use, a system that allows full play to its considerable power asrnthe world’s largest economy to shape international trade to itsrnbenefit. But the Clinton administration surrendered this principlernby warmly embracing the creation of the WTO, revivingrna concept that had been moribund under the Reagan and Bushrnadministrations. It was an abrogation by the Clinton administrationrnof its duty to continue the active conduct of foreign policyrnon behalf of the nation in an area of increasing importance;rninternational economics. That this embrace of irresponsibilityrnis based on the philosophy of supranational authority promotedrnby academics like Jackson and institutions like the WorldrnBank and GATT is demonstrated by U.S. Trade RepresentativernMickey Kantor, who constantly promotes to members ofrnCongress and the media the ideal of “a strong rules-based tradernsystem.”rnThe consequences of such a system became evident lastrnsummer during the United States-Japanese confrontation overrnthe auto and auto parts trade. Despite the great leverage possessedrnby American negotiators, Kantor backed down as therndeadline approached to impose the long-promised sanctions onrnthe import of Japanese luxury cars. Ryutaro Hashimoto, thenrnhead of Tokyo’s infamous Ministry of International Trade andrnIndustry, used the counterthreat of an appeal to the WH^O torndisarm Kantor. Hashimoto then used his diplomatic victory tornbolster his bid to become Prime Minister.rnThe American retreat in the auto and auto parts disputernraised the question of whether Section 301 of the 1974 TradernAct, which has provided the muscle behind United States commercialrndiplomacy, is still a credible tool of policy. If the WTOrnis taken seriously, then Washington cannot use Section 301 orrnany other unilateral effort to pry open overseas markets or defendrnagainst foreign predators without first obtaining Geneva’srnpermission. This, at best, places a new and complicated obstaclernin the path of the United States and, at worst, cripplesrnAmerican efforts altogether.rnChina has made joining the WTO a top priority. This is notrnbecause China endorses the notion of “free trade.” Beijingrncarefully manages its economic relations with the outsidernworld. Most Favored Nation status already gives China easy accessrnto the American market and generated for Beijing a tradernsurplus with the United States of $33.8 bilhon in manufacturedrngoods in 1995. What China wants is WTO protection againstrnany effort by the United States to use trade as leverage on Chinesernforeign policy, arms sales, or human rights practices.rnPrior to the WTO, there was no GATT mechanism to enforcerndispute panel decisions. The contending parties werernexpected to negotiate solutions to their trade conflicts. Now,rnsolutions are imposed by panels in a quasijudicial procedurernand backed by the threat of trade sanctions. WTO “rules” (orrnrulings) have been substituted for the national “power” ofrndiplomacy.rnAmericans were not prepared to accept such a usurpation ofrnpower by foreign officials. To defuse the vocal opposition to thernWTO, which had mobilized substantial public support, the followingrnreservations were added to the congressional implementingrnlegislation reasserting American sovereignty—that is,rnthe freedom of the United States to make its own laws for itsrnown benefit through its own democratic process.rnSec. 102 (a) Relationship of Agreements to United StatesrnLaw—(1) United States Law to Prevail in Conflict—Nornprovision of any of the Uruguay Round Agreements, norrnthe application of any such provision to any person or circumstance,rnthat is inconsistent with any law of the UnitedrnStates shall have effect.rn(2) Construction—Nothing in this Act shall be construedrn—(A) to amend or modify any law of the UnitedrnStates…. (B) to limit any authority conferred under anyrnlaw of the United States, including section 301 of thernTrade Act of 1974.rnThis reservation is itself confrontational. Article XVI of thernnew GATT states, “No reservations may be made in respect tornprovisions of this Agreement.” GATT Director-General PeterrnSutheriand argued during the debate that the assertion of reservationsrn”amounts to a country choosing to be above the lawrnwhenever it is inconvenient to observe the law.” He claimedrnthat this option would not be open under the WTO. It will bernup to American leaders, through precedent-setting actions, tornprove otherwise.rnAgain, a Dole-style review commission will not suffice. Indeed,rnif composed of judges operating on pseudolegal principles,rnit would only make matters worse. It would further thernnotion that international economics should be the trivial stuffrnof a “rules-based” system, where lawyers can be trusted to dornthe work of statesmen. Only by relegating the global division ofrnindustry, wealth, and technology—and the balance of powerrnthat flows from it—to the level of tort litigation can nationalrngovernments be persuaded that such fundamental issues are nornlonger their concern. This is how sovereignty will be lost; notrnswept away by conquering armies (at least, not initially), butrngiven away by the petty minds of bureaucrats and barristers.rnThe USTR’s office sought to stake out a stronger position inrnits J 995 Trade Policy Agenda and J 994 Annual Report by stating,rn”A significant amount of domestic concern was raisedrnthroughout 1994 in regard to whether or not the WTO willrnforce its members—particularly the United States—to compromisernits sovereignty in order to meet certain multilateralrntrade obligations. Nothing in the WTO relinquishes U.S.rnsovereignty. . . . Only Congress and State legislatures canrnchange U.S. laws.” But in the wake of the W T O gasoline ruling,rnUSTR officials started to talk about how easy it would be torncomply.rnAccording to syndicated columnist Finlay Lewis’s interviewrnwith Deputy U.S. Trade Representative Jeffrey Lang, “Langrnsaid the United States would not have to change its laws torncomply with the ruling, only the regulation. . . . Lang arguedrnthat compliance could be achieved without compromising thernobjectives of the clean air program and probably without doingrnmuch damage to the interests of U.S. refiners.” In other words,rnnow that the WTO has said “jump,” the USTR and the Clintonrnadministration can only ask “how high?”rnIf the United States gives in and changes either its laws or itsrnregulations just because the WTO says so, it is acting as if thernWTO does possess sovereign authority. The issue can nornlonger be avoided or papered over. If the WTO gives the ordersrnand American officials act as if they must be obeyed, that establishesrna “chain of command” with the WTO’s Geneva tribunalsrnat the top. All the brave talk about maintaining Americanrnsovereignty goes right out the window. Isn’t this what therncritics warned against, and for very good reasons?rnrn14/CHRONICLESrnrnrn