*EPF410 06/22/00
Transcript: Excerpts from House Debate on WTO Withdrawal
(Resolution defeated 363-56) (2570)

The U.S. House of Representatives voted 363-56 against a resolution seeking U.S. withdrawal from the World Trade Organization (WTO).

In the June 21 debate over the resolution, Representative Phil Crane, Republican chairman of the Ways and Means trade subcommittee, argued that the WTO embodies U.S. preferences for rules-based trade.

Crane praised the WTO dispute-settlement system, in which the United States has prevailed in 25 of 27 cases it has brought against unfair foreign trade barriers.

"This is not a perfect organization by any stretch," Crane said, "but to pull out now would mean reverting to a dark time 60 years ago when international trade was governed by political whim and a dangerous absence of rules and fair practices."

Representative Sander Levin, the senior Democrat on the subcommittee, likewise expressed the need for WTO reform but also opposed U.S. withdrawal.

"Globalization is growing. It is here to stay," Levin said. "The question is whether and how we are going to shape it. If you vote yes, I guess you are saying, Don't try to shape it; throw up your hands, retreat from the process. I think the answer instead is to pursue, to persevere ... and where there is a need for reform to get in there and work for those reforms."

Representative Ron Paul, the Texas Republican who sponsored the withdrawal resolution, criticized the WTO on a number of points. He said the WTO gave big corporations too much power to harass their competitors. He predicted the United States would have to rescue China's currency once it joins the WTO.

Most of all, he viewed WTO participation as a surrender of U.S. national sovereignty.

"We have delivered this sovereignty power to an unelected bunch of bureaucrats at the WTO," Paul said.

Following are terms and abbreviations used in the transcript:

-- WTO: World Trade Organization.

-- billion: 1,000 million.

-- GATT: General Agreement on Tariffs and Trade.

-- NAFTA: North American Free Trade Agreement.

Following are excerpts of the transcript from the Congressional Record:

(begin excerpts)

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in strong opposition to H.J. Res. 90, a resolution to withdraw congressional approval of the agreement establishing the World Trade Organization. The Committee on Ways and Means reported this resolution with an adverse recommendation by a vote of 35 to nothing.

Put simply, the consensus in the committee was that it would be unthinkable and illogical for the United States to withdraw from the WTO.

The WTO stands apart from many other international institutions in that it functions on a day-to-day basis almost completely in favor of American interests. In setting international rules for trade, the United States has had to make relatively few concessions in exchange for having open access to consumers in 136 other countries.

The WTO system is fundamentally American-based rules of the road for commerce that limit discriminatory trade barriers and damaging sanctions. Because of the strength of U.S. leadership since World War II, our trading partners have been willing to accept the structure of fair trade rules and principles.

Congress has been heavily involved in the development of these rules and principles since the establishment of the GATT [General Agreement on Tariffs and Trade] in 1947. At the same time, the WTO cannot prevent the United States from establishing whatever level of food, safety, or environmental protection on imports that we see fit to impose. The WTO system of fair play only requires that we apply the same standards to both foreign and domestic producers.

Since its inception in 1995, the WTO has functioned effectively, aiding our efforts to increase job-creating U.S. exports. The best engine for our impressive economic growth has been expanding international trade under the oversight of the WTO.

Since 1995, exports have risen by $235 billion. When we increase exports, in particular, we are increasing the number of high-wage high-tech jobs in cities and towns across America. There is absolutely no better strategy for improving living standards than to pry away trade barriers and grow foreign markets for U.S. products. Nearly 12 million high-wage American jobs depend directly on our ability to export under predictable rules.

Rules without a mechanism for enforcement would not mean much. The WTO dispute settlement system succeeds in encouraging the resolution of hundreds of trade conflicts through amicable consultations. In the 27 cases where the U.S. filed a formal challenge to foreign practices, we prevailed in 25. Our victories have won millions of dollars in increased sales for U.S. firms and workers.

In establishing the WTO dispute settlement system, Congress insisted on a mechanism with moral authority, but with no power to compel a change in our laws or regulations. Any decision to comply with a WTO panel is solely an internal decision of the United States. In the difficult WTO case against U.S. Foreign Sales Corporations that we are struggling with now, neither the European Union nor the WTO can impose any course of action on the United States.

As the world's leading exporter, the United States benefits enormously from the common sense ground rules of the WTO, such as national treatment, nondiscrimination, and due process. This is not a perfect organization by any stretch, but to pull out now would mean reverting to a dark time 60 years ago when international trade was governed by political whim and a dangerous absence of rules and fair practices.

I urge a no vote on H.J. Res. 90 ....

Mr. LEVIN. Mr. Speaker, I yield myself such time as I may consume.

I am opposed to this resolution. In a word, globalization is growing. It is here to stay. The question is whether and how we are going to shape it. If you vote yes, I guess you are saying, Don't try to shape it; throw up your hands, retreat from the process. I think the answer instead is to pursue, to persevere, to roll up our sleeves, to understand the strengths of the WTO; and where there is a need for reform to get in there and work for those reforms.

The WTO provides a rule-based foundation for growing international trade. There is no alternative but to have some kind of a global rule-based system. The alternative is anarchy, and that is not in the interest of the U.S. as the largest world trader. The World Trade Organization has also provided a means for us to attack nontariff barriers in addition to the traditional barriers to trade, tariffs, et cetera.

It is far from perfect. We continue to press Japan in terms of their nontariff barriers. We have made some progress through the WTO in certain areas. It also has addressed the new technologies as they evolve in the world. But there are other ways that the WTO has not adapted to change. Now its rulings are binding. They were not under GATT. That means that the procedures have to be more open than they are. We have to eliminate the secret procedures. We should be in there and this administration has been in there fighting for those changes.

Also, more and more globalization includes the evolving economies. That means there are new issues, issues of labor, of worker rights, labor market issues, issues of the environment. The World Trade Organization needs to address these issues. With the help and support of some of us, the administration has been endeavoring to do that.

So, in a word, it seems to me this is the question: If you vote yes, what are you saying? You cannot be saying reform. You cannot reform an organization that you say withdraw from. What you need to do is to get in there and to work at it. That is why I believe there needs to be a no vote.

Let me just say a word about some of the arguments that are used, for example, sea turtles and the Venezuela ruling. What the World Trade Organization said in those cases was the U.S. has to apply the same laws to others as we apply to ourselves. That is not a radical proposition.

Let me comment briefly on what the gentleman from Arizona said. The WTO does not endanger American antidumping laws. Period. The way the Uruguay Round was structured, our antidumping laws can persevere and we can pursue them.

Mr. Speaker, I think to vote yes on this sends the wrong message. It is the message of retreat. It is the message of withdrawal. A yes vote if shaped correctly, and I think we need to do it, says to the world, we are going to be part and parcel of a global organization. Where it has strengths, we will support it vigorously.

Where it has weaknesses we can work actively to change it; that is what we have been doing these last years. That is what we need to do with even greater energy and endeavor. I urge a no vote on this resolution ....

Mr. PAUL. Mr. Speaker, I yield myself the balance of my time.

"Peace, commerce and honest friendship with all nations, entangling alliances with none, I deem one of the essential principles of our government and consequently one of those which ought to shape its administration." Thomas Jefferson.

Thomas Jefferson, I am sure, would be aghast at this WTO trade agreement. It is out of the hands of the Congress. It is put into the hands of unelected bureaucrats at the WTO. I would venture to guess even the Hamiltonians would be a bit upset with what we do with trade today. I am pro-trade. I have voted consistently to trade with other nations, with lowering tariffs. But I do not support managed trade by international bureaucrats. I do not support subsidized trade. Huge corporations in this country like the WTO because they have political clout with it. They like it because they have an edge on their competitors. They can tie their competitors up in court. And they can beat them at it because not everybody has access. One has to be a monied interest to have influence at the World Trade Organization.

Earlier today I predicted that we would win this debate. There is no doubt in my mind that we and the American people have won this debate. We will not win the votes, but we will do well. But we have won the debate because we speak for the truth and we speak for the Constitution and we speak for the American people. That is why we have won this debate ....

We cannot control the WTO. None of us here in the Congress has anything to say. You have to have a unanimous vote with WTO to change policy. Our vote is equal to all the 134 other countries; and, therefore, we have very little to say here in the U.S. Congress.

Why is it that I have allies on the other side of the aisle where we may well disagree on the specifics of labor law and environmental law. We agree that the American people have elected us, we have taken an oath of office to obey the Constitution, that we have a responsibility to them and we should decide what the labor law ought to be, we should decide what the environmental law should be, we should decide what the tax law should be. That is why we have an alliance.

But let me remind my colleagues, the American people are getting frustrated. They feel this sense of rejection and this loss of control. Why bother coming to us? We do not have control of the WTO and they feel like they are being hurt. This is the reason we are seeing demonstrations. They say if we did not have the WTO we would have anarchy? I predict chaos. I predict eventual chaos from WTO mismanagement. The trade agreement is unmanageable. They would like to do it in secrecy, and they like to wheel and deal; but it is unmanageable.

Let me say there is another reason why we expect chaos in the economy and in trade. It has to do with the trade imbalances. Today we are at record highs. The current account deficit hit another record yesterday. It is 4.5 percent of the GDP [gross domestic product], and it is significant. But unfortunately the WTO can do nothing about that because that is a currency problem. It too causes chaos. Yet there will be an attempt by the WTO to share the problem of imbalances. Just think of how NAFTA came to the rescue of the Mexican peso immediately after NAFTA was approved; a $50 billion rescue for the politicians and the bankers who loaned money to Mexico.

Quite frankly, I have a suspicion that when the Chinese currency fails, that will be one of the things that we will do. China will be our trading partner. They are in the family of countries, so therefore we will bail out their currency. That is what I suspect will happen. Why else would the Chinese put up with the nonsense that we pass out about what we are going to do, investigate them and tell them how to write their laws? They have no intention of doing that. I think they are anxious to be with WTO because they may well see a need for their currency to be supported by our currency, which would be a tax on the American people.

This is a sovereignty issue. We do not have the authority in the U.S. House of Representatives to give our authority to the President. We do not have the authority and we should never permit the President to issue these executive orders the way he does, but this is going one step further. We have delivered this sovereignty power to an unelected bunch of bureaucrats at the WTO.

Mr. LEVIN. Mr. Speaker, I yield myself the balance of my time.

The WTO has its roots in the decision of this country and others after the Second World War not to make the mistakes that we made after the First World War, and that was for this country to engage, to take a leadership position, to craft international institutions to respond to problems, to challenges, and to opportunities. Trade is not win-win. There are losers as well as winners. Our challenge is to try to make sense out of that dynamic, to try to make sure that in our country we come out ahead and not fall behind in terms of the international scene.

They say send a message. It is the wrong message. It is the message of withdrawal. It is a message to tear down. It is much harder to build, and it is easy to tear down. Do not tell me the WTO never changes. I went to Geneva with others to work to safeguard our antidumping laws in those negotiations and we succeeded. If Members think the world is unmanageable, if they want to put blinders on, vote "yes" or "present." If they want to roll up their sleeves and make this a better world economically for this country and the other nations, vote no. Vote no.

(end excerpts)

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