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Safety scares from imports from China have filled the front pages lately. Our international legal obligations have not. Pet food and seafood tainted by toxic chemicals. Children’s clothes containing dangerous levels of formaldehyde. Dangerously defective tires. Toys coated with poisonous lead paint. Even Big Bird and SpongeBob SquarePants have been affected by this latest turn in U.S.-China trade. Senator Charles Schumer, D-N.Y. � my former colleague in the House � is right in saying, “There is no question that too many Chinese manufacturers and food producers put the bottom line ahead of safety . . . .We need stricter standards, more thorough inspections, and harsher penalties for Chinese companies and American shippers that turn a blind eye to safety.” But as Schumer and other members of Congress consider proposed legislation, and as decision makers in the Bush administration consider appropriate executive actions, they would be well advised to be mindful of our country’s legal obligations as a member of the World Trade Organization (WTO). The United States and China are both members of the WTO, and they are therefore both bound by their legal obligations under the WTO treaty, which includes at least three international agreements that will apply to any restrictions that may be imposed by the United States on unsafe imports from China. Possibility of sanctions Though members of the WTO, the United States and China are also both sovereign countries. They can do as they choose. But if, in their actions on health and safety issues, they choose to ignore their obligations under these three WTO agreements, they could face costly economic sanctions in the form of lost access to the other’s market. Such sanctions could range into the billions of dollars in lost sales annually. The first of the three agreements is the General Agreement on Tariffs and Trade (GATT), which includes fundamental rules of nondiscrimination that are the heart of the WTO-based world trading system. One of these rules is that of “national treatment,” which requires that foreign products be given no less favorable treatment than like domestic products in domestic regulation and taxation. Congress is considering the possibility of imposing user fees on importers to pay for increased inspections to ensure product safety. Any such user fees should be crafted and applied in a way that would keep China from claiming successfully in the WTO that the United States had violated national treatment and other obligations in the GATT relating to the treatment of imported products. Impact of the SPS Agreement The second of the three agreements is the WTO Agreement on the Application of Sanitary and Phytosanitary Measure (SPS Agreement), which applies to any measure taken by a WTO member to protect human, animal or plant life or health from the threat of diseases caused by, among other things, additives, toxins or contaminants in foods. Senator Christopher Dodd, D-Conn., has said, “We have the legal right and power under the WTO to keep products out of our country that threaten the health and safety of our families.” He, like Schumer, is right. But in applying SPS measures in response to such threats, we must also be mindful of WTO rules. WTO members retain the right under the SPS Agreement to apply SPS measures that uphold any level of protection for human, animal or plant life or health that, in an exercise of their sovereignty, they choose. But they will be in compliance with their obligations under the SPS Agreement only if they proceed as set out in that agreement. SPS measures must be applied only to the extent necessary to protect human, animal or plant life or health. They must be based on a risk assessment appropriate to the circumstances, based on scientific principles and not maintained without sufficient scientific evidence. SPS measures must be based on international standards � where they exist � unless a higher level of protection is justified by science or by the consequences of a risk assessment. They cannot be more trade-restrictive than required to achieve the chosen level of protection. The third agreement is the WTO Agreement on Technical Barriers to Trade (TBT Agreement), which applies to all “technical regulations,” such as those affecting toys and tires. Here, too, sovereign WTO members may apply any standard they choose. But, under the TBT Agreement, technical regulations must provide “national treatment” for imported products. They cannot create unnecessary obstacles to international trade, and cannot be more trade-restrictive than necessary to fulfill a legitimate objective, such as, for example, the prevention of deceptive practices or the protection of the environment. Dodd has urged the Bush administration to restrict Chinese imports “in a manner that is consistent with our legal obligations under the World Trade Organization.” Good advice. James Bacchus is chairman of the global trade practice group of Greenberg Traurig, based in its Washington office. He is a former judge on the highest international tribunal of world trade, a former member of Congress and a former special assistant to the U.S. trade representative in the executive office of the president.

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