and investment.
When a member nation thinks another is breaking one of those rules, it can seek formal dispute settlement. The decisions are binding and can be implemented through costly sanctions on a variety of goods.
WTO members are engaged in a round of negotiations that could reshape the process.
Sen. Max Baucus, Montana Democrat and ranking member on the Senate Finance Committee, has been especially critical of the WTO dispute-settlement process. During a speech in September, he said it looked "more and more like a kangaroo court against U.S. trade laws."
He cited WTO decisions against specific industries, including agricultural producers and steel manufacturers, a ruling against the way tariff revenues are allocated directly to American companies, and a ruling against the U.S. system of taxing companies' export earnings.
One of the biggest WTO decisions is expected this spring, when a panel will rule on U.S. tariffs, imposed in March, of up to 30 percent on steel imports.
President Bush set the tariffs, citing WTO provisions that allow a country to safeguard a domestic industry against imports.
Mr. Baucus said that he was encouraged by the executive branch report but would introduce legislation early next year to create a commission to oversee the WTO, Reuters reported.
"I believe we must work in a bipartisan fashion to create a system that is fair and transparent, and I will make this a priority in the next Congress," Mr. Baucus said.
The report said that the administration will seek a system that allows WTO member countries more control of and more flexibility in the dispute-settlement process.
Proposed measures include the right to review and comment on panel rulings, the right to delete some portions of panel reports, the ability to suspend proceedings while seeking a negotiated solution, and requiring that panelists have expertise related to the dispute.
The United States also proposed opening the dispute-settlement system to increased public scrutiny.
The secretive nature of panels has been a source of criticism from many groups, especially non-government organizations that follow trade issues.
During a briefing in early December, U.S. trade officials said recent cases had shown WTO panels to be less "creative" than those Mr. Baucus had cited, but acknowledged that the administration would seek some changes in the settlement process.
Last year, the United States filed 60 complaints with the WTO, resolving 19 without litigation, winning 16 and losing three.
The remaining cases have either not been yet resolved or are inactive.
WTO members filed 70 complaints against the United States, resolving 12 without litigation. The United States won three and lost all or parts of 20 decisions.
The remaining cases have either not yet been resolved or are inactive.

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