The World Trade Organization (WTO) was intended to be the principal forum for setting the rules of international trade and for the resolution of international trade disputes. The United States has expressed its concern with the WTO’s dispute settlement system and the Administration has blocked new appointments to the Appellate Body such that there are now insufficient judges necessary to hear new appeals. The situation does not appear likely to be resolved soon. Please join Stephen Vaughn, the former General Counsel to the United States Trade Representative and previous acting U.S. Trade Representative, for a conversations regarding the ongoing conflict, relevant issues, and thoughts regarding the future of the US and the WTO. The discussion will be moderated by Daniel Pickard.
Stephen Vaughn, Partner in the International Trade Team of King & Spalding, former General Counsel for the Office of the United States Trade Representative (USTR) and acting U.S. Trade Representative.
Moderator: Daniel Pickard, Partner in the International Trade practice and Co-Chair of the National Security practice, Wiley Rein LLP
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Dean Reuter: Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at fedsoc.org.
Greg Walsh: Welcome to The Federalist Society's Teleforum conference call. This afternoon's topic is titled, “The U.S. and the World Trade Organization: Predictions for What Comes Next - A Virtual Conversation with Stephen Vaughn.: My name is Greg Walsh and I am Assistant Director of Practice Groups at The Federalist Society.
As always, please note that all expressions of opinion are those of the experts on today's call.
Today, we are fortunate to have with us Stephen Vaughn, a partner in the International Trade Team of King & Spalding, and a Former General Counsel for the Office of the United States Trade Representative and Acting U.S. Trade Representative. Moderating today is Mr. Daniel Pickard, a Partner in the International Trade Practice and Co-Chair of the National Security practice at Wiley Rein.
After our speakers give their opening remarks, we will go to audience Q&A. Thank you all for sharing with us today. Mr. Pickard, the floor is yours.
Daniel Pickard: Great. Thanks Greg. And thanks everyone for joining today. As Greg mentioned, I'm Dan Pickard and I'd like to welcome you to The Federalist Society's program today on the U.S. and the World Trade Organization. I'm very pleased to introduce my friend, Stephen Vaughn. As Greg mentioned, Stephen is currently a Partner at the International Trade Team of King & Spalding. Prior to King & Spalding, Stephen completed more than two years of service at the General Counsel's office of the Office of the United States Trade Representative. In that position, he managed a team of government attorneys representing U.S. interests in both trade negotiations and trade litigation. While at USTR, Stephen was directly involved in numerous significant issue, including the new U.S./Canada/Mexico agreement, actions undertaken by the U.S. against China pursuant to Section 301 of the Trade Act of 1974, and efforts to revise the Korea/U.S. Free Trade Agreement. Importantly, for today's discussion, he also supervised U.S. litigation efforts before the World Trade Organization.
In 2017, Stephen also served as the Acting U.S. Trade Representative. Before USTR, Stephen spent almost two decades of private practice representing clients in high-profile trade matters. He's had lengthy experience in complex trade litigation before the U.S. International Trade Commission, the U.S. Court of International Trade, and the U.S. Court of Appeals for the Federal Circuit, as well as North American Free Trade Agreement by national panels.
Stephen is widely recognized as a leading expert in U.S. trade policy. So with that brief introduction, I'd like to express our thanks to Stephen for participating in this program and begin by asking him if he would give us some background as to the U.S. concerns in regard to the WTO.
Stephen Vaughn: Thank you very much, Dan. Thank you for having me. It's great to be able to talk to this group. Yeah, I think for a long time now, going back several administrations, the U.S. has been concerned about what was happening in returns to the dispute settlement process at the WTO. As I think a lot of people on this phone call will be aware, the United States has a constitutional system which makes it very limited, in terms of the ability of Congress to give away the sovereignty of the United States. And when we joined the WTO in 1994, the rules were set up to make very clear that we were only bound by what we had agreed to. And even under those circumstance, the United States retained its independence, in terms of whether or not it would comply with those obligations under the WTO.
And as everybody commonly knows, when we joined the Trade Agreement, the agreement is not self-executing under U.S. law. Congress makes changes to U.S. law to bring us into compliance with the agreement and then U.S. policy makers are bound by what's in U.S. law, not what's in a trade agreement.
So that was our understanding of the situation as it applied when we joined. When we started the debate on joining the WTO, it's very clear that members of Congress were confident that they had preserved and protected the sovereignty of the United States and that was important in our decision to join. What happened over the next 25 years is something that most Federalists won't be surprised to hear about, which is judicial activism. We had a series of very aggressive decisions taken by the appellate body of the WTO, which expanded the obligations that the United States was under and left smaller and smaller areas of policy safe for American policy-makers.
The Bush administration complained about this, the Obama administration have very serious concerns about it, to the point of even blocking one of the appellate body members from getting reappointed. And when we inherited the situation, it was very clear that a lot of the people in Geneva simply don't respect the sovereignty and independence of the member states and see their appellate body of the WTO as a kind of world court designed to -- that has the power to lay out new rules and new interpretations of trade in much the same way that things operate inside the European Union. That's not something the Americans had ever agreed to. I don't think it's really something that the Americans ever could agree to under our constitutional system. And so we raised these concerns in a number of forums over the last four years. We've had extensive conversations about them with every country in Europe, every other major trading partner that we have. I think everybody is very aware of our concerns and up to this point, those concerns really haven't been adequately addressed.
So for now, we don't have an active appellate body as terms of members expired. The U.S. was unable to agree to appoint new members, so we don't have that at this time. We still have a dispute settlement process that is a dispute settlement process that's much more under the control of the members, and that's much more reflective of our governmental system and what we thought we had agreed to back when we joined the WTO.
So these are not just technical trade issues, in my opinion. These are issues that, if you care about our governmental system and you care about the basic idea that Americans are supposed subject to rules and laws that are approved in a constitutional process by American policy makers, then you should be concerned about what was happening at the WTO. Because it was a real effort to change 200 years of American practice and have trade policy be made, not by people here, but by people in Geneva. And I think this is going to raise a lot of questions, in terms of going forward. What does it mean when we say we want to work with other countries? Everybody wants to work with other countries. But how much of our independence do we give up in order to do so?
Daniel Pickard: Thanks. So you anticipated my first question. I was going to ask about, obviously, the perceived crisis in regard to the appellate body, and the blocking of judges, and how that process unfolded. I guess, maybe if we could move to the current state of play now. Where do things stand in Geneva, really, as a result of the appellate body no longer having a quorum?
Stephen Vaughn: Well, right now, since the appellate body doesn't have a quorum, there's no way to appeal disputes. You still have a dispute settlement process. Members can still agree. But to submit decisions to a dispute panel, and it's a panel's decision is accepted by the Dispute Settlement Body, it would still be treated as a legitimate decision. What we don't have now is this sort of super court, which is what the appellate body had become. Which is out there laying down broad principles that would change the rules and make it more difficult for members to manage their own trade policies. So that's what it stands for now.
Obviously this is an ongoing process and we're going to have to have very serious conversations between us and the rest of the world in terms of how we want to work things out going forward.
Daniel Pickard: So in your opinion, what's got to change in the WTO for the substantive U.S. concerns to be addressed?
Stephen Vaughn: Well, so from our perspective, we're bound by the Constitution and we're bound by U.S. law. So what happens in a situation? Obviously, we -- the WTO isn't set up by a treaty binding directly on the U.S. with a series of agreements and then Congress passes statutes to make our laws consistent with those agreements.
So what we're presented here with the situation is, what if you have a case where there's an international body. And the international body says, we believe the United States is obliged to take certain actions. And if the United States doesn't take those actions, we will authorize other countries to sanction the United States. That's the situation we've been facing with the appellate body. And it creates major constitutional and political questions for Americans.
Obviously, as a technical matter, the United States still retains the sovereign power to not comply with those decisions. But you can see how it creates a constitutional temptation here. If policy makers in American want to change a policy, or want to go along with a policy that another country likes, they can use WTO disputes and say, well we have a ruling from the WTO and we have to follow that ruling.
I'm not saying that that's happened. I'm not saying that people have done that. But I am saying that if you want to maintain the clear lines of control where the people are able to know that they're only subject to rules that are approved in a constitutional manner, then it's very important to be on guard against these kind of very aggressive readings of treaties tied to the dispute settlement process that leads to sanctions for the United States. Because I think that raises very serious concerns about whether or not the trade policy of the United States is actually being made by the people who have authority to make that policy under Articles I and II of the Constitution.
So to me, those concerns have to be addressed. We cannot be party to an agreement that binds us to obligations that no member of Congress, and no one in the Executive Branch actually agreed to. It's just, you know, from an American perspective, you have to think of the agreements as more of a contract. We will live up to what we agreed to in the contract. But I think from the perspective of a lot of other members, they view it as more of a process. You signed on to this process and now you're bound by whatever results comes out of the process. That's a very difficult -- I don't think that's what we agreed to. And it's very difficult for a country that celebrates Independence Day and has a constitutional form of government to say, in this area of the law, we're just going to do what we're told.
So I think that's the heart of the question and I think we need to find some way to work together on that. And I think, ultimately, that the rest of the world needs to respect our system and give us the constitutional space that we need so that our trade policy is made in a constitutional manner that's consistent with our laws and history and traditions.
Daniel Pickard: So what have the responses been like from our major trading partners? We've expressed this concern regarding U.S. sovereignty. Has there been a broad range in reactions? Or have most of the reactions been uniform?
Stephen Vaughn: I think there are countries who recognize that this is an issue. You have a lot of countries out there who have governments that are responsive to the voters and who understand that it's very sensitive for any democracy to be ordered around by dispute settlement process that they don't have much control over. But at the end of the day, I think most people -- we get sued far more than any other country. So no other country really kind of faces the challenges that we do, in terms of the amount of cases and the amount of pressure to change our policies that we face. So it's just not as big a priority for some of these other countries as it would be for us.
And then obviously, you have other countries that just really disagree. And one of the things I think we're all going to have to have very robust conversations with friends in Europe, in particular, is they have developed a political tradition that's very different from ours, that does not give a lot of weight to the sovereignty of an independent country, that doesn't seem to have our same concerns about the voters and the role of the voters in the policy making process. And that is much more comfortable having major questions of policy decided in a very technocratic way by people who, from our way of looking at things, don't have the type of legitimacy that we would want to see in somebody who's a law maker.
And I think you see this coming up a lot in U.S./E.U. relations. Where the E.U. argues that the U.S. is bound by some type of international obligation and the Americans say, no the only real obligations are the ones that the people agreed to. And that's tension between the United States and the European Union. It's something that we're going to have to understand each other better and talk to each other more. And see how we can work together.
Daniel Pickard: So there's been some reporting in the trade press in regard to the U.S.'s emphasis on the why question. Really getting to a satisfactory answer as far as why we're in the position we're at. Where certain of our trading partners have said, that should be de-emphasized and maybe more of a focus should be placed on what changes need to occur now. I didn't know if you had any thoughts that you wanted to share about those discussions.
Stephen Vaughn: Yeah. So let me just explain a little bit about the point there. So obviously, when you're in a situation like this, and you say, look we have real concerns about how this is working, one of the first things that happens is people come in and say, “Well, tell us what kind of a fix do you want, and then we can sort of talk about that.” But here, it's a tricky issue for the Americans, because when you study the text of the agreement, I think the people who negotiated it back in the early ‘90s really did negotiate a lot of protections. For example, it's very clear, and it's clear in the text, that the dispute settlement process does not have the power to impose new obligations on members. It's clear from the text that decisions of the appellate body have to be completed and returned to the members within 90 days. It's clear from the text that if you're a member of the appellate body, you get to stay on for one term of four years and then another term of four years, and then after that you have to leave.
All of these things, and other things, are very, very clear from the text. They just haven't been enforced. The text has been disregarded and the appellate body, with the support of a lot of members, has simply failed to give the United States the benefit of the bargain that it agreed to back in the early ‘90s. So if you come to a lawyer and you say, “Okay, well, tell us the text that you want in order to alleviate your concerns,” well, a lot of that text is already there. And it didn't work. So it would be foolhardy to say, “Okay, well, given this history, now once you put in a few more pieces of text that's going to satisfy us.”
If the old text didn't work, if you have a rule that states very clearly, the decision has to be issued within 90 days. And then it turns out they don't issue decisions within 90 days and those decisions are still regarded as legitimate. Well, I can't write a rule clearer than that. So if that rule's not going to be followed, what rules are going to be followed?
So what we started asking was, it's not enough to just talk about textual potential changes. We all have to understand, why did this happen? Why did we create a body that was supposed to work a certain way and it didn't work out that way? Because until we understand that, it doesn't really make a lot of sense to agree to new changes. You just -- you're papering over those divisions and they're just going to reassert themselves. And we're all going to be right back to where we were.
So that's the issue. Some countries engaged with us on that. Other countries have resisted. But to me, we can't just keep talking past each other. It's been 25 years. We need to have a real serious conversation. If other countries are truly committed to the idea that the appellate body can change the obligations that the members thought that they had agreed to, or that the appellate body can fill in gaps that were left deliberately in the agreement, or that the appellate body can -- the issue clarifying decisions that create new obligations that didn't previously exist. If we have a large number of WTO members who are really committed to those ideas, those concepts need to be put on the table plainly and distinctly. And we need to have a conversation about that. Because if that -- I think those are propositions that the Americans are going to find it very, very difficult to agree to.
Daniel Pickard: So I guess that brings us to the big question. Where do we go from here? What steps do you think need to be taken? What steps do you think likely will, in fact, be taken?
Stephen Vaughn: Well, one of the nice things about it is, is as a practical matter, there's not much evidence that any of this has a huge -- that any of the controversy of the WTO has had a huge impact on trade. I mean, obviously now, you have issues with the pandemic and you have some other things that have been happening with China. But for the most part, if you look at the data in 2019 compared to 2016, exports were up, imports were up, trade was up, the U.S. economy was doing very, very well, employment was low, wages were rising.
So we have a lot of space here to get the right result. This isn't a crisis that needs to be resolved immediately. And I think it makes a lot of sense for us to have an honest conversation with ourselves and with our allies and say, look, we all thought we had reached an agreement in 1994, 1995. Maybe it turns out we were further apart than we thought. Maybe we're not actually ready to have a dispute settlement process with this much power. Maybe it's going to be better if a lot of these issues get resolved through negotiations as opposed to being resolved by us going to arbitration against each other. And maybe that's fine.
So the world trading system basically did not have binding arbitration for almost 50 years after the end of World War II and that system did very, very well. And we had years of prosperity and growing trade, concept in market-based systems, and obviously our victory in the Cold War.
So I think we just have to keep talking to each other and be candid with each other. And if we're not able to reach an agreement at this time, well then, you know, we have lots of other ways of resolving disputes.
Daniel Pickard: You touched on, actually, my next question before and then maybe we'll open it up for the floor. And I don't know if it would help to piece this out a little bit. But I was going to ask the question that there was a lot of press and a lot of discussion in regard to the fact that this was a "crisis." That come, I think it was December 10th, that there was great concern and some of the reporting was -- used some very strong language as far as how serious a challenge this was to the whole world order. But on December 11th, there wasn't a whole lot of reporting about -- or subsequent to that, maybe a real manifestation of negative impact as a result of the appellate body not having a quorum. And you did touch on this in your previous answer. I didn't know if you wanted to expand on that a little further, as far as why, maybe, this was perceived to be more of a crisis than it turned out to be. Or perhaps why it never was a crisis to begin with.
Stephen Vaughn: Well, yeah. I mean, and you know, this is one of the reasons that I like having this forum to talk about it. Because I think these are concept that a lot of folks here are going to be familiar with.
It's very easy to say, okay, we're going to have disputes. And the best way to deal with those disputes is to have arbitration. And we'll have people file briefs, then we'll have hearings, and the arbitrators will make rulings. And that'll be how we resolve disputes. But everybody who practice law understands that a lot of disputes are not amenable to arbitration. In fact, in a lot of disputes, trying for binding arbitration might actually make it more difficult to resolve the dispute.
The way I think we ought to be thinking about it is this. If we have a major trade dispute, whether it's with China, whether it's with the E.U., or whether it's with any other WTO member, I think a lot of ways those things can play themselves out. You can have negotiations. You can threaten tariffs, you can impose tariffs, they can threaten tariffs, they can impose tariffs. A lot of different things can happen. And there can even be situations where both sides say, you know what, in this case it would be helpful to have an arbitrator's decision. Let's go to a panel and let's get a decision from an arbitrator.
The point of all of this is to keep the decision-making process in the hands of the place where it should be, which are the elected officials in the United States whose job it is to address these types of questions, and the legitimate cabinet members and other key players in the Executive Branch who have these responsibilities as a matter of statute under U.S. law. Most of the time, many times, taking something out of the hands of negotiators and putting it in the hands of litigators does not get you closer to a solution. A lot of times, it gets you further away from a solution.
So I think that we should be doing is, look at this as an opportunity to really think through, how do we want to manage relationship in a world where we have two other economies, the Europe economy and the China economy that are almost as big as ours. And I think we're going to find that the way the administration has been dealing with it through all these different series of trade deals that they've had, and you look at the unemployment figures that I was talking about earlier, you look at what was happening in markets, all these type of financial and economic data points that we had at the end of 2019, that approach to me just works better than an approach where you say, okay we're turning everything over to the litigators and they're just going to file lawsuits.
Daniel Pickard: Great. So I know we have a particularly large audience today. So maybe, Greg, this could be a good time to open the floor if, Stephen, you'd be so kind to take some questions.
Greg Walsh: Absolutely. Let's open the floor. We'll now go to our first caller.
Thomas Dillon (sp): Hello. It's Thomas Dillon here calling from Geneva.
Stephen Vaughn: Hello.
Thomas Dillon: Hello there. Look, I'm a bit surprised about your approach to making a trade policy. I mean, the WTO is the policy, surely. The idea of a rules-based system for international trade. United States has made more complaints under the system than any other country: 124. It’s been a third party in 161 disputes. It's even made complaints this year, in India for example. It's a fundamental principle of the law treaties that they should be performed in good faith. If the WTO no longer works for the U.S., then surely the U.S. should just leave the WTO.
Stephen Vaughn: I think the United States has acted in good faith. It wasn't the United States who made the decision that we would disregard the 90-day rule on the appellate body. It wasn't the United States who made the decision that the appellate body would sort of just disregard all kind of principles and stuff that we thought that we had agreed to. It wasn't our choice that the appellate body ignored the warnings of the Bush administration and the Obama administration and lost the members of Congress. It wasn't our choice that the appellate body, and the members supporting the appellate body, really refused to seriously engage with the United States on this issue for three years. None of that was the responsibility of the United States.
We were very clear in 1994, when we agreed to this, when Congress approved it. And we said, at the time, and we've said very clearly for 25 years since, we are a sovereign independent country. We have agreed to certain principles in these WTO provisions. We will live up to those agreements, and we will participate in the process in a good faith manner. But we are not going to be bound to principles and ideas to which we never agreed.
We couldn't have been more clear on that. We've been insistent on that from the beginning. So I don't really -- I think that, to me, we're the ones who have basically stayed true to what we all agreed to back in 1994, '95. Obviously there are other people who think that they can use this process to force the Americans to adopt trade policies that we don’t want to adopt. We never agreed to that and we're not going to agree to that. And I don't think that's within either the spirit or the letter of the WTO agreement.
Greg Walsh: Daniel, is there anything that you want to go into more detail on while we wait for another caller?
Daniel Pickard: Sure. So taking the moderator's privilege to ask a question. Maybe to drill down just a little further. Stephen, there have been a couple of decisions out of the appellate body that commentators in the United States pointed out were particularly egregious, some of which turned on standard of review issues in trade remedy cases. But I didn't know if there were an example or two that you thought might be helpful to illustrate some of the concerns on the part of the U.S.
Stephen Vaughn: Well, the first thing I want to say is, after I left, USTR put out a very helpful report that goes through -- I think it's well over 100 pages and it goes into great detail about the procedural problems that we had with the appellate body. It goes through a lot of the substantive problems that we had with the appellate body. And it gives specific examples of cases.
I'm hesitant to talk about the trade remedies cases because there's a lot of people who tend to act like that's the only concern that America has. And it's very much not the only concern that Americans have. But to follow up on the example that you gave, it's very widely known and very widely recognized that while the Americans fought very hard in the negotiations to get language in the text that would make clear that there's not necessarily one correct way to interpret the anti-dumping agreement. There's not necessarily one correct way to interpret the Subsidies and Countervailing Measures Agreement. And that there would be policy space given to members so that if provisions were open to multiple interpretations, that would be okay.
That was something that was very important to the U.S. The U.S. insisted on it. The U.S. got it. Knowing trade negotiations, I'm sure the U.S. paid a price for that and it just turned out to be a complete dead letter. Once the appellate body got involved, they basically just read that language out of the agreement, entirely, and they neither changed the way the agreement was interpreted so that there would be one binding way of reading these agreements no matter what the U.S. argued for. So that's one example. And many others could be given.
Everybody understands that there's a safeguards agreement. The agreement goes into great detail about all the different things that members are supposed to do in order to impose safeguards. A lot of Americans thought that that was a very important part of the system. We have a safeguards statute, which we've had for many years. A lot of policy makers thought it was a good alternative, in some cases, to AD and CVD laws – anti-dumping and countervailing duty laws. And the appellate body has just largely just written the safeguards agreement out of the system, concerning an agreement in such a way that makes it really difficult, if not impossible to use measures effectively.
In recent years, the agreement that the appellate body has sort of been going into attack on the countervailing duty laws, which I can understand maybe people being opposed or concerned about abuses of the anti-government laws, but the countervailing duty laws are really there to prevent subsidies. I mean they are to encourage, pre your unsubsidized trade, even those laws don't withstand scrutiny at the appellate body. So you have a situation where the United States is literally signed up to an agreement where people are trying to use the agreement to make it easier for countries like China to subsidize goods for shipment to the United States. So again, that's not something we ever agreed to.
So those are just a few examples. And like I said, USTR has many, many other examples in its report.
Daniel Pickard: Great, and I know we've got another question in the queue.
Greg Walsh: Indeed we do. Let's go to the next caller.
Christine McDaniel: Oh hi. This is Christine McDaniel. Thank you Mr. Pickard. Very helpful explanation. So I'm not a lawyer, I'm an economist. So now, I just wanted to follow up with one of the moderator's questions to you about, so what needs to occur. And I think you got a little closer to answering that just on the past few minutes. So it sounds like what needs to occur, you're saying, is basically like a revising of the parameters of the appellate body or a restatement or renegotiation of the subsidies agreement? Or we just don't know yet? Thank you.
Stephen Vaughn: Well, right now, as far as I'm concerned, in terms of what need to occur, there's billions and trillions of dollars of trade taking place all around the world. There's no evidence that controversy over the dispute settlement process have changed the actions of buyers and sellers. Like I said, the economy was doing very, very, very well before it was hit by a once-in-a-century event. And I expect it to do very, very well before the economy -- like I said, we didn't have a binding dispute settlement process in the ‘80s. We didn't have a binding settlement dispute process in the early ‘90s, or in the ‘70s, or in the ‘60s and yet there was huge amounts of trade and huge amounts of competition that was taking place during that period.
So I don't see this as a "crisis" that has to be resolved. But I do think that going forward, we have three very, very large economies in the United States, the European Union, and China. We each have very different opinions about how the multilateral system ought to be organized. We each have very different views about concepts like rule of law, and sovereignty, and independence, and the will of the people, and we have to be very realistic in our expectations and in our communications. In the early ‘90s, I think there was a real sense that at the end of the Cold War, we had come to the end of history and there was really broad agreement among everybody about how things should be organized. Now we know that's not true. And so we're going to have to work with other countries, obviously, as we've done ever since 1789. But again, as we've done since 1789, that has to be done in a manner that's consistent with our Constitution and our laws.
Daniel Pickard: Great. And Stephen, being mindful of the time, there's a political question that I'd like to tee up to the extent that you're comfortable discussing it. And then want to make sure that we've got plenty of time for your concluding remarks. So, in regard to the political issue, from kind of a conservative perspective, which has been traditionally identified as pro free trade. But there's also kind of a tension with concerns regarding what are viewed as essentially international activist judges. And also the potential trampling on U.S. sovereignty interests. And I didn't know if you thought there was a way of reconciling those or if you were interested in commenting on that.
Stephen Vaughn: Sure. I mean, look, I have a lot of policy preferences and I'm sure a lot of people on the phone call have a lot of policy preferences. But to me, one of the things that, to use the term conservative, or to use the term, Federalist. I consider myself to be a conservative and I consider myself to be a Federalist.
I think one of the things that we share in common is an idea that -- it's a commitment to certain processes. It's a commitment to doing things a certain way. It's a belief that America has to act in a manner that's consistent with its Constitution. And the Constitution makes clear that authority over trade was given to the Congress. And authority over foreign relations was given to the President. And the Congress and the President are responsible to the American people, through elections and through our constitutional system. That's the system that we have. And I think to say, well, I don't trust the Congress, I don't trust the President, I don't trust our elected officials, I'm afraid that they disagree with me on this big policy matter. So what I want to do is take that power away from U.S. government and I want to give it to a body in Geneva that will order American officials to do the polices that I prefer. I think that's a very dangerous slope for people in The Federalist Society or for anybody to be honest to go down. Because once you start invoking those type of processes, why can't we have an international body that orders us to do things in the name of climate change? Why can't we have an international body that orders us to do things in the name of foreign policy reasons or international law?
It's just a mistake, in my opinion, to go down that path and that's why, to me, this is not really just an issue of trade policy. It's really a question about how does the country work? How is the country governed? If you have to sit down with somebody and they want to know, why can't we have this type of policy? Why can't we have that type of policy? I don't want the answer to be, well yeah, we Americans all want to do that, but people in Geneva tell us we can't do that. I think that would be a mistake.
Daniel Pickard: So again, I want to respectful of your time. I'm extraordinarily appreciative of you making time to speak with us today. But as I said, I want to make sure that we left time for you. If there were any last observations that you wanted to share regarding where the U.S. is, where Geneva is, or any concluding remarks. The floor is still yours.
Stephen Vaughn: Well, thank you very much. I appreciate the questions. I appreciate the fact that people have listened in. I appreciate the chance to be here and to do this. Look, this seems like, I'm sure for a lot of you, sort of a minor set of technical questions, and it wouldn't surprise me if, for a lot of you, these questions of process are overshadowed by the substantive questions of what kind of a trade policy we're going to have. And I can certainly understand why a person who has very, very strong views in terms of things like free trade, or tariffs, or what kind of a trade policy we should have, would maybe lose patience with these concerns over whether or not we're getting there through a constitutional process. Or whether we're being ordered to do things through, what I think, is a non-constitutional process. But I would really urge you to recognize the gravity that's at stake.
On the one hand, we have this huge pessimism in a lot of people in town that we can't trust elected officials to make trade policy because they're all inherently protectionist and we'll all be back to this Smoot-Hawley. That simply falls. The people who voted for Smoot-Hawley were crushed in the elections in 1932. That policy was reversed in 1934 and we never went back to it.
This idea that you can't trust elected officials, or you can't trust the voters to know what's in their own interest, is just not true. Not born out by history. It's not born out by the facts. We never had a binding dispute settlement process for over 200 years. And in those 200 years, we became the richest, and the freest, and the most successful country in the world. So this idea that economy, and trade, and all these things are dependent on seven people in Geneva is simply not correct.
On the other hand, what is concerning, and what is true, is that not all countries share our commitment to creating a government that is responsive to the voters. And to creating a government that is constrained by concepts found in the Bill of Rights. And if we start going down this road of creating international bodies that tell Americans what to do in various areas of life, we will do -- I'm afraid we will be opening a door to other areas of intrusion and regulation that could create significant problems for us.
I think the thing to do about -- what I would sort of urge people here to do is to let the negotiating process play out. United States has very good negotiators looking out for our interests. The Europeans, and the Chinese, and the other countries will be trying to work through this as well. I think everyone is committed to a flourishing global economy. I think everybody wants efficient markets where hard work and innovation is rewarded. And I think we're better off letting that process play out, but letting it play out within the context of the system that respect our constitutional traditions and does not require us to submit to decisions or interpretations with which we never agreed.
So that's my comment and I appreciate everybody's time and attention.
Daniel Pickard: Thanks again, Stephen. It is very much appreciated. I think that concludes our presentation or our program. And Greg, I'll kick it back to you.
Greg Walsh: Thank you. On behalf of The Federalist Society, I want to thank our speakers for the benefit of their valuable time and expertise today. We welcome listener feedback by email at firstname.lastname@example.org. Thank you all for joining us. We are adjourned.
Dean Reuter: Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.