Speeches and Statements

Rep. Murphy Speech at Markup of H. Res. 746, “a Resolution to Support and Reform the World Trade Organization (WTO)”

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Washington, December 17, 2019 | comments
Thank you, Mr. Chairman. I move to strike the last word.

I am grateful to Congressman Kind and my other colleagues on the committee who crafted this resolution for their leadership on this important issue.

I agree with much of what has been said by my colleagues regarding their intent with this resolution, but I feel like it’s not reflected in the resolution as written. If the resolution had reflected the balanced nature of what has been said in this committee markup, I could have supported it.

The George W. Bush administration had concerns with the WTO Appellate Body. Nevertheless, when it left office, there were seven Appellate Body judges and the Appellate Body was fully functioning.

The Obama administration had concerns with the Appellate Body as well. However, when it left office, there were seven judges and the Appellate Body was fully operational.

Naturally, the Trump administration has concerns with the Appellate Body too. But its approach to the problem has been dramatically different from its predecessors. Between 2017 and 2019, as the terms of Appellate Body judges have expired, or as judges have resigned, the administration has blocked the appointment of any new judges.

The administration is not blocking individuals from becoming judges because of well-founded concerns that the individual will engage in judicial overreach and not strictly follow the Dispute Settlement Understanding as agreed to by WTO members.

Instead, the administration is categorically blocking any individual from being considered. As far as I’m aware, no other country supports the administration’s tactics.

As a result of American actions, as of one week ago, there is only one Appellate Body judge whose term has not expired. The Appellate Body is no longer able to hear new cases because three judges are necessary for a quorum.

The binding dispute settlement system is the beating heart of the WTO. Through its brazen actions, the Trump administration is driving a stake through the WTO’s heart.

This is a huge threat to American economic prosperity and to the rules-based global trading system that bipartisan American leadership helped build over generations.

We must bear in mind that the U.S. wins over 85 percent of cases that it brings to the WTO, so claims by the President that the U.S. “never wins” in Geneva are inaccurate. Appellate Body rulings have been particularly helpful to the U.S. agriculture sector. We have effectively used the dispute settlement process to prohibit barriers that other countries have adopted to disadvantage our agriculture exports.

Likewise, the United States has used the dispute settlement process to bring China into better conformity with WTO rules. According to the Peterson Institute, of the roughly 20 cases that the U.S. brought against China between 2002 and 2019, the U.S. won 11 times, China agreed to settle 9 times, and the U.S. has never lost. This is a good record.

Without an Appellate Body, the U.S. will lose the ability to compel China and other countries to come into compliance when a panel rules against them. These countries can simply appeal to the Appellate Body, and the case will sit there in perpetuity, unable to be resolved or enforced.

With no Appellate Body, every trade dispute between nations could devolve into a mini trade war, with countries imposing tariffs and counter-tariffs on each other. That will mean new and damaging taxes on American companies and consumers—because tariffs are taxes.

There’s an old adage that says ‘you don’t know what you’ve got until it’s gone,’ and I think that applies here. The U.S. may lose some cases at the WTO, and we may not be happy about that, and we may be right that some institutional reforms are required, but destroying the WTO Appellate Body cannot be the right answer.

It is against this unique backdrop that the Committee considers the resolution before us today.

The resolution consists of several clauses expressing support for the WTO, which I genuinely appreciate, but the core of the resolution is just a critique of the WTO, including the Appellate Body.

The resolution reinforces this administration’s complaints about the Appellate Body, without acknowledging the many ways in which the Appellate Body advances U.S. economic interests.

In normal times, I might be able to swallow my concerns and support this resolution, even though I think some of the longstanding U.S. concerns about the WTO are less valid than others.

But the point is that we are not living in normal times. The President of the United States has just caused the Appellate Body to stop functioning. And he’s done so on our watch.

If this Committee truly seeks to support and reform the WTO, it should have balanced the legitimate calls for reforms with a clear call for the administration to take all reasonable steps to revive the Appellate Body. Because the resolution before us does not strike that appropriate balance, I must oppose it.

Thank you, and I yield back.
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