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Chicago Journal of International Law

Abstract

The US is currently caught between its international obligations to the World Trade Organization ("WTO') and its domestic obligations to US workers in the textile and clothing industries. As of January 1, 2005, quantitative restrictions on Chinese imports have been officially phased out-under the auspices of the WTO-thereby allowing a greater influx of Chinese goods into Member countries. The US, however, has contracted with the People's Republic of China ("China") to work around this phase-out. By means of the US-China Safeguard Provision ("Safeguard Provision"), the US has contracted with China to allow the US to institute restrictions on Chinese imports for three additional years between January 1, 2005 and December 31, 2008. Thus, during this transition period, the US violates the WTO's mission of ensuring equality in international trade by creating its own exception to the WTO's nondiscrimination rule, as opposed to confining itself to a WTO-created exception. While China has announced its intent to impose tariffs on some of its own textile exports, such measures will not release the US from its responsibility to actively enforce WTO principles when vast numbers of cheap Chinese goods continue to enter the US market. The actions of the US are problematic from a policy perspective, though not necessarily from a legal one, for two reasons. First, the influence of the US in working toward liberalized trade is diminished when the US chooses not to follow the uniform rules of the GATT but instead creates its own, more favorable safeguard provision, thereby opening the door for other Members to follow in its footsteps. Accordingly, as a leader in the international community and a founding member of the WTO, the US must avoid any appearance of impropriety and must avoid setting a precedent for accepted defiance of the GATT. Second, it is unclear that the Safeguard Provision actually benefits the US and its WTO trading partners in the long term. Therefore, instead of simply holding onto uncompetitive US industries for three extra years, the US must innovate to become competitive in new industries.

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