Palmeter compares GATT, WTO in speech: Lawyer gives case studies of U.S. World Trade Organization violations in action

by Sarah Warlick | 10/28/98 6:00am

David Palmeter, a trade lawyer and president of the Washington Foreign Law Society, emphasized the differences between the General Agreement on Tariffs and Trade and the World Trade Organization in a presentation yesterday afternoon in 2 Rockefeller.

Palmeter delivered his speech titled "The World Trade Organization and National Sovereignty" to about 65 people. He described the basic history of the WTO and three different case studies.

The WTO evolved from GATT during the eighth round of GATT negotiations on Jan. 1, 1995. With its adoption came a new process of dispute settlement that resembles the current American legal system.

GATT was founded on three basic principles: most favored nation status, constant tariff levels and national treatment. In general, all three principles ensure that imported goods and services are treated fairly and consistently in domestic markets.

Palmeter said that all three of these principles, though significant, are broad and "easier to state than to apply."

One major difference between GATT and the WTO involves the adoption of new trade measures. GATT required unanimous acceptance of its panel's final decision. This posed a problem, as protesting parties were often reluctant to formally admit defeat.

Today, the WTO adopts reports unless all members agree not to do so. This ensures that the panel's decision is upheld, unless even the winning party protests.

Another major difference between GATT and the WTO is the right to appeal. GATT never offered that option, but the WTO does.

In regards to bringing a complaint to the WTO, Palmeter said "the complaining party is really limiting its own sovereignty" by relinquishing its right to react with retaliation.

Palmeter said he believes the WTO has been a "good deal." Its overall economic benefits, such as a growth in export trade and increased worker wages, have been important to the global economy. "This system has led to diminishing trade frictions that had led to too much bloodshed in this world," Palmeter said.

With regard to globalization, Palmeter said, "we don't really have a choice." He said whether or not someone supports globalization depends on who he or she is.

"If you're Bill Gates, it's great. If you're someone who's unemployed, it's not so great," Palmeter said.

A common criticism of the WTO involves its stringent confidentiality. This is an especially foreign concept to the United States, a country accustomed to an open system and a lack of privacy in court proceedings, he said.

Palmeter said Americans "distrust the confidentiality" of the WTO. He added, "in my mind it doesn't make much sense. Eventually everything is made public."

Palmeter also analyzed three sample WTO cases in which the United States was found to be at least partly in violation of the WTO.

He first discussed the 1995 dispute between Brazil, Venezuela and the United States over gasoline regulations. The United States was holding Brazil and Venezuela to higher standards in terms of environmentally friendly gasoline.

The second case involved the Endangered Species Act and U.S. support for Turtle Excluding Devices. The United States required that TEDs be used during shrimp harvesting to prevent turtle deaths and refused to accept imports from countries that did not have laws requiring the same.

The final case began when Massachusetts, angry about human rights violations, enacted a law imposing a ten percent penalty on companies that dealt with Burma. Other nations claimed this law violated the Government Procurement Agreement of 1995.

Palmeter's speech was sponsored by the Daniel Webster Legal Society and the Rockefeller Center.