Alexander Hamilton Institute
International Trade



Remarks by the Honorable Robert Lighthizer

By Robert Lighthizer
Partner, Skadden, Arps, Slate, Meagher, & Flom LLP and Affiliates
New America Foundation
July 20, 2000



MR. LIGHTHIZER: When I read this title I had a sense that this
was going to be interesting, but after listening to Thea, and
being an avid reader of The Economist, I think it's going to
be even more interesting than I thought.

I was trying to decide, when you were talking, Thea, whether I
was one of the defendants of the corporate power structure. My
views are somewhat different although I come out on a similar

I think, first of all, that we need a WTO, and globalization
is inevitable, there is no question about that. The real issue
that the WTO and all of us have to come to grips with is how
we create rules that make it work in a way that accomplishes
all of our goals, economic efficiency as well as certain
essential social goals. And not, I think, as the challenge of
the WTO. And I might say I think that's one that they have
really come to grips with very well.

But it's impossible, really, I think, to condemn the WTO
because, really, what it is is an essential part of the
beginning process of creating the proper rules. And it really
is a negotiation. It's a negotiating body. I think we have
made a bit of a mistake by trying to turn into a court. And I
think that when you mix those two functions you are merely
looking for some kind of trouble.

When I read this title I can't help but think of binding
dispute resolution, the dispute resolution process, which runs
through a lot of these things. And whenever I think of that I
think of the old adage that sometimes when God really wants to
punish you he gives you exactly what you ask for. And I think
that's what we have in this case.

I was at USTR in the early '80s when the idea really began to
take on currency that, well, we have a problem, we need
binding resolution if a country can lose a panel decision and
then block it. And that the U.S. at that time viewed itself as
entirely the plaintiff, not really the defendant in any case.
That's the sort of problem I had. We are winning these cases,
none of which, in retrospect, had much economic impact or job
impact or much else.

But we were sort of peeved that we were winning these things
and we weren't getting any results largely out of Europe. I
mean it's largely U.S. versus Europe sort of a process or
thought process. And we said, well, we have to stop that.
So the best way to do it was just to say we will use sort of a
U.S. system. We will have kind of a court. And in everybody's
mind was, well, we will create international panelists who
will be basically like American judges.

I think now we are largely defendants, or at least when our
laws were changed we were defendants. We find ourselves with
our, in my judgment at least, democratic process under attack
wherein we make certain decisions through a democratic
process, and we find a non-democratic body now overturning
those decisions. And to me that is very troubling.

I guess my prescription, really, is to move back to more of a
negotiating kind of a settlement. Return to WTO and what it
really was meant to be. Something where you have somebody make
a decision but have it not be binding. Having moral suasion
and negotiation and the like.

The thought was that binding dispute resolution will eliminate
problems and conflicts and controversies between countries.
And in fact the opposite is the case. It's created more.
People win more cases, people fight about more cases, people
don't do what they are supposed to do after they lose, and
it's a problem

I really think that it's one that can't be corrected within
its current structure. Too many of the panelists don't come
from a democratic system and they certainly don't come from a
system with an independent judiciary. They don't come from a
system where judicial review means giving discretion to the
people who make the decision originally.

I am not saying that they are mean spirited or bad or corrupt.
They just don't see things the way we think judges should see
things. My sense is that there are only a few places in the
world where you are going to have a lot of people who could be
panelists with that kind of framework. And that's not a very
good system.

If you look at the kind of people that are proposed many times
on these panels you would be amazed. I mean, you have cases
where there are thousands of jobs and hundreds of millions of
dollars, and the WTO in one recent case, for example, proposed
to us a panelist who was a 29-year-old lawyer about three
years out of law school in the Pacific.

And you say to yourself this is not possible. No country in
the world, at least not in America, would you take someone
with that kind of experience and make him a judge to decide
whether or not what the Congress did was right or wrong. And
there are other examples, examples of people with clear bias.
And probably worst of all panelists proposed where you have
about ten lines of information on the person.

It's not a system that makes any sense. It's not a system
that's in the plaintiff's interest, and it's not a system, in
my judgment at least, that's in the defendant's interest. Now,
if you look at the results my sense is that the U.S. is not
doing very well.

I guess my premise is that no one is doing very well. But my
sense is that the U.S., are we winning more cases than we are
losing? Yes. But that doesn't really tell you very much. And I
am sure Alan Wolff talked about that. We are losing important
cases, main cases.

If you look at what goes on in the WTO, people that challenge
laws in other countries almost always win. I mean, they are
very likely to win. And in our own case the only time we have
had one challenge that we didn't lose was this U.K. 301 thing
in which case we went in there and said, listen, we concede
that we will never do anything you don't want us to do. And
then the panel said, well, we can hardly say you are wrong
about that. You know, assuming all that you say is true, then
we will let you win. I guess what I am saying is it was really
not a victory in any real sense.

I think that what we are going to see and what we haven't seen
is going to get worse and not better. I think that the
Japanese, for example, have made a decision that they are
going to challenge laws in the United States. Every single
chance they get they are going to go to the WTO. I think that
is a natural outgrowth of a system that doesn't make any
sense, but I think they have made a conscious decision,
sitting in Tokyo somewhere, to do this.

They have spent a lot of money to challenge all these things.
The net result of that is not going to be what we wanted,
which is to say less trouble in trade. There's going to be
more trouble in trade.

And I think that the future bodes very badly.
Now, what would I do, assuming you couldn't have any
negotiation, you just got rid of this thing and went back to
the old system, at a minimum we ought to do something like Mr.
Carten (phonetic) and Senator Dole and Senator Moynihan and
others proposed.

And that is to say at some point when this process is over,
get some group of non-political independent Americans to sit
down and assess whether or not what was done was right the way
we view law. My own sense is, really, that every country ought
to do that.

Every country ought to sit back and say we want to have a
group of people, eminent people, I would say judges, but
eminent people, who say: "I am going to make a decision as to
whether or not outside of the context of politics or economic
interest, just as a legal matter, what that panel did is
right." And I think everybody ought to do that. And then if
you see a pattern take some kind of action.

But absent that I think what you are going to end up with is
more tension, more problems. And, I guess to sort of tie this
up and bring it back to where I began, we are going to see it
being harder to have real negotiations to set up regulations
that should be dealing with the real important problems of
globalization in the future. And that is probably things like
labor and the environment, the whole lot of other things, too,
that have to be dealt with, and that are going to be hard to
deal with if we have this process creating irritation.



Promoting the Principles of Genuine Free and Fair Trade