International trade has been topic of discussion since the Phoenicians first began transferring the Eastern Mediterranean Sea with their ships (Bernstein, 2008). Strangely, the same problems that plagued international trade in those days remain today. Nations still debate the issues surrounding trade barriers that prevent the free flow of goods from one nation to another. The only difference in today’s society from that of the Phoenicians is that the goods have become larger and more expensive.
Against the ancient background organizations such as the World Trade Organization (WTO) (World Trade Organization) and the United States International Trade Commission (USITC) (United States International Trade Commission) have been developed. Although each organization has its own specific purpose, the general mission of each is to ensure that trade flows as smoothly, predictably and freely as possible.
The recent emergence of globalization has highlighted the need for improved trade understandings between nations. Globalization has created an international market place that requires for increasingly more sophisticated agreements between nations governing their trading activities (Hainmueller, 2006). The WTO is the result of this need.
The WTO is an organization whose membership is a conglomeration of the largest international trading partners and developing nations as well. Membership in such organization is accompanied by some strict restrictions but the organization does provide a framework from which nations can trade in the international market and be provided with some protections. In this regard the WTO administers trade agreements between member nations, provides a forum for trade negotiations and disputes, assists nations in formulating trade policies, and coordinates activities between other international organizations involved in world trade. In stark contrast to most organizations of this form, nearly all decisions made by the WTO are by consensus.
The United States International Trade Commission (USITC), meanwhile, is independent from the WTO and is quasi-judicial federal agency of the United States. The USITC has no international authority and its purpose is to provide assistance to the executive and legislative branches of the U.S. Government. The USITC existence preceded the present globalization movement having been originally created by the U.S. Congress in 1916 (as the U.S. Tariff Commission) and its purpose differs substantially from that of the WTO. Unlike the WTO which exists to facilitate international trade regardless of national interest, the USITC’s purpose is to protect the national trading interests of the United States. In addition to providing essential trading information to the executive and legislative branches of the U.S. Government, the USITC also oversees the operation of U.S. trade with other nations with an eye toward protecting U.S. interests.
Consistent with its goal of protecting U.S. interests in regard to international trade, the USITC investigates whether specific import activity by a company or nation is injuring or threatening to injure U.S. industries in violation of international trade laws. If after doing such investigation the USITC decides that an injury or potential injury is likely it issues what are identified as determinations. Determinations set forth the concerns of the USITC and initiate the process of further investigation. The areas of concerns that may result in determinations being issued include whether other nations are dumping imports into the U.S. market that may cause material harm to the industry; whether the actions of other nations are an infringement of certain statutory intellectual property rights, patent violations, or trademark infringements; or, a violation of some tariff provision enacted by an act of Congress.
As easily discerned, the mission of the WTO and USITC can, on occasion, come into conflict. The stated purpose of the WTO is to promote international trade while the responsibility of the USITC is to protect the interests of U.S. industry. As the jurisdiction of the USITC is limited to United States borders it has no authority beyond those borders. The jurisdiction of the WTO is worldwide and a condition of continued membership in said organization is adherence to its dictates the USITC must be careful in how it renders its decision so as to not undermine the WTO.
Through its investigative functions the USITC issues hundreds of determinations every year. Some of these determinations may seem insignificant to the general public but many have a far reaching effect on the U.S. economy. These determinations are based solely on their effect on American industries and are intended to be politically neutral. Examples of some recent USITC determinations include the dumping of appliances by South Korea, importation of flat-rolled steel products from Brazil, Japan and Russia; and multilayered wood flooring from China. These examples are just a small sampling of the determinations made by the USITC. Each such determination is in a different stage of investigation and enforcement and each has differing political and economic significance.
The effects of globalization have been wide reaching and have caused nations throughout the world to adjust their trade practices. The efforts of the WTO have made the process of international trade much easier and less contentious. It is not a perfect arrangement and there remain problems but they are minimized due to the existence of the WTO. Similarly, nations like the United States still must concern themselves with domestic trade matters that spill over into the international arena and the USITC allows the United States to remain active in international markets while still maintaining the domestic integrity of U.S. industry. Conflicts still exist between the goals of the WTO and USITC but both are aware of their respective importance and generally have worked toward an amicable resolution. In the end, that is all that can be expected.
Bernstein, W. J. (2008). A Splendid Exchange: How Trade Shaped the World. New York: Atlantic Monthly Press.
Hainmueller, J. (2006). Learning to Love Globalization: Education and Individual Attitudes Toward International Trade. International Organization , 469-498.
United States International Trade Commission. (n.d.). United State International Commission. Retrieved February 12, 2012, from United State International Commission: http://www.usitc.gov/
World Trade Organization. (n.d.). What is the WTO? Retrieved February 15, 2012, from World Trade Organization: http://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm