When it comes to global trade, the United States is starting to act like a scofflaw -- or so its accusers say.
In several recent cases, Washington has ignored the rulings of international trade tribunals or threatened that it will wield its economic power to keep such judgments from being enforced. These actions are evoking outrage among trading partners and arousing criticism that the United States, supposedly the leader in upholding the global trading system, is falling down on its responsibilities.
A few examples:
Although special panels of judges have repeatedly found that U.S. tariffs on Canadian lumber violate the North American Free Trade Agreement, Washington has refused to scrap the tariffs, insisting that the dispute be negotiated. That has so angered Canadian officials that they are threatening to sell the nation's oil and wood to China at the expense of the United States.
In a case in which Brazil won a verdict at the World Trade Organization against U.S. subsidies for cotton farmers, Washington has left the bulk of the subsidies untouched, and it has warned Brazilian officials that pressing their victory could cost their country the right to ship certain goods duty-free into the U.S. market.
The U.S. Congress has failed to change a law concerning the way anti-dumping duties work, despite a WTO ruling that the law violates global trade rules. The law, known as the Byrd Amendment, enables U.S. companies complaining of unfairly cheap foreign competition to receive the duties collected by the government, rather than having the government keep the money.
The result, some experts fret, is an erosion of the United States' moral authority in an area where it has traditionally prided itself on its fidelity to the rules.
"Four or five years ago, the U.S. was very much in the mode of urging other countries to abide by decisions, but the shoe is on the other foot now," said Gary Hufbauer, a scholar at the Institute for International Economics. "The U.S. is on the defensive on a number of these cases."
That could have repercussions when the United States wants other countries to implement commitments, such as China's promises to crack down on piracy of copyrights and patents, said Edward Gresser, a trade specialist at the Progressive Policy Institute.
"If we, the world's biggest trading nation, think we don't have to implement decisions that go against us," said Gresser, "it will create a climate in which it's easier for other countries to feel the same way."
To be sure, many analysts condemn the European Union more harshly than they do the United States concerning developments in another trade arena -- the ongoing global negotiations aimed at lowering trade barriers worldwide. Those talks, known as the Doha round, neared collapse last week after the E.U. failed to follow countries in offering to significantly reduce farm tariffs; a new E.U. proposal is expected Thursday.
And the failures by Washington to implement rulings are relatively few, U.S. officials maintain. "In the overwhelming number of cases, we are in full compliance," said James E. Mendenhall, general counsel at the U.S. Trade Representative's office.
Of the roughly 80 cases in which the United States has been sued at the WTO, Washington won some, lost some and settled some, Mendenhall said, adding that of those that were lost, "we are out of compliance in all of five cases right now."
"It's always the exceptions that get the attention," he said. "But exceptions are just that -- exceptions. The rule is, we comply, and others comply."
That is not how U.S. actions are seen in Canada, however, where public indignation has been mounting over the lumber spat.
Washington imposed stiff duties on Canadian softwood lumber in 2002, alleging that Canada subsidizes its industry. NAFTA panels -- even those with majority U.S. members -- have ruled five times that the duties violate the trade pact. Washington contends that those decisions aren't binding because WTO panels have found the duties to be in conformity with international rules. But Canada argues that because both countries are members of NAFTA, the NAFTA judgments should prevail.
The U.S. position is a "breach of faith," declared Paul Martin, the Canadian prime minister, in an Oct. 6 speech in New York. "Countries must live up to their agreements." To underline the nation's grievance over the issue -- which has been major news in the Canadian media -- Martin dispatched John McCallum, his acting minister of natural resources, to China a few days ago to discuss possible sales of Canadian petroleum and wood products.
"This is not a threat, and there is no linkage" to the U.S.-Canada lumber dispute, McCallum was quoted as saying in the Toronto Globe and Mail before his trip. But then he suggested the linkage does exist, saying, "If the U.S. doesn't respect NAFTA rules on wood, then what does that mean for NAFTA rules in other areas, including energy?"
Brazil, too, feels it won a judgment fair and square -- a landmark WTO decision in 2004 against U.S. government payments to cotton farmers. Such subsidies can generate overproduction of cotton in the United States that eventually gets shipped abroad, lowering world cotton prices, Brazil complained.
So far, however, Congress has shown little willingness to cut off federal largesse to the politically potent cotton producers. Although the Senate Agriculture Committee voted this week to eliminate one export-subsidy program that was particularly objectionable to the Brazilians, lawmakers contend that the fate of other, bigger programs ought to be hashed out in global trade negotiations.
To prod Washington into compliance with the WTO ruling, Brazilian officials adopted a unique strategy in recent months. Exercising their rights under the WTO to "retaliate" against a country that refuses to change its laws after losing a case, they have announced that they intend to allow large-scale copying of U.S. movies, pharmaceuticals and other items that would normally be protected by patents and copyrights.
No sooner had Brazil filed notice of its intention with the WTO this month than it got a heavy-handed admonition from Robert B. Zoellick, the deputy secretary of state and former U.S. trade representative. He told reporters in Brasilia that it will take time for Congress to fix as complicated a problem as the cotton subsidies and that retaliation would only "aggravate" U.S. lawmakers. Then he brandished a threat to eliminate Brazil's right to export goods such as plywood, auto parts and metals duty-free under a special program for developing countries.
"Keep in mind, Brazil sells about $2.5 billion under a special-preference program to the United States," Zoellick said, according to a transcript of his remarks. "I think it is dangerous for people to go down these paths because one retaliates, and all of a sudden you might find out that something else happens."
Losing those trade benefits might not deter the Brazilians from confronting Washington. But Zoellick's tactics strike some trade specialists as inconsistent with the principle that all WTO members should have equal rights under its dispute-settlement system.
"The implication of what he's saying is that the United States would deny the benefits of [WTO rulings] to any small country" that uses the preference program, said Claude Barfield, a scholar at the American Enterprise Institute. "I think it's a little over the top."
Woodworker Marty Moran protests the U.S. government's trade policy on Canadian softwood lumber in August 2001.