March 21,2003

Baucus Floor Statement Regarding WTO

Mr. President, I rise today to offer, along with Senator Craig, much needed tradelegislation. I also want to thank Senators Bayh and Rockefeller for their support for thislegislation.

The bill that we are introducing would create a Commission to review decisions of theWorld Trade Organization. Why is this legislation necessary? Simply put – we mustensure that the United States is getting the benefit of the agreements we negotiated.

WTO panels have handed down several decisions recently that go well beyond the scopeof their authority. These decisions have had a wide-ranging impact, undermining ourability to use antidumping and safeguard laws and calling major portions of the U.S. taxcode into question.

Most recently, the WTO ruled that the so-called "Byrd Amendment" violates WTO rules.In fact, the Byrd Amendment simply takes duties collected on unfairly traded productsout of the U.S. Treasury and redistributes them to companies and workers hurt by thatunfair trade.

The Byrd Amendment adds no burden whatsoever on imports. But despite this, a WTOpanel has inexplicably ruled that this law imposes an impermissible penalty for dumping.I would note here that the Administration has proposed repealing the Byrd Amendment. Istrongly oppose that. And so does an overwhelming majority of the Senate. In fact, lastmonth 70 Senators sent a letter to the President in support of this important law. I askUnanimous Consent that this letter be included in the record.

Another area that I have great concerns about involves the softwood lumber dispute. TheWTO correctly found that Canada subsidizes its lumber industry, and I applaud thatdecision. But then the WTO undercut the benefits of that decision. They ruled that whendetermining a market price, Commerce must use the subsidy-distorted Canadian timberprices rather than the market-based U.S. prices. This practice is wholly inconsistent withprevious WTO practice.

We need to start seriously examining why it is that we are losing these and other cases.In my view, it is because WTO panels have ceased interpreting our trade agreements andhave begun legislating. Instead of following the rules, they are flouting the rules. Andthey are substituting their own judgment in place of carefully negotiated principles.

In the process, they are eroding U.S. trade laws, taking away rights the U.S. bargainedfor, and imposing new obligations we never agreed to accept. Just as troubling, they aredoing so mostly under the radar of Congress and the American public.

Mr. President, the purpose of the legislation Senator Craig and I are proposing is to openthe performance of WTO panels to public debate. Under the legislation, the President, inconsultation with Congress, would create a Commission by appointing five retired federalappellate judges to serve five-year terms. The Commission would review WTOdecisions adverse to the United States to examine whether the panelists have exceededtheir authority. The commissioners would then report their findings to Congress.

Increasing the transparency of the WTO in this manner is entirely consistent with theAdministration’s stated objectives. It would also allow us to discuss openly and fairlywhether the WTO is working as it should.

This legislation offers something for everyone. If the Commission finds that the WTO isapplying the rules properly, it will silence critics – and perhaps earn converts. But if theWTO is in fact straying beyond the carefully negotiated boundaries of our tradeagreements, Congress needs to have the oversight in place so that we can remedy thesituation.

I understand and support the need for a global trading system. But we need to ensure thatthe WTO is respecting the limits of its authority and honestly applying the rules underwhich it operates. I hope that my colleagues will join me in helping to pass thisimportant legislation.