San Jose Mercury News / OpEd
THE most recent "cut your nose off to spite your face" award goes to the conservative contingent in the House that wants the United States to drop out of the World Trade Organization because the WTO ruled against some U.S. export subsidies.
If it's exports they want to encourage -- and why else be in favor of export subsidies? -- there's nothing better for the United States than the WTO.
The WTO's reason for existence is to open up the world to trade. The United States generally has lower import barriers than other countries. (Thomas Friedman's column below discusses an unacceptable exception.) We are a productivity powerhouse in agriculture, industry, and services.
The WTO now has 135 member countries, with 30 more seeking to join. As the Clinton administration notes, 96 percent of the world's people, and 80 percent of the world's economy, lie outside U.S. borders. In short, we have a lot of stuff to sell people in other countries if their governments will let them buy it. If we and they are members of the WTO, they will have a hard time discriminating against American products.
The 1994 treaty under which the United States joined the WTO allows anyone in Congress, after five years, to demand a vote on whether we should stay in.
The demand was made last week, in the wake of a ruling by the WTO that a certain $4 billion annual tax break for U.S. exporters violates trade rules. Companies can avoid taxes on some overseas sales by routing them through offshore subsidiaries. Among the beneficiaries are Boeing, Microsoft and General Motors.
The ruling was condemned as "an egregious attack on our national sovereignty," a familiar refrain of WTO critics not just from the political right, but from the environmental and labor movements.
It is true that in joining the WTO, nations agree to abide by its rulings. But the WTO's infringements of sovereignty are less than its critics charge. The organization cannot make member nations change their laws. It can make them pay a penalty if they choose not to obey the ruling.
As with any court, sometimes those under its jurisdiction are not going to like the rulings. But the benefits of living under a system of law, for those willing to be law-abiding, far outweigh the benefits of always getting to do exactly as you please.
The United States has filed 49 complaints to the WTO. Of the 25 decided, it has won 23.
In the case of the export subsidies, the WTO may well have saved the taxpayers $4 billion. With the WTO battering down trade barriers around the world, U.S. companies should need less and less assistance in selling abroad. It looks like a win-win from here.:
