World Trade Organization: Overview and Future Direction

Changes from August 21, 2020 to October 18, 2021

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World Trade Organization:
~~August 21, 2020~~October 18, 2021
Overview and Future Direction
Cathleen D. Cimino-Isaacs,
Historically, Historically, ~~the United States’~~U.S. leadership of the global trading system has ensured the United leadership of the global trading system has ensured the United
~~Coordinator~~
States a seat at States a seat at Coordinator the table to shape the international trade agenda in ways that both advance and the table to shape the international trade agenda in ways that both advance and
defend U.S. Analyst in International Analyst in International
~~defend U.S.~~ interests. The evolution of U.S. leadership and the global trading system remain of interests. The evolution of U.S. leadership and the global trading system remain of
interest to Trade and Finance Trade and Finance
~~interest to~~ Congress, which holds constitutional authority over Congress, which holds constitutional authority over ~~foreig n~~foreign commerce and establishes commerce and establishes

~~general and principal U.S. trade~~ U.S. trade negotiating objectives through legislation. Congress has negotiating objectives through legislation. Congress has
recognized the World Trade Rachel F. Fefer
~~recognized the World Trade~~ Organization (WTO) as the “foundation of the global Organization (WTO) as the “foundation of the global
trading system” within the latest trade Analyst in International Analyst in International
~~trading system” within trade~~ promotion authority (TPA) and plays a direct legislative and promotion authority (TPA) and plays a direct legislative and
oversight role over WTO Trade and Finance Trade and Finance
~~oversight role over WTO~~ agreements. The statutory basis for U.S. WTO membership is the agreements. The statutory basis for U.S. WTO membership is the

Uruguay Round Agreements Uruguay Round Agreements Act (P.L. 103-465), and U.S. priorities and objectives for the Act (P.L. 103-465), and U.S. priorities and objectives for the
General Agreement on Tariffs and Trade (GATT)/WTO have been reflected in various TPA General Agreement on Tariffs and Trade (GATT)/WTO have been reflected in various TPA
~~Ian F. Fergusson~~
legislation since 1974. Congress also legislation since 1974. Congress also has oversight of the U.S. Trade Representative and other has oversight of the U.S. Trade Representative and other
~~Specialist in International~~
agencies that participate in WTO meetings and enforce WTO commitments. agencies that participate in WTO meetings and enforce WTO commitments.
~~Trade and Finance~~

The WTO is a 164-member international organization that was created to oversee and administer The WTO is a 164-member international organization that was created to oversee and administer

~~multilateral~~global trade rules, serve as a forum for trade liberalization negotiations, and resolve trade rules, serve as a forum for trade liberalization negotiations, and resolve ~~trade~~
disputes. The United States was a major force behind the establishment of the WTO in 1995, and the rules and agreements disputes. The United States was a major force behind the establishment of the WTO in 1995, and the rules and agreements
resulting from multilateral resulting from multilateral ~~trade~~trad e negotiations since 1947. The WTO encompassed and succeeded the GATT, established in negotiations since 1947. The WTO encompassed and succeeded the GATT, established in
1947 among the United States and 22 1947 among the United States and 22 ~~other~~ countries. Through the GATT and WTO, the United States, with other countries, countries. Through the GATT and WTO, the United States, with other countries,
sought to establish a more open, rulessought to establish a more open, rules -based trading system in the postwar era-based trading system in the postwar era~~, with the goal of fostering~~ to foster international international
economic cooperation and economic cooperation and ~~raising economic prosperity worldwide~~prosperity. Today, 98% of global trade is among WTO members. . Today, 98% of global trade is among WTO members.
The WTO is a consensus and member-driven organization. Its core principles include nondiscrimination (most-favored The WTO is a consensus and member-driven organization. Its core principles include nondiscrimination (most-favored
nation treatment and national treatment), freer trade, fair competition, transparency, and encouraging development. These are nation treatment and national treatment), freer trade, fair competition, transparency, and encouraging development. These are
enshrined in WTO agreements covering goods, agriculture, services, intellectual property rightsenshrined in WTO agreements covering goods, agriculture, services, intellectual property rights (IPR), and trade facilitation, among , and trade facilitation, among
other issues. Many countries have been motivated to join the WTO not just to expand access to foreign marketsother issues. Many countries have been motivated to join the WTO not just to expand access to foreign markets, but also to but also to
spur domestic economic reforms, transition to market economies, and promote the rule of law. spur domestic economic reforms, transition to market economies, and promote the rule of law.
The WTO dispute settlement (DS) mechanism provides an enforceable means for members to resolve disputes over WTO The WTO dispute settlement (DS) mechanism provides an enforceable means for members to resolve disputes over WTO
commitments and obligations. The WTO has processed commitments and obligations. The WTO has processed ~~nearly~~more than 600 disputes, and the United States has been an active user of 600 disputes, and the United States has been an active user of
the system. Supporters of the multilateral trading system consider the DS mechanism an important success, and an the system. Supporters of the multilateral trading system consider the DS mechanism an important success, and an
enforceable DS process was a priority negotiating objective for the United States in enforceable DS process was a priority negotiating objective for the United States in ~~the Uruguay Round negotiations during~~
~~1986-1994.~~ establishing the WTO. More recently, some members, More recently, some members, ~~most~~ notably the United States, contend it has procedural shortcomings and has notably the United States, contend it has procedural shortcomings and has
exceeded its mandate in deciding exceeded its mandate in deciding certain cases. The United States has thus vetoed appointments to the WTO’s Appellate Body (AB) and, in~~certain cases. Because of this, the United States has vetoed the appointment of panelists to~~
~~the WTO’s Appellate Body (AB; the seven-member body that reviews appeals by WTO members of a panel’s findings in a~~
~~dispute case). In~~ December 2019, the terms of December 2019, the terms of ~~two of the~~ remaining jurists expired, leaving the AB unable to functionremaining jurists expired, leaving the AB unable to function ~~and~~
~~hear new cases~~. This action could . This action could ~~potentially~~ render the DS system ineffective, render the DS system ineffective, as appealed disputes remain pending resolution and as members struggle to agree to solutions that members struggle to agree to solutions that
~~sufficiently~~ address U.S. concerns. address U.S. concerns.
More broadly, many observers are concerned that the WTO’s effectiveness has diminished since the collapse of the Doha More broadly, many observers are concerned that the WTO’s effectiveness has diminished since the collapse of the Doha
Round of multilateral trade negotiations, which began in 2001, and believe the WTO needs to negotiate new rules and adopt Round of multilateral trade negotiations, which began in 2001, and believe the WTO needs to negotiate new rules and adopt
reforms to continue its role as the foundation of the trading system. To date, members have been unable to reach consensus reforms to continue its role as the foundation of the trading system. To date, members have been unable to reach consensus
for a new comprehensive agreement on trade liberalization and rules. While global supply chains and technology have for a new comprehensive agreement on trade liberalization and rules. While global supply chains and technology have
transformed global trade and investment, WTO rules have not kept up with the pace of change. Many countries have turned transformed global trade and investment, WTO rules have not kept up with the pace of change. Many countries have turned
to negotiating free trade agreements outside the WTO and plurilateral agreements involving subsets of WTO membersto negotiating free trade agreements outside the WTO and plurilateral agreements involving subsets of WTO members . The.
~~In early 2020, the~~ WTO’s 12th Ministerial Conference (MC12) WTO’s 12th Ministerial Conference (MC12) ~~was rescheduled to 2021~~is to be held in November 2021, after being postponed due to the Coronavirus Disease 2019 due to the Coronavirus Disease 2019
(COVID-19) pandemic. The biennial meeting, which usually involves active U.S. participation, (COVID-19) pandemic. The biennial meeting, which usually involves active U.S. participation, ~~was~~has been widely anticipated as an widely anticipated as an
action-forcing event for the WTO. At the previous ministerial in December 2017, no major deliverables were announced, action-forcing event for the WTO. At the previous ministerial in December 2017, no major deliverables were announced,
leaving the stakes high for MC12. leaving the stakes high for MC12. ~~Several members~~Members have committed to committed to ~~make progress on issues related to~~finalize multilateral talks on fisheries subsidies and make progress on ongoing talks, such as ongoing talks, such as
~~fisheries subsidies and~~ e-commerce, while other areas remain e-commerce, while other areas remain ~~stalled amid disagreements.~~
~~Congressional Research Service~~

~~World Trade Organization: Overview and Future Direction~~

~~In its June 2020 forecast, the WTO estimated a plunge in global trade growth for 2020, with recovery depending on the~~
~~duration of the pandemic and countries’ policy choices. The WTO has committed to work with other international~~
~~organizations to minimize disruptions to trade and~~ largely stalled. Another potential deliverable involves a framework to better equip the WTO to support efforts against the COVID-19 pandemic. In August 2021, the WTO reported a sustained rebound in global merchandise trade, after a sharp decline in global trade growth in 2020 in the aftermath of the pandemic. The WTO has committed to work to minimize disruptions to trade and Congressional Research Service World Trade Organization: Overview and Future Direction global supply chains, and encouraged WTO members to notify trade global supply chains, and encouraged WTO members to notify trade
restrictions and measures taken in response to COVID-19, which measures taken in response to COVID-19, which ~~have~~ surged surged ~~since~~in the beginning of 2020, causing concern for many the beginning of 2020, causing concern for many observers. Some . Some
members have called on the WTO to address the trade policy challenges members have called on the WTO to address the trade policy challenges ~~emerging~~that emerged from COVID-19 from COVID-19 ~~through new rules.~~
, such as through a dedicated “health and trade” initiative. Others are seeking an agreement among members to waive IPR related to vaccines and other medical products. Meanwhile, WTO members continue to explore Meanwhile, WTO members continue to explore broader aspects of reform and future negotiations. Potential reforms concern the aspects of reform and future negotiations. Potential reforms concern the
administration of the organization, its procedures and practices, administration of the organization, its procedures and practices, dispute settlement, and attempts to address the inability of WTO members to and attempts to address the inability of WTO members to
conclude new agreements. conclude new agreements. ~~Proposed reforms to dispute settlement also attempt to improve the working of the DS system,~~
~~particularly the AB, which U.S. trade officials to date have not supported.~~
Among U.S. priorities are improving transparency and compliance with WTO notification requirements and addressing the treatment of developing country status for members in future WTO negotiations. The Biden Adminis tration has pledged to reengage in multilateral cooperation, be a leader in the WTO, and work constructively towards reforms. Some U.S. government frustrations with the WTO are not new and Some U.S. government frustrations with the WTO are not new and ~~many~~ are shared are shared bywith other trading partners. other trading partners. ~~At the same~~
~~time, the Trump Administration’s overall approach has spurred questions among stakeholders and some Members of~~
~~Congress regarding future U.S. leadership and priorities for improving the trading system. Some concerns have emphasized~~
~~that the Administration’s actions to unilaterally raise tariffs under U.S. trade laws and to impede the functioning of the DS~~
~~system might undermine the WTO’s credibility.~~
~~The growing~~Under the previous Administration, U.S. actions to unilaterally raise tariffs under U.S. trade laws and to impede the functioning of the WTO DS system raised concerns among some stakeholders about the U.S. commitment to the multilateral system and potential undermining of the WTO’s credibility. Ongoing debate over the role and future direction of the WTO debate over the role and future direction of the WTO ~~are~~is of interest to Congress. Some Members of interest to Congress. Some Members in the 117th Congress have expressed have expressed
support for WTO reform efforts and U.S. leadershipsupport for WTO reform efforts and U.S. leadership~~; while others introduced joint resolutions in May 2020 to withdraw~~
~~congressional approval of WTO agreements~~ through resolutions, while others have been skeptical of the merits of the WTO. Issues Congress may address include the effects of current and future WTO . Issues Congress may address include the effects of current and future WTO
agreements on the U.S. economyagreements on the U.S. economy and workers, the value of U.S. membership and leadership in the WTO, , the value of U.S. membership and leadership in the WTO, and the possibility of establishing the possibility of establishing
new U.S. negotiating objectives or oversight hearings on new U.S. negotiating objectives or oversight hearings on ~~the~~ prospects for prospects for ~~future WTO reforms and rulemaking, and the~~
~~relevant U.S. trade authorities and impact of potential U.S. withdrawal from the WTO on U.S. economic and foreign policy~~
~~interests. The pending WTO~~ WTO reforms and rulemaking. The WTO Ministerial Conference in 2021 presents the United States and WTO members with an Ministerial Conference in 2021 presents the United States and WTO members with an
opportunity to address pressing concerns over opportunity to address pressing concerns over ~~reform efforts,~~ ongoing and new negotiationsongoing and new negotiations, reform efforts, a nonfunctioning DS system, , a nonfunctioning DS system,
and the future and the future role of the multilateral trading system more broadly, as members grapple with economic recovery from COVID-19of the multilateral trading system more broadly, as members grapple with economic recovery from COVID-19
and other and other global challenges. challenges.

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World Trade Organization: Overview and Future Direction

Introduction
The World Trade Organization (WTO) is an international organization that administers the trade The World Trade Organization (WTO) is an international organization that administers the trade
rules and agreements negotiated by its 164 members to eliminate trade barriers and create rules and agreements negotiated by its 164 members to eliminate trade barriers and create
transparent and nondiscriminatory rules to govern trade. It also serves as an important forum for transparent and nondiscriminatory rules to govern trade. It also serves as an important forum for
resolving trade disputes. The United States was a major force behind the establishment of the resolving trade disputes. The United States was a major force behind the establishment of the
WTO in 1995 and the rules and agreements that resulted from the Uruguay Round of multilateral WTO in 1995 and the rules and agreements that resulted from the Uruguay Round of multilateral
trade negotiations (1986-1994). The WTO encompassed and expanded on the commitments and trade negotiations (1986-1994). The WTO encompassed and expanded on the commitments and
institutional functions of the General Agreement on Tariffs and Trade (GATT), established in institutional functions of the General Agreement on Tariffs and Trade (GATT), established in
1947 by the United States and 22 other countries. Through the GATT and the WTO, the United 1947 by the United States and 22 other countries. Through the GATT and the WTO, the United
States and others sought to establish a more open, rules-based trading system in the postwar era, States and others sought to establish a more open, rules-based trading system in the postwar era,
with the goal of fostering international economic cooperation, stability, and prosperity worldwide. with the goal of fostering international economic cooperation, stability, and prosperity worldwide.
Today, the vast majority of world trade, 98%, takes place among WTO members. Today, the vast majority of world trade, 98%, takes place among WTO members.
The evolution of U.S. leadership in the WTO and the institution’s future agenda have been of The evolution of U.S. leadership in the WTO and the institution’s future agenda have been of
interest to Congress. The terms set by the WTO agreements govern the majority of U.S. trading interest to Congress. The terms set by the WTO agreements govern the majority of U.S. trading
relationships. relationships. ~~Some 65%~~The majority of U.S. global trade is with countries that do not have free trade of U.S. global trade is with countries that do not have free trade
agreements (FTAs) with the United States, including China, the European Union (EU), India, and agreements (FTAs) with the United States, including China, the European Union (EU), India, and
Japan,Japan,1 and thus ~~and thus, the majority of U.S. trade~~ relies primarily on the terms of WTO agreements. relies primarily on the terms of WTO agreements.
Congress has recognized the WTO as the “foundation of the global trading system” within U.S. Congress has recognized the WTO as the “foundation of the global trading system” within U.S.
trade legislationtrade legislation and plays a direct legislative and oversight role over WTO agreements.and plays a direct legislative and oversight role over WTO agreements.12 U.S. U.S.
FTAs also build on core WTO FTAs also build on core WTO agreements. While the U.S. Trade Representative (USTR) agreements. While the U.S. Trade Representative (USTR)
represents the United States at the WTO, Congress holds constitutional authority over foreign represents the United States at the WTO, Congress holds constitutional authority over foreign
commerce and establishes U.S. trade negotiating objectives and priorities and implements major commerce and establishes U.S. trade negotiating objectives and priorities and implements major
U.S. trade U.S. trade ~~liberalization~~ agreements through legislation. U.S. priorities and objectives for the agreements through legislation. U.S. priorities and objectives for the
GATT/WTO are reflected in trade promotion authority (TPA) legislation since 1974. Congress GATT/WTO are reflected in trade promotion authority (TPA) legislation since 1974. Congress
also has oversight of the USTR and other also has oversight of the USTR and other executive branch agencies that participate in WTO executive branch agencies that participate in WTO
meetings and enforce WTO commitments. meetings and enforce WTO commitments.
The WTO’s effectiveness as a negotiating body for broad-based trade liberalization has come The WTO’s effectiveness as a negotiating body for broad-based trade liberalization has come
under intensified scrutiny, as has its role in resolving trade disputes. WTO members have under intensified scrutiny, as has its role in resolving trade disputes. WTO members have
struggled to reach consensus over issues that can place developed country members against struggled to reach consensus over issues that can place developed country members against
developing country members (such as agricultural subsidies, industrial goods tariffs, and developing country members (such as agricultural subsidies, industrial goods tariffs, and
intel ectual property rights protection). The institution has also struggled to address newer trade intel ectual property rights protection). The institution has also struggled to address newer trade
barriers, such as digital trade restrictions and the role of state-owned enterprises in international barriers, such as digital trade restrictions and the role of state-owned enterprises in international
commerce, which have become more prominent commerce, which have become more prominent issues in recent years. ~~in the years since the WTO was established.~~
Global supply chains and Global supply chains and advances in technology have transformed global commerce, but trade advances in technology have transformed global commerce, but trade
rules have failed to keep up with the pace of change; since 1995, WTO members have been rules have failed to keep up with the pace of change; since 1995, WTO members have been
unable to reach consensus for a new comprehensive multilateral agreement. As a result, many unable to reach consensus for a new comprehensive multilateral agreement. As a result, many
have turned to negotiating FTAs with one another outside the WTO to build on core WTO have turned to negotiating FTAs with one another outside the WTO to build on core WTO
~~agreements and advance trade liberalization and rules~~agreements; in some of these bilateral and regional ; in some of these bilateral and regional
agreements, including those pursued by the United States and EU, agreements, including those pursued by the United States and EU, ~~certain~~ newer rules may vary newer rules may vary
significantly. Plurilateral negotiations, involving subsets of WTO members rather than al significantly. Plurilateral negotiations, involving subsets of WTO members rather than al
members, are also becoming a popular forum for tackling newer issues on the trade agenda. members, are also becoming a popular forum for tackling newer issues on the trade agenda.
The most recent round of WTO negotiations, the Doha Round, began in November 2001, but The most recent round of WTO negotiations, the Doha Round, began in November 2001, but
concluded with no clear path forward, leaving several unresolved issues after the 10th Ministerial concluded with no clear path forward, leaving several unresolved issues after the 10th Ministerial
Conference in 2015. Efforts to build on current WTO agreements outside of the Doha agenda Conference in 2015. Efforts to build on current WTO agreements outside of the Doha agenda

~~1 Section 102(b)(13) of the~~continue. While WTO members have made some progress, no major deliverables were announced at the last Ministerial in 2017, leaving the stakes high for the next meeting in November 2021. 1 T he United States has a partial trade agreement with Japan covering some goods liberalization and digital trade rules. 2 Section 102(b)(13), Bipartisan Congressional T rade Priorities and Accountability Act of 2015 (T itle I, P.L. 114- Bipartisan Congressional T rade Priorities and Accountability Act of 2015 (T itle I, P.L. 114-
~~26), which reauthorized trade promotion authority (TPA~~26). ).
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World Trade Organization: Overview and Future Direction

~~continue. While WTO members have made some progress, no major deliverables were announced~~
~~at the last Ministerial in 2017. The stakes appear high for the next meeting, which members were~~
~~forced to reschedule from 2020 to 2021~~ Members were forced to reschedule the Ministerial from 2020 due to the Coronavirus Disease 2019 (COVID-19) due to the Coronavirus Disease 2019 (COVID-19)
pandemic. COVID-19 has tested cooperation and coordination in global trade policies, disrupted pandemic. COVID-19 has tested cooperation and coordination in global trade policies, disrupted
global supply chains, and global supply chains, and ~~resulted in widespread~~spurred some trade protectionism. At the same time, several trade protectionism. At the same time, several
countries have reaffirmed the trading system, lifted restrictions, and view the WTO as countries have reaffirmed the trading system, lifted restrictions, and view the WTO as playing an playing an
important role in tackling important role in tackling the trade policy chal enges that have emerged. The Biden Administration has pledged to reengage in multilateral cooperation, be a leader in the WTO, and work constructively towards reforms.3 A key question for Congress is defining U.S. priorities under the Administration for improving the multilateral trading system. Under the previous Administration, overal skepticism of the value of the WTO institution,4 and actions to unilateral y raise tariffs under U.S. trade laws and to impede the functioning of the DS system had raised questions among some stakeholders about U.S. leadership and potential y undermining the WTO’s credibility. Observers remain concerned that China’s statist trade and investment practices as the top global trader are stressing the current WTO system and related rules and principles of free trade. Some say that the U.S. policy response so far to China concerns—such as U.S. tariff actions and China’s counterretaliation—are further straining the system. Unresolved trade disputes between major economies, including between the United States and European Union, have strained the trading system. In the near term, the WTO is faced with resolving pending disputes, many of which involve the United States, as wel as debate about the role of its Appel ate Body. At the same time, many U.S. fundamental concerns regarding the WTO predate the Trump Administration and are shared by other trading partners. The United States remains committed to reform of the trading system and is engaged in several WTO negotiations and initiatives. USTR Tai has emphasized that a “successful” ministerial in November must deliver on a meaningful agreement on fisheries subsidies, members’ response to the COVID-19 pandemic, and the importance of WTO reform.5 With growing debate over the role and future direction of the WTO, Congress may have interest in several issues, including: the value of U.S. membership and leadership in the WTO, the possibility of establishing new U.S. trade negotiating objectives, or holding oversight hearings to address prospects of new WTO reforms and rulemaking. This report provides background history of the WTO, its organization, and current status of negotiations and reform efforts. The report also explores concerns regarding the WTO’s future direction and key policy issues for Congress. Background Following World War II, countries throughout the world, led by the United States and several other developed countries, sought to establish a more transparent and nondiscriminatory trading system with the goal of raising the economic wel -being of al countries. Aware of the role of tit- for-tat trade barriers resulting from the U.S. Smoot-Hawley tariffs in exacerbating the economic depression in the 1930s, including severe drops in world trade, global production, and 3 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 31, 2021. 4 White House, “Remarks by President T rump to the 74th Session of the United Nations General Assembly,” September 25, 2019, https://www.whitehouse.gov/briefings-statements/remarks-president -trump-74th-session-united-nations-general-assembly/. 5 UST R, “Readout of Ambassador Katherine T ai’s meeting with World T rade Organization Director -General Dr. Ngozi Okonjo-Iweala,” September 22, 2021. Congressional Research Service 2 World Trade Organization: Overview and Future Direction employment, the countries that met to discuss the new trading system considered more open trade as essential for peace and economic stability.6 The intent of these negotiators was to establish an International Trade Organization (ITO) to address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. Unable to secure approval for such a comprehensive agreement, however, they reached a provisional agreement on tariffs and trade rules, known as the GATT, which went into effect in 1948.7~~trade policy chal enges that have emerged from the pandemic.~~
~~Concerns about growing protectionist trade policies predate COVID-19. Observers remain~~
~~concerned that recent U.S. tariff actions and counterretaliation, and escalating trade disputes~~
~~between major economies, most notably the United States and China, may further strain the~~
~~trading system. The WTO is faced with resolving significant pending disputes, which involve the~~
~~United States, as wel as debate about the role of its Appel ate Body.~~
~~In a break from the approaches of past Administrations, the Trump Administration has expressed~~
~~doubt over the value of the WTO institution to the U.S. economy and questioned whether~~
~~leadership in the organization benefits the United States. While USTR Robert Lighthizer~~
~~maintains that the WTO is an “important institution” that does an “enormous amount of good,”~~
~~U.S. officials have expressed skepticism toward multilateral trade deals, including those~~
~~negotiated within the WTO.2 President Trump has at times threatened to withdraw the United~~
~~States from the WTO.3 He claims that the WTO “needs drastic change,” and criticizes China as~~
~~declining to adopt promised reforms following WTO accession.4 In addition, amid concerns about~~
~~“judicial overreach” in WTO dispute findings, the Administration has withheld approval for judge~~
~~appointments to the WTO Appel ate Body—a practice that occurred under the Obama~~
~~Administration and concerns some Members of Congress.~~
~~At the same time, reform of the multilateral trading system is a stated trade policy objective of the~~
~~Trump Administration, and the United States remains engaged in certain WTO initiatives and~~
~~plurilateral efforts.5 In testimony before Congress in June 2020, USTR Lighthizer emphasized~~
~~primary U.S. concerns include that other WTO members resort more often to litigation, rather~~
~~than negotiations to craft new rules, maintain “outdated” high tariffs, and skirt WTO obligations~~
~~through flexibilities.6 The United States seeks a “broad reset” at the WTO, with across-the-board~~
~~reforms.7 While many of U.S. fundamental concerns predate the Trump Administration and are~~
~~shared by other trading partners, questions remain about U.S. priorities for improving the system.~~
~~With growing debate over the role and future direction of the WTO, Congress may maintain~~
~~interest in several issues, including: the value of U.S. membership and leadership in the WTO, the~~
~~possibility of establishing new U.S. negotiating objectives or holding oversight hearings to~~
~~address prospects of new WTO reforms and rulemaking, and the relevant U.S. trade authorities~~
~~and impact of potential WTO withdrawal on U.S. economic and foreign policy interests.~~

~~2 UST R, “ Opening Plenary Statement of UST R Robert Lighthizer at the WT O Ministerial Conference,” Press Release,~~
~~December 11, 2017.~~
~~3 John Micklethwait, Margaret T alev, and Jennifer Jacobs, “T rump T hreatens to Pull U.S. Out of WT O If It Doesn’t~~
~~‘Shape Up’,” Bloomberg News, August 30, 2018.~~
~~4 White House, “Remarks by President T rump to the 74th Session of the United Nations General Assembly,” September~~
~~25, 2019, https://www.whitehouse.gov/briefings-statements/remarks-president -trump-74th-session-united-nations-~~
~~general-assembly/.~~
~~5 UST R, 2018 Trade Policy Agenda, March 2018.~~
~~6 House Ways and Means Committee, Hearing on the President’s 2020 Trade Policy Agenda, written testimony by~~
~~Ambassador Robert E. Lighthizer, June 17, 2020.~~
~~7 Also, see Robert E. Lighthizer, “ How to Set World T rade Straight ,” Wall Street Journal op-ed, August 20, 2020.~~
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~~World Trade Organization: Overview and Future Direction~~

~~This report provides background history of the WTO, its organization, and current status of~~
~~negotiations and reform efforts. The report also explores concerns some have regarding the~~
~~WTO’s future direction and key policy issues for Congress.~~
~~Background~~
~~Following World War II, countries throughout the world, led by the United States and several~~
~~other developed countries, sought to establish a more transparent and nondiscriminatory trading~~
~~system with the goal of raising the economic wel -being of al countries. Aware of the role of tit-~~
~~for-tat trade barriers resulting from the U.S. Smoot-Hawley tariffs in exacerbating the economic~~
~~depression in the 1930s, including severe drops in world trade, global production, and~~
~~employment, the countries that met to discuss the new trading system considered more open trade~~
~~as essential for peace and economic stability.8~~
~~The intent of these negotiators was to establish an International Trade Organization (ITO) to~~
~~address not only trade barriers but other issues indirectly related to trade, including employment,~~
~~investment, restrictive business practices, and commodity agreements. Unable to secure approval~~
~~for such a comprehensive agreement, however, they reached a provisional agreement on tariffs~~
~~and trade rules, known as the GATT, which went into effect in 1948.9~~ This provisional agreement, This provisional agreement,
subject to several rounds of trade liberalization negotiations, became the principal set of rules subject to several rounds of trade liberalization negotiations, became the principal set of rules
governing international trade for the next 47 years, until the establishment of the WTO. governing international trade for the next 47 years, until the establishment of the WTO.
General Agreement on Tariffs and Trade (GATT)
The GATT was neither a formal treaty nor an international organization, but an agreement The GATT was neither a formal treaty nor an international organization, but an agreement
between governments, to which they were contracting parties. The GATT parties established a between governments, to which they were contracting parties. The GATT parties established a
secretariat based in Geneva, but it remained relatively smal , especial y compared to the staffs of secretariat based in Geneva, but it remained relatively smal , especial y compared to the staffs of
international economic institutions created by the postwar Bretton Woods conference—the international economic institutions created by the postwar Bretton Woods conference—the
International Monetary Fund and World Bank. Based on a mission to promote trade liberalization, International Monetary Fund and World Bank. Based on a mission to promote trade liberalization,
the GATT became the principal set of rules and disciplines governing international trade. the GATT became the principal set of rules and disciplines governing international trade.
The core principles and articles of the GATT The core principles and articles of the GATT
GATT/WTO Principles
(which were carried over to the WTO) (which were carried over to the WTO)
of Nondiscrimination
committed the original 23 members, including committed the original 23 members, including
Most-favored nation (MFN) treatment (also (also
the United States, to lower tariffs on a range of the United States, to lower tariffs on a range of
cal ed cal ed normal trade relations by the United States). by the United States).
Requires each member country to grant each other Requires each member country to grant each other
industrial goods and to apply tariffs in a industrial goods and to apply tariffs in a
member country treatment at least as favorable as it member country treatment at least as favorable as it
nondiscriminatory manner—the so-cal ed nondiscriminatory manner—the so-cal ed
grants to its most-favored trade partner. grants to its most-favored trade partner.
most-favored nation or MFN principle (see most-favored nation or MFN principle (see text
National treatment. Obligates each country not to . Obligates each country not to
box). By having to extend the same benefits ). By having to extend the same benefits
discriminate between domestic and foreign products; discriminate between domestic and foreign products;
and concessions to members, the economic and concessions to members, the economic
once an imported product has entered a country, the once an imported product has entered a country, the
gains from trade liberalization were magnified. gains from trade liberalization were magnified.
product must be treated no less favorably than a product must be treated no less favorably than a
“like” product produced domestical y. “like” product produced domestical y.
Exceptions to the MFN principle were al owed, Exceptions to the MFN principle were al owed,
however, including for preferential trade however, including for preferential trade
agreements outside the GATT/WTO covering “substantial y” al trade among members and for agreements outside the GATT/WTO covering “substantial y” al trade among members and for
nonreciprocal preferences for developing countries.8 GATT members also agreed to provide “national treatment” for imports from other members. For example, countries could not establish one set of health and safety regulations on domestic products while imposing more stringent regulations on imports. Although the GATT mechanism for the enforcement of these rules or principles was general y viewed as largely ineffective, the agreement nonetheless brought about a substantial reduction of tariffs and other trade barriers.9 The eight “negotiating rounds” of the GATT succeeded in 6
8 Barry Eichengreen and Douglas A. Irwin, “T he Slide to Protectionism in the Great Depression: Who Succumbed and Barry Eichengreen and Douglas A. Irwin, “T he Slide to Protectionism in the Great Depression: Who Succumbed and
Why?” Why?” The Journal of Economic History, vol. 70, no. 4 (December 2010), pp. 871-897. , vol. 70, no. 4 (December 2010), pp. 871-897.
97 One major reason the IT O lost momentum was the U.S. government’s announcement in 1950 that it would no longer One major reason the IT O lost momentum was the U.S. government’s announcement in 1950 that it would no longer
seek congressional ratification of the IT O Charter, due to opposition in the U.S. Congress. WT O, “T he GAT T years: seek congressional ratification of the IT O Charter, due to opposition in the U.S. Congress. WT O, “T he GAT T years:
from Havana to Marrakesh,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm. from Havana to Marrakesh,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm.
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~~nonreciprocal preferences for developing countries.10 GATT members also agreed to provide~~
~~“national treatment” for imports from other members. For example, countries could not establish~~
~~one set of health and safety regulations on domestic products while imposing more stringent~~
~~regulations on imports.~~
~~Although the GATT mechanism for the enforcement of these rules or principles was general y~~
~~viewed as largely ineffective, the agreement nonetheless brought about a substantial reduction of~~
~~tariffs and other trade barriers.11 The eight “negotiating rounds” of the GATT succeeded in~~
8 GAT T Article XXIV. For more information see CRS Report R45198, U.S. and Global Trade Agreements: Issues for Congress, by Brock R. Williams. 9 For more detail on perceived shortcomings of GAT T dispute settlement, see “Historic development of the WT O dispute settlement system,” https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c2s1p1_e.htm. Congressional Research Service 3 link to page 9 World Trade Organization: Overview and Future Direction reducing average tariffs on industrial products from between 20%-30% to just below 4%, and reducing average tariffs on industrial products from between 20%-30% to just below 4%, and
later establishing agreements to address certain non-tariff barriers, facilitating a 14-fold increase later establishing agreements to address certain non-tariff barriers, facilitating a 14-fold increase
in world trade over its 47-year history (sein world trade over its 47-year history (see Table 1).1210 When the first round concluded in 1947, 23 When the first round concluded in 1947, 23
countries had participated, which accounted for a majority of global trade at the time. When the countries had participated, which accounted for a majority of global trade at the time. When the
Uruguay Round establishing the WTO concluded in 1994, 123 countries had participated and the Uruguay Round establishing the WTO concluded in 1994, 123 countries had participated and the
amount of trade affected was nearly $3.7 tril ion. amount of trade affected was nearly $3.7 tril ion. ~~As of the end of 2018, there are~~There are currently 164 WTO members ~~164 WTO~~
~~members, and~~ and trade flows totaled $22trade flows totaled $22.6 tril ion tril ion ~~in 2017.13~~ in 2020.11
Table 1. Summary of GATT Negotiating Rounds
Round
Negotiating
Major
(Year: Location)
Countries (#)
Accomplishments
1947: Geneva, Switzerland
23 23
 GATT established  GATT established
 Tariff reduction of about 20% negotiated  Tariff reduction of about 20% negotiated
1949: Annecy, France
13 13
 Accession of 11 new contracting parties  Accession of 11 new contracting parties
 Tariff reduction of about 2%  Tariff reduction of about 2%
1950-51: Torquay, UK
38 38
 Accession of 7 new contracting parties  Accession of 7 new contracting parties
 Tariff reduction of about 3%  Tariff reduction of about 3%
1955-56: Geneva
26 26
 Tariff reduction of about 2.5%  Tariff reduction of about 2.5%
1960-61: Geneva (Dillon)
26 26
 Tariff reduction of about 4% and negotiations  Tariff reduction of about 4% and negotiations
involving the external tariff of the European involving the external tariff of the European
Community Community
1964-67: Geneva (Kennedy)
62 62
 Tariff reduction of about 35%  Tariff reduction of about 35%
 Negotiation of antidumping measures  Negotiation of antidumping measures
1973-79: Geneva (Tokyo)
102 102
 Tariff reduction of about 33%  Tariff reduction of about 33%
 Several nontariff barrier codes negotiated,  Several nontariff barrier codes negotiated,
including subsidies, customs valuation, standards, including subsidies, customs valuation, standards,
and government procurement and government procurement
1986-1994: Geneva (Uruguay)
123 123
 WTO created a new dispute settlement system  WTO created a new dispute settlement system
 Liberalization of agriculture, textiles, and apparel  Liberalization of agriculture, textiles, and apparel
 Rules adopted in new areas such as services, trade- Rules adopted in new areas such as services, trade-
related investment, and intel ectual property related investment, and intel ectual property
Sources: Douglas A. Irwin, Douglas A. Irwin, Free Trade Under Fire, p. 225, and Stephen D. Cohen et al., p. 225, and Stephen D. Cohen et al., Fundamentals of U.S.
Foreign Trade Policy, p. 185. , p. 185.

~~10 GAT T Article XXIV. For more information see CRS Report R45198,~~ ~~U.S. and Global Trade Agreements: Issues for~~
~~Congress, by Brock R. Williams.~~
~~11 For more detail on perceived shortcomings of GAT T dispute settlement, see “Historic development of the WT O~~
~~dispute settlement system,” https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c2s1p1_e.htm.~~
~~12 WT O, World Trade Report 2007, pp. 201-209.~~
~~13 WT O, World Trade Statistical Review 2018, https://www.wto.org/english/res_e/statis_e/wts2018_e/wts2018_e.pdf.~~
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During the first trade round held in Geneva in 1947, members negotiated a 20% reciprocal tariff During the first trade round held in Geneva in 1947, members negotiated a 20% reciprocal tariff
reduction on industrial products, and made further cuts in subsequent rounds. The Tokyo Round reduction on industrial products, and made further cuts in subsequent rounds. The Tokyo Round
represented the first attempt to reform the trade rules that had existed unchanged since 1947, by represented the first attempt to reform the trade rules that had existed unchanged since 1947, by
including issues and policies that could distort international trade. As a result, Tokyo Round including issues and policies that could distort international trade. As a result, Tokyo Round
negotiators established several plurilateral codes dealing with nontariff issues such as negotiators established several plurilateral codes dealing with nontariff issues such as
antidumping, subsidies, standards or technical barriers to trade, import licensing, customs antidumping, subsidies, standards or technical barriers to trade, import licensing, customs
valuation, and government procurement. valuation, and government procurement.1412 Countries could choose which, if any, of these codes Countries could choose which, if any, of these codes
10 WT O, World Trade Report 2007, pp. 201-209. 11 WT O, World Trade Statistical Review 2021. 12 WT O, “Pre-WTO legal texts,” https://www.wto.org/english/docs_e/legal_e/prewto_legal_e.htm. Congressional Research Service 4 World Trade Organization: Overview and Future Direction they wished to adopt. While the United States agreed to al of the codes, the majority of GATT they wished to adopt. While the United States agreed to al of the codes, the majority of GATT
signatories, including most developing countries, chose not to sign the codes. signatories, including most developing countries, chose not to sign the codes.1513
The Uruguay Round, which took eight years to negotiate (1986-1994), proved to be the most The Uruguay Round, which took eight years to negotiate (1986-1994), proved to be the most
comprehensive GATT round. This round further lowered tariffs and liberalized trade in areas that comprehensive GATT round. This round further lowered tariffs and liberalized trade in areas that
had eluded previous negotiators, notably agriculture and textiles and apparel. Several codes were had eluded previous negotiators, notably agriculture and textiles and apparel. Several codes were
amended and turned into multilateral commitments accepted by al members.amended and turned into multilateral commitments accepted by al members.1614 It also extended It also extended
rules to new areas such as services, trade-related investment measures, and intel ectual property rules to new areas such as services, trade-related investment measures, and intel ectual property
rights. It created a trade policy review mechanism, which periodical y examines each member’s rights. It created a trade policy review mechanism, which periodical y examines each member’s
trade policies and practices. Significantly, the Uruguay Round created the WTO as a legal trade policies and practices. Significantly, the Uruguay Round created the WTO as a legal
international organization charged with administering a revised and stronger dispute settlement international organization charged with administering a revised and stronger dispute settlement
mechanism—a principal U.S. negotiating objective (see mechanism—a principal U.S. negotiating objective (see text box)—as wel as many new trade )—as wel as many new trade
agreements adopted during the long negotiation. For the most part, the Uruguay Round agreements adopted during the long negotiation. For the most part, the Uruguay Round
agreements were accepted as a agreements were accepted as a single package or or single undertaking, meaning that al participants , meaning that al participants
and future WTO members were required to subscribe to al the multilateral agreements. and future WTO members were required to subscribe to al the multilateral agreements.
U.S. Trade Negotiating Objectives for Uruguay Round
U.S. trade negotiating objectives for the Uruguay Round were set by Congress in the Omnibus Trade and U.S. trade negotiating objectives for the Uruguay Round were set by Congress in the Omnibus Trade and
Competitiveness Act of 1988 (P.L. 100-418), including the fol owing: Competitiveness Act of 1988 (P.L. 100-418), including the fol owing:
 
Market access. Obtain more open, equitable, and reciprocal market access in other countries; Obtain more open, equitable, and reciprocal market access in other countries;
reduced tariffs and nontariff barriers; and more effective system of international trade disciplines. reduced tariffs and nontariff barriers; and more effective system of international trade disciplines.
 
Dispute settlement. Adopt more effective and expeditious DS mechanisms and procedures, and Adopt more effective and expeditious DS mechanisms and procedures, and
enable better enforcement of U.S. rights. enable better enforcement of U.S. rights.
 
Transparency. Ensure broader application of the principle of transparency and clarification of the Ensure broader application of the principle of transparency and clarification of the
costs and benefits of other countries’ trade policy actions. costs and benefits of other countries’ trade policy actions.
 
Development. Ensure developing countries promote the “ful est possible measure of responsibility” Ensure developing countries promote the “ful est possible measure of responsibility”
for maintaining an open trading system by providing reciprocal benefits and assuming equal obligations. for maintaining an open trading system by providing reciprocal benefits and assuming equal obligations.
 
Agriculture. Obtain more open and fair conditions of trade in agriculture, and increase U.S. exports Obtain more open and fair conditions of trade in agriculture, and increase U.S. exports
by reducing barriers to trade and production subsidies. by reducing barriers to trade and production subsidies.
 
Unfair trade practices. Discourage use of trade-distorting practices, nontariff measures, and other Discourage use of trade-distorting practices, nontariff measures, and other
unfair trading practices, such as subsidies in several sectors. unfair trading practices, such as subsidies in several sectors.
 
Services. Develop international rules in trade in services and reduce or eliminate barriers. Develop international rules in trade in services and reduce or eliminate barriers.
 
Intellectual property. Establish GATT obligations on adequate protection and effective Establish GATT obligations on adequate protection and effective
enforcement for IP, including copyrights, patents, and trade secrets. enforcement for IP, including copyrights, patents, and trade secrets.
 
Foreign direct investment. Reduce trade-distorting barriers to FDI, expand principle of national Reduce trade-distorting barriers to FDI, expand principle of national
treatment, and develop international y agreed rules. treatment, and develop international y agreed rules.
 
Worker rights. Promote respect for worker rights. Promote respect for worker rights.

~~14 WT O, “Pre-WTO legal texts,” https://www.wto.org/english/docs_e/legal_e/prewto_legal_e.htm.~~
15 World Trade Organization The WTO succeeded the GATT in 1995. In contrast to the GATT, the WTO was created as a permanent organization. But as with the GATT, the WTO Secretariat and support staff is smal by international standards and lacks independent power. The power to write rules and negotiate 13 Douglas A. Irwin, Douglas A. Irwin, Free Trade Under Fire, Princeton University Press, 2009, p. 226. Princeton University Press, 2009, p. 226.
1614 Four agreements remained “plurilateral,” including on government procurement, bovine meat, civil aircraft and dairy Four agreements remained “plurilateral,” including on government procurement, bovine meat, civil aircraft and dairy
products. See https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm. products. See https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm.
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~~World Trade Organization~~
~~The WTO succeeded the GATT in 1995. In contrast to the GATT, the WTO was created as a~~
~~permanent organization. But as with the GATT, the WTO Secretariat and support staff is smal by~~
~~international standards and lacks independent power. The power to write rules and negotiate~~
future trade liberalization resides specifical y with the member countries, and not the WTO future trade liberalization resides specifical y with the member countries, and not the WTO
director-general (DG) or staff. Thus, the WTO is referred to as a member-driven organization.director-general (DG) or staff. Thus, the WTO is referred to as a member-driven organization.17
15 The Secretariat’s primary role is to provide technical and professional support to members on The Secretariat’s primary role is to provide technical and professional support to members on
WTO activities and negotiations, monitor and analyze global trade developments, and organize WTO activities and negotiations, monitor and analyze global trade developments, and organize
Ministerial Conferences.Ministerial Conferences.
~~Decisions within the WTO are made by consensus~~ Notwithstanding the lack of formal power of the Secretariat, the DG is an advocate for the global trading system and often wields “soft power,” relying on diplomatic and political heft in helping members build consensus or break stalemates—an increasingly difficult task in recent years.16 As a result, some observers have argued that the Secretariat should be granted more authority to table proposals and advance new rules.17 Decisions within the WTO are made by consensus of members, although majority voting can be used in , although majority voting can be used in
limited circumstances. The highest-level body in the WTO is the Ministeriallimited circumstances. The highest-level body in the WTO is the Ministerial Conference, Conference, which is which is
the body of politicalthe body of political representatives (trade ministers) from each member countryrepresentatives (trade ministers) from each member country (Figure 1). The ). The
General Council is the body that oversees body that oversees ~~the~~ day-to-day operations day-to-day operations ~~of the WTO is the General Council, which~~and it consists consists
~~of a representative~~of representatives from each member country. Many other councils and committees deal with from each member country. Many other councils and committees deal with
particular issues, and members of these bodies are also national representatives. particular issues, and members of these bodies are also national representatives.
In general, the WTO has three broad functions: administering the rules and disciplines of the In general, the WTO has three broad functions: administering the rules and disciplines of the
trading system; establishing new rules through negotiations; and resolving disputes between trading system; establishing new rules through negotiations; and resolving disputes between
member states member states. 15 Ibid, p. 239. 16 David T inline and T atiana Lacerda Prazeres, “5 reasons why the role of WT O Director -General matters,” World Economic Forum, June 5, 2020. 17 Doug Palmer, “U.S. dismisses ‘invalid’ WT O Appellate Body ruling,” Politico Pro Trade, April 23, 2020. Congressional Research Service 6 World Trade Organization: Overview and Future Direction Figure 1. WTO Structure Source: WTO, https://www.wto.org/english/thewto_e/whatis_e/tif_e/organigram_e.pdf. .
Administering Trade Rules
The WTO administers the global rules and principles negotiated and signed by its members. The The WTO administers the global rules and principles negotiated and signed by its members. The
main purpose of the rules is “to ensure that trade flows as smoothly, predictably, and freely as main purpose of the rules is “to ensure that trade flows as smoothly, predictably, and freely as
possible.”18 WTO rules and agreements are essential y contracts that bind governments to keep possible.”18 WTO rules and agreements are essential y contracts that bind governments to keep
their trade policies within agreed limits. A number of fundamental principles guide WTO rules. their trade policies within agreed limits. A number of fundamental principles guide WTO rules.
In In general, as with the GATT, these key principles are nondiscrimination general, as with the GATT, these key principles are nondiscrimination (MFN treatment and national treatment) and the notion that freer and the notion that freer
trade through the gradual reduction of trade barriers strengthens the world economy and increases trade through the gradual reduction of trade barriers strengthens the world economy and increases
prosperity for each member. The prosperity for each member. The ~~WTO agreements apply the GATT principles of~~
~~nondiscrimination as discussed above: MFN treatment and national treatment. The~~ trade barriers trade barriers
concerned include tariffs, quotas, and a growing range of nontariff measures, such as product concerned include tariffs, quotas, and a growing range of nontariff measures, such as product
standards, food safety measures, subsidies, and discriminatory domestic regulations. The standards, food safety measures, subsidies, and discriminatory domestic regulations. The
fundamental principle of reciprocity is also behind members’ fundamental principle of reciprocity is also behind members’ overal aim of “entering into aim of “entering into reciprocal and reciprocal and
mutual y advantageous arrangements directed to the substantial reduction of tariffs mutual y advantageous arrangements directed to the substantial reduction of tariffs 18 “T he WT O,” https://www.wto.org/english/thewto_e/thewto_e.htm. Congressional Research Service 7 link to page 25 link to page 25 link to page 14 link to page 14 World Trade Organization: Overview and Future Direction and other ~~and other~~
barriers to trade and to the elimination of discriminatory treatment in international trade barriers to trade and to the elimination of discriminatory treatment in international trade
relations.”19 relations.”19
Transparency is another key principle of the WTO, which aims to reduce information asymmetry Transparency is another key principle of the WTO, which aims to reduce information asymmetry
in markets, ensure trust, and, therefore, foster greater stability in the global trading system. in markets, ensure trust, and, therefore, foster greater stability in the global trading system.
Transparency commitments are incorporated into individual WTO agreements. Active Transparency commitments are incorporated into individual WTO agreements. Active
participation in various WTO committees also aims to ensure that agreements are monitored and participation in various WTO committees also aims to ensure that agreements are monitored and
that members are held accountable for their actions. For example, members are required to that members are held accountable for their actions. For example, members are required to
publish their trade practices and policies and notify new or amended regulations to WTO publish their trade practices and policies and notify new or amended regulations to WTO

~~17 Ibid, p. 239.~~
~~18 “T he WT O,” https://www.wto.org/english/thewto_e/thewto_e.htm.~~
~~19 Preamble to the Marrakesh Agreement Establishing the World T rade Organization, https://www.wto.org/english/~~
~~docs_e/legal_e/04-wto_e.htm.~~
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committees. Regular trade policy reviews of each member’s trade policies and practices provide a committees. Regular trade policy reviews of each member’s trade policies and practices provide a
deeper dive into an economy’s implementation of its commitments—seedeeper dive into an economy’s implementation of its commitments—see “Trade Policy Review
Mechanism (Annex 3).”20 In addition, the WTO’s annual trade monitoring report takes stock of 20 In addition, the WTO’s annual trade monitoring report takes stock of
trade-restrictive and trade-facilitating measures of the collective body of WTO members. trade-restrictive and trade-facilitating measures of the collective body of WTO members.
While opening markets can encourage competition, innovation, and growth, it can also entail While opening markets can encourage competition, innovation, and growth, it can also entail
adjustments for workers and firms. Trade liberalization can also be more difficult for the least-adjustments for workers and firms. Trade liberalization can also be more difficult for the least-
developed countries (LDCs) and countries transitioning to market economies. WTO agreements developed countries (LDCs) and countries transitioning to market economies. WTO agreements
thus al ow countries to lower trade barriers gradual y. Developing countries and sensitive sectors thus al ow countries to lower trade barriers gradual y. Developing countries and sensitive sectors
in particular are usual y given longer transition periods to fulfil their obligations in particular are usual y given longer transition periods to fulfil their obligations~~; developing~~. Developing
countries make up about two-thirds of the WTO membershipcountries make up about two-thirds of the WTO membership~~—WTO~~, and members self-designate members self-designate their
developing country statusdeveloping country status, which has become a point of contention in recent years.21 The WTO also supplements .21 The WTO also supplements ~~this~~ so-cal ed “special and differential” so-cal ed “special and differential”
treatment (SDT) for developing countries with trade capacity-building measures to provide treatment (SDT) for developing countries with trade capacity-building measures to provide
technical assistance and help implement WTO obligations, and with permissions for technical assistance and help implement WTO obligations, and with permissions for developed countries to countries to
extend nonreciprocal, trade extend nonreciprocal, trade preference programs. preference programs.
In WTO parlance, when countries agree to open their markets further to foreign goods and In WTO parlance, when countries agree to open their markets further to foreign goods and
services, they “bind” their commitments or agree not to raise them. For goods, these bindings services, they “bind” their commitments or agree not to raise them. For goods, these bindings
amount to ceilings on tariff rates.amount to ceilings on tariff rates. ~~A country can change its bindings, but only after negotiating~~
~~with its trading partners, which could entail compensating them for loss of trade.~~22 As shown As shown inin
Figure 2, one of the achievements of the Uruguay Round was to increase the amount of trade one of the achievements of the Uruguay Round was to increase the amount of trade
under binding commitments. Bound tariff rates are not necessarily the rates WTO members apply under binding commitments. Bound tariff rates are not necessarily the rates WTO members apply
in practice to imports from trading partners; in practice to imports from trading partners; ~~so-cal ed~~ applied MFN rates can be applied MFN rates can be and are often lower than bound lower than bound
rates, as reflected in tariff reductions under the GATTrates, as reflected in tariff reductions under the GATT~~. Figure 3 shows average applied MFN~~
~~tariffs worldwide. In 2019, the United States simple average MFN tariff was 3.3%.~~
. A key issue in the Doha Round for the United States was lowering A key issue in the Doha Round for the United States was lowering major developing countries’ major developing countries’
relatively high bound tariffs to below their applied rates in relatively high bound tariffs to below their applied rates in ~~practice~~order to achieve commercial y to achieve commercial y
meaningful new market accessmeaningful new market access. Figure 3 shows average applied MFN tariffs worldwide. In 2019, the United States simple average MFN tariff was 3.3%. .
Promising not to raise a trade barrier can have a significant economic effect because the promise Promising not to raise a trade barrier can have a significant economic effect because the promise
provides traders and investors certainty and predictability in the commercial environment. A provides traders and investors certainty and predictability in the commercial environment. A
growing body of economic literature suggests certainty in the stability of tariff rates may be just growing body of economic literature suggests certainty in the stability of tariff rates may be just
as important for increasing global trade as reduction in trade barriers.as important for increasing global trade as reduction in trade barriers.2223 This proved particularly 19 Preamble to the Marrakesh Agreement Establishing the World T rade Organization, https://www.wto.org/english/docs_e/legal_e/04-wto_e.htm. ~~This proved particularly~~
~~important during the 2009 global economic downturn. Unlike in the 1930s, when countries~~
~~reacted to slumping world demand by raising tariffs and other trade barriers, the WTO reported~~
~~that its 153 members (at the time), accounting for 90% of world trade, by and large did not resort~~
~~to protectionist measures in response to the crisis.23~~

20 For more information, see https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm11_e.htm. 20 For more information, see https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm11_e.htm.
21 T he WT O does not specify criteria for “developing” country status, though a sub-group, least-developed countries, 21 T he WT O does not specify criteria for “developing” country status, though a sub-group, least-developed countries,
are defined under United Nations criteria. See, “Who are the developing countries in the WT O?” https://www.wto.org/are defined under United Nations criteria. See, “Who are the developing countries in the WT O?” https://www.wto.org/
english/tratop_e/devel_e/d1who_e.htm. english/tratop_e/devel_e/d1who_e.htm.
22 22 A country can change its bindings, but only after negotiating with its trading partners, which could entail compensating them for loss of trade. 23 See for example, Kyle Handley and Nuno Limao, “Policy Uncertainty, T rade, and Welfare: T heory and Evidence for See for example, Kyle Handley and Nuno Limao, “Policy Uncertainty, T rade, and Welfare: T heory and Evidence for
China and the United States,” China and the United States,” American Economic Review, vol. 107, no. 9 (2017). , vol. 107, no. 9 (2017).
~~23 WT O, “ Overview of Developments in the International Trading Environment,” WT/TPR/OV/12, November 18,~~
~~2009, p. 4.~~
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~~Figure 1. WTO Structure~~

~~Source:~~ ~~WTO, https://www.wto.org/english/thewto_e/whatis_e/tif_e/organigram_e.pdf.~~important during the 2009 global economic downturn. Unlike in the 1930s, when countries reacted to slumping world demand by raising tariffs and other trade barriers, the WTO reported that its 153 members (at the time), accounting for 90% of world trade, by and large did not resort to protectionist measures in response to the crisis.24
Figure 2. Uruguay Round Impact on Tariff Bindings

Source: Data from WTO, Data from WTO, Understanding the WTO: Basics,, http://www.wto.org. Created by CRS. http://www.wto.org. Created by CRS.
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Notes: Percentages reflect shares of total tariff lines; not trade-weighted. The Uruguay Round was 1986-1994. Percentages reflect shares of total tariff lines; not trade-weighted. The Uruguay Round was 1986-1994.
Figure 3. Average Applied Most-Favored Nation (MFN) Tariffs

Source: WTO, 2020, https://www.wto.org/english/res_e/reser_e/tariff_profiles_e.htm. Created by CRS. WTO, 2020, https://www.wto.org/english/res_e/reser_e/tariff_profiles_e.htm. Created by CRS.
The promotion of fair and undistorted competition is another important principle of the WTO. The promotion of fair and undistorted competition is another important principle of the WTO.
While the WTO is often described as a “free trade” organization, numerous rules are concerned While the WTO is often described as a “free trade” organization, numerous rules are concerned
with ensuring transparent and non-discriminatory competition. In addition to nondiscrimination, with ensuring transparent and non-discriminatory competition. In addition to nondiscrimination,
MFN treatment and national treatment concepts aim to promote “fair” conditions of trade. WTO MFN treatment and national treatment concepts aim to promote “fair” conditions of trade. WTO
~~rules on subsidies and antidumping in particular aim to promote fair competition in trade through~~
~~recourse to trade remedies, or temporary restriction of imports, in response to al eged unfair trade~~
~~practices—see “Trade Remedies.”24 For example, when a foreign company receives a prohibited~~
~~subsidy for exporting as defined in WTO agreements, WTO rules al ow governments to impose~~
~~duties to offset any unfair advantage found to cause injury to their domestic industries.~~ 24 WT O, “ Overview of Developments in the International Trading Environment,” WT/TPR/OV/12, November 18, 2009, p. 4. Congressional Research Service 9 link to page 21 link to page 42 link to page 26 link to page 26 World Trade Organization: Overview and Future Direction rules on subsidies and antidumping for example, were designed to promote a more level field of competition in trade through recourse to trade remedies, or temporary restriction of imports, in response to al eged unfair trade practices—see “Trade Remedies.”25 25
The scope of the WTO is broader than the GATT because, in addition to goods, it administers The scope of the WTO is broader than the GATT because, in addition to goods, it administers
multilateral agreements on agriculture, services, intel ectual property, and certain trade-related multilateral agreements on agriculture, services, intel ectual property, and certain trade-related
investment measures. These newer rules in particular are forcing the WTO and its DS system to investment measures. These newer rules in particular are forcing the WTO and its DS system to
deal with complex issues that go beyond tariff border measures. deal with complex issues that go beyond tariff border measures.
Establishing New Rules and Trade Liberalization through Negotiations
As the GATT did for 47 years, the WTO provides a negotiating forum where members reduce As the GATT did for 47 years, the WTO provides a negotiating forum where members reduce
barriers and try to sort out their trade problems. Negotiations can involve a few countries, many barriers and try to sort out their trade problems. Negotiations can involve a few countries, many
countries, or al memberscountries, or al members, and may target specific sectors. As part of the post-Uruguay Round . As part of the post-Uruguay Round ~~agenda~~agenda at the WTO, negotiations covering basic , negotiations covering basic
telecommunications and financial services were completed in 1997telecommunications and financial services were completed in 1997 ~~under the auspices of the~~
~~WTO~~. Groups of WTO members also negotiated deals to eliminate tariffs on certain . Groups of WTO members also negotiated deals to eliminate tariffs on certain information information
technology products and improve rules and procedures for government procurement. technology products and improve rules and procedures for government procurement. A more ~~A more~~

~~24 WT O, “Anti-dumping, subsidies, safeguards: contingencies, etc.” https://www.wto.org/english/thewto_e/whatis_e/~~
~~tif_e/agrm8_e.htm.~~
~~25 See CRS Report R46296, Trade Remedies: Antidumping, by Christopher A. Casey, and CRS In Focus IF10018,~~
Trade Rem edies: Antidum ping and Countervailing Duties, by Vivian C. Jones and Christopher A. Casey .
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recent significant accomplishment was the WTO Trade Facilitation Agreement recent significant accomplishment was the WTO Trade Facilitation Agreement in (TFA) in 2017, ~~2017,~~
addressing customs and logistics barriers. addressing customs and logistics barriers.
The latest round of multilateral negotiations, the Doha Development Agenda (DDA), or Doha The latest round of multilateral negotiations, the Doha Development Agenda (DDA), or Doha
Round, launched in 2001, Round, launched in 2001, ~~has~~ achieved limited progressachieved limited progress ~~to date~~, as the agenda proved difficult , as the agenda proved difficult
and contentious. Despite a lack of consensus on its future, many view the round as effectively and contentious. Despite a lack of consensus on its future, many view the round as effectively
over.26 over.26 ~~The~~Broadly, the negotiations stal ed over issues such as reducing domestic subsidies and opening negotiations stal ed over issues such as reducing domestic subsidies and opening
markets further in agriculture, industrial tariffs, nontariff barriers, services, intel ectual property markets further in agriculture, industrial tariffs, nontariff barriers, services, intel ectual property
rights, and SDT for developing countries. The negotiations exposed fissures between developed rights, and SDT for developing countries. The negotiations exposed fissures between developed
countries, led by the United States and EU, and developing countries, led by China, Brazil, and countries, led by the United States and EU, and developing countries, led by China, Brazil, and
India, who have come to play a more prominent role in global trade. India, who have come to play a more prominent role in global trade.
The inability of countries to achieve the objectives of the Doha Round prompted many to The inability of countries to achieve the objectives of the Doha Round prompted many to
question the utility of the WTO as a negotiating forum, as wel as the practicality of conducting a question the utility of the WTO as a negotiating forum, as wel as the practicality of conducting a
large-scale negotiation involving 164 participants with consensus and the single undertaking as large-scale negotiation involving 164 participants with consensus and the single undertaking as
guiding principles. At the same time, members have advanced several proposals for moving guiding principles. At the same time, members have advanced several proposals for moving
forward from Doha and making the WTO a stronger forum for negotiations in the future.27 (See forward from Doha and making the WTO a stronger forum for negotiations in the future.27 (See
“Policy Issues and Future Direction.”) .”)
With some exceptions, such as the With some exceptions, such as the ~~Trade Facilitation Agreement~~TFA, the WTO arguably has been , the WTO arguably has been
more successful in the negotiation of discrete items to which not al parties must agree or be more successful in the negotiation of discrete items to which not al parties must agree or be
bound (see bound (see “Plurilateral Agreements (Annex 4)””). Some view these plurilaterals as a more ). Some view these plurilaterals as a more
promising negotiating approach for the WTO moving forward given their flexibility,promising negotiating approach for the WTO moving forward given their flexibility, as they can as they can
involve subsets of more “like-minded” partners and advance parts of the global trade agenda. involve subsets of more “like-minded” partners and advance parts of the global trade agenda.
Some experts have raised concerns, however, that this approach could lead to “free riders”—those Some experts have raised concerns, however, that this approach could lead to “free riders”—those
who benefit from the agreement but do not make commitments—as agreements on an MFN basis, who benefit from the agreement but do not make commitments—as agreements on an MFN basis,
or otherwise, could or otherwise, could isolate some countries who do not participate and may face trade restrictions isolate some countries who do not participate and may face trade restrictions
or disadvantages as a result. Others argue that only through the single undertaking approach with or disadvantages as a result. Others argue that only through the single undertaking approach with
multiple issues multiple issues under negotiation can there be trade-offs sufficient to bring al members on board. under negotiation can there be trade-offs sufficient to bring al members on board.
25 WT O, “Anti-dumping, subsidies, safeguards: contingencies, etc.” https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm. 26 For example, see “T he Doha round finally dies a merciful death,” Financial Times, December 21, 2015. 27 See CRS Report RL32060, World Trade Organization Negotiations: The Doha Development Agenda, by Ian F. Fergusson; and CRS Report RS22927, WTO Doha Round: Im plications for U.S. Agriculture, by Randy Schnepf. Congressional Research Service 10 link to page 22 link to page 22 World Trade Organization: Overview and Future Direction Resolving Disputes
The third overal function of the WTO is to provide a mechanism to enforce its rules and settle The third overal function of the WTO is to provide a mechanism to enforce its rules and settle
trade disputes. A central goal of the United States during the Uruguay Round negotiations was to trade disputes. A central goal of the United States during the Uruguay Round negotiations was to
strengthen the DS mechanism that existed under the GATT. While the GATT’s process for strengthen the DS mechanism that existed under the GATT. While the GATT’s process for
settling disputes between member countries was informal, ad hoc, and voluntary, the WTO DS settling disputes between member countries was informal, ad hoc, and voluntary, the WTO DS
process is more formalized and enforceable.28 Under the GATT, panel proceedings could take process is more formalized and enforceable.28 Under the GATT, panel proceedings could take
years to complete; any defending party could block an unfavorable ruling; failure to implement a years to complete; any defending party could block an unfavorable ruling; failure to implement a
ruling carried no consequence; and the process did not cover al the agreements. Under the WTO, ruling carried no consequence; and the process did not cover al the agreements. Under the WTO,
there are strict timetables—though not always followed—for panel proceedings; the defending there are strict timetables—though not always followed—for panel proceedings; the defending
party cannot block rulings; there is one comprehensive DS process covering al the agreements; party cannot block rulings; there is one comprehensive DS process covering al the agreements;
and the rulings are enforceable. WTO adjudicative bodies can authorize retaliation if a member and the rulings are enforceable. WTO adjudicative bodies can authorize retaliation if a member
fails to implement a ruling or provide compensation. Yet, under both systems, considerable fails to implement a ruling or provide compensation. Yet, under both systems, considerable
emphasis is placed on having the member countries attempt to resolve disputes through emphasis is placed on having the member countries attempt to resolve disputes through

~~26 For example, see “T he Doha round finally dies a merciful death,” Financial Times, December 21, 2015.~~
~~27 See CRS Report RL32060, World Trade Organization Negotiations: The Doha Development Agenda , by Ian F.~~
~~Fergusson; and CRS Report RS22927, WTO Doha Round: Im plications for U.S. Agriculture, by Randy Schnepf.~~
~~28 T his stronger DS system was created, in part due to demands from Congress based on concerns that the GAT T~~
~~approach was ineffective in eliminating barriers to U.S. exports. In fact, it was first princ ipal trade negotiating objective~~
~~set out in the Omnibus T rade and Competitiveness Act of 1988, P.L. 100-418, §1101(b)(1), 19 U.S.C. 2901(b)(1).~~
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consultations and negotiations, rather than relying on formal panel rulings. See consultations and negotiations, rather than relying on formal panel rulings. See “Dispute
Settlement Understanding (DSU)” for more detail on WTO procedures and dispute trends. for more detail on WTO procedures and dispute trends.
The United States and the WTO
The statutory basis for U.S. membership in the WTO is the Uruguay Round Agreements Act The statutory basis for U.S. membership in the WTO is the Uruguay Round Agreements Act
(URAA, P.L. 103-465), which approved the trade agreements resulting from the Uruguay Round. (URAA, P.L. 103-465), which approved the trade agreements resulting from the Uruguay Round.
The legislation contained general provisions on: The legislation contained general provisions on:
 approval and entry into force of the Uruguay Round Agreements, and the  approval and entry into force of the Uruguay Round Agreements, and the
relationship of the agreements to U.S. laws (Section 101 of the act); relationship of the agreements to U.S. laws (Section 101 of the act);
 authorities to implement the results of current and future tariff negotiations  authorities to implement the results of current and future tariff negotiations
(Section 111 of the act); (Section 111 of the act);
 oversight of activities of the WTO (Sections 121-130 of the act);  oversight of activities of the WTO (Sections 121-130 of the act);
 procedures regarding implementation of DS proceedings affecting the United  procedures regarding implementation of DS proceedings affecting the United
States (Section 123 of the act); States (Section 123 of the act);
 objectives regarding extended Uruguay Round negotiations;  objectives regarding extended Uruguay Round negotiations;
 statutory modifications to implement specific agreements, including:  statutory modifications to implement specific agreements, including:
 Antidumping Agreement;  Antidumping Agreement;
 Agreement on Subsidies and Countervailing Measures (ASCM);  Agreement on Subsidies and Countervailing Measures (ASCM);
 Safeguards Agreement;  Safeguards Agreement;
 Agreement on Government Procurement (GPA);  Agreement on Government Procurement (GPA);
 Technical Barriers to Trade (TBT) (product standards);  Technical Barriers to Trade (TBT) (product standards);
 Agreement on Agriculture; and  Agreement on Agriculture; and
 Agreement on Trade-Related Aspects of Intel ectual Property Rights (TRIPS).  Agreement on Trade-Related Aspects of Intel ectual Property Rights (TRIPS).
U.S. priorities and objectives for the GATT/WTO have been reflected in various trade promotion U.S. priorities and objectives for the GATT/WTO have been reflected in various trade promotion
authority (TPA) legislation since 1974. For example, the Omnibus Trade and Competitiveness Act authority (TPA) legislation since 1974. For example, the Omnibus Trade and Competitiveness Act
of 1988 specifical y contained provisions directing U.S. negotiators to negotiate disciplines on of 1988 specifical y contained provisions directing U.S. negotiators to negotiate disciplines on
agriculture, DS, intel ectual property, trade in services, and safeguards, among others, that agriculture, DS, intel ectual property, trade in services, and safeguards, among others, that
28 T his stronger DS system was created, in part due to demands from Congress based on concerns that the GAT T approach was ineffective in eliminating barriers to U.S. exports. In fact, it was first principal trade negotiating objective set out in the Omnibus T rade and Competitiveness Act of 1988, P.L. 100-418, §1101(b)(1), 19 U.S.C. 2901(b)(1). Congressional Research Service 11 World Trade Organization: Overview and Future Direction resulted in WTO agreements in the Uruguay Round. The Trade Act of 2002 provided U.S. resulted in WTO agreements in the Uruguay Round. The Trade Act of 2002 provided U.S.
objectives for the Doha Round, including seeking to expand commitments on e-commerce and objectives for the Doha Round, including seeking to expand commitments on e-commerce and
clarifications to the WTO DS system. The 2015 TPAclarifications to the WTO DS system. The 2015 TPA, (which expired in July 2021) perhaps reflecting the impasse of the Doha perhaps reflecting the impasse of the Doha
Round, was more muted, seeking full implementation of existing agreements, enhanced Round, was more muted, seeking full implementation of existing agreements, enhanced
compliance by members with their WTO obligations, and new compliance by members with their WTO obligations, and new negotiations to extend negotiations to extend
commitments to new areas.29 commitments to new areas.29
Section 125(b) of the URAA sets procedures for congressional disapproval of WTO participation. Section 125(b) of the URAA sets procedures for congressional disapproval of WTO participation.
It specifies that Congress’s approval of the WTO agreement shal cease to be effective “if and It specifies that Congress’s approval of the WTO agreement shal cease to be effective “if and
only if” Congress enacts a privileged joint resolution cal ing for withdrawal. Congress may vote only if” Congress enacts a privileged joint resolution cal ing for withdrawal. Congress may vote
every five years on withdrawal; resolutions were introduced in 2000 and 2005, however neither every five years on withdrawal; resolutions were introduced in 2000 and 2005, however neither
passed.30 The debates in 2000 and 2005 were characterized by concerns about certain dispute passed.30 The debates in 2000 and 2005 were characterized by concerns about certain dispute
settlement cases, especial y adverse decisions on trade remedies, and beliefs that WTO settlement cases, especial y adverse decisions on trade remedies, and beliefs that WTO

~~29 See CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F. Fergusson and~~
~~Christopher M. Davis.~~
~~30 For the 2000 and 2005 resolutions, see https://www.congress.gov/bill/106th-congress/house-joint-resolution/90/~~
~~actions and https://www.congress.gov/bill/109th-congress/house-joint -resolution/27/actions.~~
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~~membership impinges U.S. sovereignty. WTO supporters emphasized the economic benefits and~~
~~value of an open and rules-based trading system. Several factors shaped past debates. In 2000,~~
~~China had yet to join the WTO. In 2005, China had acceded but was not yet playing a pivotal~~
~~role, and the Doha Round, launched in 2001, was actively being negotiated~~membership impinges U.S. sovereignty. WTO supporters emphasized the economic benefits and value of an open and rules-based trading system. Several factors shaped past debates. China did not join the WTO until December 2001 and was not yet very active in setting the WTO agenda at that time. More recently, U.S. . More recently, U.S.
concerns with the WTO have grown in some quarters and perception of WTO’s benefits have concerns with the WTO have grown in some quarters and perception of WTO’s benefits have
dimmed among some Members.31 In May 2020, withdrawal resolutions were introduced during dimmed among some Members.31 In May 2020, withdrawal resolutions were introduced during
the 116th Congress by Representatives DeFazio and Pal one (H.J.Res. 89) and by Senator Hawley the 116th Congress by Representatives DeFazio and Pal one (H.J.Res. 89) and by Senator Hawley
~~(S.J.Res. 71).32 A rule change proposed by the House Rules Committee and adopted by the~~
~~House, as wel as by an interpretation of the statute reportedly made by the Senate~~
~~Parliamentarian, are likely to prevent votes from occurring on the measures.33~~(S.J.Res. 71); the measures did not proceed to a vote, however.32
WTO Agreements
The WTO member-led body negotiates, administers, and settles disputes for agreements that The WTO member-led body negotiates, administers, and settles disputes for agreements that
cover goods, agriculture, services, certain trade-related investment measures, and intel ectual cover goods, agriculture, services, certain trade-related investment measures, and intel ectual
property rights, among other issues. The WTO core principles are enshrined in a series of trade property rights, among other issues. The WTO core principles are enshrined in a series of trade
agreements that include rules and commitments specific to each agreement, subject to various agreements that include rules and commitments specific to each agreement, subject to various
exceptions. The GATT/WTO system of agreements has expanded rulemaking to several areas of exceptions. The GATT/WTO system of agreements has expanded rulemaking to several areas of
international trade, but does not extensively cover some key areas, including multilateral international trade, but does not extensively cover some key areas, including multilateral
investment rules, trade-related labor or environment issues, and emerging issues like digital trade investment rules, trade-related labor or environment issues, and emerging issues like digital trade
or the commercial role of state-owned enterprises. or the commercial role of state-owned enterprises.
Marrakesh Agreement Establishing the World Trade Organization
The Marrakesh Agreement is the umbrel a agreement under which the various agreements, The Marrakesh Agreement is the umbrel a agreement under which the various agreements,
annexes, commitment schedules, and understandings reside. The Marrakesh Agreement itself annexes, commitment schedules, and understandings reside. The Marrakesh Agreement itself
created the WTO as a legal international organization and sets forth its functions, structure, created the WTO as a legal international organization and sets forth its functions, structure,
secretariat, budget procedures, decisionmaking, accession, entry-into-force, withdrawal, and other secretariat, budget procedures, decisionmaking, accession, entry-into-force, withdrawal, and other
provisions. The Agreement contains four annexes. The three major substantive areas of provisions. The Agreement contains four annexes. The three major substantive areas of
commitments undertaken by the members are contained in Annex 1. commitments undertaken by the members are contained in Annex 1.
29 See CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F. Fergusson and Christopher M. Davis. 30 For the 2000 and 2005 resolutions, see https://www.congress.gov/bill/106th-congress/house-joint-resolution/90/actions and https://www.congress.gov/bill/109th-congress/house-joint -resolution/27/actions. 31 For example, see Senator Josh Hawley’s op-ed, “T he WT O Should be Abolished,” New York Times, May 5, 2020. 32 CRS Insight IN11399, The WTO Withdrawal Resolutions, by Ian F. Fergusson and Christ opher M. Davis. Congressional Research Service 12 link to page 18 link to page 14 World Trade Organization: Overview and Future Direction Multilateral Agreement on Trade in Goods (Annex 1A)
The Multilateral Agreement on Trade in Goods establishes the rules for trade in goods through The Multilateral Agreement on Trade in Goods establishes the rules for trade in goods through
sectoral or issue-specific agreements (sesectoral or issue-specific agreements (see Table 2). Its core is the GATT 1994, which includes . Its core is the GATT 1994, which includes
GATT 1947, the amendments, understanding, protocols, and decisions of the GATT from 1947 to GATT 1947, the amendments, understanding, protocols, and decisions of the GATT from 1947 to
1994, cumulatively known as the GATT-1994, cumulatively known as the GATT-acquis, as wel as six Understandings on Articles of the as wel as six Understandings on Articles of the
GATT 1947 negotiated in the Uruguay Round. In addition to clarifying the core WTO principles, GATT 1947 negotiated in the Uruguay Round. In addition to clarifying the core WTO principles,
each agreement contains sector- or issue-specific rules and principles. The schedule of each agreement contains sector- or issue-specific rules and principles. The schedule of
commitments identifies each member’s specific binding commitments on tariffs for goods in commitments identifies each member’s specific binding commitments on tariffs for goods in
general, and combinations of tariffs and quotas for some agricultural goods. Through a series of general, and combinations of tariffs and quotas for some agricultural goods. Through a series of
negotiating rounds, members agreed to the current level of trade liberalization negotiating rounds, members agreed to the current level of trade liberalization (Figure 2 above). above).

~~31 For example, see Senator Josh Hawley’s op-ed, “T he WT O Should be Abolished,” New York Times, May 5, 2020.~~
~~32 CRS Insight IN11399, The WTO Withdrawal Resolutions, by Ian F. Fergusson and Christopher M. Davis.~~
~~33 Doug Palmer, “New ruling quashes Hawley’s hope for Senate WT O withdrawal vote,” Politico, July 1, 2020.~~
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Table 2. Marrakesh Protocol to the GATT 1994

Agreement on Agreement on
Agreement on Agreement on
Agreement on Import Agreement on Import
Agreement on Trade- Agreement on Trade-
Agriculture Agriculture
Implementation of Implementation of
Licensing Procedures Licensing Procedures
Related Aspects of Related Aspects of
Article VI (Anti- Article VI (Anti-
Intel ectual Property Intel ectual Property
dumping) dumping)
Rights (TRIPS) Rights (TRIPS)

Agreement on the Agreement on the
Agreement on Agreement on
Agreement on Subsidies Agreement on Subsidies
Understanding on Rules Understanding on Rules
Application of Sanitary and Application of Sanitary and
Implementation of Implementation of
and Countervailing and Countervailing
and Procedures Governing and Procedures Governing
Phytosanitary Measures Phytosanitary Measures
Article VII (Customs Article VII (Customs
Measures Measures
the Settlement of Disputes the Settlement of Disputes
(SPS) (SPS)
Valuation) Valuation)

Agreement on Technical Agreement on Technical
Agreement on Agreement on
Agreement on Agreement on
Agreement on Trade Agreement on Trade
Barriers to Trade (TBT) Barriers to Trade (TBT)
Preshipment Inspection Preshipment Inspection
Safeguards Safeguards
in Civil Aircraft in Civil Aircraft

Agreement on Trade- Agreement on Trade-
Agreement on Rules of Agreement on Rules of
General Agreement General Agreement
Agreement on Agreement on
Related Investment Related Investment
Origin (ROO) Origin (ROO)
on Trade in Services on Trade in Services
Government Government
Measures (TRIMS) Measures (TRIMS)
(GATS) (GATS)
Procurement Procurement
Source: CRS based on WTO. CRS based on WTO.
In the last four rounds of negotiations, WTO members aimed to expand international trade rules In the last four rounds of negotiations, WTO members aimed to expand international trade rules
beyond tariff reductions to tackle barriers in other areas. For example, agreements on technical beyond tariff reductions to tackle barriers in other areas. For example, agreements on technical
barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures aim to protect a country’s barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures aim to protect a country’s
rights to implement domestic regulations and standards, while ensuring they do not discriminate rights to implement domestic regulations and standards, while ensuring they do not discriminate
against trading partners or unnecessarily restrict trade. against trading partners or unnecessarily restrict trade.3433 33 T BT refers to technical regulations, standards and certification and conformity assessment procedures; while SPS refers to food safety and animal and plant health measures. Congressional Research Service 13 World Trade Organization: Overview and Future Direction
Agreement on Agriculture (AoA)
The Agreement on Agriculture (AoA) includes rules and commitments on market access and The Agreement on Agriculture (AoA) includes rules and commitments on market access and
disciplines on certain domestic agricultural support programs and export subsidies. Its objective disciplines on certain domestic agricultural support programs and export subsidies. Its objective
was to provide a framework for WTO members to reform certain aspects of agricultural trade and was to provide a framework for WTO members to reform certain aspects of agricultural trade and
domestic farm policies to facilitate more market-oriented and open trade.domestic farm policies to facilitate more market-oriented and open trade.3534 Regarding market Regarding market
access, members agreed not to restrict agricultural imports by quotas or other nontariff measures, access, members agreed not to restrict agricultural imports by quotas or other nontariff measures,
converting them to tariff-equivalent levels of protection, such as tariff-rate quotas—a process converting them to tariff-equivalent levels of protection, such as tariff-rate quotas—a process
cal ed “tariffication.” Developed countries committed to cut tariffs (or out-of-quota tariffs, those cal ed “tariffication.” Developed countries committed to cut tariffs (or out-of-quota tariffs, those
tariffs applied to any imports above the agreed quota threshold) by an average of 36% in equal tariffs applied to any imports above the agreed quota threshold) by an average of 36% in equal
increments over six years; developing countries committed to 24% tariff cuts over 10 years. increments over six years; developing countries committed to 24% tariff cuts over 10 years.

~~34 T BT refers to technical regulations, standards and certification and conformity assessment pro cedures; while SPS~~
~~refers to food safety and animal and plant health measures.~~
~~35 WT O, “Agriculture: fairer markets for farmers,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm.~~
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Special safeguards to temporarily restrict imports were permitted for products considered Special safeguards to temporarily restrict imports were permitted for products considered
sensitive by a member in certain events, such as fal ing prices or surges of imports. sensitive by a member in certain events, such as fal ing prices or surges of imports.
The AoA also categorizes and restricts agricultural domestic support programs, according to their The AoA also categorizes and restricts agricultural domestic support programs, according to their
potential to distort trade. Members agreed to limit and reduce the most distortive forms of potential to distort trade. Members agreed to limit and reduce the most distortive forms of
domestic subsidies over 6 to 10 years, referred to as “amber box” subsidies and measured by the domestic subsidies over 6 to 10 years, referred to as “amber box” subsidies and measured by the
Aggregate Measure of Support (AMS) index.Aggregate Measure of Support (AMS) index.3635 Subsidies considered to cause minimal distortion Subsidies considered to cause minimal distortion
on production and trade are not subject to spending limits and are exempted from obligations as on production and trade are not subject to spending limits and are exempted from obligations as
“green box” and “blue box” subsidies or under “green box” and “blue box” subsidies or under de minimis (below a certain threshold) or SDT (below a certain threshold) or SDT
provisions. A so-cal ed “peace” clause protected members using domestic subsidies that comply provisions. A so-cal ed “peace” clause protected members using domestic subsidies that comply
with the agreement from being chal enged under other WTO agreements, such as through use of with the agreement from being chal enged under other WTO agreements, such as through use of
countervailing duties; the clause expired after nine years in 2003. In addition, AoA commitments countervailing duties; the clause expired after nine years in 2003. In addition, AoA commitments
required that export subsidies were to be capped and subject to incremental reductions. required that export subsidies were to be capped and subject to incremental reductions.
Members are required to submit notifications regularly on the implementation of AoA Members are required to submit notifications regularly on the implementation of AoA
commitments on market access, domestic subsidies, and export competition—though some commitments on market access, domestic subsidies, and export competition—though some
countries, including the United States, have raised concerns that these requirements are not countries, including the United States, have raised concerns that these requirements are not
abided by in a consistent abided by in a consistent ~~fashion~~manner. .
Further agricultural trade reform was a major priority under the Doha Round, but to date, Further agricultural trade reform was a major priority under the Doha Round, but to date,
negotiations have seen limited progress on resolving major issues. Members have advanced some negotiations have seen limited progress on resolving major issues. Members have advanced some
areas for reform, however, for example, in 2015 members reached an agreement to fully eliminate areas for reform, however, for example, in 2015 members reached an agreement to fully eliminate
export subsidies for agriculture. export subsidies for agriculture.36
Trade-Related Investment Measures (TRIMS)
The framework of the GATT did not address the growing linkages between trade and investment. The framework of the GATT did not address the growing linkages between trade and investment.
During the Uruguay Round, the Agreement on Trade-Related Investment Measures (TRIMS) was During the Uruguay Round, the Agreement on Trade-Related Investment Measures (TRIMS) was
drafted to address certain investment measures that may restrict and distort trade. The agreement drafted to address certain investment measures that may restrict and distort trade. The agreement
did not address the regulation or protection of foreign investment, but focused on investment did not address the regulation or protection of foreign investment, but focused on investment
measures that may violate basic GATT disciplines on trade in goods, such as nondiscrimination. measures that may violate basic GATT disciplines on trade in goods, such as nondiscrimination.
Specifical y, members committed not to apply any TRIM that is inconsistent with provisions on Specifical y, members committed not to apply any TRIM that is inconsistent with provisions on
national treatment or a prohibition of quantitative restrictions on imports or exports. TRIMS national treatment or a prohibition of quantitative restrictions on imports or exports. TRIMS
includes an annex with an il ustrative list of prohibited measures, such as local content includes an annex with an il ustrative list of prohibited measures, such as local content
requirements—requirements to purchase or use products of domestic origin. The agreement also requirements—requirements to purchase or use products of domestic origin. The agreement also
34 WT O, “Agriculture: fairer markets for farmers,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm. 35 T he United States committed to spend no more than $19.1 billion annually on amber box programs. For more detail, see CRS Report R45305, Agriculture in the WTO: Rules and Lim its on U.S. Dom estic Support, by Randy Schnepf. 36 For more information, see CRS Report R46456, Reforming the WTO Agreement on Agriculture, by Anita Regmi, Nina M. Hart, and Randy Schnepf. Congressional Research Service 14 link to page 48 link to page 40 World Trade Organization: Overview and Future Direction includes a safeguard measure for balance of payment difficulties, which permits developing includes a safeguard measure for balance of payment difficulties, which permits developing
countries to temporarily suspend TRIMS obligations. countries to temporarily suspend TRIMS obligations.
While TRIMS and other WTO agreements, such as the GATS (see below), include some While TRIMS and other WTO agreements, such as the GATS (see below), include some
provisions pertaining to investment, the lack of comprehensive multilateral rules on investment provisions pertaining to investment, the lack of comprehensive multilateral rules on investment
led to several efforts under the Doha Round to consider proposals, which to date have been led to several efforts under the Doha Round to consider proposals, which to date have been
unfruitful (see unfruitful (see “Future Negotiations on Selected Issues”). In December 2017, 70 WTO members ”). In December 2017, 70 WTO members
announced new discussions on developing a multilateral framework on investment facilitation, in announced new discussions on developing a multilateral framework on investment facilitation, in
part to complement the successful negotiation of rules on trade facilitation. part to complement the successful negotiation of rules on trade facilitation.

~~36 T he United States committed to spend no more than $19.1 billion annually on amber box programs. For more detail,~~
~~see CRS Report R45305, Agriculture in the WTO: Rules and Lim its on U.S. Dom estic Support, by Randy Schnepf.~~
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General Agreement on Trade in Services (GATS) (Annex 1B)
The GATT agreements focused solely on trade in goods. Services were eventual y covered in the The GATT agreements focused solely on trade in goods. Services were eventual y covered in the
GATS as a result of the Uruguay Round.37 The GATS provides the first and only multilateral GATS as a result of the Uruguay Round.37 The GATS provides the first and only multilateral
framework of principles and rules for government policies and regulations affecting services framework of principles and rules for government policies and regulations affecting services
trade. It has served as a foundation for bilateral and regional trade agreements covering services. trade. It has served as a foundation for bilateral and regional trade agreements covering services.
The services trade agenda is complex due to the characteristics of the sector. “Services” refers to The services trade agenda is complex due to the characteristics of the sector. “Services” refers to
a growing range of economic activities, such as audiovisual, construction, computer and related a growing range of economic activities, such as audiovisual, construction, computer and related
services, express delivery, e-commerce, financial, professional (e.g., accounting and legal services, express delivery, e-commerce, financial, professional (e.g., accounting and legal
services), retail and wholesaling, transportation, tourism, and telecommunications. Advances in services), retail and wholesaling, transportation, tourism, and telecommunications. Advances in
information technology and the growth of global supply chains have reduced barriers to trade in information technology and the growth of global supply chains have reduced barriers to trade in
services, expanding the services tradable across national borders. But liberalizing trade in services services, expanding the services tradable across national borders. But liberalizing trade in services
can be more complex than for goods, since the impediments faced by service providers occur can be more complex than for goods, since the impediments faced by service providers occur
largely within the importing country, as so-cal ed “behind the border” barriers, some in the form largely within the importing country, as so-cal ed “behind the border” barriers, some in the form
of government regulations. While the right of governments to regulate service industries is widely of government regulations. While the right of governments to regulate service industries is widely
recognized as prudent and necessary to protect consumers from harmful or unqualified providers, recognized as prudent and necessary to protect consumers from harmful or unqualified providers,
a main focus of WTO members is whether these regulations are applied to foreign service a main focus of WTO members is whether these regulations are applied to foreign service
providers in a discriminatory and unnecessarily trade restrictive manner that limits market access. providers in a discriminatory and unnecessarily trade restrictive manner that limits market access.
The GATS contains multiple parts, including definition of scope (excluding government-provided The GATS contains multiple parts, including definition of scope (excluding government-provided
services); principles and obligations, including MFN treatment and transparency; market access services); principles and obligations, including MFN treatment and transparency; market access
and national treatment obligations; annexes listing exceptions that members take to MFN and national treatment obligations; annexes listing exceptions that members take to MFN
treatment; as wel as various technical elements. Members negotiated GATS on a positive list treatment; as wel as various technical elements. Members negotiated GATS on a positive list
basis, which means that the commitments only apply to those services and modes of delivery basis, which means that the commitments only apply to those services and modes of delivery
listed in each member’s schedule of commitments.38 WTO members adopted a system of listed in each member’s schedule of commitments.38 WTO members adopted a system of
classifying four modes of delivery for services to measure trade in services and classify classifying four modes of delivery for services to measure trade in services and classify
government measures that affect trade in services, including cross-border supply, consumption government measures that affect trade in services, including cross-border supply, consumption
abroad, commercial presence, and temporary presence of natural personsabroad, commercial presence, and temporary presence of natural persons (Figure 4). Under . Under
GATS, unless a member country has specifical y committed to open its market to suppliers in a GATS, unless a member country has specifical y committed to open its market to suppliers in a
particular service, particular service, the national treatment and market access obligations do not apply. the national treatment and market access obligations do not apply.
In addition to the GATS, some members made specific sectoral commitments in financial services In addition to the GATS, some members made specific sectoral commitments in financial services
and telecommunications. Negotiations to expand these commitments were later folded into the and telecommunications. Negotiations to expand these commitments were later folded into the
broader services negotiations. broader services negotiations.
WTO members aimed to update GATS provisions and market WTO members aimed to update GATS provisions and market access commitments as part of the access commitments as part of the
~~Doha Round. Several WTO members have since submitted revised offers of services~~
~~liberalization, but in the view of the United States and others the talks have not yielded adequate~~
~~offers of improved market access (see “Future Negotiations”). Given the lack of progress, in~~
~~2013, 23 WTO members, including the United States, representing approximately 70% of global~~
~~services trade, launched negotiations of a services-specific plurilateral agreement.39 Although~~
~~outside of the WTO structure, participants designed the Trade in Services Agreement (TiSA)~~
~~negotiations in a way that would not preclude a concluded agreement from someday being~~
~~brought into the WTO. TiSA talks were initial y led by Australia and the United States, but have~~
~~since stal ed; the Trump Administration has not stated a formal position on TiSA~~Doha Round, but the talks have failed to advance. A subset of WTO members is involved in negotiations on domestic regulation of services (see “Services”). .

37 For more analysis, see CRS Report R43291, 37 For more analysis, see CRS Report R43291, U.S. Trade in Services: Trends and Policy Issues, by Rachel F. Fefer. , by Rachel F. Fefer.
38 Within U.S. FT As, the United States has sought a more comprehensive negative list approach, in which obligations 38 Within U.S. FT As, the United States has sought a more comprehensive negative list approach, in which obligations
are to apply to all types of services, unless explicitly excluded by a country in its list of nonconforming measures. are to apply to all types of services, unless explicitly excluded by a country in its list of nonconforming measures.
~~39 See CRS In Focus IF10311, Trade in Services Agreement (TiSA) Negotiations, by Rachel F. Fefer.~~
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~~Figure 4. Four Modes of Service Delivery and Hypothetical Examples~~

Source: CRS based on WTO.
Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) (Annex 1C)
The TRIPS Agreement marked the first time multilateral trade rules incorporated intel ectual The TRIPS Agreement marked the first time multilateral trade rules incorporated intel ectual
property rights (IPR)—legal, private, enforceable rights that governments grant to inventors and property rights (IPR)—legal, private, enforceable rights that governments grant to inventors and
artists to encourage innovation and creative output.artists to encourage innovation and creative output.4039 Like the GATS, TRIPS was negotiated as Like the GATS, TRIPS was negotiated as
part of the Uruguay Round and was a major U.S. objective for the round. TRIPS sets minimum part of the Uruguay Round and was a major U.S. objective for the round. TRIPS sets minimum
standards of protection and enforcement for IPR. Much of the agreement sets out the extent of standards of protection and enforcement for IPR. Much of the agreement sets out the extent of
coverage of the various types of intel ectual property, including patents, copyrights, trademarks, coverage of the various types of intel ectual property, including patents, copyrights, trademarks,
trade secrets, and geographical indications. TRIPS includes provisions on nondiscrimination and trade secrets, and geographical indications. TRIPS includes provisions on nondiscrimination and
on enforcement measures, such as civil and administrative procedures and remedies. on enforcement measures, such as civil and administrative procedures and remedies.
The TRIPS Agreement’s newly placed requirements on many developing countries elevated the The TRIPS Agreement’s newly placed requirements on many developing countries elevated the
debate over the relationship between IPR and development. At issue is the balance of rights and debate over the relationship between IPR and development. At issue is the balance of rights and
obligations between protecting private right holders and securing broader public benefits, such as obligations between protecting private right holders and securing broader public benefits, such as
access to medicines and the free flow of data, especial y in developing countries. TRIPS includes access to medicines and the free flow of data, especial y in developing countries. TRIPS includes
flexibilities for developing countries al owing longer phase-in periods for implementing flexibilities for developing countries al owing longer phase-in periods for implementing
obligations and, separately, for pharmaceutical patent obligations—these were subsequently obligations and, separately, for pharmaceutical patent obligations—these were subsequently
extended for LDCs until January 2033 or until they no longer qualify as LDCs, whichever is extended for LDCs until January 2033 or until they no longer qualify as LDCs, whichever is

~~40 For more detail, see CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias~~
~~Akhtar and Ian F. Fergusson.~~
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~~earlier.41~~earlier.40 The 2001 WTO “Doha Declaration” committed members to interpret and implement The 2001 WTO “Doha Declaration” committed members to interpret and implement
TRIPS obligations in a way that supports public health and access to medicines.TRIPS obligations in a way that supports public health and access to medicines.4241 In 2005, In 2005,
members agreed to amend TRIPS to al ow developing and LDC members that lack production members agreed to amend TRIPS to al ow developing and LDC members that lack production
capacity to import generic medicines from third country producers under “compulsory licensing” capacity to import generic medicines from third country producers under “compulsory licensing”
arrangements.arrangements.4342 The amendment entered into force in January 2017. The amendment entered into force in January 2017.43 The COVID-19 pandemic renewed debate in the WTO over potential exceptions to TRIPS rules for public health emergencies. Some members have proposed a TRIPS waiver for COVID-related health products and technologies, including vaccines. Negotiations remain contentious and ongoing.44 44
Trade Remedies
While WTO agreements uphold MFN principles, they also al ow exceptions to binding tariffs in While WTO agreements uphold MFN principles, they also al ow exceptions to binding tariffs in
certain circumstances. The WTO Agreement on Subsidies and Countervailing Measures (ASCM), certain circumstances. The WTO Agreement on Subsidies and Countervailing Measures (ASCM),
the WTO Agreement on Safeguards, and articles in the GATT, commonly known as the the WTO Agreement on Safeguards, and articles in the GATT, commonly known as the
Antidumping Agreement, al ow for trade remedies in the form of temporary measures (e.g., Antidumping Agreement, al ow for trade remedies in the form of temporary measures (e.g.,
primarily duties or quotas) to mitigate the adverse impact of various trade practices on domestic primarily duties or quotas) to mitigate the adverse impact of various trade practices on domestic
industries and workers. These include actions taken against dumping (sel ing at an unfairly low industries and workers. These include actions taken against dumping (sel ing at an unfairly low
39 For more detail, see CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias Akhtar and Ian F. Fergusson. 40 WT O, “Intellectual property: protection and enforcement,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm. 41 Declaration on the T RIPS Agreement and Public Health, (WT /MIN(01)/DEC/2), November 14, 2001, http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm. For more on T RIPS, see CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias Akhtar and Ian F. Fergusson . 42 WT O, “ WT O IP rules amended to ease poor countries’ access to affordable medicines,” January 23, 2017, https://www.wto.org/english/news_e/news17_e/trip_23jan17_e.htm. 43 Notably, this marked the first time that a WT O agreement was amended since the WT O’s inception (WTO 2017). 44 CRS In Focus IF11858, Potential WTO TRIPS Waiver and COVID-19, by Shayerah I. Akhtar and Ian F. Fergusson. Congressional Research Service 16 link to page 38 World Trade Organization: Overview and Future Direction price) or to counter certain government subsidies, and emergency measures to limit “fairly”-price) or to counter certain government subsidies, and emergency measures to limit “fairly”-
traded imports temporarily, designed to “safeguard” domestic industries. traded imports temporarily, designed to “safeguard” domestic industries.
Supporters of trade remedies view them as necessary to shield domestic industries and workers Supporters of trade remedies view them as necessary to shield domestic industries and workers
from unfair competition and to level the playing field. from unfair competition and to level the playing field. ~~Other domestic constituents~~Others, including , including
some importers and downstream consuming industries, voice concern that antidumping (AD) and some importers and downstream consuming industries, voice concern that antidumping (AD) and
countervailing duty (CVD) actions can serve as disguised protectionism and create inefficiencies countervailing duty (CVD) actions can serve as disguised protectionism and create inefficiencies
in the in the ~~world~~global trading system by raising prices on imported goods. How trade remedies are applied trading system by raising prices on imported goods. How trade remedies are applied
to imports has to imports has become a major source of disputes under the WTO (see below). become a major source of disputes under the WTO (see below).
The United States has enacted trade remedy laws that conform to the WTO rules:45 The United States has enacted trade remedy laws that conform to the WTO rules:45
 U.S. antidumping laws (19 U.S.C. §1673 et seq.) provide relief to domestic  U.S. antidumping laws (19 U.S.C. §1673 et seq.) provide relief to domestic
industries that have been, or are threatened with, the adverse impact of imports industries that have been, or are threatened with, the adverse impact of imports
sold in the U.S. market at prices that are shown to be less than fair market value. sold in the U.S. market at prices that are shown to be less than fair market value.
The relief provided is an additional import duty placed on the dumped imports. The relief provided is an additional import duty placed on the dumped imports.
 U.S. countervailing duty laws (19 U.S.C. §1671 et seq.) give similar relief to  U.S. countervailing duty laws (19 U.S.C. §1671 et seq.) give similar relief to
domestic industries that have been, or are threatened with, the adverse impact of domestic industries that have been, or are threatened with, the adverse impact of
imported goods that have been subsidized by a foreign government or public imported goods that have been subsidized by a foreign government or public
entity, and can therefore be sold at lower prices than U.S.-produced goods. The entity, and can therefore be sold at lower prices than U.S.-produced goods. The
relief provided is a duty placed on the subsidized imports. relief provided is a duty placed on the subsidized imports.
 U.S. safeguard laws give domestic industries relief from import surges of goods;  U.S. safeguard laws give domestic industries relief from import surges of goods;
no al egation of “unfair” practices is needed to launch a safeguard investigation. no al egation of “unfair” practices is needed to launch a safeguard investigation.
Although used less frequently than AD/CVD laws, Section 201 of the Trade Act Although used less frequently than AD/CVD laws, Section 201 of the Trade Act
of 1974 (19 U.S.C. §2251 et seq.), is designed to give domestic industry the ~~of 1974 (19 U.S.C. §2251 et seq.), is designed to give domestic industry the~~

~~41 WT O, “Intellectual property: protection and enforcement,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/~~
~~agrm7_e.htm.~~
~~42 Declaration on the T RIPS Agreement and Public Health, (WT /MIN(01)/DEC/2), November 14, 2001,~~
~~http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm. For more on T RIPS, see CRS Report~~
~~RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias Akhtar and Ian F. Fergusson .~~
~~43 WT O, “ WT O IP rules amended to ease poor countries’ access to affordable medicines,” January 23, 2017,~~
~~https://www.wto.org/english/news_e/news17_e/trip_23jan17_e.htm.~~
~~44 Notably, this marked the first time that a WT O agreement was amended since the WT O’s inception (WTO 2017).~~
~~45 For more detail, see CRS Report R46296, Trade Remedies: Antidumping, by Christopher A. Casey, CRS In Focus~~
~~IF10018, Trade Rem edies: Antidum ping and Countervailing Duties, by Vivian C. Jones and Christopher A. Casey , and~~
~~CRS In Focus IF10786, Safeguards: Section 201 of the Trade Act of 1974, by Vivian C. Jones.~~
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opportunity to adjust to import competition and remain competitive. The relief opportunity to adjust to import competition and remain competitive. The relief
provided is general y a temporary import duty and/or quota. Unlike AD/CVD, provided is general y a temporary import duty and/or quota. Unlike AD/CVD,
safeguard laws require presidential action for relief to be put into effect. safeguard laws require presidential action for relief to be put into effect.
Members are currently engaged in negotiating rules on subsidies related to fisheries (see “Fisheries Subsidies”). Dispute Settlement Understanding (DSU) (Annex 2)
The DS system, often cal ed the “crown jewel” of the WTO, has been considered by some The DS system, often cal ed the “crown jewel” of the WTO, has been considered by some
observers to be one of the most important successes of the multilateral trading system.46 WTO observers to be one of the most important successes of the multilateral trading system.46 WTO
agreements contain provisions that are either binding or nonbinding. The WTO Understanding on agreements contain provisions that are either binding or nonbinding. The WTO Understanding on
Rules and Procedures Governing the Settlement of Disputes—Dispute Settlement Understanding Rules and Procedures Governing the Settlement of Disputes—Dispute Settlement Understanding
or DSU—provides an enforceable means for WTO members to resolve disputes arising under the or DSU—provides an enforceable means for WTO members to resolve disputes arising under the
binding provisions.47 The DSU commits members not to determine violations of WTO obligations binding provisions.47 The DSU commits members not to determine violations of WTO obligations
or impose penalties unilateral y, but to settle complaints about al eged violations under DSU rules or impose penalties unilateral y, but to settle complaints about al eged violations under DSU rules
and procedures. In recent years, there have been some cal s by members for reform of the DS and procedures. In recent years, there have been some cal s by members for reform of the DS
45 For more detail, see CRS Report R46296, Trade Remedies: Antidumping, by Christopher A. Casey, CRS In Focus IF10018, Trade Rem edies: Antidum ping and Countervailing Duties, by Vivian C. Jones and Christopher A. Casey , and CRS In Focus IF10786, Safeguards: Section 201 of the Trade Act of 1974, by Vivian C. Jones. 46 WT O, “T he Place of the WT O in the International Legal Order,” Speeches—DG Pascal Lamy, June 15, 2008, https://www.wto.org/english/news_e/sppl_e/sppl94_e.htm. 47 For more information, see CRS In Focus IF10436, Dispute Settlement in the World Trade Organization: Key Legal Concepts, by Brandon J. Murrill. Congressional Research Service 17 link to page 23 link to page 51 World Trade Organization: Overview and Future Direction system to deal with procedural delays and new strains on the system, including the growing system to deal with procedural delays and new strains on the system, including the growing
volume and complexity of cases and disagreement over the role of the Appel ate Body (AB). volume and complexity of cases and disagreement over the role of the Appel ate Body (AB).
The Dispute Settlement Body (DSB) is a plenary committee of the WTO, which oversees the The Dispute Settlement Body (DSB) is a plenary committee of the WTO, which oversees the
panels and adopts the recommendation of a DS panel or AB panel (see below). Panels are panels and adopts the recommendation of a DS panel or AB panel (see below). Panels are
composed of three (or five in complex cases) panelists—not citizens of the members involved—composed of three (or five in complex cases) panelists—not citizens of the members involved—
chosen through a roster of “wel qualified governmental and/or non-governmental individuals” chosen through a roster of “wel qualified governmental and/or non-governmental individuals”
maintained by the Secretariat. WTO members must first attempt to settle a dispute through maintained by the Secretariat. WTO members must first attempt to settle a dispute through
consultations, but if these fail, a member seeking to initiate a dispute may request that a panel consultations, but if these fail, a member seeking to initiate a dispute may request that a panel
examine and report on its complaint. A respondent party is able to block the establishment of a examine and report on its complaint. A respondent party is able to block the establishment of a
panel at the DSB once, but if the complainant requests its establishment again at a subsequent panel at the DSB once, but if the complainant requests its establishment again at a subsequent
meeting of the DSB, a panel is established. At its conclusion, the panel recommends a decision to meeting of the DSB, a panel is established. At its conclusion, the panel recommends a decision to
the DSB that it wil adopt unless al parties agree to block the recommendation. The DSU sets out the DSB that it wil adopt unless al parties agree to block the recommendation. The DSU sets out
a timeline of approximately one year for the initial resolution of disputes (sea timeline of approximately one year for the initial resolution of disputes (see Figure 54); however, ); however,
cases are rarely resolved in this timeframe. cases are rarely resolved in this timeframe.
The DSU also provides for AB review of panel reports in the event a decision is appealed. The The DSU also provides for AB review of panel reports in the event a decision is appealed. The
AB is composed of seven rotating panelists, appointed by the DSB, that serve four-year terms, AB is composed of seven rotating panelists, appointed by the DSB, that serve four-year terms,
with the possibility of a one-term reappointment. According to the DSU, appeals are to be limited with the possibility of a one-term reappointment. According to the DSU, appeals are to be limited
to questions of law or legal interpretation developed by the panel in the case (Article 17.6). The to questions of law or legal interpretation developed by the panel in the case (Article 17.6). The
AB is to make a recommendation, and the DSB is to ratify that recommendation within 120 days AB is to make a recommendation, and the DSB is to ratify that recommendation within 120 days
of the ratification of the initial panel report, but again, such timely resolution rarely occurs. The of the ratification of the initial panel report, but again, such timely resolution rarely occurs. The
United States has raised several issues regarding the practices of the AB and has blocked the United States has raised several issues regarding the practices of the AB and has blocked the
appointments of several judges—for more on the debate, see appointments of several judges—for more on the debate, see “Proposed Institutional Reforms.” .”

~~46 WT O, “T he Place of the WT O in the International Legal Order,” Speeches—DG Pascal Lamy, June 15, 2008,~~
~~https://www.wto.org/english/news_e/sppl_e/sppl94_e.htm.~~
~~47 For more information, see CRS In Focus IF10436,~~ ~~Dispute Settlement in the World Trade Organization: Key Legal~~
~~Concepts, by Brandon J. Murrill.~~
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~~Figure 5~~ Figure 4. WTO Dispute Settlement Procedure
Stages and Time Periods Stages and Time Periods

Source: Created by CRS. Based on information from Madhur Jha, Samantha Amerasinghe, and Philippe Dauba -Created by CRS. Based on information from Madhur Jha, Samantha Amerasinghe, and Philippe Dauba -
Pantanacce, Pantanacce, Global trade: Trade first! (Avoiding an own goal), Standard Chartered, 2017, p. 17. , Standard Chartered, 2017, p. 17.
Notes: Alternating colors indicate a different stage of the procedure. Time periods displayed are approximate. Alternating colors indicate a different stage of the procedure. Time periods displayed are approximate.
The WTO establishes timelines for each stage with one year total for the initial resolution of disputes; however, The WTO establishes timelines for each stage with one year total for the initial resolution of disputes; however,
in practice, cases are rarely resolved within this timeframe. in practice, cases are rarely resolved within this timeframe.
Congressional Research Service 18 link to page 25 World Trade Organization: Overview and Future Direction Following the adoption of a panel or appel ate report, the DSB oversees the implementation of the Following the adoption of a panel or appel ate report, the DSB oversees the implementation of the
findings. The losing party is then to propose how it is to bring itself into compliance “within a findings. The losing party is then to propose how it is to bring itself into compliance “within a
reasonable period of time” with the DSB-adopted findings. A reasonable period of time is reasonable period of time” with the DSB-adopted findings. A reasonable period of time is
determined by mutual agreement with the DSB, among the parties, or through arbitration. If a determined by mutual agreement with the DSB, among the parties, or through arbitration. If a
dispute arises over the manner of implementation, the DSB may form a panel to judge dispute arises over the manner of implementation, the DSB may form a panel to judge
compliance. If a party declines to comply, the parties negotiate over compensation pending full compliance. If a party declines to comply, the parties negotiate over compensation pending full
implementation. If there is stil no agreement, the DSB may authorize retaliation in the amount of implementation. If there is stil no agreement, the DSB may authorize retaliation in the amount of
the determined cost of the offending party’s measure to the aggrieved party’s economy.the determined cost of the offending party’s measure to the aggrieved party’s economy.
Filing a DS case provides a way for countries to resolve disputes through a legal process and to Filing a DS case provides a way for countries to resolve disputes through a legal process and to
do so publicly, signaling to domestic and international constituents the need to address do so publicly, signaling to domestic and international constituents the need to address
outstanding issues. DS procedures can serve as a deterrent for countries considering not abiding outstanding issues. DS procedures can serve as a deterrent for countries considering not abiding
by WTO agreements, and rulings can help build a body of case law to inform countries when they by WTO agreements, and rulings can help build a body of case law to inform countries when they
implement new regulatory regimes or interpret WTO agreements. implement new regulatory regimes or interpret WTO agreements.
That said, WTO agreements and decisions of panels are not self-executing and cannot directly That said, WTO agreements and decisions of panels are not self-executing and cannot directly
modify U.S. law. If a case is brought against the United States and the panel renders an adverse modify U.S. law. If a case is brought against the United States and the panel renders an adverse
decision, the United States would be expected to remove the offending measure within a decision, the United States would be expected to remove the offending measure within a
reasonable period of time or face the possibility of either paying compensation to the complainant reasonable period of time or face the possibility of either paying compensation to the complainant
or be subject to sanctions, often in the form of higher tariffs on imports of certain U.S. products. or be subject to sanctions, often in the form of higher tariffs on imports of certain U.S. products.
As of mid- As of mid-~~2020~~2021, the WTO has initiated , the WTO has initiated ~~nearly~~more than 600 disputes on behalf of its members and 600 disputes on behalf of its members and issued issued
more than 350 rulingsmore than 350 rulings~~, with DS activity peaking in 2018~~.48 Nearly two-thirds of WTO members .48 Nearly two-thirds of WTO members
have participated in the DS system. Not al complaints result in formal panel proceedings; about have participated in the DS system. Not al complaints result in formal panel proceedings; about

~~48 WT O, “Dispute settlement activity—some figures,” https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm.~~
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half were resolved during consultations. Complainants have usual y won their cases, in large part half were resolved during consultations. Complainants have usual y won their cases, in large part
because they tend to only initiate disputes that they have a higher chance of winning. In the words because they tend to only initiate disputes that they have a higher chance of winning. In the words
ofof former WTO DG Roberto Azevêdo, the widespread use of the DS system is evidence it “enjoys WTO DG Roberto Azevêdo, the widespread use of the DS system is evidence it “enjoys
tremendous tremendous confidence among the membership, who value it as a fair, effective, efficient confidence among the membership, who value it as a fair, effective, efficient
mechanism to solve mechanism to solve trade problems.”49 trade problems.”49
The United States is an active user of the DS system. Among WTO members, the United States The United States is an active user of the DS system. Among WTO members, the United States
has been a complainant in the most dispute cases since the system was established in 1995, has been a complainant in the most dispute cases since the system was established in 1995,
initiating 124 disputes.50 The two largest targets of complaints initiated by the United States are initiating 124 disputes.50 The two largest targets of complaints initiated by the United States are
China and the EU, which, combined, account for more than one-thir China and the EU, which, combined, account for more than one-third (Figure 6).
~~Figure 6~~5). 48 WT O, “Dispute settlement activity—some figures,” https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm. 49 WT O, “WT O disputes reach 500 mark,” November 10, 2015, https://www.wto.org/english/news_e/news15_e/ds500rfc_10nov15_e.htm. 50 Dispute count as of early August 2020. WT O, https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm. Congressional Research Service 19 link to page 29 World Trade Organization: Overview and Future Direction Figure 5. WTO Disputes Involving the United States

Source: WTO, https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm. Created by CRS. WTO, https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm. Created by CRS.
Notes: Does not include cases with U.S. participation as a third party. Dispute count as of Does not include cases with U.S. participation as a third party. Dispute count as of ~~August 1, 2020~~September 1, 2021. .
As a respondent in As a respondent in ~~155~~156 dispute cases since 1995, the United States has also had the most disputes dispute cases since 1995, the United States has also had the most disputes
filed against it by other WTO members, followed by the EU (filed against it by other WTO members, followed by the EU (8789 disputes) and China ( disputes) and China (44
47 disputes). The EU has filed the most cases against the United States, followed by Canada, China, disputes). The EU has filed the most cases against the United States, followed by Canada, China,
South Korea, Brazil, and India. A large number of complaints concern trade remedies, in South Korea, Brazil, and India. A large number of complaints concern trade remedies, in
particular methodologies used for calculating and imposing antidumping duties on U.S. imports. particular methodologies used for calculating and imposing antidumping duties on U.S. imports.
Several pending WTO disputes are of significance to the United States. These include chal enges Several pending WTO disputes are of significance to the United States. These include chal enges
to the tariff measures imposed by the Trump Administration under U.S. trade laws, including to the tariff measures imposed by the Trump Administration under U.S. trade laws, including
Section 201 (safeguards), Section 232 (national security), and Section 301 (“unfair” trading Section 201 (safeguards), Section 232 (national security), and Section 301 (“unfair” trading
practices)practices) (Table 3)..51 Nine WTO members, including China, the EU, Canada, and Mexico, Nine WTO members, including China, the EU, Canada, and Mexico,
initiated initiated ~~separate~~ complaints at the WTO, based on al egations that U.S. Section 232 tariffs on complaints at the WTO, based on al egations that U.S. Section 232 tariffs on
steel and aluminum steel and aluminum imports are inconsistent with WTO rules. In May 2019, the cases involving imports are inconsistent with WTO rules. In May 2019, the cases involving
Canada and Mexico were withdrawn, due to a negotiated settlement with the United States.Canada and Mexico were withdrawn, due to a negotiated settlement with the United States.51
52 Consultations were unsuccessful in resolving the remaining disputes and panel decisions are Consultations were unsuccessful in resolving the remaining disputes and panel decisions are
expected in expected in ~~late 2020~~2021. Most countries notified their complaints pursuant to the Agreement on . Most countries notified their complaints pursuant to the Agreement on
Safeguards, though some also Safeguards, though some also al ege that U.S. tariff measures and related exemptions are contrary ~~al ege that U.S. tariff measures and related exemptions are contrary~~

~~49 WT O, “WT O disputes reach 500 mark,” November 10, 2015, https://www.wto.org/english/news_e/news15_e/~~
~~ds500rfc_10nov15_e.htm.~~
~~50 Dispute count as of early August 2020. WT O, https://www.wto.org/english/tratop_e/dispu_e/~~
~~find_dispu_cases_e.htm.~~
~~51 T he three countries announced a joint monitoring and consultation system to replace the tariffs. See https://ustr.gov/~~
~~about-us/policy-offices/press-office/press-releases/2019/may/united-states-announces-deal-canada-and.~~
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~~to U.S. obligations under~~ to U.S. obligations under several provisions of the GATT.several provisions of the GATT. ~~Several other WTO members have~~
~~requested to join the disputes as third parties.~~
~~In 2018, the~~ The United States filed its own WTO complaints over retaliatory tariffs imposed by United States filed its own WTO complaints over retaliatory tariffs imposed by ~~six~~
seven countries (Canada, China, EU, countries (Canada, China, EU, India, Mexico, Russia, and Turkey) in response to U.S. actionsMexico, Russia, and Turkey) in response to U.S. actions~~.52 Most~~
~~recently, in July 2019 the United States filed a similar case against India. The cases are in the~~
~~panel stage (except for resolved cases with Canada and Mexico).~~, and decisions are pending.53 The United States has invoked The United States has invoked
~~the~~ the GATT national security exception national security exception (~~(GATT~~ Article XXI) in defense of its tariffs (see Article XXI) in defense of its tariffs (see “Key Exceptions
under GATT/WTO””), and ), and ~~states~~claims that that the tariffs are not safeguards as claimed by other countries. Trade Policy Review Mechanism (Annex 3) Annex 3 sets the procedures for regular trade policy reviews that are conducted by the Secretariat to report on the trade policies of members. These reviews are carried out by the Trade Policy Review Body (TPRB) and are conducted periodical y with the largest economies (United States, EU, Japan, and China) evaluated every three years, the next 16 largest economies every five 51 See CRS Report R45529, Trump Administration Tariff Actions: Frequently Asked Questions, coordinated by Brock R. Williams. 52 T he three countries announced a joint monitoring and consultation system to replace the tariffs. See https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/may/united-states-announces-deal-canada-and. 53 With the exception of resolved cases with Mexico and Canada. Congressional Research Service 20~~the tariffs are not safeguards as claimed by other countries.~~
~~Table 3. WTO Challenges to Tariff Measures Imposed by Trump Administration~~
~~Under U.S. Trade Laws~~
~~Complainant~~
~~Dispute~~
~~Issue~~
~~country~~
~~number~~
~~Date Filed / Latest Status~~
~~SECTION 201~~

~~U.S. safeguard measure on~~
~~South Korea~~
~~DS545 5/14/18 consultations requested;~~
~~crystalline silicon photovoltaic~~

~~9/26/18 panel established but not yet composed~~
~~products~~

~~China~~
~~DS562 8/14/18 consultations requested~~
~~10/24/19 panel composed~~
~~U.S. safeguard measure on~~
~~South Korea~~
~~DS546 5/14/18 consultations requested;~~
~~large residential washers~~
~~7/01/19 panel composed~~
~~imports~~
~~SECTION 232~~
~~U.S. tariffs on steel and~~
~~China~~
~~DS544 4/05/18 consultations requested;~~
~~aluminum imports~~
~~01/25/19 panel composed~~
~~India~~
~~DS547 5/18/18 consultations requested;~~
~~01/25/19 panel composed~~
EU
~~DS548 6/01/18 consultations requested;~~
~~01/25/19 panel composed~~
~~Canada~~
~~DS550 6/01/18 consultations requested;~~
~~05/23/19 settled or terminated~~
~~(withdrawn, mutual y agreed solution)~~
~~Mexico~~
~~DS551 6/05/18 consultations requested;~~
~~05/28/19 settled or terminated~~
~~(withdrawn, mutual y agreed solution)~~
~~Norway~~
~~DS552 6/12/18 consultations requested;~~
~~01/25/19 panel composed~~
~~Russia~~
~~DS554 6/29/18 consultations requested;~~
~~01/25/19 panel composed~~
~~Switzerland~~
~~DS556 7/09/18 consultations requested;~~
~~01/25/19 panel composed~~

~~Turkey~~
~~DS564 8/15/18 consultations requested;~~
~~01/25/19 panel composed~~

~~SECTION 301~~

~~52 UST R, “United States Challenges Five WT O Members Imposing Illegal T ariffs Against U.S. Products,” press~~
~~release, July 2018, https://go.usa.gov/xPftA.~~
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~~Complainant~~
~~Dispute~~
~~Issue~~
~~country~~
~~number~~
~~Date Filed / Latest Status~~
~~U.S. tariffs on certain Chinese~~
~~China~~
~~DS543 4/04/18 consultations requested;~~
~~imports~~
~~06/03/19 panel composed~~

~~China~~
~~DS565 8/23/18 consultations requested~~

~~China~~
~~DS587 09/02/19 consultations requested~~
Source: WTO, https://www.wto.org/english/tratop_e/dispu_e/dispu_status_e.htm.
Note: Status as of August 1, 2020. Panel established is when the DSB has agreed to create a panel but the
~~panelists have not yet been chosen (i.e., panel composed).~~
~~Trade Policy Review Mechanism (Annex 3)~~
~~Annex 3 sets the procedures for regular trade policy reviews that are conducted by the Secretariat~~
~~to report on the trade policies of members. These reviews are carried out by the Trade Policy~~
~~Review Body (TPRB) and are conducted periodical y with the largest economies (United States,~~
~~EU, Japan, and China) evaluated every three years, the next 16 largest economies every five~~
World Trade Organization: Overview and Future Direction years, and remaining economies every seven years. These reviews are meant to increase years, and remaining economies every seven years. These reviews are meant to increase
transparency of a country’s trade policy and enable a multilateral assessment of the effect of transparency of a country’s trade policy and enable a multilateral assessment of the effect of
policies on the trading system. The reviews also al ow each member country to question specific policies on the trading system. The reviews also al ow each member country to question specific
practices of other members, and may serve as a forum to flag, and possibly avoid, future disputes. practices of other members, and may serve as a forum to flag, and possibly avoid, future disputes.
~~The~~To take one example, the most recent trade policy review of China occurred in most recent trade policy review of China occurred in ~~July 2018.53~~2018 and its next review is slated for October 2021.54 During the review During the review
members noted and commended some recent initiatives of China to open market access and members noted and commended some recent initiatives of China to open market access and
~~liberalize~~ liberalize its foreign investment regime. Several concerns were also raised, including “the its foreign investment regime. Several concerns were also raised, including “the
preponderant role of the State in general, and of preponderant role of the State in general, and of state-owned enterprises in particular,” and state-owned enterprises in particular,” and
“China’s support and subsidy policies and local content requirements, including those that may be “China’s support and subsidy policies and local content requirements, including those that may be
part of the 2025 [Made in China] plan.”part of the 2025 [Made in China] plan.”5455 The United States also had its latest review in 2018 (see text box).
2018 Trade Policy Review of the United States
The most recent trade policy review of the United States culminated in December 2018 The most recent trade policy review of the United States culminated in December 2018~~.55~~ under the Trump Administration.56 The Secretariat’sThe Secretariat’s
report issued in Novemberreport issued in November is a factual description of a country’s policy and of significant developments since the is a factual description of a country’s policy and of significant developments since the
last review. It does not pass judgement on the consistency of a country’s policies with WTO agreements.last review. It does not pass judgement on the consistency of a country’s policies with WTO agreements.
Subsequently, the TPRB met on December 17-19 to assessSubsequently, the TPRB met on December 17-19 to assess the report,the report, pose questions, and al ow other memberspose questions, and al ow other members
to opine on specificto opine on specific aspects of U.S. policy. In his statement, U.S.aspects of U.S. policy. In his statement, U.S. Ambassador to the WTO Dennis Shea contended Ambassador to the WTO Dennis Shea contended
that U.S. trade policy is “steadfastly focused on the national interest including retaining and using US sovereignthat U.S. trade policy is “steadfastly focused on the national interest including retaining and using US sovereign
power topower to act in defense of that interest.”act in defense of that interest.” He described U.S. trade policy as resting on five major pil ars:He described U.S. trade policy as resting on five major pil ars:
“supporting U.S.“supporting U.S. national security, strengthening the U.S.national security, strengthening the U.S. economy, negotiating better trade deals, aggressiveeconomy, negotiating better trade deals, aggressive
enforcement of U.S.enforcement of U.S. trade laws, and reforming the multilateral trading system.”trade laws, and reforming the multilateral trading system.”56 57
While WTO members general y lauded the United States on a free and open trade policy, and recognizedWhile WTO members general y lauded the United States on a free and open trade policy, and recognized its its
traditional role as a pil ar of the multilateral trading system, some countries voiced their displeasure at recent U.S. traditional role as a pil ar of the multilateral trading system, some countries voiced their displeasure at recent U.S.
trade actions. Members took issue with the imposition of tariffs on steel and aluminum as a result of the Section trade actions. Members took issue with the imposition of tariffs on steel and aluminum as a result of the Section
232 national security determinations; the imposition of Section 301 tariffs on China; increased use of trade 232 national security determinations; the imposition of Section 301 tariffs on China; increased use of trade
remedies; and rising levels of trade-distorting farm subsidies, including the aid package for agricultural producers remedies; and rising levels of trade-distorting farm subsidies, including the aid package for agricultural producers
hit by retaliatory tariffs; as wel as perennial irritants, such as Buy American policies and Jones Act maritime and cabotage restrictions.58 According to the EU Ambassador to the WTO Marc Vanheukelen, “the multilateral trading system is in a deep crisis and the United States is in the epicenter for a number of reasons.”59 Plurilateral Agreements (Annex 4) Most WTO agreements in force have been negotiated on a multilateral basis, meaning the entire body of WTO members subscribes to them. By contrast, plurilateral agreements are negotiated by a subset of WTO members and often focus on a specific sector. A handful of such agreements supplement the main WTO agreements discussed previously.60 54
53 For the text of the report, see https://www.wto.org/english/tratop_e/tpr_e/tp475_e.htm. For the text of the report, see https://www.wto.org/english/tratop_e/tpr_e/tp475_e.htm.
54For more information on the T PR schedule, see https://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm . 55 WT O, “T rade Policy Review: China: Concluding remarks by the Chairperson,” July 11 and 13, 2018, WT O, “T rade Policy Review: China: Concluding remarks by the Chairperson,” July 11 and 13, 2018,
https://www.wto.org/english/tratop_e/tpr_e/tp475_crc_e.htm. https://www.wto.org/english/tratop_e/tpr_e/tp475_crc_e.htm.
55Also see, CRS In Focus IF10964, “Made in China 2025” Industrial Policies: Issues for Congress, by Karen M. Sutter. 56 See https://www.wto.org/english/tratop_e/tpr_e/tp482_e.htm. See https://www.wto.org/english/tratop_e/tpr_e/tp482_e.htm.
5657 “U.S. Statement by Ambassador Shea at the 14th T rade Policy Review of the United States,” December 17, 2018, “U.S. Statement by Ambassador Shea at the 14th T rade Policy Review of the United States,” December 17, 2018,
https://geneva.usmission.gov/2018/12/17/u-s-statement-by-ambassador-shea-at-the-14th-wto-tpr-of-the-united-states-https://geneva.usmission.gov/2018/12/17/u-s-statement-by-ambassador-shea-at-the-14th-wto-tpr-of-the-united-states-
of-america/. of-america/.
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~~hit by retaliatory tariffs; as wel as perennial irritants, such as Buy American policies and Jones Act maritime and~~
~~cabotage restrictions.57 According to the EU Ambassador to the WTO Marc Vanheukelen, “the multilateral~~
~~trading system is in a deep crisis and the United States is in the epicenter for a number of reasons.”58~~
~~Plurilateral Agreements (Annex 4)~~
~~Most WTO agreements in force have been negotiated on a multilateral basis, meaning the entire~~
~~body of WTO members subscribes to them. By contrast, plurilateral agreements are negotiated by~~
~~a subset of WTO members and often focus on a specific sector. A handful of such agreements~~
~~supplement the main WTO agreements discussed previously.59~~58 “Concluding Remarks of the Chairperson, Ambassador Sunanta Kangvalkulkij” T rade Policy Review Body, December 19, 2018, https://www.wto.org/english/tratop_e/tpr_e/tp482_crc_e.htm. 59 “U.S. Criticized at WT O,” Washington Trade Daily, December 18, 2018. 60 One example is the Agreement on T rade in Civil Aircraft , which entered into force in 1980 between 32 WT O Congressional Research Service 21 World Trade Organization: Overview and Future Direction
Within the WTO, members have two ways to negotiate on a plurilateral basis, also known as Within the WTO, members have two ways to negotiate on a plurilateral basis, also known as
“variable geometry.”“variable geometry.”6061 A group of countries can negotiate with one another provided that the A group of countries can negotiate with one another provided that the
group extends the benefits to al other WTO members on an MFN basis—the foundational group extends the benefits to al other WTO members on an MFN basis—the foundational
nondiscrimination principle of the GATT/WTO. Because the benefits of the agreement are to be nondiscrimination principle of the GATT/WTO. Because the benefits of the agreement are to be
shared among shared among al all WTO members and not just the participants, the negotiating group likely would WTO members and not just the participants, the negotiating group likely would
include those members forming a critical mass of world trade in the product or sector covered by include those members forming a critical mass of world trade in the product or sector covered by
the negotiationthe negotiation in order to avoid the problem of free riders—those countries that receive trade in order to avoid the problem of free riders—those countries that receive trade
benefits without committing to liberalization. An example of this type of plurilateral agreement benefits without committing to liberalization. An example of this type of plurilateral agreement
granting unconditional MFN is the Information Technology Agreement (ITA), in which tariffs on granting unconditional MFN is the Information Technology Agreement (ITA), in which tariffs on
selected information technology goods were lowered to zero, as negotiated by WTO members selected information technology goods were lowered to zero, as negotiated by WTO members
comprising more than 90% of world trade in these goods (see below). comprising more than 90% of world trade in these goods (see below).
A second type of plurilateral is the non-MFN agreement, often referred to as “conditional-MFN.” A second type of plurilateral is the non-MFN agreement, often referred to as “conditional-MFN.”
In this type, participants undertake obligations among themselves, but do not extend the benefits In this type, participants undertake obligations among themselves, but do not extend the benefits
to other WTO members, unless they directly participate in the agreement. Also known as the to other WTO members, unless they directly participate in the agreement. Also known as the
“club” approach, non-MFN plurilaterals al ow for wil ing members to address policy issues not “club” approach, non-MFN plurilaterals al ow for wil ing members to address policy issues not
covered by WTO disciplines. However, these agreements require a waiver from the entire WTO covered by WTO disciplines. However, these agreements require a waiver from the entire WTO
membership to commence negotiations. Some countries are reluctant to al ow other countries to membership to commence negotiations. Some countries are reluctant to al ow other countries to
negotiate for fear of being left out, even while not being ready to commit themselves to new negotiate for fear of being left out, even while not being ready to commit themselves to new
disciplines. Yet, according to one commentator, these members are “simply outsmarting disciplines. Yet, according to one commentator, these members are “simply outsmarting
themselves” by encouraging more ambitious members to take negotiations out of the WTO. themselves” by encouraging more ambitious members to take negotiations out of the WTO.
Government Procurement Agreement
The Government Procurement Agreement (GPA) is an early example of a plurilateral agreement The Government Procurement Agreement (GPA) is an early example of a plurilateral agreement
with limited WTO membership—first developed as a code in the 1979 Tokyo Round.with limited WTO membership—first developed as a code in the 1979 Tokyo Round. ~~As of the~~
~~end of 2019, 48 WTO members (including the 28 EU member countries and~~62 Currently, 48 WTO members (including EU members separately and the United States) United States)
participate in the participate in the GPA; non-GPA signatories do not enjoy rights under the GPA; non-GPA signatories do not enjoy rights under the ~~GPA.61~~agreement.63 The GPA provides market access for various nondefense government projects to contractors of its signatories.64 Each member specifies government entities and goods and services (with thresholds and limitations) that are open to procurement bids by foreign firms of the other GPA members. For example, the U.S. GPA market access schedules of commitments cover 85 federal-level entities and voluntary commitments by 37 states.65 Negotiations to expand the GPA were concluded in 2012, and a revised GPA entered into force in 2014. Several countries, including China—which committed to pursuing GPA participation in its 2001 WTO accession process—are in long-pending negotiations to accede to the GPA. The growing role of the state in China’s economy may make China’s interest in joining and ability to meet requirements increasingly difficult, however. China’s position outside the GPA has given the U.S. government and other WTO members flexibility to address a range of China concerns through procurement measures. According to estimates by the ~~The GPA~~

~~57 “Concluding Remarks of the Chairperson, Ambassador Sunanta Kangvalkulkij” T rade Policy Review Body,~~
~~December 19, 2018. https://www.wto.org/english/tratop_e/tpr_e/tp482_crc_e.htm.~~
~~58 “U.S. Criticized at WT O,” Washington Trade Daily, December 18, 2018.~~
~~59 One example is the Agreement on T rade in Civil Aircraft , which entered into force in 1980 between 32 WT O~~
members, including the United States. T he agreement eliminates import duties on all aircraft, other than military members, including the United States. T he agreement eliminates import duties on all aircraft, other than military
aircraft, and other specified products. See https://www.wto.org/english/tratop_e/civair_e/civair_e.htm. aircraft, and other specified products. See https://www.wto.org/english/tratop_e/civair_e/civair_e.htm.
6061 Peter Sutherland et al., “T he Future of the WT O: Addressing institutional challenges in the new millennium,” World Peter Sutherland et al., “T he Future of the WT O: Addressing institutional challenges in the new millennium,” World
T rade Organization, 2004, p. 64. T rade Organization, 2004, p. 64.
61 62 CRS In Focus IF11651, WTO Agreement on Government Procurement (GPA), by Andres B. Schwarzenberg. 63 In November 2018, WT O members approved in principle the UK’s market access offer to In November 2018, WT O members approved in principle the UK’s market access offer to continue GPA continue GPA
membership as a separate member, following its pending withdrawal from the EU. See WT O, https://www.wto.org/membership as a separate member, following its pending withdrawal from the EU. See WT O, https://www.wto.org/
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~~provides market access for various nondefense government projects to contractors of its~~
~~signatories.62 Each member specifies government entities and goods and services (with thresholds~~
~~and limitations) that are open to procurement bids by foreign firms of the other GPA members.~~
~~For example, the U.S. GPA market access schedules of commitments cover 85 federal-level~~
~~entities and voluntary commitments by 37 states.63~~
~~Negotiations to expand the GPA were concluded in March 2012, and a revised GPA entered into~~
~~force on April 6, 2014. Several countries, including China—which committed to pursuing GPA~~
~~participation in its 2001 WTO accession process—are in long-pending negotiations to accede to~~
~~the GPA. Australia was the latest WTO member to join the revised GPA in May 2019. According~~
~~to estimates by the~~ english/news_e/news18_e/gpro_28nov18_e.htm. 64 For more information on the GPA, see https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm. 65 For the U.S. GPA schedule, see https://www.wto.org/english/tratop_e/gproc_e/gp_app_agree_e.htm. Congressional Research Service 22 World Trade Organization: Overview and Future Direction U.S. Government Accountability Office (GAO), from 2008 to 2012, 8% of U.S. Government Accountability Office (GAO), from 2008 to 2012, 8% of
total global government expenditures, and approximately one-third of U.S. federal government total global government expenditures, and approximately one-third of U.S. federal government
procurement, procurement, was covered by the GPA or similar commitments in U.S. FTAs.was covered by the GPA or similar commitments in U.S. FTAs.6466
Information Technology Agreement
Unlike the GPA, the Information Technology Agreement (ITA) is a plurilateral agreement that is Unlike the GPA, the Information Technology Agreement (ITA) is a plurilateral agreement that is
applied on an unconditional MFN basis. In other words, al WTO members benefit from the tariff applied on an unconditional MFN basis. In other words, al WTO members benefit from the tariff
reductions enacted by parties to the ITA regardless of their own participation.reductions enacted by parties to the ITA regardless of their own participation.6567 Original y Original y
concluded in 1996 by a subset of WTO members, the ITA provides tariff-free treatment for concluded in 1996 by a subset of WTO members, the ITA provides tariff-free treatment for
covered IT products; however, the agreement does not cover services or digital products like covered IT products; however, the agreement does not cover services or digital products like
software. In December 2015, a group of 51 WTO members, including the United States, software. In December 2015, a group of 51 WTO members, including the United States,
negotiated an expanded agreement to cover an additional 201 products and technologies, valued negotiated an expanded agreement to cover an additional 201 products and technologies, valued
at over $1 tril ion in annual global exports.at over $1 tril ion in annual global exports.6668 Members committed to reduce the majority of tariffs Members committed to reduce the majority of tariffs
by 2019. In June 2016, the United States initiated the ITA tariff cuts. by 2019. In June 2016, the United States initiated the ITA tariff cuts. ~~China~~ Analysts point to how China's reticence to make concessions prolonged negotiations, jeopardized outcomes, and raised concerns about how China might undermine future negotiations.69 China began its cuts in mid-~~began its cuts in mid-~~
September 2016, with plans to reduce tariffs over five to seven yearsSeptember 2016, with plans to reduce tariffs over five to seven years but maintains high tariff peaks. .
Trade Facilitation Agreement
The Trade Facilitation Agreement (TFA) is the newest WTO multilateral trade agreement, The Trade Facilitation Agreement (TFA) is the newest WTO multilateral trade agreement,
entering into force on February 22, 2017, and perhaps the lasting legacy of the Doha Round, since entering into force on February 22, 2017, and perhaps the lasting legacy of the Doha Round, since
it is the only major concluded component of the negotiations. it is the only major concluded component of the negotiations.6770 The TFA aims to address multiple The TFA aims to address multiple
trade barriers confronted by exporters and importers and reduce trade costs by streamlining, trade barriers confronted by exporters and importers and reduce trade costs by streamlining,
modernizing, and speeding up the customs processes for cross-border trade, as wel as making it modernizing, and speeding up the customs processes for cross-border trade, as wel as making it
more transparent. Some analysts view the TFA as evidence that achieving new multilateral more transparent. Some analysts view the TFA as evidence that achieving new multilateral
agreements is possible and that the design, including special and differential treatment provisions, agreements is possible and that the design, including special and differential treatment provisions,
could serve as a template for future agreements. could serve as a template for future agreements.

~~english/news_e/news18_e/gpro_28nov18_e.htm.~~
~~62 For more information on the GPA, see https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm.~~
~~63 For the U.S. GPA schedule, see https://www.wto.org/english/tratop_e/gproc_e/gp_app_agree_e.htm.~~
6466 U.S. GAO, United States Reported Opening More Opportunities to Foreign Firms T han Other Countries, but U.S. GAO, United States Reported Opening More Opportunities to Foreign Firms T han Other Countries, but ~~Bett er~~Better
Data Are Needed, GAO-17-168, February 9, 2017, p. 10. Also, see CRS In Focus IF11580, Data Are Needed, GAO-17-168, February 9, 2017, p. 10. Also, see CRS In Focus IF11580, U.S. Governm ent
Procurem ent and International Trade, by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
6567 For more information on the ITA, see https://www.wto.org/english/tratop_e/inftec_e/inftec_e.htm and For more information on the ITA, see https://www.wto.org/english/tratop_e/inftec_e/inftec_e.htm and
https://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm. https://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm.
6668 UST R, “U.S. and WT O Partners Announce Final Agreement on Landmark Expansion of Information T echnology UST R, “U.S. and WT O Partners Announce Final Agreement on Landmark Expansion of Information T echnology
Agreement,” December 2015, https://go.usa.gov/xPftt. Agreement,” December 2015, https://go.usa.gov/xPftt.
6769 For example, see Phil Muncaster, "China Stalls WT O T rade T alks on T ariff Free IT Goods," The Register, July 18, 2013, https://www.theregister.co.uk/2013/07/18/wto_trade_talks_dut y_ita_stall_china/. 70 See CRS Report R44777, See CRS Report R44777, WTO Trade Facilitation Agreement, by Rachel F. Fefer and Vivian C. Jones. , by Rachel F. Fefer and Vivian C. Jones.
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The TFA has three sections. The first is the The TFA has three sections. The first is the
heart of the agreement, containing the main heart of the agreement, containing the main
Impact of the WTO Trade Facilitation
provisions, of which many, but not al , are provisions, of which many, but not al , are
Agreement
binding and enforceable. Mandatory articles binding and enforceable. Mandatory articles
According to WTO estimates, global export gains from According to WTO estimates, global export gains from
include requiring members to publish include requiring members to publish
ful implementation of the TFA could range from $750 ful implementation of the TFA could range from $750
information, including publishing certain information, including publishing certain
bil ion to more than $3.6 tril ion dol ars per year and, bil ion to more than $3.6 tril ion dol ars per year and,
for the 2015-2030 time period, could increase world for the 2015-2030 time period, could increase world
items online; issue advance rulings in a items online; issue advance rulings in a
export growth by 2.7% a year and world GDP growth export growth by 2.7% a year and world GDP growth
reasonable amount of time; and provide for reasonable amount of time; and provide for
by over 0.5% a year. by over 0.5% a year.
appeals or reviews, if requested. The second appeals or reviews, if requested. The second
The Organisation for Economic Co-operation and The Organisation for Economic Co-operation and
section provides for SDT for developing section provides for SDT for developing
Development (OECD) estimates that TFA Development (OECD) estimates that TFA
country and LDC members, al owing them country and LDC members, al owing them
implementation could lower the costs of doing trade as implementation could lower the costs of doing trade as
more time and assistance to implement the more time and assistance to implement the
much as 12.5%-17.5% global y. much as 12.5%-17.5% global y.
agreement. The TFA is the first WTO agreement. The TFA is the first WTO
agreement in which members determine their own implementation schedules and in which agreement in which members determine their own implementation schedules and in which
progress in implementation is explicitly linked to technical and financial c apacity. The TFA progress in implementation is explicitly linked to technical and financial c apacity. The TFA
requires that “donor members,” including the United States, provide the needed capacity building requires that “donor members,” including the United States, provide the needed capacity building
and support. Final y, the third section sets institutional arrangements for administering the TFA. and support. Final y, the third section sets institutional arrangements for administering the TFA.
As of As of ~~the TFA’s third anniversary in February 2020, 91~~August 2021, 94% of the membership have ratified the % of the membership have ratified the
agreement.agreement.71 Members have been actively notifying their commitments and progress Members have been actively notifying their commitments and progress~~, and capacity-~~
—as of August 2021, 70% of implementation commitments have been notified72—and capacity-building activities are ongoing to support full building activities are ongoing to support full ~~implementation~~
implementation. Key Exceptions under GATT/WTO
Under WTO agreements, members general y cannot discriminate among trading partners, though Under WTO agreements, members general y cannot discriminate among trading partners, though
specific market access commitments can vary significantly by agreement and by member. WTO specific market access commitments can vary significantly by agreement and by member. WTO
rules permit some broad exceptions, which al ow members to adopt trade policies and practices rules permit some broad exceptions, which al ow members to adopt trade policies and practices
that may be inconsistent with WTO disciplines and principles such as MFN treatment, granting that may be inconsistent with WTO disciplines and principles such as MFN treatment, granting
special preferences to certain countries, and restricting trade in certain sectors, provided certain special preferences to certain countries, and restricting trade in certain sectors, provided certain
conditions are met. Some of the key exceptions follow. conditions are met. Some of the key exceptions follow.
General exceptions. GATT Article XX grants WTO members the right to take certain measures GATT Article XX grants WTO members the right to take certain measures
necessary to protect human, animal, or plant life or health, or to conserve exhaustible natural necessary to protect human, animal, or plant life or health, or to conserve exhaustible natural
resources, among other aims. The measures, however, must not entail “arbitrary” or resources, among other aims. The measures, however, must not entail “arbitrary” or
“unjustifiable” discrimination between countries, or serve as “disguised restriction on “unjustifiable” discrimination between countries, or serve as “disguised restriction on
international trade.” GATS Article XIV provides for similar exceptions for trade in services. international trade.” GATS Article XIV provides for similar exceptions for trade in services.
National security exception. GATT Article XXIGATT Article XXI protects the right of members to take any action protects the right of members to take any action
considered “necessary for the protection of essential national security interests,” as related to (i) considered “necessary for the protection of essential national security interests,” as related to (i)
fissionable materials; (i ) traffic in arms, ammunition, and implements of war, and such traffic in fissionable materials; (i ) traffic in arms, ammunition, and implements of war, and such traffic in
other goods and materials carried out to supply a military establishment; and (i i) taken in time of other goods and materials carried out to supply a military establishment; and (i i) taken in time of
war or other emergency in international relations. Similar exceptions relate to trade in services war or other emergency in international relations. Similar exceptions relate to trade in services
(GATS Article XIV bis) and intel ectual property rights (TRIPS Article 73). (GATS Article XIV bis) and intel ectual property rights (TRIPS Article 73).
More favorable treatment to developing countries. The so-cal ed “enabling clause” of the The so-cal ed “enabling clause” of the
GATT—cal ed the “Decision on Differential and More Favorable Treatment, Reciprocity and GATT—cal ed the “Decision on Differential and More Favorable Treatment, Reciprocity and
Fuller Participation of Developing Countries” of 1979—enables developed country members to Fuller Participation of Developing Countries” of 1979—enables developed country members to
grant differential and more favorable treatment to developing countries that is not extended to grant differential and more favorable treatment to developing countries that is not extended to
71 WT O T rade Facilitation Agreement Database, https://tfadatabase.org/ratifications. 72 Ibid., https://tfadatabase.org/implementation. Congressional Research Service 24 link to page 31 World Trade Organization: Overview and Future Direction other members. For example, this permits granting unilateral and nonreciprocal trade preferences other members. For example, this permits granting unilateral and nonreciprocal trade preferences
to developing countries under special programs, such as the U.S. Generalized System of to developing countries under special programs, such as the U.S. Generalized System of
Preferences (GSP), and also relates to regional trade agreements outside the WTO (see below). Preferences (GSP), and also relates to regional trade agreements outside the WTO (see below).
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Exceptions for regional trade agreements (RTAs). WTO countries are permitted to depart from WTO countries are permitted to depart from
the MFN principle and grant each other more favorable treatment in trade agreements outside the the MFN principle and grant each other more favorable treatment in trade agreements outside the
WTO, provided certain conditions are met. Three sets of rules general y apply. GATT Article WTO, provided certain conditions are met. Three sets of rules general y apply. GATT Article
XXIV applies to goods trade, and al ows the formation of free trade areas and customs unions XXIV applies to goods trade, and al ows the formation of free trade areas and customs unions
(areas with common external tariffs). These provisions require that RTAs be notified to the other (areas with common external tariffs). These provisions require that RTAs be notified to the other
WTO members, cover “substantial y al trade,” and do not effectively raise barriers on imports WTO members, cover “substantial y al trade,” and do not effectively raise barriers on imports
from third parties. GATS Article V al ows for economic integration agreements related to from third parties. GATS Article V al ows for economic integration agreements related to ~~services~~s ervices
trade, provided they entail “substantial sectoral coverage,” eliminate “substantial y al trade, provided they entail “substantial sectoral coverage,” eliminate “substantial y al
discrimination,” and do not “raise the overal level of barriers to trade in services” on members discrimination,” and do not “raise the overal level of barriers to trade in services” on members
outside the agreement. Paragraph 2(c) of the “enabling clause,” which deals with special and outside the agreement. Paragraph 2(c) of the “enabling clause,” which deals with special and
differential treatment, al ows for RTAs among developing countries in goods trade, based on the differential treatment, al ows for RTAs among developing countries in goods trade, based on the
“mutual reduction or elimination of tariffs.” RTA provisions in the GATS also al ow greater “mutual reduction or elimination of tariffs.” RTA provisions in the GATS also al ow greater
flexibility in sectoral coverage within services agreements that include developing countries. flexibility in sectoral coverage within services agreements that include developing countries.
Joining the WTO: The Accession Process
There are currently 164 members of the WTO. Another 22 countries are seeking to become There are currently 164 members of the WTO. Another 22 countries are seeking to become
members.members.6873 Joining the WTO means taking on the commitments and obligations of al the Joining the WTO means taking on the commitments and obligations of al the
multilateral agreements. Governments are motivated to join not just to expand access to foreign multilateral agreements. Governments are motivated to join not just to expand access to foreign
markets but also to spur domestic economic reforms, help transition to market economies, and markets but also to spur domestic economic reforms, help transition to market economies, and
promote the rule of law.promote the rule of law.6974 While any state or customs territory fully in control of its trade policy While any state or customs territory fully in control of its trade policy
may become a WTO member, a lengthy process of accession involves a series of documentation may become a WTO member, a lengthy process of accession involves a series of documentation
of a country’s trade regime and market access negotiation requirements (seof a country’s trade regime and market access negotiation requirements (see Figure 7~~).70~~
6).75 For example, Kazakhstan joined the WTO on November 30, 2015, after a 20-year process. For example, Kazakhstan joined the WTO on November 30, 2015, after a 20-year process.
Afghanistan became the 164th WTO member on July 29, 2016, after nearly 12 years of Afghanistan became the 164th WTO member on July 29, 2016, after nearly 12 years of
negotiating its accession terms. Other countries have initiated the process but face delays. 73 For the current status of accessions, see https://www.wto.org/english/thewto_e/acc_e/status_e.htm. 74~~negotiating its accession terms. Other countries have initiated the process but face delays. Iran~~
~~first applied for membership in 1996 and, while it submitted its Memorandum on the Foreign~~
~~Trade Regime in 2009 (a prerequisite for negotiating an accession package), Iran has not begun~~
~~the bilateral negotiation process, and the United States is unlikely to support its accession.71~~
~~As the WTO general y operates by member consensus, any single member could block the~~
~~accession of a prospective new member. As part of the process, a prospective member must~~
~~satisfy specific market access conditions of other WTO members by negotiating on a bilateral~~
~~basis. The United States has been a central arbiter of the accession process for countries like~~
~~China (joined in 2001, see below), Vietnam (2007), and Russia (2012), with which permanent~~
~~normal trade relations had to be established concurrently under U.S. law for the United States to~~
~~receive the full benefits of their membership.~~

~~68 For the current status of accessions, see https://www.wto.org/english/thewto_e/acc_e/status_e.htm.~~
69 Uri Dadush and Chiedu Osakwe, ed., Uri Dadush and Chiedu Osakwe, ed., WTO Accessions and Trade Multilateralism: Case Studies and Lessons from
the WTO at Twenty, Cambridge University Press and the World T rade Organization, 2015.Cambridge University Press and the World T rade Organization, 2015.
70 75 For more information on WT O accessions, see https://www.wto.org/english/thewto_e/acc_e/acces_e.htm and For more information on WT O accessions, see https://www.wto.org/english/thewto_e/acc_e/acces_e.htm and
https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c4s1p1_e.htm. https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c4s1p1_e.htm.
~~71 Iran’s prospective membership is complicated by U.S. economic sanctions, which restrict trade and investment.~~
~~Iran’s accession to the WT O would require the United States and other members to extend MFN treatment to Iran.~~
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World Trade Organization: Overview and Future Direction

Figure 76. WTO Accession Process

Source: WTO. Created by CRS. WTO. Created by CRS.
Note: The Working Party is a group of members negotiating multilateral y with a country applying to join. The Working Party is a group of members negotiating multilateral y with a country applying to join.
As the WTO general y operates by member consensus, any single member could block the accession of a prospective new member. As part of the process, a prospective member must satisfy specific market access conditions of other WTO members by negotiating on a bilateral basis. The United States has been a central arbiter of the accession process for countries like China (joined in 2001, see below), Vietnam (2007), and Russia (2012), with which permanent normal trade relations had to be established concurrently under U.S. law for the United States to receive the full benefits of their membership. China’s Accession and Membership China~~China’s Accession and Membership~~
~~China formal y~~ joined the WTO in December 2001. joined the WTO in December 2001.72 China has emerged as a major China has emerged as a major ~~player in the~~
~~global economy, as the fastest-growing economy,~~ global trader and is the largest merchandise exporter, and second-largest merchandise exporter, and second-
largest merchandise importer worldwide. China’s largest merchandise importer worldwide. China’s accession into the WTO on commercial y accession into the WTO on commercial y
meaningful terms was a major U.S. trade objective during the late 1990s.meaningful terms was a major U.S. trade objective during the late 1990s. Entry into the WTO was Entry into the WTO was
viewed by many as an important catalyst for spurring additional economic and trade reforms and viewed by many as an important catalyst for spurring additional economic and trade reforms and
the opening of China’s economy in a market, rules-based direction.the opening of China’s economy in a market, rules-based direction.~~73 These reforms have made~~
~~China~~76 China’s entry into the WTO helped it to become an increasingly significant market for U.S. exporters, a central factor in global supply an increasingly significant market for U.S. exporters, a central factor in global supply
chains, and a major source chains, and a major source of low-cost goods for U.S. consumers. At the same time, China has of low-cost goods for U.S. consumers. At the same time, China has ~~yet~~
~~to fully transition to a market economy and the government continues to intervene in many parts~~
~~of the economy, which has created a growing debate over the role of the WTO in both respects.~~failed to implement key commitments in areas such as services and has shifted toward a more statist economic development path. Many of the areas in which Chinese firms are expanding offshore remain highly restricted or closed to foreign firms in China. This growing asymmetry in market conditions and access has been spurring debate about options to address China’s practices of concern both within and outside the WTO. 76 Written testimony by Nicholas R. Lardy, “Issues in China’s WT O Accession,” May 9, 2001, Brookings Institution, https://www.brookings.edu/testimonies/issues-in-chinas-wto-accession/. Congressional Research Service 26 World Trade Organization: Overview and Future Direction
Negotiations for China’s accession to the GATT and then the WTO began in 1986 and took more Negotiations for China’s accession to the GATT and then the WTO began in 1986 and took more
than 15 years to complete. China sought to enter the WTO as a developing country, while U.S. than 15 years to complete. China sought to enter the WTO as a developing country, while U.S.
trade officials insisted that China’s entry had to be based on “commercial y meaningful terms” trade officials insisted that China’s entry had to be based on “commercial y meaningful terms”
that would require China to significantly reduce trade and investment barriers within a relatively that would require China to significantly reduce trade and investment barriers within a relatively
short time. In the end, a compromise was reached that required China to make immediate and short time. In the end, a compromise was reached that required China to make immediate and
extensive reductions in various trade and investment barriers, while extensive reductions in various trade and investment barriers, while ~~al owing~~allowing it to maintain some it to maintain some
protection (or a transitional period of protection) for certain sensitive sectors protection (or a transitional period of protection) for certain sensitive sectors ~~(see text box).74~~

~~72 For more information, see CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison.~~
~~73 Written testimony by Nicholas R. Lardy, “Issues in China’s WT O Accession,” May 9, 2001, Brookings Institution,~~
~~https://www.brookings.edu/testimonies/issues-in-chinas-wto-accession/.~~
~~74 For more detail on the terms, see CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison.~~
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and to reconcile various laws, regulations, and policies following accession (see text box).77
Selected Terms of China’s 2001 WTO Accession
 
Reduce the average tariff for industrial goods from 17% to 8.9%, and average tariffs on U.S. for industrial goods from 17% to 8.9%, and average tariffs on U.S.
priority agricultural products from 31% to 14%. priority agricultural products from 31% to 14%.
 
Limit subsidies for agricultural production to 8.5% of the value of farm output, eliminate to 8.5% of the value of farm output, eliminate
export subsidies on agricultural exports, and regularly notify WTO of al state subsidies. export subsidies on agricultural exports, and regularly notify WTO of al state subsidies.
 
Grant full trade and distribution rights to foreign enterprises within three years (with some within three years (with some
exceptions, such as for certain agricultural products, minerals, and fuels). exceptions, such as for certain agricultural products, minerals, and fuels).
 
Provide nondiscriminatory treatment to all WTO members, such as treating foreign firms , such as treating foreign firms
no less favorably than Chinese firms for trade purposes. no less favorably than Chinese firms for trade purposes.
 
End discriminatory trade policies against foreign invested firms, such as domestic content , such as domestic content
rules and technology transfer requirements. rules and technology transfer requirements.
 
Implement the TRIPS Agreement (which sets (which sets ~~basic~~ minimum standards on IPR protection and rules for standards on IPR protection and rules for
enforcement) upon accession. enforcement) upon accession.
 
Fully open the banking system to foreign financial institutions within five years. to foreign financial institutions within five years.
 
Allow joint ventures in insurance and telecommunications sectors (with various degrees of sectors (with various degrees of
foreign ownership al owed). foreign ownership al owed).
After joining the WTO, China began to implement economic reforms that facilitated its transition After joining the WTO, China began to implement economic reforms that facilitated its transition
toward a market economy and increased its openness to trade and foreign direct investment toward a market economy and increased its openness to trade and foreign direct investment
(FDI). China also general y implemented its tariff cuts on schedule. However, by 2006, U.S. (FDI). China also general y implemented its tariff cuts on schedule. However, by 2006, U.S.
officials and companies noted evidence of some trends toward a more restrictive trade regime and officials and companies noted evidence of some trends toward a more restrictive trade regime and
more state intervention in the economy. more state intervention in the economy.7578 In particular, observers have voiced concern about In particular, observers have voiced concern about
various Chinese industrial policies, such as those that foster indigenous innovation based on various Chinese industrial policies, such as those that foster indigenous innovation based on
forced technology transfer, domestic subsidies, and IP theft. Some stakeholders have expressed forced technology transfer, domestic subsidies, and IP theft. Some stakeholders have expressed
concerns over China’s mixed record of implementing certain WTO obligations and asserted that, concerns over China’s mixed record of implementing certain WTO obligations and asserted that,
in some cases, China appeared to be abiding by the letter but not the “spirit” of the WTO. in some cases, China appeared to be abiding by the letter but not the “spirit” of the WTO.7679
The United States and other WTO members have used dispute set lement (DS) procedures on a The United States and other WTO members have used dispute set lement (DS) procedures on a
number of occasions to address China’s al eged noncompliance with certain WTO commitments. number of occasions to address China’s al eged noncompliance with certain WTO commitments.
As a respondent, China accounts for about 12% of total WTO disputes since 2001. The United As a respondent, China accounts for about 12% of total WTO disputes since 2001. The United
States has brought 23 dispute cases against China at the WTO on issues, including IPR protection, States has brought 23 dispute cases against China at the WTO on issues, including IPR protection,
subsidies, and discriminatory industrial policies, and has largely prevailed in most cases. Though subsidies, and discriminatory industrial policies, and has largely prevailed in most cases. Though
~~some issues remain contested, China has largely complied with most WTO rulings.77 China has~~
~~also increasingly used DS to confront what it views as discriminatory measures; to date, it has~~
~~brought 16 cases against the United States (as of August 2020).~~
~~More broadly, the Trump Administration has questioned whether WTO rules are sufficient to~~
~~address the chal enges that China’s economy presents. USTR Lighthizer expressed this view in~~
~~remarks in September 2017: “The sheer scale of their coordinated efforts to develop their~~
~~economy, to subsidize, to create national champions, to force technology transfer, and to distort~~

75 77 For more detail on the terms, see CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison. 78 See UST R, See UST R, 2016 Report to Congress on China’s WTO Compliance, January 2017, and the annual UST R January 2017, and the annual UST R National
Trade Estim ate Reports for specific examples. for specific examples.
76 79 For example, see Written testimony by the U.S.-China Business Council, “China’s Implementation of its World For example, see Written testimony by the U.S.-China Business Council, “China’s Implementation of its World
T rade Organization Commitments,” Submitted in response to the Office of the U.S. T rade Representative’s Request for T rade Organization Commitments,” Submitted in response to the Office of the U.S. T rade Representative’s Request for
Comments and Notice of Public Hearing Concerning China’s Compliance with WT O Commitments, SeptemberComments and Notice of Public Hearing Concerning China’s Compliance with WT O Commitments, September 21, 21,
2016; and Atkinson et al., 2016; and Atkinson et al., Stopping China’s Mercantilism : A Doctrine of Constructive, Alliance-Backed Confrontation, ,
Information Technology and Innovation Foundation, March 16, 2017. Information Technology and Innovation Foundation, March 16, 2017.
77 James Bacchus, Simon Lester, and Huan Zhu, “Disciplining China at the WT O,” CAT O Institute, Policy Analysis
~~No. 856, November 15, 2018.~~
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Congressional Research Service 27 link to page 53 link to page 53 link to page 53 World Trade Organization: Overview and Future Direction some issues remain contested, China has largely complied with most WTO rulings.80 China has also increasingly used DS to confront what it views as discriminatory measures; to date, it has brought 16 cases against the United States. More broadly, the Trump Administration has questioned whether WTO rules are sufficient to address the chal enges that China’s economy presents. USTR Lighthizer expressed this view in remarks in September 2017: “The sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer, and to distort markets in China and throughout the world is a threat to the world trading system that is markets in China and throughout the world is a threat to the world trading system that is
unprecedented. Unfortunately, the World Trade Organization is not equipped to deal with this unprecedented. Unfortunately, the World Trade Organization is not equipped to deal with this
problem.”problem.”7881 USTR views efforts to resolve concerns over Chinese trade practices to date as USTR views efforts to resolve concerns over Chinese trade practices to date as
limited in effectiveness, including through WTO DS, as wel as recent proposals by WTO limited in effectiveness, including through WTO DS, as wel as recent proposals by WTO
members to craft new rules and WTO reforms.members to craft new rules and WTO reforms.7982 In its latest annual report to Congress on China’s In its latest annual report to Congress on China’s
WTO compliance for WTO compliance for ~~2019~~2020, USTR stated: , USTR stated:
[The WTO DS] mechanism is not designed to address a trade regime that broadly conflicts [The WTO DS] mechanism is not designed to address a trade regime that broadly conflicts
with the fundamental underpinnings of the WTO system. No amount of WTO DS by other with the fundamental underpinnings of the WTO system. No amount of WTO DS by other
WTO members would be sufficient to remedy this systemic problem. Indeed, manyWTO members would be sufficient to remedy this systemic problem. Indeed, many of the of the
most harmful policies and practices being pursued by China are not even directly most harmful policies and practices being pursued by China are not even directly
disciplined by WTO rules.disciplined by WTO rules.8083
Another related U.S. concern is China’s claim that it is a “developing country” under the WTO, Another related U.S. concern is China’s claim that it is a “developing country” under the WTO,
and, in particular, implications for concessions under ongoing and future WTO negotiations.and, in particular, implications for concessions under ongoing and future WTO negotiations.8184
Through developing country status, which countries self-designate, countries are entitled to Through developing country status, which countries self-designate, countries are entitled to
certain rights under special and differential treatment (SDT), among other provisions in WTO certain rights under special and differential treatment (SDT), among other provisions in WTO
agreements (for more discussion, see agreements (for more discussion, see “Treatment of Developing Countries” and ” and text box). ). ~~While~~
~~it is unclear the extent of SDT provisions China has sought in current ongoing negotiations, China~~
~~is a part of the coalition group of Asian developing members at the WTO and has claimed to be a~~
~~developing country in various fora.82 In the view of the Trump Administration,~~The Trump Administration directed USTR to seek WTO reform in this area, claiming “the United States “the United States
has never accepted China’s claim to developing-country status,” and the WTO should change its has never accepted China’s claim to developing-country status,” and the WTO should change its
approach to affording flexibilities based on approach to affording flexibilities based on ~~developing country~~such status. status.8385 (See (See “Treatment of
~~Developing Countries”.) Some Members of Congress also view this issue as a priority for WTO~~
~~reform in order to address what they perceive as China’s “predatory trade practices and abuse.”84~~
~~Chinese officials assert that despite being the world’s second-largest economy, China remains a~~
~~developing country, due to its relatively low GDP per capita and other economic chal enges.85~~
~~Concerns over China’s trade actions despite its WTO commitments have led the Trump~~
~~Administration to increase the use of unilateral mechanisms outside the WTO that in its view~~
~~more effectively address Chinese “unfair trade practices;” the recent Section 301 investigation of~~
~~Chinese IPR and technology transfer practices and resulting imposition of tariffs is evidence of~~

78Developing Countries”.) In the view of USTR Katherine Tai, “If the WTO is going to succeed in promoting equitable economic development, it is critical that the institution rethink the ability of countries to self-select developing country status. The rules for special and differential treatment should be reserved for those countries whose development indicators and global competitiveness actual y warrant such flexibilities; they should not be abused by countries that are already major trading powers.”86 Some Members of Congress also view this issue as a priority for WTO reform in order to address what they perceive as China’s “predatory trade practices and abuse.”87 Chinese 80 James Bacchus, Simon Lester, and Huan Zhu, “Disciplining China at the WT O,” CAT O Institute, Policy Analysis No. 856, November 15, 2018. 81 “U.S. T rade Policy Priorities: Robert Lighthizer, United States T rade Representative,” September 18, 2017, CSIS, “U.S. T rade Policy Priorities: Robert Lighthizer, United States T rade Representative,” September 18, 2017, CSIS,
https://www.csis.org/events/us-trade-policy-priorities-robert -lighthizer-united-states-trade-representative. https://www.csis.org/events/us-trade-policy-priorities-robert -lighthizer-united-states-trade-representative.
7982 See UST R, See UST R, ~~2019~~2020 Report to Congress on China’s WTO Compliance, , ~~March 2020.~~
~~80 Ibid, pp. 14-15.~~
81January 2021. 83 Ibid, p. 23. 84 See “U.S. Statement at the T rade Policy Review of the People’s Republic of China,” Statement as delivered by See “U.S. Statement at the T rade Policy Review of the People’s Republic of China,” Statement as delivered by
Ambassador Dennis C. Shea on Behalf of the United States of America, JulyAmbassador Dennis C. Shea on Behalf of the United States of America, July 11, 2018, Geneva. 85 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July 26, 2019. 86 U.S. Congress, Senate Finance Committee, Questions for the Record, Hearing to Consider the Nomination of Katherine C. T ai, of the District of Columbia, to be United States T rade Representative, February 25, 2021. 87 Rep. Darin LaHood and Rep. Anthony Gonzalez, “Reforming China’s unfair practices at the WT O will level the global playing field,” Op-ed, Washington Examiner, August 4, 2020. Congressional Research Service 28 link to page 49 World Trade Organization: Overview and Future Direction officials assert that despite being the world’s second-largest economy, China remains a developing country, due to its relatively low GDP per capita and other economic chal enges.88 Building concerns in the U.S. government and business community over China’s economic practices and trade actions led the Trump Administration to resort to unilateral mechanisms outside the WTO, such as the Section 301 investigation of Chinese IPR and technology transfer practices that in its view more effectively addressed Chinese “unfair trade practices.”89 Prior to ~~11, 2018, Geneva.~~
~~82 In its June 2018 white paper “China and the World T rade Organization,” which reflects on its compliance with WT O~~
~~obligations and support for the multilateral trading system, China called itself the “largest developing country in the~~
~~world.” See http://www.xinhuanet.com/english/2018-06/28/c_137286993.htm.~~
~~83 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July~~
~~26, 2019.~~
~~84 Rep. Darin LaHood and Rep. Anthony Gonzalez, “Reforming China’s unfair practices at the WT O will level the~~
~~global playing field,” Op-ed, Washington Examiner, August 4, 2020.~~
~~85 “China remains largest developing country: economist,” Xinhua, April 15, 2018. As per the World Bank, China is~~
~~considered a developed country, though it is often distinguished as an “ emerging market.” However, based on World~~
~~Bank classifications of countries by income groupings, using gross national income (GNI) per capita, China is~~
~~considered an upper-middle income economy. See World Bank, https://www.worldbank.org/en/country/china/overview~~
~~and https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.~~
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~~this strategy.86 Prior to~~ the establishment of the WTO, the United States resorted to Section 301 the establishment of the WTO, the United States resorted to Section 301
relatively frequently, in particular due to concerns that the GATT lacked an effective DS system.relatively frequently, in particular due to concerns that the GATT lacked an effective DS system.87
90 When the United When the United States joined the WTO in 1995, it agreed to use the DS mechanism rather than States joined the WTO in 1995, it agreed to use the DS mechanism rather than
act unilateral y; many analysts contend that the United States has violated its WTO obligations by act unilateral y; many analysts contend that the United States has violated its WTO obligations by
imposing tariffs against China under Section 301. Following its investigation, the United States imposing tariffs against China under Section 301. Following its investigation, the United States
also initiated a WTO DS case against China’s “discriminatory technology licensing” in 2018. also initiated a WTO DS case against China’s “discriminatory technology licensing” in 2018.
Subsequently, China filed its own complaints at the WTO over U.S. tariff actionsSubsequently, China filed its own complaints at the WTO over U.S. tariff actions, which remain in effect under the Biden Administration (see above). (see above).
The United States has pursued The United States has pursued ~~cooperation to some extent~~some cooperation with other countries with similar with other countries with similar
concerns over Chinese non-market policies and practices, and the need to clarify and improve concerns over Chinese non-market policies and practices, and the need to clarify and improve
WTO rules on WTO rules on industrial subsidies and state-owned enterprises (SOEs) in particular.industrial subsidies and state-owned enterprises (SOEs) in particular.~~88 In~~
~~December~~91 Since 2017, the United States, EU, and Japan 2017, the United States, EU, and Japan ~~announced new~~have been engaged in trilateral trilateral ~~efforts~~talks to cooperate to cooperate
on issues related to government-supported excess capacity, unfair competition caused by market-on issues related to government-supported excess capacity, unfair competition caused by market-
distorting subsidies and SOEs, forced technology transfer, and local content requirements.distorting subsidies and SOEs, forced technology transfer, and local content requirements.~~89 The~~
~~three officials have made advances toward a draft text on stronger rules on industrial subsidies;~~
~~however, talks appear to have make limited progress since mid-2019.90 (See~~ 92 In January 2020, the three sides advanced a proposal to strengthen existing WTO rules on industrial subsidies.93 (See “Competition with ~~“Competition with~~
~~SOEs and Non-Market Practices”.)~~
~~“Non-market oriented” policies and practices of China are a central driver of recent efforts. A~~
~~related WTO dispute involving China was poised to have significant implications for the~~
~~treatment of China’s economy under WTO rules, in particular the terms of China’s “nonmarket~~
~~economy” (NME) status under its WTO accession protocol.91 USTR Lighthizer described the~~
~~case as “the most serious litigation matter we have at the WTO” and that a decision in favor of~~
~~China would be “cataclysmic” for the WTO.92 Both the United States and EU continue to treat~~
~~China as a nonmarket economy in antidumping and countervailing duty proceedings, a point of~~
~~contention for China. Under its accession, China agreed to al ow WTO members to use~~
~~alternative methodologies, such as surrogate countries, for assessing prices and costs on products~~
~~subject to AD measures, amid their concerns that distortions in the Chinese economy caused by~~
~~government intervention result in Chinese prices that do not reflect market forces. China contends~~
~~that its WTO accession protocol requires al members to terminate use of the alternative~~
~~methodology by December 11, 2016. The NME distinction is important to China as it has often~~
~~resulted in higher AD margins on Chinese exports; moreover, a significant share of Chinese~~

~~86 CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg.~~
~~87 Chad P. Bown, “~~SOEs and Non-Market Practices”.) Current Status and Ongoing Negotiations Buenos Aires Ministerial MC11, 2017 The last WTO Ministerial Conference (MC11) in December 2017, in Buenos Aires, Argentina, resulted in few major outcomes but served as an opportunity for members to take stock of 88 “China remains largest developing country: economist,” Xinhua, April 15, 2018. As per the World Bank, China is considered a developed country, though it is often distinguished as an “ emerging market.” However, based on World Bank classifications of countries by income groupings, using gross national income (GNI) per capita, China is considered an upper-middle income economy. See World Bank, https://www.worldbank.org/en/country/china/overview and https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups. 89 CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg and CRS In Focus IF11284, U.S.-China Trade Relations, by Karen M. Sutter. 90 CRS Report R46604, Section 301 of the Trade Act of 1974: Origin, Evolution, and Use, by Andres B. Schwarzenberg; Chad P. Bown, “ Rogue 301: T rump to Dust Off Another Outdated US T rade Laws,” Peterson Institute for Rogue 301: T rump to Dust Off Another Outdated US T rade Laws,” Peterson Institute for
International Economics, August 3, 2017, https://piie.com/blogs/trade-investment-policy-watch/rogue-301-trump-dust-International Economics, August 3, 2017, https://piie.com/blogs/trade-investment-policy-watch/rogue-301-trump-dust-
another-outdated-us-trade-law. another-outdated-us-trade-law.
88 91 Some experts suggest that the United States should pursue a comprehensive, multilateral case at the WT O with a Some experts suggest that the United States should pursue a comprehensive, multilateral case at the WT O with a
broad coalition of countries sharing concerns about certain Chinese practices that either violate one or broad coalition of countries sharing concerns about certain Chinese practices that either violate one or ~~more~~mo re specific specific
WT O commitments or that “nullify or impair” a benefit provided to WT O members (known as a non -violation claim WT O commitments or that “nullify or impair” a benefit provided to WT O members (known as a non -violation claim
under Article XXIII of the GAT T ). See U.S.-China Economic and Security Review Commission, under Article XXIII of the GAT T ). See U.S.-China Economic and Security Review Commission, Hearing on U.S.
Tools to Address Chinese Market Distortions, written testimony of Jennifer Hillman, June 8, 2018. , written testimony of Jennifer Hillman, June 8, 2018.
8992 UST R, “Joint Statement by the United States, European UST R, “Joint Statement by the United States, European ~~Unio n~~Union and Japan at MC11,” December 11, 2017. and Japan at MC11,” December 11, 2017.
90 93 UST R, “Joint Statement on T rilateral Meeting of the T rade Ministers of the United States, Japan, and the European UST R, “Joint Statement on T rilateral Meeting of the T rade Ministers of the United States, Japan, and the European
~~Union,” press release, May 31, 2018; and “Joint Statement of the Trilateral Meeting of the T rade Ministers,” press~~
~~release, January 9, 2019 and May 23, 2019.~~
~~91 Section 301 through 310 of the T rade Act of 1974, commonly called “Section 301,” is one of the principal statutory~~
~~means by which the United States addresses “unfair” foreign trade barriers to U.S. exports and enforces U.S. rights~~
~~under trade agreements. Section 301 applies to foreign acts, policies, and practices that UST R determines either~~
~~violates, or is inconsistent with, a trade agreement; or is “unjustifiable” and burdens or restricts U.S. trade.~~
~~92 David Lawder, “U.S. formally opposes China market economy status at the WT O,” Reuters, November 30, 2017~~Union,” press release, January 2020. .
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~~exports is subject to trade remedies.93 The United States and the EU have argued that the WTO~~
~~language is vague and did not automatical y obligate them to extend market economy status~~
~~(MES) to China because it is stil not a market economy.94~~
~~In December 2016, China requested consultations under WTO DS with the United States and EU~~
~~over the failure to grant China MES. In April 2017, a panel was established in the EU case. In~~
~~November 2017, the United States formal y submitted arguments as a third party in support of the~~
~~EU; China’s case involving the United States did not progress. The EU-China panel said it~~
~~expected to issue its final report during the second quarter of 2019.95 In May 2019, however,~~
~~China requested to suspend its dispute with the EU before the findings were issued.96~~
~~Current Status and Ongoing Negotiations~~
~~Buenos Aires Ministerial MC11, 2017~~
~~The last WTO Ministerial Conference (MC11) took place in December 2017, in Buenos Aires,~~
~~Argentina. After countries were unable to complete the Doha Round (see text box below), many~~
~~questioned what could effectively be achieved at MC11. WTO Director-General Azevêdo had~~
~~tempered expectations for major negotiated outcomes, acknowledging that “members’ positions~~
~~continue to diverge significantly on the substantial issues.”97 These differences were perhaps most~~
~~apparent by the inability of WTO members to reach consensus over a Ministerial Declaration,~~
~~largely due to staunch disagreements over including references to the mandate of the Doha Round~~
~~(see text box).98 Instead the Ministerial became primarily an opportunity for members to take~~
~~stock of ongoing talks and further define priority work areas.~~
ongoing talks and further define priority work areas. Although WTO members worked intensively to build consensus over proposals in several areas, Although WTO members worked intensively to build consensus over proposals in several areas,
~~MC11 did not result in major breakthroughs. WTO members committed to intensify negotiations~~
~~to reduce fisheries subsidies, “with a view to adopting” an agreement by the next Ministerial; the~~
~~United States has supported these efforts. A joint statement was issued by 60 members in support~~
~~of advancing multilateral negotiations on domestic regulations in services.~~ MC11 did not result in major breakthroughs. Subsets of WTO Subsets of WTO
members members ~~also~~ issued statements committing to new work programs or open-ended talks for issued statements committing to new work programs or open-ended talks for
interested parties to potential y conclude plurilateral agreements in areasinterested parties to potential y conclude plurilateral agreements in areas~~, including:99~~
~~ E-commerce: among 84 WTO members, including the United States;~~
~~ Investment facilitation: among 98 WTO members; and~~

~~93 Chad P. Bown, “ Should the United States Recognize China as a Market Economy?” Peterson Institute for~~
~~International Economics, December 2016.~~
~~94 T he expectation back in 2001 was that China would transition to a market economy within 15 years.~~
~~95 WT O, “DS516: European Union – Measures Related to Price Comparison Methodologies,” https://www.wto.org/~~
~~english/tratop_e/dispu_e/cases_e/ds516_e.htm.~~
~~96 Some speculate that this action was in anticipation of some findings that were not favorable to China. T om Miles,~~
~~“China pulls WT O suit over claim to be a market economy,” Reuters, June 17, 2019.~~
~~97 WT O, “DG Azevêdo details process for MC11 as preparations enter final stages,” November 28, 2017,~~
~~https://www.wto.org/english/news_e/spra_e/spra201_e.htm.~~
~~98 “MC11 expected to end without Ministerial declaration as U.S., India clash over language on development,”~~ ~~Inside~~
~~U.S. Trade, December 13, 2017.~~
~~99 Number of countries in the talks reflects current participants, which expanded since the original announcemen ts.~~
~~WT O, “New initiatives on electronic commerce, investment facilitation and MSMEs,” December 13, 2017,~~
~~https://www.wto.org/english/news_e/news17_e/minis_13dec17_e.htm.~~
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. These Joint Statement Initiatives (JSI) include:94  Domestic regulation of services: among 65 members, the United States stated plans to join;  E-commerce: among 86 WTO members, including the United States;  Investment facilitation: among 98 WTO members; and   Micro, small and medium-sized enterprises: among 90 WTO members. : among 90 WTO members.
The lack of concrete multilateral outcomes at MC11 was a reminder of the continued resistance of The lack of concrete multilateral outcomes at MC11 was a reminder of the continued resistance of
some countries to a new agenda outside of the original 2001 Doha mandate. In the view of some countries to a new agenda outside of the original 2001 Doha mandate. In the view of EU
former EU Trade Commissioner Cecilia Malmström, the MinisterialTrade Commissioner Cecilia Malmström, the Ministerial “laid bare the deficiencies of the “laid bare the deficiencies of the
negotiating function at the WTO” and negotiating function at the WTO” and ~~that “members are systematical y being blocked from~~
~~addressing the pressing realities of global trade.” Malmström~~she blamed the lack of progress on blamed the lack of progress on
“procedural excuses and vetoes” and “cynical hostage taking.”“procedural excuses and vetoes” and “cynical hostage taking.”~~100~~95 Some developing country Some developing country
members, including India, attempted to block multilateral progress in a range of areas absent members, including India, attempted to block multilateral progress in a range of areas absent
more progress on Doha issues, such as agricultural stockholding for food security. Such “hostage-more progress on Doha issues, such as agricultural stockholding for food security. Such “hostage-
taking” tactics, widely taking” tactics, widely acknowledged to have hindered progress in the Doha Round, further acknowledged to have hindered progress in the Doha Round, further
highlight the difficulty of achieving future consensus among al 164 members. highlight the difficulty of achieving future consensus among al 164 members.
In contrast, the United States general y viewed the MinisterialIn contrast, the United States general y viewed the Ministerial ~~outcome~~ outcome and launch of plurilateral talks positively—that it positively—that it
~~signaled~~ signaled “the impasse at the WTO was broken,” paving the way for like-minded countries to “the impasse at the WTO was broken,” paving the way for like-minded countries to
pursue new work pursue new work in other areas.96 ~~in other areas.101 USTR expressed U.S. support in particular for forthcoming~~
~~work on e-commerce, scientific standards for agriculture, and disciplines on fisheries subsidies.~~

What Happened to the Doha Round
The Doha Round launched in November 2001, but after nearly two decades of negotiations, members did not The Doha Round launched in November 2001, but after nearly two decades of negotiations, members did not
achieve its agendaachieve its agenda~~. In the 2015 Ministerial Declaration, WTO members acknowledged their divisions over the~~
~~future of Doha and over reaffirming its continuation:~~
~~We recognize that many Members reaffirm the Doha Development Agenda (DDA), and the Declarations and~~
~~Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their ful~~
~~commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they~~
~~believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members~~
~~have different views on how to address the negotiations.~~
and in 2015 were unable to reach consensus to reaffirm its mandate. Put simply, the large and diverse membership of the WTO made consensus on the broad Doha mandate Put simply, the large and diverse membership of the WTO made consensus on the broad Doha mandate
difficult. At the root of the stalemate were persistent differences among the United States, EU, and developing difficult. At the root of the stalemate were persistent differences among the United States, EU, and developing
countries on major issues including agricultural market access, subsidies, industrial tariffs and nontariff barriers, countries on major issues including agricultural market access, subsidies, industrial tariffs and nontariff barriers,
services, and trade remedies. Developing countries, including large emerging markets like China, Brazil, and services, and trade remedies. Developing countries, including large emerging markets like China, Brazil, and
India, sought reduction of agricultural tariffs and subsidies by developed countries, nonreciprocal market access India, sought reduction of agricultural tariffs and subsidies by developed countries, nonreciprocal market access
for manufacturing sectors, and continued protection for services sectors. In contrast, developed country for manufacturing sectors, and continued protection for services sectors. In contrast, developed country
members sought reciprocal trade liberalization, especial y commercial y meaningful market access in advanced members sought reciprocal trade liberalization, especial y commercial y meaningful market access in advanced
developing countries, while retaining protection for agriculture. developing countries, while retaining protection for agriculture.
Procedural rigidities inherent in the WTO negotiating approach also complicated negotiations. In particular, the Procedural rigidities inherent in the WTO negotiating approach also complicated negotiations. In particular, the
“single undertaking” approach, which means “nothing is agreed until everything is agreed,” prevented progress “single undertaking” approach, which means “nothing is agreed until everything is agreed,” prevented progress
in select areas where consensus might be easier to achieve. However, some experts view a big package as the in select areas where consensus might be easier to achieve. However, some experts view a big package as the
best approach to securing major new trade liberalization where every member has to give and take. best approach to securing major new trade liberalization where every member has to give and take.
Countries have disagreed about how to learn best from the perceived failure of Doha, leaving the path forward Countries have disagreed about how to learn best from the perceived failure of Doha, leaving the path forward
~~unclear. In the view of former USTR Michael Froman, the “route forward is a new form of pragmatic~~
~~multilateralism. Moving beyond Doha does not mean leaving its unfinished business behind. Rather, it means~~
~~bringing new approaches to the table. Doha issues are too important to leave to the Doha architecture that has~~
~~failed for so long.” Recently, the EU, Canada, and others have put forward proposals to “modernize” the WT O.~~

~~100~~unclear as members continue to negotiate both at a multilateral and plurilateral level. 94 Number of countries in the talks reflects current participants, which expanded since the original announcements. WT O, “New initiatives on electronic commerce, investment facilitation and MSMEs,” December 13, 2017, https://www.wto.org/english/news_e/news17_e/minis_13dec17_e.htm. 95 European Commission, “EU Statement at the Heads of Delegations meeting,” European Commission, “EU Statement at the Heads of Delegations meeting,” ~~Buenos~~Buen os Aires, Argentina, December Aires, Argentina, December
13, 2017, http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156464.pdf. 13, 2017, http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156464.pdf.
~~101~~ 96 UST R, “UST R Robert Lighthizer Statement on the Conclusion of the WT O Ministerial Conference,” press release, UST R, “UST R Robert Lighthizer Statement on the Conclusion of the WT O Ministerial Conference,” press release,
December 2017. December 2017.
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Outlook for MC12, 2021
The Ministerial general y convenes every two years to make decisions and announce progress on The Ministerial general y convenes every two years to make decisions and announce progress on
multilateral trade agreements. multilateral trade agreements. ~~With Kazakhstan as the host for MC12, members scheduled the~~
~~Ministerial for June 2020 in the expectation of more accommodating weather. Following the~~
~~mixed results of MC11, the United States and other WTO members had hoped MC12 would be~~
Due to the COVID-19 pandemic, the 12th Ministerial (MC12) was postponed until November 2021.97 During the pandemic, some WTO activities have continued virtual y, including General Council meetings, and some negotiations, while others stal ed as members reevaluated whether it is viable and appropriate for talks to be conducted virtual y. While the virtual format may al ow for more representatives to participate and facilitate consultations with national ministries, the missing element of face-to-face consultations and side conversations may make it harder to conclude highly contentious issues. Following the mixed results of MC11, WTO members hope MC12 wil be an action-forcing event ~~an action-forcing event~~ to conclude key negotiations and make progress on multiple initiatives, to conclude key negotiations and make progress on multiple initiatives,
demonstrating the value of the WTO. demonstrating the value of the WTO. ~~MC12 was also to~~The ministerial wil also serve as a critical forum for taking stock serve as a critical forum for taking stock
of various WTO of various WTO reform proposals and the crisis in the DS system. MC12, to be held in a hybrid format of in-person as wel as virtual participation, wil be the first Ministerial meeting to be chaired by the new WTO DG Ngozi Okonjo-Iweala, who was selected by WTO members in February 2021, after the Biden Administration formal y supported her candidacy. Okonjo-Iweala has cal ed on WTO members to focus efforts and show flexibility to conclude longstanding negotiations on agriculture and fisheries subsidies (see below). In particular, she has urged members to work together and find ways forward to address proposals on: access to medical products for combatting the pandemic; special and differential treatment; and dispute settlement (see “Proposed Institutional Reforms”). The DG has expressed frustration with inertia in ongoing negotiations,98 and said she is seeking breakthroughs in the impasses to produce two or three concrete deliverables at MC-12 and announcements on progress on the multiple ongoing plurilateral negotiations launched at the end of MC11.99 At the same time, WTO leadership and U.S. trade officials have tempered expectations for major outcomes at MC12.100 USTR Tai has emphasized that a “successful” ministerial must at least deliver a meaningful agreement on fisheries subsidies, on members’ response to the COVID-19 pandemic, and the importance of WTO reform.101 In a later speech, she stated that “We can use the upcoming ministerial to deliver results on achievable outcomes,” pointing to specific opportunities in trade and health, trade facilitation, the ongoing fisheries negotiations, reforming the WTO’s monitoring function, and revitalizing dispute settlement.102 At the October 2021 G-20 Trade and Investment Ministerial meeting, the ministers noted that the G-20 members “commit to a successful and productive WTO 12th Ministerial Conference as an important opportunity to advance WTO reform to revitalize the organization.”103 97 For more information on MC12, see https://www.wto.org/english/thewto_e/minist_e/mc12_e/mc12_e.htm . 98 Bryce Baschuk, “Okonjo-Iweala Grows Frustrated With WT O Inertia, Floats Quitting,” Bloomberg, September 30, 2021. 99 WT O General Council, “ Chair urges members to focus on priorities, outcomes for MC12 ,” July 28, 2021. 100 Doug Palmer, “ WT O chief outlines modest goals for ministerial meeting,” Politico, September 23, 2021; 101 UST R, “Readout of Ambassador Katherine T ai’s meeting with World T rade Organization Director -General Dr. Ngozi Okonjo-Iweala,” September 22, 2021. 102 UST R, “ Ambassador Katherine T ai's Remarks As Prepared for Delivery on the World T rade Organization ,” October 14, 2021. 103 G20, Ministerial Statement on T rade and Investment, October 12, 2021, https://www.g20.org/wp-content/uploads/2021/10/G20-TIMM-statement-PDF.pdf. Congressional Research Service 31 link to page 44 World Trade Organization: Overview and Future Direction Selected Ongoing WTO Negotiations In anticipation of MC12, WTO members continue to make progress and seek concrete outcomes on some ongoing talks, including fisheries subsidies and e-commerce. In other areas, such as agriculture, prospective outcomes remain limited. In addition to ongoing negotiations for new rules and trade liberalization, other talks among members involve responses to the COVID-19 pandemic (see “COVID-19 and WTO Reactions”). Agriculture While plurilaterals have become the negotiating approach for several issues, for some issues, multilateral solutions arguably remain ideal, such as achieving longstanding objectives on disciplines for ~~reform proposals and the crisis in the DS system.~~
~~Due to the COVID-19 pandemic, MC12 was postponed to 2021.102 During COVID-19, some~~
~~WTO activities have continued virtual y, including General Council meetings, and some in person~~
~~as wel , as limited staff returned to offices in May. But several negotiations stal ed as members~~
~~reevaluate whether it is viable and appropriate for talks to be conducted virtual y. The strategic~~
~~direction for MC12 wil be shaped by new leadership of the WTO Secretariat, following DG~~
~~Azevêdo’s announcement that he wil resign at the end of August 2020, a year before his term’s~~
~~end. Azevêdo resigned early to prevent the DG selection from coinciding with MC12, potential y~~
~~diverting political attention from achieving critical outcomes (see text box under “Policy Issues~~
~~and Future Direction”).~~
~~Selected Ongoing WTO Negotiations~~
~~Despite the postponement of the 2020 Ministerial, several countries continue to make progress on~~
~~some ongoing talks, including fisheries subsidies and e-commerce. In other areas, such as~~
~~agriculture and environmental goods, talks remain largely stal ed with no clear path forward. The~~
~~various states of talks raise the stakes for making progress at the rescheduled Ministerial in 2021.~~
~~Agriculture~~
~~For some issues, multilateral solutions arguably remain ideal, for example, disciplines on~~
agricultural subsidies, which are widely used by developed and advanced developing countries agricultural subsidies, which are widely used by developed and advanced developing countries
~~alike. While the Doha Round largely did not achieve its~~ alike. While members were largely unable to achieve the Doha Round’s comprehensive negotiating mandate to comprehensive negotiating mandate to
lower agricultural tariffs and subsidies, negotiations more lower agricultural tariffs and subsidies, negotiations more limited in scope have continued.limited in scope have continued.~~103 The~~
~~2015 Nairobi Ministerial~~ 104 For example, in 2015, members agreed to eliminateagreed to eliminate export subsidies for agricultureexport subsidies for agriculture~~, but the issue of~~
~~public stockholding remains~~; at the same time, other issues where members have agreed to interim solutions, such as regarding public stockholding for ensuring food security remain seemingly intractable. Public stockholding—otherwise known as seemingly intractable. Public stockholding—otherwise known as
price support or supply control programs—is used by governments, especial y in developing price support or supply control programs—is used by governments, especial y in developing
countries to purchase and stockpile food to bolster domestic farm prices by removing surplus countries to purchase and stockpile food to bolster domestic farm prices by removing surplus
~~stocks from the market. Some governments may release portions of these government-owned~~
~~stocks to the public during periods of market volatility or shortage, but a major concern is that~~
~~some of these stocks may be exported at below their purchase price, thus acting as indirect export~~
~~subsidies. These programs can also become problematic when governments purchase food at a~~
~~price and quantity that effectively become trade-distorting domestic support.~~
~~Since the last Ministerial, working groups have met to seek convergence in the areas of domestic~~
~~support, market access, export competition, export prohibition/restrictions, public stockholding,~~
~~and cotton trade issues. With the postponement of MC12, members have exchanged views in~~

~~102 WT O, “ DG Azevêdo provides urgent information to WTO members on MC12 date and venue,” Press release,~~
~~March 12, 2020.~~
~~103 For more detailed analysis, see CRS Report R46456, Reforming the WTO Agreement on Agriculture, by Anita~~
~~Regmi, Nina M. Hart, and Randy Schnepf.~~
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~~writing on issues, including public stockholding and special safeguard mechanisms for~~
~~developing countries. Recognizing the potential social and economic impact of the COVID-19~~
~~pandemic, the chair of the Agriculture Committee plans to seek member feedback on the ongoing~~
~~negotiations in an effort to revitalize reform efforts in September 2020.104~~
~~As part of WTO reform efforts, the United States has also~~ stocks from the market.105 Reaching an agreement on public stockholding continues to be a priority for some developing countries such as India. The MC12 negotiating text on agriculture released in July 2021 seeks an agreement on “principles” that WTO members would further negotiate to continue the reform process.106 Priority areas cover key pil ars of the AoA, such as domestic support, market access, and export competition, as wel as areas that emerged during the Doha Round, including reform to the cotton sector, export restrictions, a special safeguard mechanism to protect farmers in developing countries, and public stockholding. Upcoming discussions aimed at addressing domestic support for agriculture could have implications for the United States; recent ad hoc U.S. domestic support programs in response to international trade retaliation and economic disruption caused by the COVID-19 pandemic added to existing programs has caused the United States to approach its committed spending limits.107 Establishing commitments to “cap and reduce” existing trade and domestic production-distorting entitlements by at least half by 2030 remains a priority for several WTO member nations including those represented by the so-cal ed Cairns Group (including Australia, Brazil, and Canada, among others).108 104 For more detailed analysis, see CRS Report R46456, Reforming the WTO Agreement on Agriculture, by Anita Regmi, Nina M. Hart, and Randy Schnepf. 105 Some governments may release portions of these government -owned stocks to the public during periods of market volatility or shortage, but a major concern is that some of these stocks may be exported at below their purchase price, thus acting as indirect export subsidies. T hese programs can also become problematic when governments purchase food at a price and quantity that effectively become trade-distorting domestic support. 106 WT O, “ Agriculture negotiations chair introduces draft text for ministerial outcome on farm trade,” July 29, 2021. For other background, see CRS Report R46918, Key Issues in WTO Agriculture Negotiations, by Anita Regmi. 107 Under the AoA, the United States is committed to spend no more than $19.1 billion annually on domestic farm support programs most likely to distort trade under the WT O. For 2019 -2020 crop year, the United States reports it spent $18.2 billion in agricultural subsidies. 108 Argentina, et al, “ Framework for Negotiations on Domestic Support,” JOB/AG/177/Rev.2, July 15, 2021. Congressional Research Service 32 World Trade Organization: Overview and Future Direction Another major objective seen as a potential MC12 outcome is enhancing transparency. As part of WTO reform efforts, the United States has flagged the broader issue of the importance of notifications and transparency.109 WTO ~~flagged the broader issue of~~
~~notifications and transparency, which has implications for agricultural trade reform. WTO~~
agreements require members to notify subsidies and trade-distorting support to ensure agreements require members to notify subsidies and trade-distorting support to ensure
transparency and consistency with a member’s transparency and consistency with a member’s ~~obligation~~WTO obligations. Compliance with . Compliance with WTO notifications has notifications has
been notoriously lax, with some countries been notoriously lax, with some countries years behind on their reporting. In advance of MC12, the United States with other WTO members (including Canada, the EU, and Japan) submitted a proposal cal ing for enhanced transparency obligations, along with other reporting commitments on market access and domestic support.110 If implemented, this proposal would establish a new, single streamlined notification process covering export subsidies, export financing, international food aid, and exporting State Trading Enterprises. It would also specify and explain calculations in WTO notifications related to domestic agricultural support. The United States sees enhanced transparency and a streamlined notification process as feasible MC12 outcomes. The United States and other countries are also raising issues of non-tariff barriers, seeking to establish a work program to identify chal enges and impacts of emerging issues related to the implementation and application of the SPS Agreement. The program’s goals include promoting the adoption and use of safe, innovative plant-protection products and veterinary medicines, and encourage the use of international standards and recommendations developed by recognized standard-setting organizations as the basis for harmonizing SPS measures. The declaration also cal s for basing SPS measures on scientific evidence and principles; incorporating scientific uncertainty in risk analysis; supporting access and use of “innovative tools and technologies” (such as plant breeding innovations); and addressing disease transmission and pest control.111 The prospects for achieving any of these outcomes at the MC12 remain uncertain however, given the highly contentious nature of ongoing negotiations involving food and agriculture. Fisheries Subsidies WTO members have been engaged in multilateral negotiations on disciplines related to fisheries subsidies that contribute to overcapacity and overfishing since 2001, and in recent years accelerated talks with a view toward reaching an agreement by 2020.112 Members missed that goal due to persistent disagreements on key issues and delays to negotiations caused by the pandemic. Members have committed to finish negotiations by MC12, and many consider an achievement critical to upholding the WTO’s legitimacy as a negotiating forum, in part, as it is the only current multilateral negotiation involving al countries. An agreement on fisheries subsidies aims to meet the goals outlined in the UN Sustainable Development Goal 14, including with respect to il egal, unregulated, and unreported (IUU) fishing. In June 2021, the chair of the negotiations released a revised draft negotiating text, which outlined key provisions such as:  prohibition of subsidies to vessels or operators engaged in IUU fishing; 109 United States, “Notification of Select Domestic Support Variables in the WT O,” JOB/AG/181, February 19, 2020. 110 Argentina, et al, “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O Agreements,” JOB/GC/204/Rev.6, JOB/CT G/14/Rev.6, July 15, 2021. For other background, see CRS In Focus IF11906, Agriculture in the WTO’s 12th Ministerial Conference (MC12 ), by Renée Johnson. 111 Argentina, et al, “Sanitary and Phytosanitary Declaration for the T welfth WTO Ministerial Conference,” G/SPS/GEN/1758/Rev.7, July 13, 2021. For other background, see CRS In Focus IF11903, Addressing Nontariff Barriers to Agricultural Trade at the WTO, by Renée Johnson 112 For more detail, see CRS In Focus IF11929, World Trade Organization Fisheries Subsidies Negotiations, by Liana Wong. Congressional Research Service 33 World Trade Organization: Overview and Future Direction  prohibition of subsidies supporting fishing or fishing related activities for overfished stock and subsidies contributing to overcapacity and overfishing (e.g., subsidies for building or upgrading vessels, fuel subsidies, price support for fish cost, etc.) with some exceptions;  SDT for developing and LDC members, including delayed implementation of certain provisions, technical assistance and capacity building; and  strengthened notification requirements of fisheries subsides to improve transparency. The extent of flexibilities offered in SDT provisions and the scope of exceptions to certain subsidies continue to be major points of contention among members. The United States has emphasized notification requirements and the need for subsidy caps that “can combine transparent and accountable policy space with serious constraints on major subsidizers.”113 The United States has sought application of the commitments to the majority of countries, while some ~~years behind on their reporting. According to U.S.~~
~~Department of Agriculture trade counsel, Jason Hafemeister, these practices have consequences:~~
~~In the absence of transparency, how are we to determine whether Members are complying~~
~~with existing obligations? Moreover, only with comprehensive and current information can~~
~~negotiators understand, discuss, and address the problems that face farmers today: high~~
~~tariffs, trade distorting support, and non-tariff barriers.105~~
~~Some experts see a transparency agreement as a feasible outcome for an eventual MC12. The~~
~~United States and other countries are also raising issues of special and differential treatment in the~~
~~agriculture negotiations (see below).~~
~~Fisheries Subsidies~~
~~As noted above, WTO members committed to negotiate disciplines related to fisheries subsidies~~
~~that contribute to overcapacity and overfishing with a view toward reaching an agreement by~~
~~2020. The proposals aim to meet the goals outlined in the UN Sustainable Development Goal 14~~
~~targeting il egal, unregulated, and unreported (IUU) fishing. Members have tabled proposals to:~~
~~ combat IUU fishing, overfishing, and overcapacity by prohibiting harmful~~
~~fishery subsidies,~~
~~ cap the total amount of fisheries subsidies,~~
~~ identify al eged maintenance of a prohibited subsidy by another member through~~
~~a consultation mechanism, and~~
~~ require greater transparency over fishing subsidies.106~~
~~Members had committed to finish negotiations on fisheries subsidies at MC12, an achievement~~
~~many view as critical to upholding the WTO’s legitimacy. With the cancel ation of in-person~~
~~meetings during the pandemic, the chair initial y attempted to continue talks, but halted them after~~
~~some parties voiced concerns about the virtual participation. The chair released a consolidated~~
~~text in June, which forms the basis for negotiations with four rounds planned for September~~
~~through the end of 2020, with the goal to conclude the agreement by year-end or by MC12.~~
~~The United States has emphasized notification requirements and the need for subsidy caps that~~
~~“can combine transparent and accountable policy space with serious constraints on major~~

~~104 WT O, “ WT O members appoint new chair for agriculture talks,” July 21, 2020, https://www.wto.org/english/~~
~~news_e/news20_e/agng_21jul20_e.htm.~~
~~105 U.S. Department of Agriculture, Foreign Agriculture Service, “What’s Next for Agriculture in the WT O?” January~~
~~5, 2018, https://www.fas.usda.gov/newsroom/what -s-next-agriculture-wto.~~
~~106 “New fisheries subsidies proposals considered ahead of December target for agreement,” WT O Press Release,~~
~~September 13, 2019, https://www.wto.org/english/news_e/news19_e/fish_13sep19_e.htm.~~
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~~subsidizers.”107 The United States has sought application of the commitments to al countries,~~
~~while some~~ developing country members have sought flexibilities in implementing developing country members have sought flexibilities in implementing
~~commitments.108 A recent U.S. executive order aims to increase enforcement and resources to~~
~~combat IUU fishing and promote domestic seafood production.109~~commitments.114 In May 2021, USTR Tai submitted a proposal that the agreement include provisions addressing the use of forced labor on fishing vessels, often linked to IUU fishing. The proposal would require explicit recognition of the problem of forced labor, and additional transparency with respect to those vessels or operators engaging in forced labor.115 The proposed language was not included in the latest revised text, though some WTO members, such as the EU, have expressed support for addressing forced labor in the negotiations.
Electronic Commerce/Digital Trade
Digital trade has emerged as a major force in world trade since the Uruguay Round, creating end Digital trade has emerged as a major force in world trade since the Uruguay Round, creating end
products (e.g., email or social media), enabling trade in services (e.g., consulting), and facilitating products (e.g., email or social media), enabling trade in services (e.g., consulting), and facilitating
goods trade through services, such as logistics and supply chain management that depend on goods trade through services, such as logistics and supply chain management that depend on
digital data flows. While the GATS contains explicit commitments for telecommunications and digital data flows. While the GATS contains explicit commitments for telecommunications and
financial services that underlie e-commerce, trade barriers related to digital trade, information financial services that underlie e-commerce, trade barriers related to digital trade, information
flows, and other related issues are not specifical y included. The WTO Work Program on flows, and other related issues are not specifical y included. The WTO Work Program on
Electronic Commerce was established in 1998 to examine trade-related issues for e-commerce Electronic Commerce was established in 1998 to examine trade-related issues for e-commerce
under existing agreements.under existing agreements.~~110~~116 Under the work program, members agreed to continue a temporary Under the work program, members agreed to continue a temporary
moratorium on e-commerce customs duties, and have renewed the moratorium at each ministerial moratorium on e-commerce customs duties, and have renewed the moratorium at each ministerial
meeting. Members had extended the moratorium on customs duties on electronic transmissions meeting. Members had extended the moratorium on customs duties on electronic transmissions
until MC12, but it is unclear if the extension wil be sustained after the delayed Ministerial, given until MC12, but it is unclear if the extension wil be sustained after the delayed Ministerial, given
~~the opposition of some developing countries and lack of agreement on what would constitute the~~
~~scope of electronic transmissions.~~
~~Separate from the work program, at the 11th Ministerial, over 75 countries agreed to “initiate~~
~~exploratory work on negotiations on electronic commerce issues in the WTO.”111 After initial~~
~~talks, information exchanges and education, especial y targeting developing country members,~~
~~the United States and other parties formal y launched the e-commerce initiative in January~~
~~2019,112 and negotiations commenced in March 2019. Known as the Joint Statement Initiative on~~
~~E-commerce (JSI) and coordinated by Australia, Japan, and Singapore, the now 84 participants~~
~~are a mix of developed and developing countries and include the United States, EU, and China,~~
~~among others. As with the work program, some developing countries have opted not to participate~~
~~in the negotiations. For example, India and South Africa stated they do not want to accept~~
~~international constraints on efforts to protect their domestic industry or raise potential tariff~~
~~revenue on digital products, actions could be prohibited or curtailed under a new agreement.~~
~~Multiple negotiating parties submitted proposals outlining their positions and desired scope for~~
~~the negotiations.113 The United States was one of the first parties to submit a discussion paper.~~
~~The U.S. proposal includes “trade provisions that represent the highest standard in safeguarding~~
~~and promoting digital trade” and reflects the U.S. support for a market-driven, open, interoperable~~
~~internet under a multi-stakeholder system.114 The paper echoes many of the commitments~~the opposition of some developing countries who see a potential new revenue stream and a lack of agreement on what would constitute the scope of electronic transmissions.117

~~107~~113 Hannah Monicken, “WTO to start fisheries text negotiations in fall; U.S. sees ‘missing pieces’,” Hannah Monicken, “WTO to start fisheries text negotiations in fall; U.S. sees ‘missing pieces’,” Inside U.S. Trade,
July 21, 2020. July 21, 2020.
~~108~~114 “WT O Polarized over Fisheries Subsidies,” “WT O Polarized over Fisheries Subsidies,” Washington Trade Daily, July 2020. July 2020.
~~109 White House, “ Executive Order on Promoting American Seafood Competitiveness and Economic Growth ,” May 7,~~
~~2020.~~
~~110~~115 UST R, “Members to Address Forced Labor on Fishing Vessels in Ongoing Fisheries Subsidies Negotiations,” Press release, May 26, 2021. 116 WT O, “Electronic Commerce,” https://www.wto.org/english/tratop_e/ecom_e/ecom_e.htm. WT O, “Electronic Commerce,” https://www.wto.org/english/tratop_e/ecom_e/ecom_e.htm.
~~111 Joint Statement on Electronic Commerce, WT O WT/MIN(17).60, December 13, 2017.~~
~~112 Joint Statement on Electronic Commerce, WT O WT/L/1056, January 25, 2019.~~
~~113 All proposals can be found on the WT O online documents portal: https://docs.wto.org/dol2fe/Pages/FE_Search/~~
~~FE_S_S001.aspx.~~
~~114 United States, Joint Statement on Electronic Commerce, WT O INF/ECOM/23, April 26, 2019.~~
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~~World Trade Organization: Overview and Future Direction~~

~~contained in the U.S.-Mexico-Canada Agreement (USMCA), which entered into force in July~~
~~2020. On the other hand, a proposal by China focuses on facilitating narrowly on e-commerce~~
~~and global value chains as a means to assist WTO members, especial y developing countries, in~~
~~benefiting from digital trade.115 Some proposals included digital trade facilitation measures (e.g.,~~
~~electronic single windows and interoperability, technology for customs risk management), but it~~
~~is unclear if these issues should be considered under the WTO Committee on Trade Facilitation~~
~~and implementation of the TFA.116~~
~~The plurilateral negotiations are happening within the WTO context as the parties aim to set a~~
~~new international standard that could eventual y become a multilateral agreement. With MC12’s~~
~~postponement, the parties are negotiating virtual y, as wel as through hybrid in-person/virtual~~
~~formats, al owing trade negotiators and subject matter experts to participate.~~
~~The parties recognize that there are some significant hurdles, including issues related to data~~
~~flows and privacy, but aim to have a consolidated text this year. A June 2020 statement by the~~
~~members of the so-cal ed Ottawa Group117 cal ed for “officials to prioritize and accelerate work~~
~~on the Joint Statement Initiative on E-commerce, including through informal and virtual~~
~~discussions, ahead of the rescheduled Twelfth Ministerial Conference (MC12) in 2021, including~~
~~by the development of a consolidated negotiating text by the end of 2020 at the latest.”118 While~~
~~not a member of the group, the United States is reportedly in agreement with the goal of~~
~~completion of a streamlined text by the end of the year.119~~
~~Environmental Goods Agreement (EGA)~~
~~The EGA negotiations were initiated in mid-2014 to liberalize trade in environmental goods~~
~~through tariff liberalization. The original 14 participants, including the United States, the EU, and~~
~~China, represented nearly 90% of global trade in covered environmental goods;120 talks have~~
~~since expanded to include 18 WTO members. Like the ITA, the EGA would be an open~~
~~plurilateral agreement so that the benefits achieved through negotiations would be extended on an~~
~~MFN basis to al WTO members. Despite 18 rounds of negotiations, members were unable to~~
~~conclude the agreement by the meeting of the General Council in December 2016, and no~~
~~negotiations have taken place since. Several stakeholders blamed China for the lack of progress,~~
~~as it rejected the list of products to be included and requested lengthy tariff phaseout periods~~
~~which other countries refused to accept.121 The EGA’s future remains uncertain; while several~~
~~countries have expressed support for resuming talks, the Trump Administration has not put~~
~~forward a public position on the agreement.122~~

~~115 China, Joint Statement on Electronic Commerce, WT O INF/ECOM/19, April 23, 2019.~~
~~116 T he T rade Facilitation Committee was created on 22 February 2017 when the T rade Facilitation Agreement (T FA)~~
~~entered into force. For more information, see https://www.wto.org/english/tratop_e/tradfa_e/comm_tradfa_e.htm.~~
~~117 Ottawa Group members include Canada, Australia, Brazil, Chile, the European Union, Japan, Kenya, Mexico, N ew~~
~~Zealand, Norway, Singapore, South Korea, and Switzerland.~~
~~118 Government of Canada, “ June 2020 Statement of the Ottawa Group: Focusing Action on Covid-19,” June 15, 2020,~~
~~https://www.international.gc.ca/world-monde/international_relations-relations_internationales/wto-omc/2019-06-~~
~~covid-19.aspx?lang=eng.~~
~~119 “U.S. Urges Speed in E-Commerce T alks,” Washington Trade Daily, June 15, 2020.~~
~~120 WT O, “ Azevêdo welcomes launch of plurilateral environmental goods negotiations,” July 8, 2014.~~
~~121 “EU blames China for WT O environmental trade talks collapse,” Reuters, December 4, 2016; “Key Lawmaker, EU~~
~~and industry all blame China for torpedoing EGA deal,” Inside U.S. Trade, December 7, 2016.~~
~~122 “U.S. remains silent as WT O members look for ways to resume EGA talks,” Inside U.S. Trade, June 22, 2017.~~
~~Congressional Research Service~~

36117 T he countries cite a United Nations report showing increased volumes of electronic transmissions replace trade in physical goods cause governments to forego as much as $3.4 billion in tariffs for developing countries. In contrast, others cite an OECD study that found foregone revenue of the moratorium is likely to be relatively small and that its lapse would come at the expense of wider gains in the economy including export competitiveness and productivity. For more information, see UNCT AD, Rising Product Digitalisation and Losing T rade Competitiveness, 2017; Growing Congressional Research Service 34 link to page 45 World Trade Organization: Overview and Future Direction Separate from the work program, over 85 WTO members are participating in negotiations launched at the MC11 that aim to establish a global framework and obligations that enable digital trade in a nondiscriminatory and less trade restrictive manner. Australia, Japan, and Singapore are the co-conveners of the JSI on E-commerce, and participants include the United States, the EU, and several developing countries, including China and Brazil. India and South Africa are not participating in the negotiations and are actively chal enging the legal status of the “Joint Statement Initiative” talks because they are not being conducted on a multilateral basis (see “Plurilateral Agreements”).118 The initial U.S. proposal was based on most recent U.S. trade agreements and seeks a high standard agreement include removing and reducing barriers and developing rules and disciplines on market access, data flows, nondiscriminatory treatment of digital products, protection of intel ectual property and digital security measures, and intermediary liability, among others.119 The co-conveners aim to have ten areas of “clean text” before MC12. To date, they have announced finalized text on: unsolicited messages (spam), electronic signatures and authentication, and e-contracts, open government data, and online consumer protection.120 Other areas such as cross-border data flows and data protection remain contentious. The outlook may be chal enging, given the different national approaches and policies, especial y among the United States, EU, and China. There is not yet agreement on whether the final obligations wil be subject to dispute settlement, which could affect the scope, depth, and enforceability of commitments that participants are wil ing to agree to. In addition, capacity building and technical assistance, as wel as transition periods, in addition to other flexibilities may be required to get less developed countries on board. Services Since the GATS, the scope of global trade in services has increased tremendously, spurred by advances in IT and the growth of global supply chains. Yet, these advances are largely not reflected in the GATS. WTO members committed to further services negotiations, which began in 2000 and were incorporated into the Doha Round. Further talks were spurred by recognition among many observers that GATS, while extending the principles of nondiscrimination and transparency to services trade, did not provide much actual liberalization, as many countries simply bound existing practices.121 However, services talks during Doha also succumbed to developing countries’ resistance to open their markets in response to developed country demands, as wel as dissatisfaction with other aspects of the single undertaking. T rade in Electronic T ransmissions: Implications for the South, 2019; Andrenelli, A. and J. López González (2019), "Electronic transmissions and international trade - shedding new light on the moratorium debate", OECD T rade Policy Papers, No. 233, OECD Publishing, Paris, https://doi.org/10.1787/57b50a4b-en. 118 India and South Africa submission to the WT O General Council, “T he Legal Status of ‘Joint Statement Initiatives’ and T heir Negotiated Outcomes,” WT /GC/W/819, February 19, 2021. India stated it will not join, preferring to maintain its policy flexibility to favor domestic firms, limit foreign market access, and raise revenue in the future through potential customs duties. Subhayan Chakraborty, “ India refuses to join e-commerce talks at WT O, says rules to hurt country,” The Business Standard, February 25, 2019. 119 T he United States, “Joint Statement on Electronic Commerce Initiative,” WT O, April 12, 2018. 120 WT O, “ E-commerce talks: two “foundational” articles cleaned; development issues discussed,” press release, September 13, 2021. 121 Gary Clyde Hufbauer, “Liberalization of Services T rade,” in Trans-Pacific Partnership: An Assessment, ed. Cathleen Cimino-Isaacs and Jeffrey J. Schott, (Washington, DC: Peterson Institute of International Economics, 2016). Congressional Research Service 35 World Trade Organization: Overview and Future Direction Aside from increased market access, several issues are ripe for future negotiations at the WTO, such as transition from the current positive list schedule of commitments to a negative list.122 Instead of a member declaring which services are open for competition, it would need to declare which sectors are exempted. This exercise in itself could force members to reexamine their approximately 25-year-old commitments and decide whether current market access barriers wil be maintained. The issue of “servicification” of traditional goods industries—for example, services that are sold with a good, such as insurance or maintenance services, or enabling services, such as distribution, transportation, marketing, or retail—has also attracted attention as the subject of possible WTO negotiations.123 Other issues of interest to members include services facilitation (transparency, streamlining administrative procedures, simplifying domestic regulations),124 and emergency safeguards, envisioned in GATS (Article X) as an issue for future negotiation. Recently, members have focused on the economic impact of COVID-19 on sectors such as tourism, transport and distribution services, as wel as the chal enges and opportunities presented for digital services delivery and digital trade facilitation. Given the lack of concrete progress in the GATS negotiations, some WTO members signed on to the JSI on Services Domestic Regulation launched at the end of MC11.125 The negotiations focus on licensing and qualification requirements and processes, and technical standards, aiming to increase transparency, legal certainty and predictability, and facilitate businesses’ participation in global services trade. In July 2021, the Biden Administration announced that the United States would join the talks, noting that “improved transparency and regulatory processes can support democratic values, open societies, and a worker-centric trade agenda.”126 The current participating parties account for over 90% of global services trade and aim to reach a significant outcome by MC12. The coordinator announced the conclusion of text-based negotiations,127 noting that the parties were finalizing their schedules of commitments with the aim of completing the process in advance of MC12, providing the WTO with a concrete deliverable for the Ministerial.128 The parties aim to incorporate their commitments into members’ GATS schedules to be applied on an MFN basis. There is a maximum transitional period of seven years for developing countries to implement disciplines for specific services sectors; notably, China did not ask for developing country status for the this agreement. 122 U.S. FT As use a negative list approach, and the proposed T iSA negotiations use a hybrid approach to apply a negative list to national treatment commitments and a positive list for market access. 123 International Centre for T rade and Sustainable Development (ICT SD), “Negotiating Disciplines on Domestic Regulations in Services,” June 2018, https://www.ictsd.org/themes/services-and-digital-economy/research/negotiating-disciplines-on-domestic-regulations-in. 124 Marta Soprana, “ Services facilitation in regional trade agreements and opportunities for convergence,” The E15 Initiative, October 2018, http://e15initiative.org/blogs/services-facilitation-in-regional-trade-agreements-and-opportunities-for-convergence/. 125 WT O, Joint Ministerial Statement on Services Domestic Regulation, WT /MIN(17)/61, December 13, 2017. 126 UST R, United States Announces Intention to Join WTO Initiative on Services Domestic Regulation, Support Conclusion of Negotiations by MC12, July 20, 2021. 127 T he negotiated text is available at: WT O, Joint Initiative on Services Domestic Regulation, Reference Paper on Services Domestic Regulation, INF/SDR/1, September 27, 2021. 128 WT O, “ Participants in domestic regulation talks conclude text negotiations, on track for MC12 deal,” news item, September 27, 2021. Congressional Research Service 36 World Trade Organization: Overview and Future Direction Environment Environmental provisions were not included in the Uruguay Round agreements apart from GATT exceptions,129 leading several WTO members to seek to ensure trade policies are more responsive to climate and environmental chal enges. In November 2020, more than 50 countries launched the WTO Trade and Environmental Sustainability Structured Discussions (TESSD), which broadly aims to “promote transparency and information sharing, identifying areas for future work within the WTO, support technical assistance and capacity building needs, particularly for least-developed countries, and work on deliverables for environmental sustainability in the various areas of the WTO.”130 Members suggest various topics may be included in future talks, such as climate change, plastics waste, biodiversity, fossil fuel subsidies, decarbonizing supply chains, and carbon border adjustment mechanisms.131 Possible deliverables considered for MC12 largely entail defining the agenda, such as a declaration setting parameters for negotiations on liberalizing trade in environmental goods and services and a future work program for addressing other priority issues.132 While the United States did not join the initiative when launched, the Biden Administration has pledged to be an active and constructive participant moving forward.133 The United States was an original participant in the now-stal ed plurilateral Environmental Goods Agreement (EGA) negotiation, launched in 2014 to eliminate tariffs on a range of environmental goods. The EGA involved 18 participants, including the United States, the EU, and China, and represented nearly 90% of global trade in covered environmental goods.134 Like the ITA, the EGA had been envisioned as an open plurilateral agreement so that the benefits achieved through negotiations would be extended on an MFN basis to al WTO members. Despite 18 rounds of negotiations, members were unable to conclude the agreement by the meeting of the General Council in December 2016. Since then, talks have stal ed and the Trump Administration did not prioritize reviving the EGA. Several stakeholders blamed China for the lack of progress, as it rejected the list of products to be included and requested lengthy tariff phaseout periods which other countries refused to accept.135 Some Members of Congress support reviving the EGA talks and have urged the Biden Administration to prioritize relaunching negotiations.136 Policy Issues and Future Direction The inability of WTO members to conclude a comprehensive agreement during the Doha Round raised new questions about the WTO’s future direction. Many intractable issues from Doha remain unresolved, and members have yet to reach consensus on a way forward. Persistent differences about the extent and balance of trade liberalization continue to limit progress, as indicated by the outcomes of recent ministerial meetings. Further, members remain divided over 129 GAT T Article XX on General Exceptions states that WTO members may adopt policy measures that are inconsistent with GAT T disciplines, but necessary to protect human, animal or plant life or health (paragr aph (b)), or relating to the conservation of exhaustible natural resources (paragraph (g)). 130 WT O, “ Members review draft MC12 declaration on trade and environmental sustainability ,” July 19, 2021. 131 “U.S. pledges active participation in WT O environmental sustainability talks,” Inside U.S. Trade, March 5, 2021. 132 WT O, “ First meeting held to advance work on trade and environmental sustainability ,” March 5, 2021. 133 “U.S. pledges active participation in WT O environmental sustainability talks,” Inside U.S. Trade, March 5, 2021. 134 WT O, “ Azevêdo welcomes launch of plurilateral environmental goods negotiations,” July 8, 2014. 135 “EU blames China for WT O environmental trade talks collapse,” Reuters, December 4, 2016; “Key Lawmaker, EU and industry all blame China for torpedoing EGA deal,” Inside U.S. Trade, December 7, 2016. 136 See, e.g., H.Res. 295. See also “Ways & Means Republicans to T ai: Relaunch Environmental Goods Agreement talks,” Inside U.S. Trade, April 22, 2021, and “ House Democrats to Biden: Relaunch Environmental Goods Agreement talks,” Inside U.S. Trade, April 7, 2021. Congressional Research Service 37

~~World Trade Organization: Overview and Future Direction~~

~~Policy Issues and Future Direction~~
~~The inability of WTO members to conclude a comprehensive agreement during the Doha Round~~
~~raised new questions about the WTO’s future direction. Many intractable issues from Doha~~
~~remain unresolved, and members have yet to reach consensus on a way forward. Persistent~~
~~differences about the extent and balance of trade liberalization continue to limit progress, as~~
~~indicated by the outcomes of recent ministerial meetings. Further, members remain divided over~~
~~adopting new issues on the agenda, amid concerns that the WTO could lose relevance if its rules~~
~~are not updated to reflect the modern global economy. Some WTO members seek to incorporate~~
~~new issues that pose chal enges to the trading system, such as digital trade, competition with~~
~~SOEs, global supply chains, and the relationship between trade and environment issues.~~
~~These divisions have cal ed into question the viability of the “single undertaking,” or one-package~~
~~approach in future multilateral negotiations and suggest broader need for institutional reform if~~
~~the WTO is to remain a relevant negotiating body. Moreover, the consistent practice of some~~
~~countries like India to block discussion of new issues serves as a reminder of the power of a~~
~~single member to halt progress in the WTO’s consensus-based system.~~
~~As a result of slow progress at the WTO, countries have increasingly turned to other venues to~~
~~advance trade liberalization and rules, namely plurilateral agreements and preferential FTAs~~
~~outside the WTO. Plurilaterals have been seen as having the potential to resurrect the WTO’s~~
~~relevance as a negotiating body, but have also been seen as possibly undermining multilateralism,~~
~~if the agreements are not extended to al WTO members on an MFN basis. Regional trade~~
~~agreements have also been seen as potential laboratories for new rules. How these negotiations~~
~~and agreements wil ultimately affect the WTO’s status as the preeminent global trade institution~~
~~is widely debated.~~
~~The fundamental longstanding chal enges facing the WTO are compounded by recent~~
~~developments that have further strained the trading system. In the near-term, COVID-19 has~~
~~highlighted serious economic and trade policy chal enges, in addition to the health crisis, and has~~
~~spurred protectionist trade and investment policies and disruptions to supply chains that may have~~
~~lasting effects.123 Many observers have cal ed for better global coordination in policy responses,~~
~~with some advocating for a new WTO plurilateral agreement on medical goods. Whether the~~
~~WTO is equipped to play a meaningful role in the crisis is also tied to broader questions about the~~
~~need for systemic reform of the institution. As Deputy DG Alan Wolff posited in May 2020:124~~
~~In the current upsurge in criticism of the inadequacies of the collective res ponses to the~~
~~pandemic, the WTO is receiving heightened scrutiny. Were the WTO Members to join~~
~~together to meet the trade challenges of the coronavirus and the desperately needed~~
~~economic recovery, most public criticisms of the WTO would likely disappear. But the~~
~~problems preceded the pandemic and will, absent reforms, persist after the pandemic is~~
~~over and its after-effects have been addressed. It is necessary to understand what values the~~
~~multilateral trading system is designed to promote before it can be reformed.~~
~~Prior to the crisis, concerns were already mounting about the growing use of trade protectionist~~
~~policies by both developed and developing countries, recent U.S. unilateral tariff actions and~~

~~123 See for example, OECD, COVID-19 and International Trade: Issues and Actions, June 12, 2020,~~
~~http://www.oecd.org/coronavirus/policy-responses/covid-19-and-international-trade-issues-and-actions-494da2fa/;~~
~~Chad P. Bown, “COVID-19 Could Bring Down the T rading System: How to Stop Protectionism From Running~~
~~Amok,” Foreign Affairs, April 28, 2020, https://www.foreignaffairs.com/articles/united-states/2020-04-28/covid-19-~~
~~could-bring-down-trading-system.~~
~~124 WT O, “ DDG Wolff: T his is the time to consider the future of the multilateral trading system ,” May 27, 2020.~~
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37

~~link to page 44~~ ~~World Trade Organization: Overview and Future Direction~~

~~counterretaliation by other countries, and escalating trade disputes between major economies.~~
~~Many countries are questioning whether the WTO is equipped to effectively handle the~~
~~chal enges of emerging markets like China, where the state may play a central role in~~
~~international trade, as wel as the deepening trade tensions between major economic players.~~
~~Some experts view the multilateral trading system as facing a potential crisis, while others remain~~
~~optimistic that the current state of affairs could spur renewed focus on reforms of the system.~~
~~WTO members, including the EU, Canada, Japan, and the United States, are exploring areas for~~
~~reform and have submitted various proposals.~~
~~New WTO leadership wil face ushering the trading system through these chal enges. WTO~~
~~members are currently in the process of selecting a new DG among eight candidates (see~~ ~~text~~
~~box). The process requires al 164 members to agree by consensus on the appointment. WTO~~
~~members and observers view the outcome of the DG race and fresh leadership as important to~~
~~inject new momentum into the institution, amid efforts to increase its relevance and chart a path~~
~~forward. The WTO has expedited the intensive selection process, usual y lasting nine months, to~~
~~conclude possibly by early November, after Azevêdo steps down and following the U.S.~~
~~presidential election.125~~
~~Selection of WTO Director-General~~
~~Notwithstanding the lack of formal power of the WTO Secretariat, the DG is an advocate for the global trading~~
~~system and often wields “soft power,” relying on diplomatic and political heft in helping members build consensus~~
~~or break stalemates—an increasingly difficult task in recent years.126 As a result, some have argued that the~~
~~Secretariat should be granted more authority to table proposals and advance new rules.127~~
~~In the current DG race, analysts have variously cal ed for an “honest broker” and dealmaker, politician over~~
~~technocrat, or a “peacekeeper.” DG qualifications broadly include “extensive experience in international relations,~~
~~encompassing economic, trade and/or political experience; a firm commitment to the work and objectives of the~~
~~WTO; proven leadership and managerial ability; and demonstrated communication skil s.”128 The eight candidates~~
~~in 2020 have a breadth of experience (Table 4). A recent survey suggests management and political experience,~~
~~economics training, and WTO negotiating experience are preferred characteristics.129 Experts speculated at the~~
~~onset that Nigeria’s Ngozi Okonjo-Iweala and Kenya’s Amina Mohamed lead the field.130~~
~~WTO DG appointments general y have alternated between developing and developed countries, and have hailed~~
~~from al regions except Africa, the Middle East, and North America—regions home to five current candidates.~~
~~With Azevêdo from Brazil, some developed countries view it as their moment, while African countries strongly~~
~~argue it is their turn. No female has ever served as DG, and some are cal ing for a change to the status quo.~~
~~Candidates have emphasized that regardless of these factors, the person most qualified for the position should be~~
~~chosen. Some have highlighted their political neutrality for managing differences between the United States and~~
~~China as advantages to their candidacy.~~

~~125 Members were unable to agree on which deputy DG would serve as acting DG at the end of August until the~~
~~selection process concludes, attributed to disagreements between the U.S. and China. “U.S. official: China blocked~~
~~acting DG compromise at WT O,” Inside U.S. Trade, July 30, 2020.~~
~~126 David T inline and T atiana Lacerda Prazeres, “5 reasons why the role of WT O Director -General matters,” World~~
~~Economic Forum, June 5, 2020, https://www.weforum.org/agenda/2020/06/5-reasons-why-the-world-trade-~~
~~organization-wto-director-general-position-matters-roberto-azevedo-step-down/.~~
~~127 Doug Palmer, “U.S. dismisses ‘invalid’ WT O Appellate Body ruling,” Politico Pro Trade, April 23, 2020.~~
~~128 WT O, Procedures for the Appointment of Director-Generals, WT /L/509, January 20, 2003.~~
~~129 Fiorinia et al., “Selecting the next WT O Director-General: What the trade community thinks,” VoxEU, July 8, 2020,~~
~~https://voxeu.org/article/selecting-next-wto-director-general-what -trade-community-thinks.~~
~~130 Jim Brunsden and Alan Bettie, “Kenyan and Nigerian candidates lead field for WT O chief,” Financial Times, July~~
~~8, 2020.~~
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~~World Trade Organization: Overview and Future Direction~~

~~Table 4. WTO DG Candidates~~
~~Candidate (by order of~~
~~announcement)~~
~~Country~~
~~Background and Key Positions~~
~~Jesús Seade Kuri~~
~~Mexico~~

~~Foreign Affairs Under Secretary for North~~
~~America~~

~~Former Deputy DG of the WTO~~

~~Former Deputy DG of the GATT~~
~~Ngozi Okonjo-Iweala~~
~~Nigeria~~

~~Former Finance Minister~~

~~Former Managing Director World Bank~~
~~Abdel-Hamid Mamdouh~~
~~Egypt~~

~~Senior Counsel, King & Spalding LLP~~

~~Former WTO official~~
~~Tudor Ulianovschi~~
~~Moldova~~

~~Former Foreign Minister~~

~~Former Ambassador to WTO~~
~~Yoo Myung-hee~~
~~South Korea~~

~~Trade Minister~~
~~Amina C. Mohamed~~
~~Kenya~~

~~Secretary for Sports, Culture and Heritage~~

~~Former Foreign Affairs and Trade Minister;~~
~~Chair of 2015 WTO Ministerial Conference~~

~~Former Deputy Secretary-General United~~
~~Nations~~
~~Mohammad Maziad Al-Tuwaijri~~
~~Saudi Arabia~~

~~Royal Court Adviser~~

~~Former Economy and Planning Minister~~

~~Former Banking Executive~~
~~Liam Fox~~
~~United Kingdom~~

~~Former Trade Secretary~~
Source: WTO, “Candidates for DG selection process 2020,” https://www.wto.org/english/thewto_e/dg_e/
~~dgsel20_e/dgsel20_e.htm~~
~~DG candidates met (primarily virtual y) with WTO members from July 15-17 to present views and answer~~
~~questions.131 This campaign phase, expected to last through September 7, is fol owed by consultations among~~
~~members over two months to narrow the field and build consensus around a candidate (two candidates are to be~~
~~eliminated in the first round and three candidates in the second round, leaving two for the final selection). A~~
~~selection committee, headed by the GC Chair, leads this process. The committee then issues its recommendation~~
~~on the candidate most likely to gain consensus, and members make their final decision.132~~
~~Regarding ideal qualities for a DG, in testimony to Congress USTR Lighthizer cal ed for leadership that supports~~
~~fundamental, across the-board reform and understands the nature of problems facing market economies in dealing~~
~~with China and current rules that fail to discipline large state-run economies.133 He noted that any “whiff of anti-~~
~~Americanism” would be grounds for a U.S. veto.~~
~~COVID-19 and WTO Reactions~~
~~As countries across the world grapple with COVID-19, many WTO activities have been disrupted~~
~~and trade policy chal enges have emerged~~ World Trade Organization: Overview and Future Direction adopting new issues on the agenda, amid concerns that the WTO could lose relevance if its rules are not updated to reflect the modern global economy. More broadly, these persistent divisions have cal ed into question the viability of the “single undertaking,” or one-package approach in future multilateral negotiations, and suggest broader need for institutional reform if the WTO is to remain a relevant negotiating body. As a result of slow progress at the WTO, countries have increasingly turned to other venues to advance trade liberalization and rules, namely plurilateral agreements and preferential FTAs outside the WTO. While plurilaterals are viewed as having the potential to resurrect the WTO’s relevance as a negotiating body, at the same time they have also been seen as possibly undermining multilateralism, if the agreements are not extended to al WTO members on an MFN basis. Similarly, regional trade agreements have also been seen as potential laboratories for new rules, absent multilateral progress. How these negotiations and agreements wil ultimately affect the WTO’s status as the preeminent global trade institution is widely debated. The fundamental longstanding chal enges facing the WTO are compounded by recent developments that have further strained the trading system. In the near-term, in addition to the health crisis, COVID-19 has highlighted serious economic and trade policy chal enges, and has spurred protectionist trade and investment policies and caused disruptions to supply chains that may have lasting effects.137 Many observers have cal ed for better global coordination in policy responses, with some advocating for a dedicated trade and health initiative. Whether the WTO is equipped to play a meaningful role in the crisis is also tied to broader questions about the need for systemic reform of the institution. Prior to the crisis, concerns had been mounting about the growing use of trade protectionism by both developed and developing countries, U.S. unilateral tariff actions and counterretaliation by other countries, and escalating trade disputes between major economies. Many countries have questioned whether the WTO is equipped to effectively handle the chal enges of large economies and markets like China, where the state may play a central role in international trade, as wel as the deepening trade tensions between major economic players. Some experts view the multilateral trading system as facing a potential crisis, while others remain hopeful that the current state of affairs could spur renewed focus on reforms of the system. The United States and other WTO members are exploring areas for reform and have submitted various proposals. As DG Okonjo-Iweala expressed optimism for the role of trade and the WTO to tackle global problems:138 But even as we fight to end the pandemic, making full use of trade's power to tackle vaccine inequity, we must engage in serious thinking about what it will take to build back a better world economy. A world economy that is greener, more prosperous and more inclusive. A world economy that is more responsive to problems of the global commons. A WTO that is more responsive to changing economic realities and the evolving needs of the people we serve. 137 See for example, OECD, COVID-19 and International Trade: Issues and Actions, June 12, 2020, http://www.oecd.org/coronavirus/policy-responses/covid-19-and-international-trade-issues-and-actions-494da2fa/; Chad P. Bown, “COVID-19 Could Bring Down the T rading System: How to Stop Protectionism From Running Amok,” Foreign Affairs, April 28, 2020, https://www.foreignaffairs.com/articles/united-states/2020-04-28/covid-19-could-bring-down-trading-system. 138 WT O, “ Public Forum 2021: Introductory remarks by DG Okonjo-Iweala,” September 28, 2021. Congressional Research Service 38 World Trade Organization: Overview and Future Direction COVID-19 and WTO Reactions As countries across the world grapple with COVID-19, trade policy chal enges have emerged with some cal ing for enhanced global coordination. Experts have emphasized trade policies as playing a . Experts have emphasized trade policies as playing a
major role in major role in ~~two respects. First in~~ helping respond to COVID-19 and helping respond to COVID-19 and ~~second,~~ in assisting in the in assisting in the
recovery. The WTO committed to work with other international organizations to minimize recovery. The WTO committed to work with other international organizations to minimize
disruptions to cross-border trade and global supply chains—in particular those central to disruptions to cross-border trade and global supply chains—in particular those central to
combatting the virus. The WTO has also sought to inform members of the impact of the combatting the virus. The WTO has also sought to inform members of the impact of the
pandemic, and cal ed on members to abide by pandemic, and cal ed on members to abide by notification obligations on trade-related measures ~~notification obligations on trade-related measures~~

~~131 For candidates statements, see https://www.wto.org/english/thewto_e/dg_e/dgsel20_e/dgsel20_e.htm.~~
~~132 In the (rare) absence of consensus, procedures specify that as a last resort there can be recourse to other voting~~
~~procedures.~~
~~133 House Ways and Means Committee, Hearing on the President’s 2020 Trade Policy Agenda, written testimony by~~
~~Ambassador Robert E. Lighthizer, June 17, 2020.~~
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39

~~World Trade Organization: Overview and Future Direction~~

taken in response. Many countries, including the United States, taken in response. Many countries, including the United States, ~~have~~ imposed temporary imposed temporary
restrictions on exports of certain medical goods and some foodstuffs to mitigate potential restrictions on exports of certain medical goods and some foodstuffs to mitigate potential
shortages.shortages.~~134~~139 At the same time, At the same time, ~~some~~several countries have since lifted restrictions or implemented countries have since lifted restrictions or implemented
measures to liberalize trade.measures to liberalize trade.~~135~~140 A WTO report in April 2020 warned of the policies’ long-term A WTO report in April 2020 warned of the policies’ long-term
costs, in terms of lower supply and higher prices.costs, in terms of lower supply and higher prices.~~136~~141 WTO leadership urged careful consideration WTO leadership urged careful consideration
of ripple effects of export curbs, as most major countries are both exporters of ripple effects of export curbs, as most major countries are both exporters and importers of and importers of
medical supplies, and emphasized medical supplies, and emphasized the use of WTO-consistent tools to address critical shortages, such use of WTO-consistent tools to address critical shortages, such
as unilateral yas unilateral y eliminating tariffs or other taxes, expediting customs eliminating tariffs or other taxes, expediting customs procedures, and using procedures, and using
~~subsidies to generate production. In April, the WTO estimated a plunge in global trade in 2020,~~
~~with a potential recovery in 2021 dependent on the duration of the pandemic and countries’ policy~~
~~choices.137 For the latter, transparency is viewed as critical y important; however, members have~~
~~been slow to formal y notify new measures.138~~
subsidies to generate production. WTO agreements WTO agreements ~~are flexible~~ have flexibilities in permitting emergency measures related to national security or in permitting emergency measures related to national security or
health that may contravene WTO obligations. They broadly require, however, that such health that may contravene WTO obligations. They broadly require, however, that such
restrictions be targeted, temporary, and transparent, and do not unnecessarily restrict trade. GATT restrictions be targeted, temporary, and transparent, and do not unnecessarily restrict trade. GATT
Article XI prohibits export bans and restrictions, other than duties, taxes or other charges, but Article XI prohibits export bans and restrictions, other than duties, taxes or other charges, but
al ows members to apply restrictions temporarily “to prevent or relieve critical shortages of al ows members to apply restrictions temporarily “to prevent or relieve critical shortages of
foodstuffs or other products essential” to the exporting country, among other circumstances. In foodstuffs or other products essential” to the exporting country, among other circumstances. In
the case of foodstuffs, members must give “due consideration to the effects on food security” of the case of foodstuffs, members must give “due consideration to the effects on food security” of
importers. As previously discussed, general exceptions providing policy flexibility require that importers. As previously discussed, general exceptions providing policy flexibility require that
restrictions are not “a means of arbitrary or unjustifiable discrimination,” or “disguised restriction restrictions are not “a means of arbitrary or unjustifiable discrimination,” or “disguised restriction
on international trade,” among other conditions. on international trade,” among other conditions.
Several WTO agreements have relevance to health-related policy, such as TBT, SPS, GATS and Several WTO agreements have relevance to health-related policy, such as TBT, SPS, GATS and
TRIPS. TRIPS. ~~Others~~Other WTO agreements guide implementation of policies, including the WTO’s core principle of guide implementation of policies, including the WTO’s core principle of
nondiscrimination and rules on subsidies. Specific commitments have contributed to nondiscrimination and rules on subsidies. Specific commitments have contributed to ~~liberalized~~
liberalized trade in medical products: (1) tariff negotiations during the Uruguay Round; (2) a plurilateral trade in medical products: (1) tariff negotiations during the Uruguay Round; (2) a plurilateral
Agreement on Pharmaceutical Products, updated in 2011; and (3) the expanded ITA in Agreement on Pharmaceutical Products, updated in 2011; and (3) the expanded ITA in 2015. 2015.
These have improved market access for medical products, but These have improved market access for medical products, but tariff and non-tariff barriers remain. An April 2020 barriers remain. An April 2020
WTO report estimates WTO report estimates there is nearly $600 bil ionnearly $600 bil ion in annual trade in critical medical products with limited in annual trade in critical medical products with limited
availability during COVID-19.availability during COVID-19.~~139~~142 For these products, the average applied For these products, the average applied MFN tariff is 4.8%, but MFN tariff is 4.8%, but
certain products, such as hand soap and face masks, have certain products, such as hand soap and face masks, have ~~relatively~~ relatively high tariffs in some countries. high tariffs in some countries.
As measures to restrict trade spread in early 2020, some countries As measures to restrict trade spread in early 2020, some countries, including including ~~the G-20~~
members of the G-20, recommitted to WTO guidance that measures be targeted, temporary, and transparentrecommitted to WTO guidance that measures be targeted, temporary, and transparent~~. A group of~~
~~seven countries led by New Zealand and Singapore issued stronger statements~~; while other groups of members committed to maintain open to maintain open
~~and connected supply chains.140 Forty-two WTO members pledged to lift emergency measures as~~
~~soon as possible; the United States, EU, and China did not join the pledge. Experts have~~and connected supply chains.143 A group of

~~134~~139 CRS In Focus IF11551, CRS In Focus IF11551, Export Restrictions in Response to the COVID-19 Pandemic, by Christopher A. Casey and , by Christopher A. Casey and
Cathleen D. Cimino-Isaacs. Cathleen D. Cimino-Isaacs.
~~135~~140 WT O, “ WT O report on G20 shows moves to facilitate imports even as trade restrictions remain widespread,” June WT O, “ WT O report on G20 shows moves to facilitate imports even as trade restrictions remain widespread,” June
29, 2020, https://www.wto.org/english/news_e/news20_e/trdev_29jun20_e.htm. 29, 2020, https://www.wto.org/english/news_e/news20_e/trdev_29jun20_e.htm.
~~136~~141 WT O, WT O, Export Prohibitions and Restrictions, Information Note, April 23, 2020. , Information Note, April 23, 2020.
~~137 WT O, “T rade falls steeply in first half of 2020,” Press Release, June 22, 2020, https://www.wto.org/english/news_e/~~
~~pres20_e/pr858_e.htm.~~
~~138 WT O, “COVID-19 and world trade,” https://www.wto.org/english/tratop_e/covid19_e/covid19_e.htm.~~
~~139~~142 WT O, WT O, Trade in Medical Goods in the Context of Tackling COVID-19, Information Note, April 3, 2020. , Information Note, April 3, 2020.
~~140~~143 See https://www.international.gc.ca/gac-amc/news-nouvelles/2020-03-25-joint-ministerial-statement-declaration- See https://www.international.gc.ca/gac-amc/news-nouvelles/2020-03-25-joint-ministerial-statement-declaration-
~~ministerielle-commune.aspx?lang=eng.~~
Congressional Research Service Congressional Research Service

4039 World Trade Organization: Overview and Future Direction 42 WTO members pledged to lift emergency measures as soon as possible; the United States, EU, and China did not join the pledge. Some countries are considering principles for a COVID-19 trade response and advocate for a plurilateral agreement to further liberalize and promote trade on medical goods. Experts have advocated for more coordinated trade policies worldwide or concrete action in the WTO.144 WTO DG Okonjo-Iweala has, in particular, emphasized the important role of the WTO in contributing to solutions to trade-related obstacles to ramping up global production of, and to equitably distributing and administering COVID-19 vaccines.145 Delay in production and distribution of vaccines has led to cal s by some countries to issue compulsory licenses to manufacture generic versions—authorized under certain conditions under the WTO TRIPS Agreement—or to waive related IPR obligations. A proposal by India and South Africa for a temporary waiver of certain TRIPS Agreement obligations for al coronavirus-related medical products, vaccines, and treatments has yet to achieve consensus among WTO members, being largely opposed by some members with research oriented pharmaceutical industries.146 In May 2021, USTR Katherine Tai announced the Biden Administration’s support for the concept of an IPR waiver for COVID-19 vaccines, and pledged to “actively participate in text-based negotiations at the [WTO] to make that happen.”147 Though the United States has not put forward a specific text proposal, it continues to engage in discussions that “have not been easy.”148 Various bil s have been introduced in the 117th Congress to al ow for more congressional input or approval before the Biden Administration can agree to a waiver.

~~World Trade Organization: Overview and Future Direction~~

~~advocated for more coordinated trade policies worldwide or concrete action in the WTO.141 In~~
~~June, the Ottawa Group recommended a range of actions, with a central role for the WTO:142~~
~~In response to these challenges, thinking has begun on trade policy actions that would~~
~~support an inclusive, sustainable, and resilient recovery as well as what trade rules should~~
~~be adapted or developed to guide collaborative policy responses to future global crises. In~~
~~this context, the WTO must play an important role in helping ensure coordination and~~
~~coherence between actions its members take. This will require initiative and engagement~~
~~by WTO members in order to be successful.~~
~~Some WTO members advocate for a plurilateral agreement on medical goods, modeled after the~~
~~ITA. Other members acknowledge that there is neither time nor political wil to conclude a round~~
~~of tariff negotiations in the near term, but advocate for unilateral reductions. New Zealand and~~
~~Singapore recently agreed to an “open plurilateral” agreement to remove tariffs, not to impose~~
~~export restrictions, and to remove nontariff barriers on COVID-19 related products.143 The two~~
~~countries have encouraged others to join. U.S. trade officials have said they prioritize dealing~~
~~with the crisis before discussing the WTO role.144 Per USTR Lighthizer remarks in May to G20~~
~~trade ministers: “while we are in the midst of the crisis, we caution against embarking upon new~~
~~plurilateral tariff cutting negotiations, or trying to dictate what the future role of the WTO may be~~
~~in terms of addressing longer-term actions. Indeed, we find it inappropriate to use this crisis,~~
~~which has been tragic for the global community, to push other agendas.”~~
Negotiating Approaches
Plurilateral Agreements
In contrast to the consensus-based agreements of the WTO, some members, including the United In contrast to the consensus-based agreements of the WTO, some members, including the United
States, point to the progress made in sectoral or plurilateral settings as the way forward for the States, point to the progress made in sectoral or plurilateral settings as the way forward for the
institution. By assembling coalitions of interested parties, negotiators may more easily and institution. By assembling coalitions of interested parties, negotiators may more easily and
quickly achieve trade liberalizing objectives, as shown by the ITA. Sectoral agreements are quickly achieve trade liberalizing objectives, as shown by the ITA. Sectoral agreements are
viewed as one way to pursue new agreements and extend WTO disciplines and commitments in viewed as one way to pursue new agreements and extend WTO disciplines and commitments in
new areas, including, for example, U.S. trade priorities in digital trade and SOEs. new areas, including, for example, U.S. trade priorities in digital trade and SOEs. ~~The~~
~~commitments by some WTO members to pursue talks in e-commerce, investment facilitation,~~
~~SMEs and other areas, could plant the seeds for future plurilaterals.~~
~~Plurilateral negotiations, however, stil involve resolving divisions among developed and~~
~~advanced developing countries. Members were able ultimately to overcome their differences in~~
~~the ITA negotiation, but thus far have been unable to reach consensus in the EGA. At the same~~
~~time, the participation of developing and emerging market economies, such as China and India, is~~

~~141~~To be effective, it is critical that plurilateral agreements include a critical mass of negotiating parties to cover a meaningful share of global trade of the goods or services covered. For example, in the plurilateral ministerielle-commune.aspx?lang=eng. 144 For example, see Richard E. Baldwin and Simon J. Evenett ed., For example, see Richard E. Baldwin and Simon J. Evenett ed., COVID-19 and Trade Policy: Why Turning Inward
Won’t Work, Centre for Economic Policy Research, April 2020; Wendy Cutler, “Coronavirus: T he Need to Adjust and , Centre for Economic Policy Research, April 2020; Wendy Cutler, “Coronavirus: T he Need to Adjust and
Reshape Our T rade Agenda,” March 17, 2020, https://asiasociety.org/policy-institute/coronavirus-need-adjust-and-Reshape Our T rade Agenda,” March 17, 2020, https://asiasociety.org/policy-institute/coronavirus-need-adjust-and-
reshape-our-trade-agenda; Jennifer Hillman, “ Six Proactive Steps in a Smart T rade Approach to Fighting COVID-19,” reshape-our-trade-agenda; Jennifer Hillman, “ Six Proactive Steps in a Smart T rade Approach to Fighting COVID-19,”
Think Global Health,, March 20, 2020, https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade- 20, 2020, https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade-
approach-fighting-covid-19; and Anabel Gonzalez, “ A memo to trade ministers on how trade policy can help fight approach-fighting-covid-19; and Anabel Gonzalez, “ A memo to trade ministers on how trade policy can help fight
COVID-19,” T rade and Investment Policy Watch blog, https://www.piie.com/blogs/trade-and-investment -policy-COVID-19,” T rade and Investment Policy Watch blog, https://www.piie.com/blogs/trade-and-investment -policy-
watch/memo-trade-ministers-how-trade-policy-can-help-fight-covid. watch/memo-trade-ministers-how-trade-policy-can-help-fight-covid.
~~142 Government of Canada, “ June 2020 Statement of the Ottawa Group: Focusing Action on Covid-19,” June 15, 2020,~~
~~https://www.international.gc.ca/world-monde/international_relations-relations_internationales/wto-omc/2019-06-~~
~~covid-19.aspx?lang=eng.~~
~~143 See https://www.mfat.govt.nz/en/trade/covid-19-and-trade/.~~
~~144 “U.S.: Wait until crisis subsides to address WT O’s role,” Inside U.S. Trade, May 15, 2020.~~
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~~link to page 64 link to page 64~~ ~~World Trade Organization: Overview and Future Direction~~

~~critical to achieving agreements that cover a meaningful share of global trade. There is also a~~
~~concern that plurilateral agreements not applied on an MFN basis could lead nonparticipating~~
~~countries to become marginalized from the trading system and face new trade restrictions. To~~
~~attract a critical mass of participants and lower barriers for developing countries and LDCs who~~
~~may be hesitant to agree to ambitious commitments, agreements could al ow flexibility in~~
~~implementation timeframes and provide additional assistance, as in the TFA.~~
~~Some experts question whether potential waning U.S. leadership in plurilateral and multilateral~~
~~trade negotiations might slow momentum toward concluding new agreements (see “Value of the~~
~~Multilateral System and U.S. Leadership and Membership”). The Trump Administration has yet~~
~~to clarify its position on plurilaterals pursued under the Obama Administration, such as EGA and~~
~~TiSA, which have stal ed, but is supporting new efforts on e-commerce/digital trade.~~
~~Preferential Free Trade Agreements~~
~~Given that the WTO al ows its members to establish preferential FTAs outside the WTO that are~~
145 WT O, “Chair Summary following ‘COVID-19 and Vaccine Equity: What Can the WT O Contribute?’” Speeches, April 14, 2021, and WT O, “ Public Forum 2021: Introductory remarks by DG Okonjo-Iweala,” September 28, 2021. 146 For more detail and analysis, see CRS In Focus IF11858, Potential WTO TRIPS Waiver and COVID-19, by Shayerah I. Akhtar and Ian F. Fergusson. 147 UST R, “ Statement from Ambassador Katherine T ai on the Covid-19 T rips Waiver,” May 5, 2021. 148 UST R, “ Ambassador Katherine T ai's Remarks As Prepared for Delivery on the World T rade Organization ,” October 14, 2021. Congressional Research Service 40 World Trade Organization: Overview and Future Direction negotiations on the domestic regulation of services, the 60-plus members account for 85% of global services trade. Plurilateral negotiations, however, stil involve resolving divisions among developed and advanced developing countries. Members were able ultimately to overcome their differences in the ITA negotiation, but such divisions were a major contributing factor to the stal ed EGA. At the same time, some members, such as India and South Africa have chal enged the use of plurilateral initiatives, raising concerns that the current set of JSIs launched during MC11 are “legal y inconsistent” with WTO rules and principles. In their view, JSI leaders must either: seek consensus from the entire WTO membership to add the new plurilateral agreements, pursue the agreements outside of the WTO, or amend the underlying Marrakesh Agreement, which established the WTO.149 The JSI proponents argue that if these are “open” plurilateral agreements applied on an MFN basis, approval by the full membership is not required. The legal debate remains unresolved. USTR Tai voiced support for the use of plurilateral agreements, as the Administration seeks to support the WTO while also employing new tools to resolve trade issues.150 On the other hand, there is also a concern that plurilateral agreements not applied on an MFN basis could lead nonparticipating countries to become marginalized from the trading system and face new trade restrictions. To attract a critical mass of participants and lower barriers for developing countries and LDCs who may be hesitant to agree to ambitious commitments, agreements could al ow flexibility in implementation timeframes and provide additional assistance, as in the TFA. Preferential Free Trade Agreements Given that the WTO al ows its members to establish preferential FTAs outside the WTO that are consistent with WTO rules, many countries have formed bilateral or regional FTAs and customs consistent with WTO rules, many countries have formed bilateral or regional FTAs and customs
areas; since 1990, the number of RTAs in force has increased seven-fold, with around 300 areas; since 1990, the number of RTAs in force has increased seven-fold, with around 300
agreements notified to the WTO and in force.agreements notified to the WTO and in force.~~145~~151 FTAs have often provided more negotiating FTAs have often provided more negotiating
flexibility for countries to advance new trade liberalizationflexibility for countries to advance new trade liberalization and rulemaking that builds on WTO and rulemaking that builds on WTO
agreements; however, the agreements vary widely in terms of scope and depth. Like plurilaterals, agreements; however, the agreements vary widely in terms of scope and depth. Like plurilaterals,
many view comprehensive FTAs as having potential for advancing the global trade agenda. many view comprehensive FTAs as having potential for advancing the global trade agenda.
However, like plurilaterals, FTAs can also have downsides compared to multilateral deals. However, like plurilaterals, FTAs can also have downsides compared to multilateral deals.
The United States currently has 14 FTAs in force with 20 countries, with some new partial The United States currently has 14 FTAs in force with 20 countries, with some new partial
~~agreements completed or in progress. The Trump Administration has stated a preference for~~
~~negotiating bilateral FTAs, rather than multiparty agreements. In October 2019, the United States~~
~~and Japan signed the “first stage” of trade agreements covering certain agricultural and industrial~~
~~goods market access, as wel as rules on digital trade—the agreements did not require~~
~~congressional approval.146 In January 2020, Congress approved the USMCA between the United~~
~~States, Mexico, and Canada, which replaces~~ agreements completed or in progress. Most recently, the Trump Administration negotiated the U.S.-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020, replacing the North American Free Trade Agreement the North American Free Trade Agreement
~~(NAFTA).147 In addition, USTR notified Congress of trade negotiations with the EU, the UK, and~~
~~most recently, Kenya.~~
(NAFTA). The United States also negotiated a limited trade agreement with Japan, covering some tariff liberalization and rules on digital trade, which entered into effect in 2020. In general, U.S. FTAs are considered to be “WTO-plus” in that they In general, U.S. FTAs are considered to be “WTO-plus” in that they reaffirm the WTO reaffirm the WTO
agreements, but also eliminate most tariff and nontariff barriers and contain rules and obligations agreements, but also eliminate most tariff and nontariff barriers and contain rules and obligations
in areas not covered by the WTO. For example, most U.S. FTAs include access to services in areas not covered by the WTO. For example, most U.S. FTAs include access to services
markets beyond what is contained in the GATS or, more recently, digital trade markets beyond what is contained in the GATS or, more recently, digital trade obligations and obligations and
~~disciplines to address distortions from state-led trade practices. The recent U.S. limited~~
~~agreements with Japan, however, represent a significant shift in approach from recent U.S. FTAs,~~
~~which typical y involve one comprehensive negotiation and agenda. Several analysts question the~~
~~extent to which the stage-one agreement adheres to GATT Article XXIV, requiring that FTAs~~

~~145 As of the end of 2019. WT O RT A database, https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.~~
~~146 White House, “Joint Statement of the United States and Japan,” September 25, 2019. https://www.whitehouse.gov/~~
~~briefings-statements/joint -statement-united-states-japan-2/; UST R, “ FACT SHEET : U.S.-Japan T rade Agreement,”~~
~~September 2019, https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2019/september/fact -sheet -us-japan-~~
~~trade-agreement .~~
~~147 CRS In Focus IF10997, U.S.-Mexico-Canada (USMCA) Trade Agreement, by M. Angeles Villarreal and Ian F.~~
~~Fergusson.~~
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disciplines to address distortions from state-led trade practices. 149 India and South Africa, “T he Legal Status of “Joint Statement Initiatives” and T heir Negotiated Outcomes,” WT O WT /GC/W/819, February 19, 2021. 150 UST R T ai speaking at “ A Conversation with Ambassador Katherine T ai, U.S. T rade Representative,” CSIS, October 4, 2021. 151 As of the end of 2019. WT O RT A database, https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx. Congressional Research Service 41 link to page 47 World Trade Organization: Overview and Future Direction The recent U.S. limited agreements with Japan, however, represented a significant shift in approach from recent U.S. FTAs, which typical y involve one comprehensive negotiation and agenda. Several analysts questioned the extent to which the agreement, as wel as some non-U.S. trade agreements, adhere to GATT Article XXIV, requiring that FTAs cover “substantial y al trade,” in particular given the exclusion of U.S.-Japan auto trade.cover “substantial y al trade,” in particular given the exclusion of U.S.-Japan auto trade.~~148~~
152 Whether or not the agreement violates the letter or spirit of this provision Whether or not the agreement violates the letter or spirit of this provision ~~likely depends on the~~
~~timeline and scope of the next stage of U.S.-Japan talks, which both sides indicated aim to be~~
~~comprehensive in scope~~may depend on whether the two countries seek second stage talks on a comprehensive agreement, and whether another WTO member would chal enge it , and whether another WTO member would chal enge it via~~via WTO~~ dispute dispute
settlement.settlement.~~149~~153 In practice, however, WTO members have rarely chal enged other In practice, however, WTO members have rarely chal enged other trading partners’ trading partners’
agreements for consistency with these requirements agreements for consistency with these requirements atin DS proceedings. DS proceedings.~~150~~154
While U.S. FTAs cover some major trading partners, the majority of U.S. trade, including with While U.S. FTAs cover some major trading partners, the majority of U.S. trade, including with
significant trade partners such as China and the EU, continues to rely solely on the terms of significant trade partners such as China and the EU, continues to rely solely on the terms of
market access and rulemaking in WTO agreements. In 2019, the United States traded $3.6 tril ion market access and rulemaking in WTO agreements. In 2019, the United States traded $3.6 tril ion
with non-FTA partners, compared to $2 tril ion with its FTA partners with non-FTA partners, compared to $2 tril ion with its FTA partners (Figure 87). ).
Figure 87. U.S. Trade in the WTO

Sources: Data from the Census Bureau and Bureau of Economic Analysis. Figure created by CRS. Data from the Census Bureau and Bureau of Economic Analysis. Figure created by CRS.
Notes: Includes exports and imports of goods and services.Includes exports and imports of goods and services. U.S. trade with non-FTA partners is covered under U.S. trade with non-FTA partners is covered under
WTO rules. Since the U.S.-Japan trade agreement, which entered into effect in January 2020 covers a portion WTO rules. Since the U.S.-Japan trade agreement, which entered into effect in January 2020 covers a portion
(5%), but not al bilateral goods trade and second-stage talks remain incomplete, Japan is not included as a ful (5%), but not al bilateral goods trade and second-stage talks remain incomplete, Japan is not included as a ful
FTA partner for il ustrative purposes. FTA partner for il ustrative purposes.
More recently, groups of countries have also been pursuing so-cal ed “mega-regional” trade More recently, groups of countries have also been pursuing so-cal ed “mega-regional” trade
agreements that have broad membership and cover significant shares of global trade. These agreements that have broad membership and cover significant shares of global trade. These
include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
~~signed in March 2018 between 11 countries in the Asia-Pacific region to replace the proposed~~
~~TPP, near complete negotiations over the Regional Comprehensive Economic Partnership~~
~~(RCEP) between the Association of Southeast Asian Nations (ASEAN) and five of its FTA~~

~~148~~152 “Analysts question WT O compliance of U.S.-Japan deal,” “Analysts question WT O compliance of U.S.-Japan deal,” Inside U.S. Trade, September 17, 2019. In addition, the , September 17, 2019. In addition, the
GAT S includes a similar provision. GAT S includes a similar provision.
~~149~~153 U.S. negotiating objectives, released at the outset of the talks in December 2018, suggested a broad range of issues U.S. negotiating objectives, released at the outset of the talks in December 2018, suggested a broad range of issues
beyond tariffs and digital trade would be covered. See https://ustr.gov/countries-regions/japan-korea-apec/japan/us-beyond tariffs and digital trade would be covered. See https://ustr.gov/countries-regions/japan-korea-apec/japan/us-
japan-trade-agreement -negotiations. japan-trade-agreement -negotiations.
~~150~~154 Petros C. Mavroidis, “If I Don’t Do It, Somebody Else Will (or Won't),” Petros C. Mavroidis, “If I Don’t Do It, Somebody Else Will (or Won't),” Journal of World Trade, vol. 40, no. 1 , vol. 40, no. 1
(February 2006): 187-214. (February 2006): 187-214.
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~~partners including China,151 and the Pacific Al iance signed in June 2012 among Chile, Colombia,~~
~~Mexico, and Peru. Such agreements could potential y~~ signed in March 2018 between 11 countries in the Asia-Pacific region, and the Regional Comprehensive Economic Partnership (RCEP), signed in November 2020 between the Association of Southeast Asian Nations (ASEAN) and five of its FTA partners, including China.155 Such agreements could help to consolidate trade rules across help to consolidate trade rules across
~~regions, and~~regions, especial y as new parties join, and, to a varying extent, address new issues not covered by the WTO. With U.S. to a varying extent, address new issues not covered by the WTO. With U.S.
withdrawal from the TPP withdrawal from the TPP ~~and Trump Administration’s preference for bilateral negotiations,~~in 2017, some view the the
United States United States isas likely likely to play a more limited to play a more limited role in shaping rules in such forarole in shaping rules in such fora ~~under the current~~
~~Administration.~~
~~There has been wide debate regarding~~. Experts have widely debated the relationship of preferential FTAs to the WTO and the relationship of preferential FTAs to the WTO and
~~multilateral~~ multilateral trading system.trading system.~~152~~156 Some argue that crafting new rules through mega-regionals could Some argue that crafting new rules through mega-regionals could
undermine the trading system, create competing regional trade blocs and rules, lead to trade undermine the trading system, create competing regional trade blocs and rules, lead to trade
diversion, and marginalize countries not participating in the initiatives.diversion, and marginalize countries not participating in the initiatives.~~153 In remarks in July 2020,~~
~~USTR Lighhizer claimed “we should have a multilateral system or a bunch of bilateral systems,”~~
~~noting that otherwise the two systems fundamental y conflict with one another.154~~157 On the other On the other
hand, some view such agreements as potential y spurring new momentum at the global level.hand, some view such agreements as potential y spurring new momentum at the global level.
~~WTO DG Azevêdo has supported the latter sentiment, expressing~~ For example, in support of that view, former WTO DG Azevêdo expressed that “RTAs [regional trade that “RTAs [regional trade
agreements] are blocks which can help build the edifice of global rules and liberalization.”agreements] are blocks which can help build the edifice of global rules and liberalization.”~~155~~
158 Many analysts have viewed Many analysts have viewed the CPTPP the CPTPP ~~specifical y~~ through this lens.through this lens.~~156~~159 Some experts view Some experts view
~~plurilateral agreements~~plurilateral agreements, in particular in particular, as potential vehicles for bringing new rulemaking from RTAs as potential vehicles for bringing new rulemaking from RTAs
into the multilateralinto the multilateral trading system, as NAFTA did for the groundbreaking Uruguay Round in trading system, as NAFTA did for the groundbreaking Uruguay Round in
1994.1994.~~157~~160 While RTAs may propagate precisely what the multilateral system—with MFN and While RTAs may propagate precisely what the multilateral system—with MFN and
national treatment at its underpinnings—was designed to prevent, namely trade diversion and national treatment at its underpinnings—was designed to prevent, namely trade diversion and
fragmented trading blocs, some observers fragmented trading blocs, some observers believe it may be the only way trade may be liberalizedbelieve it may be the only way trade may be liberalized
in the future as additional interested in the future as additional interested parties could join the over time. parties could join the over time.
Future Negotiations on Selected Issues
Since the founding of the WTO, the landscape of global trade has changed dramatical y. The Since the founding of the WTO, the landscape of global trade has changed dramatical y. The
commercial internet, the growth of supply chains, and increasing trade in services have al commercial internet, the growth of supply chains, and increasing trade in services have al
contributed to the tremendous expansion of trade. However, WTO disciplines have not been contributed to the tremendous expansion of trade. However, WTO disciplines have not been
significantly modernized or expanded since 1995, aside from the TFA and renegotiation of the significantly modernized or expanded since 1995, aside from the TFA and renegotiation of the
ITA and GPA. In addition to ongoing WTO efforts to negotiate new trade liberalization and rules ITA and GPA. In addition to ongoing WTO efforts to negotiate new trade liberalization and rules
in areas like e-commerce and digital trade, the following selected areas of trade policy could be in areas like e-commerce and digital trade, the following selected areas of trade policy could be
subjects for future negotiations multilateral y within the WTO, or as plurilateralssubjects for future negotiations multilateral y within the WTO, or as plurilaterals~~. Meaningful~~
~~progress in areas such as services, competition with SOEs, investment, and labor and~~
~~environment issues could help increase the relevance of the WTO as a negotiating body. More~~

~~151 India, an original member, dropped out of RCEP in December 2019, when RCEP members announced the~~
~~agreement’s preliminary conclusion. CRS Insight IN11200,~~ ~~The Regional Comprehensive Economic Partnership:~~
~~Status and Recent Developm ents~~,, and help increase the relevance of the WTO as a negotiating body. More recently, the COVID-19 pandemic and subsequent disruption to supply chains and spread of new trade restrictions have also led to some cal s for a dedicated plurilateral agreement on medical goods trade. 155 CRS In Focus IF11891, Regional Comprehensive Economic Partnership (RCEP), coordinated by Cathleen D. Cimino-Isaacs by Cathleen D. Cimino-Isaacs ~~and Michael D. Sutherland.~~
~~152~~. 156 For example, see World Economic Forum, For example, see World Economic Forum, Regional Trade Agreements: Game Changers or Costly Distractions for
the World Trading System , July 2014. , July 2014.
~~153~~ 157 For more on the debate, see CRS Report R45198, For more on the debate, see CRS Report R45198, U.S. and Global Trade Agreements: Issues for Congress, by , by
Brock R. Williams. Brock R. Williams.
~~154 David Lawder and Andrea Shalal, “Lighthizer says bilateral trade pacts conflict with multilateral trading system ,”~~
~~Reuters, July 9, 2020.~~
~~155~~158 WT O, “Regional trade agreements ‘cannot substitute’ the multilateral trading system,” September 25, 2014, WT O, “Regional trade agreements ‘cannot substitute’ the multilateral trading system,” September 25, 2014,
https://www.wto.org/english/news_e/spra_e/spra33_e.htm. https://www.wto.org/english/news_e/spra_e/spra33_e.htm.
~~156~~159 See CRS Report R44489, See CRS Report R44489, The Trans-Pacific Partnership (TPP): Key Provisions and Issues for Congress, ,
coordinated by Ian F. Fergusson and Brock R. Williams. coordinated by Ian F. Fergusson and Brock R. Williams.
~~157~~160 For example, see Chad P. Bown, For example, see Chad P. Bown, Mega-Regional Trade Agreements and the Future of the WTO, Council on Foreign Council on Foreign
Relations, Part of Discussion Paper Series on Global and Regional Governance, September 2016. Relations, Part of Discussion Paper Series on Global and Regional Governance, September 2016.
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4443 World Trade Organization: Overview and Future Direction Competition with SOEs and Non-Market Practices The United States and other members of the WTO see an increased need to discipline state-owned or state-dominated enterprises engaged in international commerce, and designated monopolies, whether through the WTO or through regional or bilateral FTAs. However, WTO rules on competition with state-owned or state-dominated enterprises are limited to state trading enterprises (STE)—enterprises, such as agricultural marketing boards, that influence the import

~~World Trade Organization: Overview and Future Direction~~

~~recently, the COVID-19 pandemic, and subsequent disruption to supply chains and spread of new~~
~~trade restrictions have also led to some cal s for a dedicated plurilateral agreement on medical~~
~~goods trade.~~
~~Services~~
~~Since the GATS, the scope of global trade in services has increased tremendously, spurred by~~
~~advances in IT and the growth of global supply chains. Yet, these advances are largely not~~
~~reflected in the GATS. WTO members committed to further services negotiations, which began in~~
~~2000 and were incorporated into the Doha Round. Further talks were spurred by recognition~~
~~among many observers that GATS, while extending the principles of nondiscrimination and~~
~~transparency to services trade, did not provide much actual liberalization, as many countries~~
~~simply bound existing practices.158 However, services talks during Doha also succumbed to~~
~~developing countries’ resistance to open their markets in response to developed country demands,~~
~~as wel as dissatisfaction with other aspects of the single undertaking. Whether the stal ed~~
~~plurilateral TiSA talks wil ultimately lead to services reform in the WTO is an open question.~~
~~Aside from increased market access, several issues are ripe for future negotiations at the WTO,~~
~~such as transition from the current positive list schedule of commitments to a negative list.159~~
~~Instead of a member declaring which services are open for competition, it would need to declare~~
~~which sectors are exempted. This exercise in itself could force members to reexamine their~~
~~approximately 25-year-old commitments and decide whether current market access barriers wil~~
~~be maintained. Before the pandemic, WTO members had been discussing proposals on market~~
~~access for tourism and related services and environmental services. The issue of “servicification”~~
~~of traditional goods industries—for example, services that are sold with a good, such as insurance~~
~~or maintenance services, or enabling services, such as distribution, transportation, marketing, or~~
~~retail—has also attracted attention as the subject of possible WTO negotiations.160 Other issues of~~
~~interest to members include services facilitation (transparency, streamlining administrative~~
~~procedures, simplifying domestic regulations),161 and emergency safeguards, envisioned in GATS~~
~~(Article X) as an issue for future negotiation. Recently members have focused on the economic~~
~~impact of COVID-19 on sectors such as tourism, transport and distribution services as wel as the~~
~~chal enges and opportunities presented for digital services delivery and digital inclusion.~~
~~Competition with SOEs and Non-Market Practices~~
~~The United States and other members of the WTO see an increased need to discipline state-owned~~
~~or state-dominated enterprises engaged in international commerce, and designated monopolies,~~
~~whether through the WTO or through regional or bilateral FTAs. However, WTO rules on~~
~~competition with state-owned or state-dominated enterprises are limited to state trading~~
~~enterprises (STE)—enterprises, such as agricultural marketing boards, that influence the import~~

~~158 Gary Clyde Hufbauer, “Liberalization of Services T rade,” in Trans-Pacific Partnership: An Assessment, ed.~~
~~Cathleen Cimino-Isaacs and Jeffrey J. Schott, (Washington, DC: Peterson Institute of International Economics, 2016).~~
~~159 U.S. FT As use a negative list approach, and the proposed T iSA negotiations use a hybrid approach to apply a~~
~~negative list to national treatment commitments and a positive list for market access.~~
~~160 International Centre for T rade and Sustainable Development (ICT SD), “Negotiating Disciplines on Domestic~~
~~Regulations in Services,” June 2018, https://www.ictsd.org/themes/services-and-digital-economy/research/negotiating-~~
~~disciplines-on-domestic-regulations-in.~~
~~161 Marta Soprana, “ Services facilitation in regional trade agreements and opportunities for convergence,” The E15~~
~~Initiative, October 2018, http://e15init iative.org/blogs/services-facilitation-in-regional-trade-agreements-and-~~
~~opportunities-for-convergence/.~~
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or export of a good. GATT Article XVII requires them to act consistently with GATT or export of a good. GATT Article XVII requires them to act consistently with GATT
commitments on nondiscrimination, to operate in accordance with commercial considerations, commitments on nondiscrimination, to operate in accordance with commercial considerations,
and to abide by other GATT disciplines, such as disciplines on import and export restrictions. The and to abide by other GATT disciplines, such as disciplines on import and export restrictions. The
transparency obligations consist of reporting requirements describing the reason and purpose of transparency obligations consist of reporting requirements describing the reason and purpose of
the STE, products covered, a description of its functions, and pertinent statistical information. the STE, products covered, a description of its functions, and pertinent statistical information. ~~162~~161
Meanwhile, countries desiring disciplines on SOEs have turned to FTAs. The CPTPP and the Meanwhile, countries desiring disciplines on SOEs have turned to FTAs. The CPTPP and the
USMCA have dedicated chapters on SOEs. The USMCA includes commitments that SOEs of a USMCA have dedicated chapters on SOEs. The USMCA includes commitments that SOEs of a
party act in accordance with commercial considerations; requires parties to provide party act in accordance with commercial considerations; requires parties to provide
nondiscriminatory treatment to like goods or services to those provided by SOEs; and prohibits nondiscriminatory treatment to like goods or services to those provided by SOEs; and prohibits
most noncommercial assistance to SOEs, among other issues. The USMCA SOE chapter could most noncommercial assistance to SOEs, among other issues. The USMCA SOE chapter could
also be aimed at countries other than the three USMCA parties, such as China, to signal their also be aimed at countries other than the three USMCA parties, such as China, to signal their
negotiating intentions going forward. While there could be a desire to multilateralize these negotiating intentions going forward. While there could be a desire to multilateralize these
disciplines, they likely would face objections from those members engaged in such practices. disciplines, they likely would face objections from those members engaged in such practices.
State support provided to SOEs, including subsidies, is a closely related issue, as it can play a State support provided to SOEs, including subsidies, is a closely related issue, as it can play a
major role in market-distorting behavior under current rules. The WTO Agreement on Subsidies major role in market-distorting behavior under current rules. The WTO Agreement on Subsidies
and Countervailing Measures (ASCM) covers the provision of specified subsidies granted to and Countervailing Measures (ASCM) covers the provision of specified subsidies granted to
SOEs, including by the government or any “public body.” Some members, including the United SOEs, including by the government or any “public body.” Some members, including the United
States and EU, have contested past interpretations by the Appel ate Body of what qualifies as a States and EU, have contested past interpretations by the Appel ate Body of what qualifies as a
public body as too narrow, and remain concerned that a large share of Chinese and other SOEs in public body as too narrow, and remain concerned that a large share of Chinese and other SOEs in
effect have avoided being subject to disciplines.effect have avoided being subject to disciplines.~~163~~162 As discussed, the United States, EU, and Japan As discussed, the United States, EU, and Japan
are engaged in ongoing discussions to strengthen WTO rules. A January 2020 joint statement by are engaged in ongoing discussions to strengthen WTO rules. A January 2020 joint statement by
the trilateral proposed areas for changes to the existing WTO ASCM rules on industrial the trilateral proposed areas for changes to the existing WTO ASCM rules on industrial
subsidies.subsidies.~~164~~163 Recommended changes include expanding the types of prohibited subsidies, Recommended changes include expanding the types of prohibited subsidies,
reversing the burden of proof to the subsidizing country, and incentives for subsidy notifications, reversing the burden of proof to the subsidizing country, and incentives for subsidy notifications,
among others. China opposes the proposal and stated it wil not negotiate new rules on industrial among others. China opposes the proposal and stated it wil not negotiate new rules on industrial
subsidies.subsidies.~~165~~ 164 It is unclear if the trilateral members or others wil pursue a plurilateralIt is unclear if the trilateral members or others wil pursue a plurilateral agreement on agreement on
subsidy disciplines; moreover, analysts emphasize that such efforts must ultimately achieve buy-subsidy disciplines; moreover, analysts emphasize that such efforts must ultimately achieve buy-
in from in from China and others to have a lasting impact.165 China’s Ambassador to the WTO, however, stated 161~~China and others to have a lasting impact.166 Regardless, members may seek to revisit~~
~~multilateral competition rules if market distortions emerge in the post-pandemic economic~~
~~recovery, given many governments have provided subsidies and other forms of support to~~
~~domestic industries during the economic downturn.~~
~~Investment~~
~~With limited provisions under TRIMS and GATS, rules and disciplines covering international~~
~~investment are not part of the WTO. More extensive protection for investors was one of the~~
~~“Singapore issues” proposed at the 1996 WTO Ministerial as a topic for future negotiations, but~~

~~162~~ WT O, “T echnical Information on State T rading Enterprises,” https://www.wto.org/english/tratop_e/statra_e/ WT O, “T echnical Information on State T rading Enterprises,” https://www.wto.org/english/tratop_e/statra_e/
statra_info_e.htm. statra_info_e.htm.
~~163~~162 European Commission, European Commission, WTO Modernization, Concept Paper, September 2018, pp. 4-5; and UST R, Statement by the , Concept Paper, September 2018, pp. 4-5; and UST R, Statement by the
U.S. to the Dispute Settlement Body, March 2011, https://ustr.gov/sites/default/files/uploads/U.S. to the Dispute Settlement Body, March 2011, https://ustr.gov/sites/default/files/uploads/
Mar25%20Stmt%20US%20AD-CVD%20fin.pdf. Mar25%20Stmt%20US%20AD-CVD%20fin.pdf.
~~164~~163 “Joint Statement of the T rilateral Meeting of the T rade Ministers of Japan, the United States and the “Joint Statement of the T rilateral Meeting of the T rade Ministers of Japan, the United States and the ~~E uropean~~European
Union,” January 14, 2020, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/january/joint-Union,” January 14, 2020, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/january/joint-
statement -trilateral-meeting-trade-ministers-japan-united-states-and-european-union. statement -trilateral-meeting-trade-ministers-japan-united-states-and-european-union.
~~165~~164 Doug Palmer, “ Envoy: China can't support WT O talks on industrial subsidies,” Doug Palmer, “ Envoy: China can't support WT O talks on industrial subsidies,” Politico Pro, May 12, 2020. , May 12, 2020.
~~166~~165 Wendy Cutler and Andrew Chatzky, Wendy Cutler and Andrew Chatzky, Curbing State-Driven Trade Policies: How to Craft New & Effective
Approaches to Counter Distortive Practices, Asia Society Policy Institute, July 2020. , Asia Society Policy Institute, July 2020.
Congressional Research Service Congressional Research Service

4644 World Trade Organization: Overview and Future Direction that that more “collective research” into both industrial and agriculture subsidies is needed before discussing potential rules updates.166 Regardless, members may seek to revisit multilateral competition rules if market distortions emerge in the post-pandemic economic recovery, given many governments have provided subsidies and other forms of support to domestic industries during the economic downturn. Investment With limited provisions under TRIMS and GATS, rules and disciplines covering international investment are not part of the WTO. More extensive protection for investors was one of the “Singapore issues” proposed at the 1996 WTO Ministerial as a topic for future negotiations, but

~~World Trade Organization: Overview and Future Direction~~

then dropped under opposition from developing countries at the 2003 Cancun Ministerial. The then dropped under opposition from developing countries at the 2003 Cancun Ministerial. The
OECD also attempted to liberalize investment practices and provide investor protections through OECD also attempted to liberalize investment practices and provide investor protections through
a Multilateral Agreement on Investment, however, that effort was abandoned in 1998 in the face a Multilateral Agreement on Investment, however, that effort was abandoned in 1998 in the face
of widespread campaigns by nongovernment organizations in developed countries. of widespread campaigns by nongovernment organizations in developed countries.
While multilateral attempts to negotiate investment disciplines have not borne fruit, countries While multilateral attempts to negotiate investment disciplines have not borne fruit, countries
have agreed to investment protections within bilateral investment treaties (BITs) and chapters in have agreed to investment protections within bilateral investment treaties (BITs) and chapters in
bilateral and regional FTAs. The U.S. “model BIT” serves as the basis for most recent U.S. bilateral and regional FTAs. The U.S. “model BIT” serves as the basis for most recent U.S.
FTAs.167 These provisions are often negotiated between developed countries and developing FTAs.167 These provisions are often negotiated between developed countries and developing
countries—often viewed as having less robust legal systems—that want to provide assurance that countries—often viewed as having less robust legal systems—that want to provide assurance that
incoming FDI wil be protected in the country. Developed countries themselves have begun to incoming FDI wil be protected in the country. Developed countries themselves have begun to
diverge on the use and inclusion of provisions on investor-state dispute settlement (ISDS).168 diverge on the use and inclusion of provisions on investor-state dispute settlement (ISDS).168
Incorporating investment issues more fully in the WTO would recognize that trade and Incorporating investment issues more fully in the WTO would recognize that trade and
investment issues are increasingly interlinked. Moreover, bringing coherence to the nearly 3,000 investment issues are increasingly interlinked. Moreover, bringing coherence to the nearly 3,000
BITs or trade agreements with investment provisions could be a role for the WTO. In addition, BITs or trade agreements with investment provisions could be a role for the WTO. In addition,
agreement on investment disciplines could help to resolve the thorny issue of investment agreement on investment disciplines could help to resolve the thorny issue of investment
adjudication between the competing models of ISDS and an investment court, as proposed by the adjudication between the competing models of ISDS and an investment court, as proposed by the
EU in its recent FTAs, given that disputes likely would remit to WTO DS. While it remains EU in its recent FTAs, given that disputes likely would remit to WTO DS. While it remains
unclear whether developing countries would be more amenable to negotiating investment unclear whether developing countries would be more amenable to negotiating investment
disciplines multilateral y than they were in 2003, this area could be ripe for plurilateral activity. disciplines multilateral y than they were in 2003, this area could be ripe for plurilateral activity.
In the meantime, since MC11 some WTO members have been pursuing the development of a In the meantime, since MC11 some WTO members have been pursuing the development of a
multilateral framework on investment facilitation. The group is comprised of a mix of developed multilateral framework on investment facilitation. The group is comprised of a mix of developed
and developing economies, including the EU, Canada, China, Japan, Mexico, Singapore, and and developing economies, including the EU, Canada, China, Japan, Mexico, Singapore, and
Russia, but not the United States.169 Russia, but not the United States.169
~~Labor and Environment~~
~~Labor and environmental provisions were not included in the Uruguay Round agreements, largely~~
~~at the insistence of developing countries.170 Some observers maintain that this has created major~~
~~gaps in global trade rules and cal for the WTO to address these issues.171 Related provisions have~~
~~developed and evolved within U.S. FTAs outside the WTO. Recent U.S. FTAs require partner~~
~~countries to adhere to international y recognized labor principles of the International Labor~~
~~Organization (ILO) and applicable multilateral environmental agreements, and to enforce their~~
~~labor or environmental laws and not to derogate from these laws to attract trade and investment.~~
~~Recent agreements like the CPTPP and USMCA also contain provisions, though not identical,~~

166 Sarah Anne Aarup, “‘Not the right time’ to launch WT O talks on industrial subsidies, China says,” Politico Pro, September 30, 2021. 167 CRS In Focus IF10052, 167 CRS In Focus IF10052, U.S. International Investment Agreements (IIAs), by Martin A. Weiss and Shayerah Ilias , by Martin A. Weiss and Shayerah Ilias
Akhtar, and CRS Report R43052, Akhtar, and CRS Report R43052, U.S. International Investm ent Agreem ents: Issues for Congress, by Shayerah Ilias , by Shayerah Ilias
Akhtar and Martin A. Weiss. Akhtar and Martin A. Weiss.
168 T he United States has pursued ISDS in most of its FT As. In the proposed USMCA, the T rump Administration 168 T he United States has pursued ISDS in most of its FT As. In the proposed USMCA, the T rump Administration
restricted recourse to ISDS in the case of Mexico and ended the application of ISDS with Canada. Recent EU restricted recourse to ISDS in the case of Mexico and ended the application of ISDS with Canada. Recent EU
agreements contain an investment court model with a standing body replacing ad hoc tribunals common to ISDS. agreements contain an investment court model with a standing body replacing ad hoc tribunals common to ISDS.
169 “Joint Ministerial Statement on Investment Facilitation for Development,” WT/MIN(17)/59, December 13, 2017. 169 “Joint Ministerial Statement on Investment Facilitation for Development,” WT/MIN(17)/59, December 13, 2017.
~~170 One labor-related provision, GAT T Article XX(e) provides an exception to trade obligations for measures “relating~~
~~to products of prison labor.”~~
~~171 For example, in the view of T hea Lee of the Economic Policy Institute, WT O rules are currently “lopsided” and do~~
~~not adequately protect the interests of workers, consumers, and the environment; in particular, the WTO should~~
~~recognize that “violation of internationally recognized workers’ rights is as much an unfair trade policy as the violation~~
~~of patents or copyrights.” Senate Foreign Relations Committee,~~ ~~Hearing on Multilateral Economic Institutions and~~
~~U.S. Foreign Policy,~~ ~~written testimony by T hea M. Lee, November 27, 2018.~~
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~~World Trade Organization: Overview and Future Direction~~

~~prohibiting the most harmful fisheries subsidies, and relating to il egal trafficking, marine species,~~
~~air quality, marine litter, and sustainable forestry. More broadly, while inclusion of labor and~~
~~environmental provisions in FTAs has expanded in the past decade, in general the commitments~~
~~can vary widely in their scope and depth, with only some subject to DS mechanisms.172~~
~~While general provisions on labor and environment may be a heavy lift at this time given these~~
~~differences, the WTO has undertaken an effort to discipline fisheries subsidies, which could have~~
~~a beneficial environmental effect (see above). However, fisheries subsidies may be a special case,~~
~~as it directly pertains to an existing trade-related agreement, the ASCM.~~
Proposed Institutional Reforms
Many observers, including some Members of Congress, believe the WTO needs to adopt reforms Many observers, including some Members of Congress, believe the WTO needs to adopt reforms
to continue its role as the foundation of the world trading system. to continue its role as the foundation of the world trading system.170 In particular, its negotiating In particular, its negotiating
function has atrophied following the collapse of the Doha Round. Its DS mechanism, while function has atrophied following the collapse of the Doha Round. Its DS mechanism, while
functioning, is viewed by some WTO members as cumbersome and time consuming. functioning, is viewed by some WTO members as cumbersome and time consuming. ~~And some~~
Moreover, some observers, including U.S. officials, contend it has exceeded its mandate when deciding observers, including U.S. officials, contend it has exceeded its mandate when deciding cases. cases.
Potential changes described below address institutional and negotiation reform, as wel as reforms Potential changes described below address institutional and negotiation reform, as wel as reforms
to the DS system. Reforms concern the administration of the organization, including its to the DS system. Reforms concern the administration of the organization, including its
procedures and practices, and attempts to address the inability of WTO members to conclude new procedures and practices, and attempts to address the inability of WTO members to conclude new
agreements. DS reforms attempt to improve the working of the DS system, particularly the agreements. DS reforms attempt to improve the working of the DS system, particularly the
Appel ate Body (AB), which fel below its three-member quorum in Appel ate Body (AB), which fel below its three-member quorum in ~~December~~2019, chal enging the , chal enging the
WTO’s ability to effectively enforce DS decisions. WTO’s ability to effectively enforce DS decisions.
~~Certain~~Several WTO members have been exploring WTO members have been exploring ~~some~~key aspects of reform. aspects of reform.~~173 In September 2018, the~~
~~European Commission published a revised paper on its comprehensive approach “to modernise~~
~~the WTO and to make international trade rules fit for the chal enges of the global economy.”174 As~~
171 In February 2021, the European Commission issued its Trade Policy Review, with a dedicated annex on reform of the WTO.172 Specified priorities for reform include: the WTO’s contribution to sustainable development; restoring a fully functioning DS system with a reformed Appel ate Body; more effective negotiating function, through modernizing rules, including addressing state interventions, imbalances between market access commitments, and progress on agricultural negotiations; and improving the WTO’s monitoring function. As noted, the United States, EU, and Japan have issued scoping papers on strengthening WTO noted, the United States, EU, and Japan have issued scoping papers on strengthening WTO
disciplines on industrial subsidies disciplines on industrial subsidies and SOEs. The Ottawa Group~~and SOEs.~~
~~In addition, in late 2018 Canada organized a ministerial among a smal group~~ of “like-minded” of “like-minded”
countries interested in WTO reform, countries interested in WTO reform, organized by Canada in 2018, including Australia, Brazil, Chile, the EU, Japan, Kenya, including Australia, Brazil, Chile, the EU, Japan, Kenya,
Mexico, New Zealand, Norway, Singapore, South Korea, and SwitzerlandMexico, New Zealand, Norway, Singapore, South Korea, and Switzerland~~. Canadian trade~~
~~officials said that “starting smal has al owed us to address problems head-on and quickly develop~~
~~proposals,” while acknowledging that a larger effort must include the United States and China.175~~
have held a number of meetings since 2018 and issued various proposals.173 In a joint communiqué, the group of 13 countries emphasized that “the In a joint communiqué, the group of 13 countries emphasized that “the current situation at the current situation at the
WTO is no longer sustainable,” and identified three areas in particular requiring “urgent WTO is no longer sustainable,” and identified three areas in particular requiring “urgent
~~consideration”:~~consideration.” These include: (1) safeguarding and strengthening the DS system; safeguarding and strengthening the DS system; (2) reinvigorating the WTO’s reinvigorating the WTO’s
negotiating function; including how the development dimension can be best pursued in negotiating function; including how the development dimension can be best pursued in
rulemaking; and rulemaking; and (3) strengthening the monitoring and strengthening the monitoring and transparency of WTO members’ trade policies.174 The Ottawa Group has put forward various proposals, most recently on a “trade and health” initiative for temporary and permanent actions of WTO members in response to the pandemic that 170 For congressional views for example, see S.Res. 101 and H.Res. 382. 171 For a database listing of ~~transparency of WTO members’ trade~~

~~172 T he ILO reports that less than a third of trade agreements have labor-related provisions (as of 2016). Of those,~~
~~nearly half are U.S., EU or Canadian agreements, while about a quarter are between South -South trading partners. See~~
~~ILO, Labour-related provisions in trade agreem ents, GB.328/POL/3, September 2016.~~
~~173 For a database listing of some of the~~ ongoing reform efforts by country, see CSIS, “WT O Reform T racker,” ongoing reform efforts by country, see CSIS, “WT O Reform T racker,”
https://tradeguys.csis.org/trade-explained/wto-tracker/. https://tradeguys.csis.org/trade-explained/wto-tracker/.
~~174~~172 European Commission, Trade Policy Review – An Open, Sustainable and Assertive Trade Policy, COM(2021) 66 final, February 2, 2021. 173 Canadian officials said that “starting small has allowed us to address problems head-on and quickly develop proposals,” while acknowledging that a larger effort must include the United States and China. Janyce McGregor, “Global trade reform must include China, U.S., Jim Carr says ~~European Commission, “EU proposals on WT O modernization,” WK8329/2018 INIT, July 5, 2018 ; and “European~~
~~Commission presents comprehensive approach for the modernization of the World T rade Organization,” press release,~~
~~September 18, 2018, http://europa.eu/rapid/press-release_IP-18-5786_en.htm.~~
~~175 Janyce McGregor, “Global trade reform must include China, U.S., Jim Carr says~~ after hosting WT O meeting,” after hosting WT O meeting,” CBC
News, October 25, , October 25, 2018. 174 “Joint Communiqué of the Ottawa Ministerial on WT O Reform,” October 15, 2018, https://www.canada.ca/en/global-affairs/news/2018/10/joint -communique-of-the-ottawa-ministerial-on-wto-reform.html; Government of Canada, “Summary of Ottawa Group Meeting in Paris, May 2019,” May 23, 2019, https://www.canada.ca/en/global-affairs/news/2019/05/summary-of-ottawa-group-meeting-in-paris-may-2019.html. ~~2018.~~
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~~policies.176 The group held its third meeting in May 2019, and confirmed that “work continues~~
~~apace on developing concrete proposals to be brought forward for consideration by the wider~~
~~membership.”177~~includes a range of actions relating to exports, trade facilitation, technical regulations, tariffs, and transparency.175 Some Members of Congress have expressed support for these Some Members of Congress have expressed support for these ~~new~~ efforts to efforts to
address address longstanding concerns of the United States.176 Separately, some Members of Congress have pointed the need for the WTO to address other issues, such as labor and worker rights to support the Biden Administration’s worker-centered trade policy.177~~longstanding concerns of the United States.178~~
~~China held its own mini-ministerial among 34 WTO members in November 2019 to discuss~~
~~reform efforts, and cal ed on al parties “to firmly support the multilateral trading system,~~
~~resolutely oppose unilateralism and protectionism, actively participate in the necessary reform of~~
~~the WTO….and enhance the WTO’s confidence”179~~
Institutional Issues
Consensus in Decisionmaking
While consensus in decisionmaking is a long-standing core practice at the GATT/WTO, voting on While consensus in decisionmaking is a long-standing core practice at the GATT/WTO, voting on
a nonconsensus basis is authorized for certain activities on a one member-one vote basis. For a nonconsensus basis is authorized for certain activities on a one member-one vote basis. For
example, interpretations of the WTO agreements and country waivers from certain provisions example, interpretations of the WTO agreements and country waivers from certain provisions
require a three-fourths affirmative vote for some matters, while a two-thirds affirmative vote is require a three-fourths affirmative vote for some matters, while a two-thirds affirmative vote is
required for an amendment to an agreement. However, even when voting is possible, the practice required for an amendment to an agreement. However, even when voting is possible, the practice
of consensus decisionmaking remains the norm. of consensus decisionmaking remains the norm.
As an organization of sovereign entities, some observers believe the practice of consensus As an organization of sovereign entities, some observers believe the practice of consensus
decisionmaking gives legitimacy to WTO actions. Consensus assures that actions taken are in the decisionmaking gives legitimacy to WTO actions. Consensus assures that actions taken are in the
self-interest of al its members. Consensus also reassures smal countries that their concerns must self-interest of al its members. Consensus also reassures smal countries that their concerns must
be addressed. However, the practice of consensus has often led to deadlock, especial y in the be addressed. However, the practice of consensus has often led to deadlock, especial y in the
Doha Round negotiations. The ability to block consensus also has perpetuated so-cal ed “hostage Doha Round negotiations. The ability to block consensus also has perpetuated so-cal ed “hostage
taking,” in which a country can block consensus over an unrelated matter. taking,” in which a country can block consensus over an unrelated matter.
In order to attempt to expedite institutional decisionmaking, some expert observers have proposed In order to attempt to expedite institutional decisionmaking, some expert observers have proposed
alternatives to the alternatives to the current system, such as: current system, such as:
 Use the voting procedures currently prescribed in the WTO agreements.  Use the voting procedures currently prescribed in the WTO agreements.
 Adopt a weighted voting system based on a formula that includes criteria relating  Adopt a weighted voting system based on a formula that includes criteria relating
to a member’s GDP, trade flows, population, or a combination thereof. to a member’s GDP, trade flows, population, or a combination thereof.
 Establish an executive committee composed of a combination of permanent and  Establish an executive committee composed of a combination of permanent and
rotating members, or composed based on a formula as above or representatives of rotating members, or composed based on a formula as above or representatives of
differing groups of countries. differing groups of countries.

~~176 “Joint Communiqué of the Ottawa Ministerial on WT O Reform,” October 15, 2018, https://www.canada.ca/en/~~
~~global-affairs/news/2018/10/joint -communique-of-the-ottawa-ministerial-on-wto-reform.html.~~
~~177 Government of Canada, “Summary of Ottawa Group Meeting in Paris, May 2019,” May 23, 2019,~~
~~https://www.canada.ca/en/global-affairs/news/2019/05/summary-of-ottawa-group-meeting-in-paris-may-2019.html.~~
~~178~~  Maintain current consensus voting but require a member stating an objection to explain why it is doing so, or why it is a matter of vital national interest.178 The Single Undertaking Approach The “single undertaking” method by which WTO members negotiate agreements means that during a negotiating round, al issues are up for negotiation until everything is agreed. On one 175 Government of Canada, “ Minister Ng announces tabling of Ottawa Group’s T rade and Health Initiative at WTO General Council,” News Release, December 17, 2020. 176 House Ways and Means Chairman Kevin Brady noted, “I am pleased that some of the key trading partners appear to House Ways and Means Chairman Kevin Brady noted, “I am pleased that some of the key trading partners appear to
be engaged in serious discussion of the concerns the United States has raised for many years about the need for reform be engaged in serious discussion of the concerns the United States has raised for many years about the need for reform
... the WT O urgently needs to reform to keep the organization well-functioning and viable, including with respect to ... the WT O urgently needs to reform to keep the organization well-functioning and viable, including with respect to
negotiations towards new agreements as well as improving dispute resolution.” See “Brady Calls for Serious WT O negotiations towards new agreements as well as improving dispute resolution.” See “Brady Calls for Serious WT O
Reform,” October 25, 2018, https://waysandmeans.house.gov/brady-calls-for-serious-wto-reform/. Reform,” October 25, 2018, https://waysandmeans.house.gov/brady-calls-for-serious-wto-reform/.
~~179 “At mini-ministerial, WTO members call for resuming Appellate Body nominations,” Inside U.S. Trade, November~~
~~5, 2019.~~
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~~ Maintain current consensus voting but require a member stating an objection to~~
~~explain why it is doing so, or why it is a matter of vital national interest.180~~
~~The Single Undertaking Approach~~
~~The “single undertaking” method by which WTO members negotiate agreements means that~~
~~during a negotiating round, al issues are up for negotiation until everything is agreed. On one~~177 Rep. Blumenauer, “Chairman Blumenauer Leads Colleagues in Encouraging Biden Administration to Continue to Advocate for Worker Protections at Upcoming World T rade Organization Conference,” October 12, 2021. 178 Peter Sutherland et al., The Future of the WTO: Addressing institutional challenges in the new millennium , World T rade Organization, 2004, p. 64. Congressional Research Service 47 World Trade Organization: Overview and Future Direction
hand, this method, in which nothing is agreed until everything is agreed, is suited for large, hand, this method, in which nothing is agreed until everything is agreed, is suited for large,
complex rounds in which rules and disciplines in many areas of trade (goods, services, complex rounds in which rules and disciplines in many areas of trade (goods, services,
agriculture, IPR, etc.) are discussed. It permits negotiation on a cross-sectoral basis, so countries agriculture, IPR, etc.) are discussed. It permits negotiation on a cross-sectoral basis, so countries
can make a concession in one area of negotiation and receive a concession elsewhere. The can make a concession in one area of negotiation and receive a concession elsewhere. The
method is intended to prevent smal er countries from being “steamrolled” by the demands of method is intended to prevent smal er countries from being “steamrolled” by the demands of
larger economies, and helps ensure that each country sees a net benefit in the resulting agreement. larger economies, and helps ensure that each country sees a net benefit in the resulting agreement.
On the other hand, arguably, the single undertaking has contributed to the breakdown of the On the other hand, arguably, the single undertaking has contributed to the breakdown of the
negotiating function under the WTO, exemplified by the never-completed Doha Round, as issues negotiating function under the WTO, exemplified by the never-completed Doha Round, as issues
of importance to one country or another served to block consensus at numerous points during the of importance to one country or another served to block consensus at numerous points during the
round. Some members, including the EU, have cal ed for “flexible multilateralism,” based on round. Some members, including the EU, have cal ed for “flexible multilateralism,” based on
continued support for full multilateral negotiations where possible, but pursuit of plurilateral continued support for full multilateral negotiations where possible, but pursuit of plurilateral
agreements on an MFN basis where multilateral consensus is not possible. agreements on an MFN basis where multilateral consensus is not possible.~~181~~179
Transparency/Notification
An important task of the WTO is to monitor each member’s compliance with various agreements. An important task of the WTO is to monitor each member’s compliance with various agreements.
A WTO member is required to notify the Secretariat of certain relevant domestic laws or practices A WTO member is required to notify the Secretariat of certain relevant domestic laws or practices
so that other members can assess the consistency of WTO members’ domestic laws, regulations, so that other members can assess the consistency of WTO members’ domestic laws, regulations,
and actions with WTO agreements. Required notifications include measures concerning and actions with WTO agreements. Required notifications include measures concerning
subsidies, agricultural support, quantitative restrictions, TBT, and SPS standards. subsidies, agricultural support, quantitative restrictions, TBT, and SPS standards.
Compliance with the WTO agreement’s notification requirements, especial y regarding Compliance with the WTO agreement’s notification requirements, especial y regarding
government subsidy programs, has become a serious concern among certain members, including government subsidy programs, has become a serious concern among certain members, including
the United States. Many WTO members are late in submitting their required notifications or do the United States. Many WTO members are late in submitting their required notifications or do
not submit them at al . This effectively prevents other members from fully examining the policies not submit them at al . This effectively prevents other members from fully examining the policies
of their trading partners. In November 2018, the United States, EU, and others put forward a joint proposal that addresses several of these elements, including penalties for noncompliance.180 The Biden Administration revised the proposal to eliminate financial penalties for missed notifications, relying more on “name and shame” tactics, and focused on providing capacity building and technical assistance to those members who request it.181 The revised proposal, which attracted multiple co-sponsors, also cal s for a new Working Group on Notification Obligations and Procedures. ~~of their trading partners. In response, some members—notably the United States and the EU—~~
~~have proposed incentives for compliance or sanctions for noncompliance with notification~~
~~reporting requirements. These include:~~
~~ A U.S. proposal to impose a series of sanctions including steps to “name and~~
~~shame” an offending member, limiting the member from using certain WTO~~
~~resources, and designating a member “inactive.”182~~
~~ An EU proposal to create a rebuttable presumption that a non-notified subsidy~~
~~measure is an actionable subsidy or a subsidy causing serious prejudice, thereby~~
~~al owing a member to chal enge the subsidy under WTO DS.~~

~~180 Peter Sutherland et al., The Future of the WTO: Addressing institutional challenges in the new millennium , World~~
~~T rade Organization, 2004, p. 64.~~
~~181 European Commission, “WT O modernization,” Concept Paper, September 2018.~~
~~182 “Procedures to enhance transparency and strengthen notification requirements under WT O agreements,”~~
~~Communications from the United States, JOB/GC/148, October 30, 2017; under this proposal, inactive members would~~
~~have access to most training and technical assistance, and would be referred to as such in General Council meetings.~~
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~~ An EU proposal to encourage counternotifications—a chal enge to the accuracy~~
~~or existence of another member’s notification—against members that do not~~
~~voluntarily notify on their own.183 In May and November 2018, for example, the~~
~~United States launched counternotifications of India’s farm subsidy notifications~~
~~regarding wheat, rice, and cotton.~~
~~In November 2018, the United States, EU, Japan, Argentina, and Costa Rica put forward a joint~~
~~proposal that reflects several of these elements, including penalties for noncompliance.184 It also~~
~~specifies exemptions for developing countries that lack capacity and have requested assistance to~~
~~help fulfil notification obligations.~~
Treatment of Developing Countries
A country’s development status can affect the pace at which a country undertakes its WTO A country’s development status can affect the pace at which a country undertakes its WTO
obligations. Given that WTO members self-designate their status, some members hold on to obligations. Given that WTO members self-designate their status, some members hold on to
developing-country status even after their economies begin more to resemble their developed-developing-country status even after their economies begin more to resemble their developed-
country peers.country peers.~~185~~182 In addition, some of the world’s largest economies, including China In addition, some of the world’s largest economies, including China, and India, India, ~~and~~
~~Brazil,~~ may justify developing country status because their per capita incomes more closely may justify developing country status because their per capita incomes more closely
resemble those of a developing country than those of developed countries. Developing country resemble those of a developing country than those of developed countries. Developing country
~~status~~ status 179 European Commission, “WT O modernization,” Concept Paper, September 2018. 180 “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O Agreements,” JOB/GC/204, November 1, 2018. 181 “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O Agreements,” JOB/GC/204/Rev.6, July 15, 2021. 182 T he WT O does not specify criteria for “developing” or “developed” country status, but least-developed countries are defined under U.N. criteria. Congressional Research Service 48 World Trade Organization: Overview and Future Direction enables a country to claim special and differential treatment (SDT) both in the context of enables a country to claim special and differential treatment (SDT) both in the context of
existing obligations and in negotiations for new disciplines (see existing obligations and in negotiations for new disciplines (see text box).).~~186~~183 The WTO specifies, The WTO specifies,
however, that while the designated status is based on self-selection, it is “not necessarily however, that while the designated status is based on self-selection, it is “not necessarily
automatical y accepted in al WTO bodies.” automatical y accepted in al WTO bodies.”~~187~~184
Several developed countries, including the EU and United States, have expressed frustration at Several developed countries, including the EU and United States, have expressed frustration at
this state of affairs. In January 2019, the United States circulated a paper warning that the WTO is this state of affairs. In January 2019, the United States circulated a paper warning that the WTO is
at risk of becoming irrelevant due to the practice of allowing members to self-designate their at risk of becoming irrelevant due to the practice of allowing members to self-designate their
development status to obtain special and differential treatment.development status to obtain special and differential treatment.~~188 On July 26,~~185 In July 2019, President 2019, President
Trump Trump issued a “Memorandum on Reforming Developing-Country Status in the World Trade issued a “Memorandum on Reforming Developing-Country Status in the World Trade
OrganizationOrganization~~.”189 The~~ ,” instructing the USTR to work to reform the WTO self-declaration practice.186 The President stated that the WTO dichotomy between developed and President stated that the WTO dichotomy between developed and
developing countries is outdated and “has al owed some WTO Members to gain unfair developing countries is outdated and “has al owed some WTO Members to gain unfair
advantages in the international trade arena.” He specifical y mentioned China, stating that “the advantages in the international trade arena.” He specifical y mentioned China, stating that “the
United States has never accepted China’s claim to developing-country status, and virtual y every United States has never accepted China’s claim to developing-country status, and virtual y every
current economic indicator belies current economic indicator belies China’s claim.” ~~China’s claim.” The President instructed USTR to work to~~
~~reform the WTO self-declaration practice and, if no substantial progress is made within 90 days,~~
~~to take certain unilateral actions, such as no longer treating a country as developing if the USTR~~

~~183 European Commission, “EU proposals on WT O modernization,” WK8329/2018 INIT, July 5, 2018.~~
~~184 “Procedures to Enhance T ransparency and Strengthen Not ification Requirements Under WT O Agreements,”~~
~~JOB/GC/204, November 1, 2018.~~
~~185 T he WT O does not specify criteria for “developing” or “developed” country status, but least-developed countries~~
~~are defined under U.N. criteria.~~
~~186 For examples of types of the SDT provisions in WT O agreements, see https://www.wto.org/english/tratop_e/~~
~~devel_e/teccop_e/s_and_d_eg_e.htm.~~
~~187 “Understanding the WT O: T he Organization,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm.~~
~~188 “An undifferentiated WT O: Self-declared development status risk institutional irrelevance,” Communications from~~
~~the United States, WT /GC/W/757, January 16, 2019.~~
~~189 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July~~
~~26, 2019.~~
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~~believes that designation to be improper, and to publish a list of al economies USTR believes to~~
~~be “inappropriately” claiming developing-economy status.~~
~~The U.S. memorandum received a mixed response from other WTO members. Defending its~~
Defending its developing country status and the availabilitydeveloping country status and the availability of SDT, of SDT, ~~a Chinese Foreign Ministry spokesperson~~
~~insisted~~Chinese officials insist that ~~that~~ the principle of SDT “reflects the core values and basic principles of the WTO” and the principle of SDT “reflects the core values and basic principles of the WTO” and
“must be safeguarded no matter how the WTO is reformed.”“must be safeguarded no matter how the WTO is reformed.” ~~At the same time, she stated that in~~
~~claiming the status, “China does not intend to shy away from its due international~~
~~responsibilities,” while the U.S. position shows the United States to be “capricious, arrogant and~~
~~selfish.”190~~187 China, India, South Africa, and others China, India, South Africa, and others ~~defend~~have defended the relevance of development status, the relevance of development status,
claiming that, “the persistence of the enormous development divide between the developing and claiming that, “the persistence of the enormous development divide between the developing and
developed Members of the WTO is reflected on a wide range of indicators.”developed Members of the WTO is reflected on a wide range of indicators.”~~191~~188 Developed Developed
countries, such as Norway and others, also have emphasized the importance of SDT as a “tool for countries, such as Norway and others, also have emphasized the importance of SDT as a “tool for
enabling development and greater participation enabling development and greater participation in the multilateral trading system.”in the multilateral trading system.”~~192~~189 Further, in Further, in
their view, “negotiating criteria for designating Members’ access to S&D is unlikely to be their view, “negotiating criteria for designating Members’ access to S&D is unlikely to be
productive. What matters is responding adequately to the specific development needs of productive. What matters is responding adequately to the specific development needs of
Members.” On the other hand, some countries, like South Korea, Brazil,Members.” On the other hand, some countries, like South Korea, Brazil, and Singapore, and Singapore, ~~recently~~
agreed not to seek SDT,agreed not to seek SDT,~~193~~190 and Taiwan previously changed its and Taiwan previously changed its status to “developed” in 2018.status to “developed” in 2018.~~194~~
~~Several other suggestions have been made to address the situation, including encouraging~~
~~countries to graduate from developing country status; setting quantifiable criteria for development~~
~~status; targeting SDT in future agreements on a needs-driven, differential basis; and requiring full~~
~~eventual implementation of al new agreements.195 Some of these steps were implemented in the~~
~~WTO Trade Facilitation Agreement.~~
~~The Meaning of “Developing Country” Status~~
~~The WTO does not apply established definitions of “developed” and “developing” countries to its~~
~~members; in practice, most WTO members select their designation as “developing.” In general,~~
~~this status means countries are entitled to certain rights under so-cal ed “special and differential~~
~~treatment” (SDT). Broadly, these provisions include the fol owing:196~~

~~Measures that aim to increase trading opportunities for developing countries.~~

~~Requirements that WTO members safeguard the interests of developing countries.~~

~~190~~191 183 For examples of types of the SDT provisions in WT O agreements, see https://www.wto.org/english/tratop_e/devel_e/teccop_e/s_and_d_eg_e.htm. 184 “Understanding the WT O: T he Organization,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm. 185 “An undifferentiated WT O: Self-declared development status risk institutional irrelevance,” Communications from the United States, WT /GC/W/757, January 16, 2019. 186 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July 26, 2019. 187 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying’s Regular Press Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying’s Regular Press
Conference,” July 29, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/Conference,” July 29, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/
t1684227.shtml. t1684227.shtml.
~~191~~188 “T he Continued Relevance of Special and Differential T reatment in Favour of Developing Members to Promote “T he Continued Relevance of Special and Differential T reatment in Favour of Developing Members to Promote
Development and Ensure Inclusiveness,” Communication from China, India, South Africa and the Bolivarian Republic Development and Ensure Inclusiveness,” Communication from China, India, South Africa and the Bolivarian Republic
of Venezuela, WT /GC/W/765, February 18, 2019. of Venezuela, WT /GC/W/765, February 18, 2019.
~~192~~ 189 “Pursuing the Development Dimension in WT O Rule-making Efforts,” Communication from Norway, Iceland, New “Pursuing the Development Dimension in WT O Rule-making Efforts,” Communication from Norway, Iceland, New
Zealand, Singapore and Switzerland, WT /GC/W/Zealand, Singapore and Switzerland, WT /GC/W/~~7 70~~770/Rev.2, May 6, 2019. /Rev.2, May 6, 2019.
~~193~~190 “S. Korea Has ‘Little to Gain’ in Maintaining Developing-Nation Status,” “S. Korea Has ‘Little to Gain’ in Maintaining Developing-Nation Status,” KBSWorld, September 5, 2019; , September 5, 2019;
“Singapore does not take advantage of WT O special provisions for developing nations in negotiating agreements: “Singapore does not take advantage of WT O special provisions for developing nations in negotiating agreements:
MT I,” MT I,” can, July 27, 2019; and Iana Dreyer, “ Beyond Brussels: Brazil accepts to forego WT O developing country , July 27, 2019; and Iana Dreyer, “ Beyond Brussels: Brazil accepts to forego WT O developing country
status,” status,” Borderlex, March 20, 2019. , March 20, 2019.
~~194~~ 191 Joseph Yeh, “T aiwan will benefit from ‘developed’ country status in WT O: Deng,” Joseph Yeh, “T aiwan will benefit from ‘developed’ country status in WT O: Deng,” Focus Taiwan, October 14, , October 14,
2018. 2018.
~~195 For example, see European Commission, “EU proposals on WT O modernization,” July 5, 2018.~~
~~196 See WT O, “Special and differential treatment provisions,” https://www.wto.org/english/tratop_e/devel_e/~~
~~dev_special_differential_provisions_e.htm, and “ Examples of provisions for differential and more favourable treatment~~
~~of developing countries,” https://www.wto.org/english/tratop_e/devel_e/teccop_e/s_and_d_eg_e.htm.~~
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Congressional Research Service 49 World Trade Organization: Overview and Future Direction Several other suggestions have been made, including encouraging countries to graduate from developing country status; setting quantifiable criteria for development status; targeting SDT in future agreements on a needs-driven, differential basis; and requiring full eventual implementation of al new agreements.192 Some of these steps were implemented in the WTO Trade Facilitation Agreement. The Meaning of “Developing Country” Status The WTO does not apply established definitions of “developed” and “developing” countries to its members; in practice, most WTO members select their designation as “developing.” In general, this status means countries are entitled to certain rights under so-cal ed “special and differential treatment” (SDT). Broadly, these provisions include the fol owing:193  Measures that aim to increase trading opportunities for developing countries.  Requirements that WTO members safeguard the interests of developing countries.
 
Transitional time periods for implementing WTO agreements and commitments. Transitional time periods for implementing WTO agreements and commitments.
 
Flexibility of commitments, action, and use of certain policy instruments. Flexibility of commitments, action, and use of certain policy instruments.
 
Technical assistance to build capacity to carry out WTO work, handle disputes, and Technical assistance to build capacity to carry out WTO work, handle disputes, and
implement technical standards. implement technical standards.
 
Specific provisions for least-developed countries. Specific provisions for least-developed countries.
These provisions are general y nonreciprocal, meaning that developed country members agree to These provisions are general y nonreciprocal, meaning that developed country members agree to
unilateral y grant additional preferences or flexibilities to developing countries. According to the unilateral y grant additional preferences or flexibilities to developing countries. According to the
WTO, there are 145 SDT provisions across core WTOWTO, there are 145 SDT provisions across core WTO agreements including on goods, agreements including on goods,
agriculture, services, intel ectual property, government procurement, and DS.agriculture, services, intel ectual property, government procurement, and DS.~~197~~194 Most recently, Most recently,
SDT provisions were also included in the Trade Facilitation Agreement. Certain ministerial SDT provisions were also included in the Trade Facilitation Agreement. Certain ministerial
declarations and General Council decisions al ow for SDT as wel . The Bali Ministerial in declarations and General Council decisions al ow for SDT as wel . The Bali Ministerial in
December 2013 established a monitoring mechanism to review implementation of SDT provisions. December 2013 established a monitoring mechanism to review implementation of SDT provisions.
Dispute Settlement
Supporters of the multilateral trading system consider the dispute settlement mechanism (DSM) Supporters of the multilateral trading system consider the dispute settlement mechanism (DSM)
not only a success of the system, but essential to maintain the relevance of the institution, not only a success of the system, but essential to maintain the relevance of the institution,
especial y while the WTO has struggled as a negotiating body. However, the DSM is facing especial y while the WTO has struggled as a negotiating body. However, the DSM is facing
increased pressure for reform, in part due to long-standing U.S. objections over certain rules and increased pressure for reform, in part due to long-standing U.S. objections over certain rules and
proceduresprocedures.—as former USTR Lighthizer USTR Lighthizer ~~contends that~~contended, the WTO has become a “litigation-centered the WTO has become a “litigation-centered
organization,” which has lost its focus on negotiations.organization,” which has lost its focus on negotiations.~~198~~195 While WTO members have actively While WTO members have actively
used the DSM since its creation, some have also voiced concerns about various aspects, including used the DSM since its creation, some have also voiced concerns about various aspects, including
procedural delays and compliance, and believe the current system could be reformed to be fairer procedural delays and compliance, and believe the current system could be reformed to be fairer
and more efficient. and more efficient.
The Doha Round included negotiations to reform the DS system through “improvements and The Doha Round included negotiations to reform the DS system through “improvements and
clarifications” to DSU rules.clarifications” to DSU rules.~~199~~196 A framework of 50 proposals was circulated in 2003 but countries 192 For example, see European Commission, “EU proposals on WT O modernization,” July 5, 2018. 193 See WT O, “Special and differential treatment provisions,” https://www.wto.org/english/tratop_e/devel_e/dev_special_differential_provisions_e.htm, and “ Examples of provisions for differential and more favourable treatment of developing countries,” https://www.wto.org/english/tratop_e/devel_e/teccop_e/s_and_d_eg_e.htm. 194 WT O Committee on T rade and Development, Special and Differential Treatment Provisions in WTO Agreements and Decisions, Note by the Secretariat, WT /COMT D/W/219, September 22, 2016. 195 UST R Robert Lighthizer, “Opening Plenary Statement,” December 11, 2017. 196 “Doha WT O Ministerial 2001: Ministerial Declaration,” WT /MIN(01)/DEC/1, November 20, 2001, https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm. Congressional Research Service 50 World Trade Organization: Overview and Future Direction ~~A framework of 50 proposals was circulated in 2003 but countries~~
were unable to reach consensus.were unable to reach consensus.~~200~~197 Discussions Discussions ~~have~~ continued beyond Doha with a primary continued beyond Doha with a primary
focus on 12 issues, including third-party rights, panel composition, and remand authority of the focus on 12 issues, including third-party rights, panel composition, and remand authority of the
Appel ateAppel ate Body. Under prior Administrations, the United States proposed greater control for Body. Under prior Administrations, the United States proposed greater control for
WTO members over the process, guidelines for the adjudicative bodies, and greater transparency, WTO members over the process, guidelines for the adjudicative bodies, and greater transparency,
such as public such as public access to proceedings. However, these negotiations have yet to achieve results. access to proceedings. However, these negotiations have yet to achieve results.
Some experts suggest that enhancing the capabilities and legitimacy of the DS system wil likely Some experts suggest that enhancing the capabilities and legitimacy of the DS system wil likely
require several changes, including improving mechanisms for oversight, narrowing the scope of require several changes, including improving mechanisms for oversight, narrowing the scope of
and diverting sensitive issues from adjudication, improving institutional support, and providing and diverting sensitive issues from adjudication, improving institutional support, and providing
WTO members more input over certain procedures.WTO members more input over certain procedures.~~201~~198 Other analysts point to major chal enges Other analysts point to major chal enges
facing the DS system that could have the potential to either dismantle the current system or facing the DS system that could have the potential to either dismantle the current system or
further catalyze change. These include most notably, the Appel ate Body ceasing to operate in further catalyze change. These include most notably, the Appel ate Body ceasing to operate in

~~197 WT O Committee on T rade and Development,~~ ~~Special and Differential Treatment Provisions in WTO Agreements~~
~~and Decisions, Note by the Secretariat, WT /COMT D/W/219, September 22, 2016.~~
~~198 UST R Robert Lighthizer, “Opening Plenary Statement,” December 11, 2017.~~
~~199 “Doha WT O Ministerial 2001: Ministerial Declaration,” WT /MIN(01)/DEC/1, November 20, 2001,~~
~~https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm.~~
~~200 T here have been some cases of past DSU procedural reforms, such as the decisions to accept outside counsel and~~
am icus curiae briefs in panel deliberations. See Craig VanGrasstek, ~~The History and Future of the World Trade~~
~~Organization, World T rade Organization, 2013.~~
~~201 Robert McDougall, “ Crisis in the WT O: Restoring the WT O Dispute Settlement Function ,” Centre for International~~
~~Governance Innovation, CIGI Papers No. 194, October 2018.~~
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~~December 2019 and forthcoming rulings on WTO disputes over U.S. Section 232 tariffs, or~~
~~resolution of the long-standing, though currently dormant, dispute regarding China’s treatment as~~
~~a nonmarket economy.202~~December 2019 and forthcoming rulings in 2021 on WTO disputes over U.S. Section 232 tariffs.199 Many analysts point to the impasse over reform of the DS system as Many analysts point to the impasse over reform of the DS system as
also reflecting deeper systemic issues concerning the inability of the WTO to keep up with also reflecting deeper systemic issues concerning the inability of the WTO to keep up with
structural changes in structural changes in the global economy. One report concludes, the WTO’s “dispute settlement the global economy. One report concludes, the WTO’s “dispute settlement
function cannot be safeguarded unless, at the same time, the WTO’s rule-making function is also function cannot be safeguarded unless, at the same time, the WTO’s rule-making function is also
strengthened and strengthened and the substantive trade rules are modernized.”the substantive trade rules are modernized.”~~203~~200
Appellate Body (AB) Vacancies
The immediate flashpoint to the system is the refusal of the United States to consent to the The immediate flashpoint to the system is the refusal of the United States to consent to the
appointment of new AB jurists. The United States has long-standing objections to decisions appointment of new AB jurists. The United States has long-standing objections to decisions
involving the AB’s interpretation of certain U.S. trade remedy laws in particular—the subject of involving the AB’s interpretation of certain U.S. trade remedy laws in particular—the subject of
the majority of complaints brought by other WTO members against the United States.the majority of complaints brought by other WTO members against the United States.~~204~~201 The The
AB’s seven jurists are appointed to four-year terms on a rolling basis, with the possibility of a AB’s seven jurists are appointed to four-year terms on a rolling basis, with the possibility of a
one-term reappointment. The one-term reappointment. The ~~Trump Administration, as wel as the Obama Administration in one~~
~~instance,~~prior two U.S. Administrations blocked the process to appoint new blocked the process to appoint new jurists as their term’s expired, leaving the AB unable to function after December 2019.202 To date, the Biden Administration has not altered U.S. policy. ~~jurists as their term’s expired, leaving the AB with~~
~~one member in December 2019.205 Deputy DG of the WTO Alan Wolff summarized the stakes of~~
~~the Appel ate Body ceasing to function: with member countries unable to appeal an adverse panel~~
~~decision against one of their policies, “there is a risk of every trade dispute devolving into smal~~
~~and not so smal trade wars, consisting of retaliation and counter-retaliation.”206~~
WTO members and other stakeholders are exploring a number of options, in the absence of a WTO members and other stakeholders are exploring a number of options, in the absence of a
functioning AB, that may support the current system (see below), to forestal collapse of dispute functioning AB, that may support the current system (see below), to forestal collapse of dispute
settlement altogether. settlement altogether. ~~Interim or permanent solutions debated include the possible creation of a~~
~~paral el DS system that mirrors the WTO but does not include the United States; fal back to a~~
~~GATT-like system where a disputing party can block decisions; or tacit agreement by members to~~
~~accept panel decisions without appeal.207 Most notably, on April 30,~~Most notably, in 2020, a group of members 2020, a group of members
led by the EU put into effect an ad hoc Multi-Party Interim Appeal Arbitration Arrangement led by the EU put into effect an ad hoc Multi-Party Interim Appeal Arbitration Arrangement
(MPIA), pursuant to Article 25 of the DSU, as a temporary measure to arbitrate disputes, which (MPIA), pursuant to Article 25 of the DSU, as a temporary measure to arbitrate disputes, which
mirrors the main functions of the WTO appeals system.mirrors the main functions of the WTO appeals system.~~208 On July 31, the~~203 The MPIA took a final step MPIA took a final step
toward becoming operational when members toward becoming operational when members formal y decided on the pool of 10 standing formal y decided on the pool of 10 standing
~~arbitrators to hear appeals. To date, 22 WTO members, including China, are part of the MPIA; it~~
~~does not apply to cases involving members who have not joined, including the United States.~~
~~The United States, has criticized these efforts as “endorsing and legitimizing” the Appel ate Body~~
~~practices that “breached the rules set by WTO members,” that have been central to U.S.~~
~~concerns.209 One study considers the merits of interim solutions, suggesting that “no-appeal and~~
~~appeal-arbitration agreements can preserve rights for some members, but solutions that attempt to~~

~~202~~arbitrators to hear appeals. To date, 22 WTO 197 T here have been some cases of past DSU procedural reforms, such as the decisions to accept outside counsel and am icus curiae briefs in panel deliberations. See Craig VanGrasstek, The History and Future of the World Trade Organization, World T rade Organization, 2013. 198 Robert McDougall, “Crisis in the WT O: Restoring the WT O Dispute Settlement Function ,” Centre for International Governance Innovation, CIGI Papers No. 194, October 2018. 199 Jack Caporal et al., Jack Caporal et al., The WTO at a Crossroad, Center for Strategic and International Studies, September 2019. , Center for Strategic and International Studies, September 2019.
~~203~~200 CIGI Expert Consultation on WTO Reform , Special Report: Spring 2019, Centre for International Governance , Special Report: Spring 2019, Centre for International Governance
Innovation (CIGI), September 12, 2019. Innovation (CIGI), September 12, 2019.
~~204~~201 Adam Behsudi, “T he man getting ready to take on the WTO,” Adam Behsudi, “T he man getting ready to take on the WTO,” Politico, February 15, 2017. , February 15, 2017.
~~205~~202 T he Obama Administration blocked the reappointment of a Korean AB jurist in May 2016. T he Obama Administration blocked the reappointment of a Korean AB jurist in May 2016.
~~206 Megan Cassella, “WT O’s Wolff: More trade wars coming if Appellate Body dies,” Politico, October 16, 2018.~~
~~207 Jack Caporal et al., The WTO at a Crossroad, Center for Strategic and International Studies, September 2019.~~
~~208 See European Commission, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2143.~~
~~209 “U.S.: EU-Canada interim plan would ‘legitimize’ bad Appellate Body practices,” Inside U.S. Trade, September 30,~~
~~2019.~~
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~~exclude the United States are not in the interests of most members.”210~~203 See European Commission, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2143. Congressional Research Service 51 World Trade Organization: Overview and Future Direction members, including China, are part of the MPIA; it does not apply to cases involving members who have not joined, including the United States. The Trump Administration criticized these efforts as “endorsing and legitimizing” the Appel ate Body practices that “breached the rules set by WTO members,” that have been central to U.S. concerns.204 One study considers the merits of interim solutions, suggesting that “no-appeal and appeal-arbitration agreements can preserve rights for some members, but solutions that attempt to exclude the United States are not in the interests of most members.”205 In the view of Japan, one In the view of Japan, one
major economy that has not joined the MPIA, “attempts to adopt measures of provisional nature major economy that has not joined the MPIA, “attempts to adopt measures of provisional nature
must serve the ultimate purpose of achieving a long-lasting reform” of the DS system.must serve the ultimate purpose of achieving a long-lasting reform” of the DS system.~~211~~206 Some Some
analysts argue that the experience of the MPIA wil likely lead to new approaches to handling analysts argue that the experience of the MPIA wil likely lead to new approaches to handling
appeals, but without engagement the United States wil have no ability to shape its direction.appeals, but without engagement the United States wil have no ability to shape its direction.~~212~~207
More broadly, some are also concerned that the perceived U.S. disinterest or lack of leadership in More broadly, some are also concerned that the perceived U.S. disinterest or lack of leadership in
resolving the impasse over the AB may undermine other U.S. efforts to advance WTO reforms resolving the impasse over the AB may undermine other U.S. efforts to advance WTO reforms
and new rules beset by a lack of trust among members. Other experts have cautioned against a and new rules beset by a lack of trust among members. Other experts have cautioned against a
quick agreement to restart the AB without deeper engagement from members on U.S. critiques, quick agreement to restart the AB without deeper engagement from members on U.S. critiques,
arguing that the U.S. risks losing its leverage, and that DS and WTO reforms should be done arguing that the U.S. risks losing its leverage, and that DS and WTO reforms should be done
together. together.~~213~~208
Proposed DS Reforms
The United States expounded on some of the perceived shortcomings of the DS system in The United States expounded on some of the perceived shortcomings of the DS system in ~~its most~~
~~recent trade policy agenda and~~ a lengthy report on the AB issued in February 2020.lengthy report on the AB issued in February 2020.~~214~~209 Arguably, the Arguably, the
main U.S. complaint is that the system, particularly the AB has “overreached on substantive main U.S. complaint is that the system, particularly the AB has “overreached on substantive
issues, engaged in impermissible gap-fil ing, and read into the WTO agreements rules that are issues, engaged in impermissible gap-fil ing, and read into the WTO agreements rules that are
simply not there… adding to or diminishing the rights and obligations of WTO Members.”simply not there… adding to or diminishing the rights and obligations of WTO Members.”210 ~~215~~
This is particularly so in the areas of subsidies, AD and CVDs, standards, and safeguards. At its This is particularly so in the areas of subsidies, AD and CVDs, standards, and safeguards. At its
crux, the current controversy is over crux, the current controversy is over the autonomy of the AB, its deference to the DSB, and its the autonomy of the AB, its deference to the DSB, and its
obligations to implement the provisions of the DSU. The United States has been the most vocal in obligations to implement the provisions of the DSU. The United States has been the most vocal in
its criticisms, yet other WTO members have expressed similar concerns. While the United States its criticisms, yet other WTO members have expressed similar concerns. While the United States
has not tabled specific reforms for these complaints to the WTO membership, it has criticized has not tabled specific reforms for these complaints to the WTO membership, it has criticized
aspects of the DS system in various General Council meetings and reports. Meanwhile, several aspects of the DS system in various General Council meetings and reports. Meanwhile, several
members, singly or in groups, have tabled members, singly or in groups, have tabled proposals or suggestions on how to reform AB proposals or suggestions on how to reform AB
procedures and practices. The General Council launched an informal process on the functioning procedures and practices. The General Council launched an informal process on the functioning
of the ABof the AB ~~at its~~ in December 2018 December 2018 ~~meeting~~. This group’s facilitator, Ambassador David Walker of . This group’s facilitator, Ambassador David Walker of
~~New Zealand, proposed in October 2019 a list of items of convergence among its participants as a~~
~~draft decision of the General Council—the United States ultimately declined to back the draft~~
~~decision. Under each of the following issues, U.S. concerns are raised along with Ambassador~~
~~Walker’s proposals to address them.216~~
Disregard for the 90-day, DSU-mandated deadline for AB appeals. USTR claims that the AB
~~does not have the authority to fail to meet the deadline without consulting the DSB, maintaining~~

~~210~~New Zealand, proposed in October 2019 a list of items 204 “U.S.: EU-Canada interim plan would ‘legitimize’ bad Appellate Body practices,” Inside U.S. Trade, September 30, 2019. 205 CIGI Expert Consultation on WTO Reform , Special Report: Spring 2019, Centre for International Governance , Special Report: Spring 2019, Centre for International Governance
Innovation (CIGI), September 12, 2019, p. 18. Innovation (CIGI), September 12, 2019, p. 18.
~~211~~206 Permanent Mission of Japan to the International Organizations in Geneva, “T rade Policy Review: Japan,” Permanent Mission of Japan to the International Organizations in Geneva, “T rade Policy Review: Japan,”
Statement, July 8, 2020, https://www.geneve-mission.emb-japan.go.jp/itpr_en/statement_trade_20200708.html. Statement, July 8, 2020, https://www.geneve-mission.emb-japan.go.jp/itpr_en/statement_trade_20200708.html.
~~212~~ 207 Senate Finance Committee, Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, written written
testimony by Jennifer Hillman, July 29, 2020. testimony by Jennifer Hillman, July 29, 2020.
~~213 Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, written~~
~~testimony by T homas R. Graham, July 29, 2020.~~
~~214~~208 Ibid. 209 UST R called the report the “the first comprehensive study of the Appellate Body’s failure to comply with WT O UST R called the report the “the first comprehensive study of the Appellate Body’s failure to comply with WT O
rules and interpret WTO agreements as written,” and published it “to examine and explain the problem, not dictate rules and interpret WTO agreements as written,” and published it “to examine and explain the problem, not dictate
solutions.” See solutions.” See Report on the Appellate Body of the World Trade Organization, February 2020., February 2020.
~~215 Ibid, pp. 8-9.~~
~~216 WT O General Council, “Informal Process Related to the Functioning of the Appellate Body – Report by the~~
~~Facilitator, H.E. David Walker (New Zealand), (Job /GC/222), T uesday October 15, 2019.~~
Also see CRS Report R46852, The World Trade Organization’s (WTO’s) Appellate Body: Key Disputes and Controversies, by Nina M. Hart and Brandon J. Murrill. 210 UST R, Report on the Appellate Body, pp. 8-9. Congressional Research Service Congressional Research Service

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of convergence among its participants as a draft decision of the General Council—the United States ultimately declined to back the draft decision. Under each of the following issues, U.S. concerns are raised along with Ambassador Walker’s proposals to address them.211 Disregard for the 90-day, DSU-mandated deadline for AB appeals. USTR claims that the AB does not have the authority to fail to meet the deadline without consulting the DSB, maintaining that the deadline “helps ensure that the AB focuses its report on the issue on appeal.” The that the deadline “helps ensure that the AB focuses its report on the issue on appeal.” The
facilitator found convergence on the following issues: facilitator found convergence on the following issues:
 The AB is obligated to issue its report no later than 90 days from the date a party  The AB is obligated to issue its report no later than 90 days from the date a party
to the dispute notifies its intention to appeal. to the dispute notifies its intention to appeal.
 The parties may agree with the Appel ate Body to extend the timeframe for  The parties may agree with the Appel ate Body to extend the timeframe for
issuance of the Appel ate Body report beyond 90 days in cases of unusual issuance of the Appel ate Body report beyond 90 days in cases of unusual
complexity or periods of numerous appeals. The parties wil notify such complexity or periods of numerous appeals. The parties wil notify such
agreement to the DSB and the Chair of the AB. agreement to the DSB and the Chair of the AB.
  Extension of service by former AB jurists on cases continuing after their
four-year terms have expired. The United States maintains that the AB does The United States maintains that the AB does
not have the authority unilateral y to extend the terms of jurists, rather that not have the authority unilateral y to extend the terms of jurists, rather that
authority lies with the DSB and that it is a matter of adherence to the DSU.authority lies with the DSB and that it is a matter of adherence to the DSU.~~217~~212
In actual practice, however, it may be the case that having former jurists stay In actual practice, however, it may be the case that having former jurists stay
on to finish an appeal may be more efficient than having a new jurist join the on to finish an appeal may be more efficient than having a new jurist join the
case. The DSB has the authority and responsibility to determine the case. The DSB has the authority and responsibility to determine the
membership of the AB and must fil vacancies as they arise.membership of the AB and must fil vacancies as they arise.
 The DSB shal launch the selection process for a new member 180 days  The DSB shal launch the selection process for a new member 180 days
before the expiration of the term of an outgoing AB member. If a vacancy before the expiration of the term of an outgoing AB member. If a vacancy
arises before the expiration of an AB jurist’s mandate, the DSB shal launch arises before the expiration of an AB jurist’s mandate, the DSB shal launch
an immediate selection process.an immediate selection process.
 AB members may be assigned a new appeal until 60 days prior to the  AB members may be assigned a new appeal until 60 days prior to the
expiration of their term. expiration of their term.
 An AB panel may complete an appeal after expiration of the member’s term  An AB panel may complete an appeal after expiration of the member’s term
if the oral hearing is held prior to the expiration. if the oral hearing is held prior to the expiration.
During the Obama Administration, the United States blocked the reappointment of a South During the Obama Administration, the United States blocked the reappointment of a South
Korean jurist to the AB in May 2016. The United States cited what it considered “abstract Korean jurist to the AB in May 2016. The United States cited what it considered “abstract
discussions” in prior decisions by the jurist that went beyond the legal scope of the WTO.discussions” in prior decisions by the jurist that went beyond the legal scope of the WTO.~~218~~213 This This
action has led to the concern that the prospect of non-reappointment could affect the action has led to the concern that the prospect of non-reappointment could affect the
independence of the AB system.independence of the AB system.~~219~~214 However, one former AB jurist opines that, “reappointment is However, one former AB jurist opines that, “reappointment is
an option, not a right,” and cal s for the WTO members to determine if a more formal process an option, not a right,” and cal s for the WTO members to determine if a more formal process
similar to initial appointment of AB jurists is needed for reappointment. similar to initial appointment of AB jurists is needed for reappointment.~~220~~215

~~217~~211 WT O General Council, “Informal Process Related to the Functioning of the Appellate Body – Report by the Facilitator, H.E. David Walker (New Zealand), (Job /GC/222), T uesday October 15, 2019. 212 UST R indicates this plank requires immediate attention, noting “the United States is resolute in its view that UST R indicates this plank requires immediate attention, noting “the United States is resolute in its view that
Members need to resolve this issue before moving on to the issue of replacing Appellate Body Members.” See UST R Members need to resolve this issue before moving on to the issue of replacing Appellate Body Members.” See UST R
2018 Annual Report, March 2018, p. 26. , March 2018, p. 26.
~~218~~213 Shawn Donnan, “US accused of undermining WT O,” Shawn Donnan, “US accused of undermining WT O,” Financial Times, May 30, 2016. , May 30, 2016.
~~219~~214 European Commission, “EU proposals on WT O modernization,” (WK8329/2018 INIT), July 5, 2018, p. 16. European Commission, “EU proposals on WT O modernization,” (WK8329/2018 INIT), July 5, 2018, p. 16.
~~220~~215 WT O, “Farewell Speech of Appellate Body Member Ricardo Ramirez-Hernandez, May 28, 2018, WT O, “Farewell Speech of Appellate Body Member Ricardo Ramirez-Hernandez, May 28, 2018,
https://www.wto.org/english/tratop_e/dispu_e/ricardoramirezfarwellspeech_e.htm. https://www.wto.org/english/tratop_e/dispu_e/ricardoramirezfarwellspeech_e.htm.
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Dispute Settlement Understanding, Article 3.2
The dispute settlement system of the WTO is a central element in providing security and predictability to The dispute settlement system of the WTO is a central element in providing security and predictability to
the multilateral trading system. The members recognize that it serves to preserve the rights and obligations the multilateral trading system. The members recognize that it serves to preserve the rights and obligations
of members under the covered agreements, and to clarify the existing provisions of those agreements in of members under the covered agreements, and to clarify the existing provisions of those agreements in
accordance with customary rules of interpretation of public international law. Recommendations accordance with customary rules of interpretation of public international law. Recommendations ~~a nd~~and
rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements. rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.
Other criticisms of the AB involve the extent to which it can interpret WTO agreements. The Other criticisms of the AB involve the extent to which it can interpret WTO agreements. The
United States, in arguing for a more restrictive view of the power of the DSB, points to Article United States, in arguing for a more restrictive view of the power of the DSB, points to Article
3.2 that “recommendations and rulings of the DSB cannot add to or diminish the rights and 3.2 that “recommendations and rulings of the DSB cannot add to or diminish the rights and
obligations provided in the covered agreements” (see obligations provided in the covered agreements” (see text box above).above). However, those supporting However, those supporting
a more expansive view of the DSU’s role can point to the same article, which highlights the role a more expansive view of the DSU’s role can point to the same article, which highlights the role
“to clarify the existing provisions of those agreements in accordance with customary rules of “to clarify the existing provisions of those agreements in accordance with customary rules of
interpretation of public international law.” The scope and reach of the AB’s activities is an interpretation of public international law.” The scope and reach of the AB’s activities is an
enduring controversy for the organization, not limited to the Trump Administration. USTR has enduring controversy for the organization, not limited to the Trump Administration. USTR has
flagged several specific practices relating to these issues, such as the following: flagged several specific practices relating to these issues, such as the following:
Issuing advisory opinions on issues not relevant to the issue on appeal. This point relates to the This point relates to the
U.S. concern that the AB is engaged in “judicial overreach” by going beyond deciding the case at U.S. concern that the AB is engaged in “judicial overreach” by going beyond deciding the case at
hand. USTR contends that the ability to issue advisory opinions or interpretations of text rests hand. USTR contends that the ability to issue advisory opinions or interpretations of text rests
with the Ministerial Conference or General Council. The facilitator found convergence on the with the Ministerial Conference or General Council. The facilitator found convergence on the
following issues: following issues:
 The AB should not rule on issues not raised by either party.  The AB should not rule on issues not raised by either party.
 The AB shal address issues raised by parties only to the extent necessary to  The AB shal address issues raised by parties only to the extent necessary to
assist the DSB in making a decision. assist the DSB in making a decision.
The following two suggestions, while not part of the Walker recommendations, have also been The following two suggestions, while not part of the Walker recommendations, have also been
raised in this context: raised in this context:
 Rather than issue advisory opinions, the AB also could “remand” issues of  Rather than issue advisory opinions, the AB also could “remand” issues of
uncertainty to the standing committees of the WTO for further negotiation. uncertainty to the standing committees of the WTO for further negotiation.
Canada has suggested this could al ow for more interaction between the Canada has suggested this could al ow for more interaction between the
panel and appeal level.panel and appeal level.~~221~~216
 Members could also use a provision of the WTO Agreement (Article IX.2) to  Members could also use a provision of the WTO Agreement (Article IX.2) to
seek an “authoritative interpretation” of a WTO text at the General Council seek an “authoritative interpretation” of a WTO text at the General Council
or Ministerial Conference, which could be adopted by a three-fourths vote.or Ministerial Conference, which could be adopted by a three-fourths vote.
De novo review of facts or domestic law in cases on appeal. The United States al eges that the AB The United States al eges that the AB
is not giving the initial panel due deference on matters of fact, including regarding the panel’s is not giving the initial panel due deference on matters of fact, including regarding the panel’s
interpretation of domestic law. This point derives from USTR’s view that a country’s domestic or interpretation of domestic law. This point derives from USTR’s view that a country’s domestic or
municipal law should be considered as fact, and that the panel’s interpretation of the domestic law municipal law should be considered as fact, and that the panel’s interpretation of the domestic law
is thus not reviewable by the AB. The facilitator found convergence on the following issues: is thus not reviewable by the AB. The facilitator found convergence on the following issues:
 The meaning of a party’s municipal (domestic) laws is a matter of fact, and  The meaning of a party’s municipal (domestic) laws is a matter of fact, and
not reviewable by the AB. not reviewable by the AB.
 The DSU does not permit  The DSU does not permit de novo review or ‘to complete the analysis’ of review or ‘to complete the analysis’ of
facts in a dispute. facts in a dispute.

~~221~~216 See, for example, Joost Pauwelyn, See, for example, Joost Pauwelyn, Appeal without Remand: A Design Flaw in WTO Dispute Settlement and How to
Fix It, International Centre for Trade and Sustainable Development, June 2007; Canada submission, JOB/GC/201, p. 3. International Centre for Trade and Sustainable Development, June 2007; Canada submission, JOB/GC/201, p. 3.
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Treatment of AB decisions as precedent. Like the previous two concerns, this complaint speaks to Like the previous two concerns, this complaint speaks to
the al eged overreach of the AB. USTR asserts that while AB reports can provide “valuable the al eged overreach of the AB. USTR asserts that while AB reports can provide “valuable
clarification” of covered agreements, they cannot be considered or substituted for the WTO clarification” of covered agreements, they cannot be considered or substituted for the WTO
agreements and obligations negotiated by members. However, according to one former DG of the agreements and obligations negotiated by members. However, according to one former DG of the
WTO, “the precedent concept used in the WTO jurisprudence is ... central y important to the WTO, “the precedent concept used in the WTO jurisprudence is ... central y important to the
effectiveness of the WTO dispute settlement procedure goals of security and predictability.”effectiveness of the WTO dispute settlement procedure goals of security and predictability.”~~222~~217 A A
related concern some WTO members have is “gap-fil ing” by the DS system, where the legal related concern some WTO members have is “gap-fil ing” by the DS system, where the legal
precedent is unclear or ambiguous or there are no or incomplete WTO rules regarding a contested precedent is unclear or ambiguous or there are no or incomplete WTO rules regarding a contested
issue. Here there are diametrical yissue. Here there are diametrical y opposite beliefs: a U.S. trade practitioner asks, “Is fil ing gaps opposite beliefs: a U.S. trade practitioner asks, “Is fil ing gaps
and construing silences real y not the creation of rights and obligations through disputes vs. and construing silences real y not the creation of rights and obligations through disputes vs.
leaving such function to negotiations by the members?”leaving such function to negotiations by the members?”~~223~~218 The former DG, however, contends The former DG, however, contends
that “every juridical institution has at least some measure of gap-fil ing responsibility as part of that “every juridical institution has at least some measure of gap-fil ing responsibility as part of
its efforts to resolve ambiguity.”its efforts to resolve ambiguity.”~~224~~219 The issue of the legitimacy of precedence or gap-fil ing may The issue of the legitimacy of precedence or gap-fil ing may
be one of the thorniest issues of al with few solutions proposed that would potential y satisfy be one of the thorniest issues of al with few solutions proposed that would potential y satisfy
differences among members. The facilitator found convergence on the following issues: differences among members. The facilitator found convergence on the following issues:
 DS proceedings do not create precedent.  DS proceedings do not create precedent.
 Members find value in the consistency and predictability of the interpretation  Members find value in the consistency and predictability of the interpretation
of rights and obligations under the covered agreements. of rights and obligations under the covered agreements.
 Panels and the AB should take previous panel/Appel ate Body reports into  Panels and the AB should take previous panel/Appel ate Body reports into
account to the extent they find them relevant to a dispute they are account to the extent they find them relevant to a dispute they are
considering. considering.
 Reaffirms that findings and recommendations of panels and the AB and  Reaffirms that findings and recommendations of panels and the AB and
recommendations and rulings of the DSB cannot add to or diminish the rights recommendations and rulings of the DSB cannot add to or diminish the rights
and obligations provided in the covered agreements. and obligations provided in the covered agreements.
 Reaffirms Article 17.6 of the Antidumping Agreement, which states that  Reaffirms Article 17.6 of the Antidumping Agreement, which states that
“where the panel finds that a relevant provision of the Agreement admits of “where the panel finds that a relevant provision of the Agreement admits of
more than one permissible interpretation, the panel shal find the [domestic more than one permissible interpretation, the panel shal find the [domestic
administrative] authorities’ measure to be in conformity with the Agreement administrative] authorities’ measure to be in conformity with the Agreement
if it rests upon one of those permissible interpretations.” if it rests upon one of those permissible interpretations.”
The Walker process also found consensus to establish a mechanism for regular dialogue between The Walker process also found consensus to establish a mechanism for regular dialogue between
WTO members and the AB in an informal setting to discuss issues related to the functioning of WTO members and the AB in an informal setting to discuss issues related to the functioning of
the AB, but unrelated to particular cases. the AB, but unrelated to particular cases.
It is likely that many of the issues that could arise from proposed reforms to the WTO system It is likely that many of the issues that could arise from proposed reforms to the WTO system
would require clarification of or amendment to the language of the Marrakesh Agreement or the would require clarification of or amendment to the language of the Marrakesh Agreement or the
DSU. Clarification could take the form of interpretation of the agreements. As noted above, DSU. Clarification could take the form of interpretation of the agreements. As noted above,
interpretation can be undertaken by the Ministerial Conference (held every two years), General interpretation can be undertaken by the Ministerial Conference (held every two years), General
Council, or DSB, with a three-fourths vote of the WTO membership. Amending the Council, or DSB, with a three-fourths vote of the WTO membership. Amending the
~~decisionmaking~~decision-making provisions of the Marrakesh Agreement (Article IX) or the DSU would require provisions of the Marrakesh Agreement (Article IX) or the DSU would require
consensus of the membership at the Ministerialconsensus of the membership at the Ministerial Conference (Marrakesh Agreement, Article X.8). Conference (Marrakesh Agreement, Article X.8).
Amendments to the Marrakesh Agreement would require a two-thirds vote of the membership. As Amendments to the Marrakesh Agreement would require a two-thirds vote of the membership. As
noted above, negotiations related to reforms of the DSM occurred during the Doha Round, and noted above, negotiations related to reforms of the DSM occurred during the Doha Round, and

~~222~~217 Peter Sutherland et al., Peter Sutherland et al., The Future of the WTO: Addressing institutional challenges in ~~th e~~the new millennium , World , World
T rade Organization, 2004, p. 55. T rade Organization, 2004, p. 55.
~~223~~218 T erence Stewart, “T he Broken Multilateral T rade Dispute System,” Asia Society Policy Institute, February 7, 2018. T erence Stewart, “T he Broken Multilateral T rade Dispute System,” Asia Society Policy Institute, February 7, 2018.
~~224~~219 Sutherland, 2004, p. 52. Sutherland, 2004, p. 52.
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despite the criticism of the DSM by the United States and others, the General Council or the DSB despite the criticism of the DSM by the United States and others, the General Council or the DSB
has not undertaken serious consideration of these reforms. has not undertaken serious consideration of these reforms.
The The ~~United States~~Trump Administration criticized some of the Walker proposals as seeking to change WTO criticized some of the Walker proposals as seeking to change WTO DS rules to DS rules to
fit the practices objectionable to the United States, rather than adhering to the rules as original yfit the practices objectionable to the United States, rather than adhering to the rules as original y
~~negotiated. Instead of seeking to accommodate current practices,~~ negotiated. U.S. Ambassador to the WTO U.S. Ambassador to the WTO
Dennis Shea proposed that WTO members “engage in a deeper discussion” of why the Appel ate Dennis Shea proposed that WTO members “engage in a deeper discussion” of why the Appel ate
Body has “felt free to depart from what WTO Members agreed to,” and that “without this Body has “felt free to depart from what WTO Members agreed to,” and that “without this
understanding, there is no reason to believe that simply adopting new or additional language, in understanding, there is no reason to believe that simply adopting new or additional language, in
whatever form, wil be effective in addressing the whatever form, wil be effective in addressing the concerns shared by several Members.”concerns shared by several Members.”~~225 In~~
~~testimony before Congress in June 2020, USTR Lighthizer commented that it would be a~~
~~welcome outcome if the AB were never to go back into effect.226~~220
Selected Challenges and Issues for Congress
Value of the Multilateral System and U.S. Leadership and Membership
The United States has served as a leader in the WTO and the GATT since their creation The United States has served as a leader in the WTO and the GATT since their creation~~. The~~
~~United States~~ , and played a major role in shaping played a major role in shaping ~~GATT/WTO~~subsequent negotiations and rulemaking, many of negotiations and rulemaking, many of
which reflect U.S. laws and norms. It was a leading advocate in the Uruguay Round for which reflect U.S. laws and norms. It was a leading advocate in the Uruguay Round for
expanding negotiations to include services and IPR, key sources of U.S. competitiveness, as wel expanding negotiations to include services and IPR, key sources of U.S. competitiveness, as wel
as binding DS to ensure new rules were enforceable. as binding DS to ensure new rules were enforceable. ~~Today, many~~Many stakeholders across the United stakeholders across the United
States rely on WTO rules to open markets for importing and exporting goods and services, and to States rely on WTO rules to open markets for importing and exporting goods and services, and to
defend and advance U.S. defend and advance U.S. economic interests. economic interests.
~~As discussed, the Trump~~In a shift from the previous administration, the Biden Administration has emphasized reengagement in the multilateral trading system with U.S. trading partners, and its commitment to be a leader in the WTO. Many observers questioned U.S. commitment to the system under the Trump Administration, which had ~~Administration has~~ variously expressed doubt over the value of the variously expressed doubt over the value of the
WTO and multilateral trade negotiations to the U.S. economyWTO and multilateral trade negotiations to the U.S. economy~~. While President Trump’s initial~~
~~talk of WTO withdrawal has abated, the Administration continues to express skepticism toward~~
~~the value of multilateralism, often preferring bilateral negotiations to address “unfair trading~~
~~practices.”~~, emphasizing bilateral negotiations and unilateral action to address “unfair trading practices.” While some U.S. frustrations with the WTO are not new and are maintained by the Biden Administration, as wel as shared by other trading partners, the Trump Administration’s overal approach spurred questions regarding the future of U.S. leadership. While many view U.S. concerns as justified, the U.S. While many view U.S. concerns as justified, the U.S. continued practice of blocking practice of blocking appointments of the AB of the AB
and reticence to debate specific reforms and reticence to debate specific reforms in particular could cede U.S. leadership to others. At the same time, could cede U.S. leadership to others. At the same time,
~~reform of the multilateral trading system is a stated U.S. trade policy objective, and the United~~
~~States has remained engaged~~the Biden Administration’s stated commitment to restoring U.S. leadership and engaging in reform of the multilateral trading system and in certain initiatives and plurilateral efforts at the WTO in certain initiatives and plurilateral efforts at the WTO~~, and has put~~
~~forward several reform proposals in other areas. While some U.S. frustrations with the WTO are~~
~~not new and are shared by other trading partners, the Administration’s overal approach has~~
~~spurred questions regarding the future of U.S. leadership of and participation in the WTO.~~
could reassert the United States’ as a perceived constructive player in the institution.221 Some Members of Congress have also questioned the benefits of U.S. participation in the WTO, with some advocating for withdrawing from the institution. Most observers maintain that the possibility of U.S. withdrawal from the WTO remains unlikely Most observers maintain that the possibility of U.S. withdrawal from the WTO remains unlikely
for procedural and substantive reasons. Procedural y, a withdrawal resolution would have to pass for procedural and substantive reasons. Procedural y, a withdrawal resolution would have to pass
the House and Senate; it has also been debated what legal effect the resolution would have if the House and Senate; it has also been debated what legal effect the resolution would have if
adopted.adopted.~~227~~222 While resolutions were introduced in May 2020 during the 116th Congress, While resolutions were introduced in May 2020 during the 116th Congress, ~~a rule~~
~~change proposed by the House Rules Committee and adopted by the House, as wel as by an~~
~~interpretation of the statute reportedly made by the Senate Parliamentarian, are likely to prevent~~
~~votes from occurring on the measures.228 Moreover, if the United States were to consider such a~~votes did not proceed on the

~~225~~220 Ambassador Dennis Shea, “Statements delivered by Ambassador Shea at the Meeting of the WT O General Council, Ambassador Dennis Shea, “Statements delivered by Ambassador Shea at the Meeting of the WT O General Council,
July 23, 2019, https://geneva.usmission.gov/2019/07/23/statements-delivered-by-ambassador-dennis-shea-wto-general-July 23, 2019, https://geneva.usmission.gov/2019/07/23/statements-delivered-by-ambassador-dennis-shea-wto-general-
council-meeting-july-23-2019/. council-meeting-july-23-2019/.
~~226 “UST R: If WT O Appellate Body never comes back, ‘that would be fine,’” Inside U.S. Trade, June 17, 2020.~~
~~227~~221 UST R, Fact Sheet: 2021 Trade Agenda and 2020 Annual Report, March 2021. 222 For a discussion of the debate, see Jack Caporal et al., For a discussion of the debate, see Jack Caporal et al., The WTO at a Crossroad, Center for Strategic and Center for Strategic and
International Studies, September 2019. International Studies, September 2019.
~~228 Doug Palmer, “New ruling quashes Hawley’s hope for Senate WT O withdrawal vote,” Politico, July 1, 2020.~~
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measures.223 Moreover, if the United States were to consider such a step, withdrawal would have a number of practical consequences. The United States would face step, withdrawal would have a number of practical consequences. The United States would face
economic costs, since absent WTO membership, remaining members would no longer be economic costs, since absent WTO membership, remaining members would no longer be
obligated to grant the United States MFN status under WTO agreements, or uphold WTO rules on obligated to grant the United States MFN status under WTO agreements, or uphold WTO rules on
IPR and restrictions on the use of regulations, trade-related investment measures, or subsidies. IPR and restrictions on the use of regulations, trade-related investment measures, or subsidies.
Consequently, U.S. goods and services could face significant disadvantages in other markets, as Consequently, U.S. goods and services could face significant disadvantages in other markets, as
members without FTAs with the members without FTAs with the United States could raise tariffs or other trade barriers on U.S. United States could raise tariffs or other trade barriers on U.S.
exports at wil . More broadly, the United States would stand to lose influence over the writing of exports at wil . More broadly, the United States would stand to lose influence over the writing of
future global trade rules. future global trade rules.
~~A broader~~ Another question is whether the WTO would flounder withoutquestion is whether the WTO would flounder without continued U.S. leadership, or whether other U.S. leadership, or whether other
members like the EU and China would expand their rolesmembers like the EU and China would expand their roles~~. As some in the United States question~~
~~the value of WTO participation and leadership, other countries have asserted themselves as~~
~~advocates for the global trading system. As noted, cooperation on WTO reform has been elevated~~
~~as a major topic at recent high-level meetings including among the EU, China, and Canada.229~~ as advocates for the system.
Ongoing congressional oversight could examine the value, both economic and political, of U.S. Ongoing congressional oversight could examine the value, both economic and political, of U.S.
WTO membership and leadership. WTO membership and leadership. For example, Congress could consider, orCongress could consider, or ~~could~~ ask the U.S. International ask the U.S. International
Trade Commission to investigate the value of the WTO or potential impact of WTO withdrawal Trade Commission to investigate the value of the WTO or potential impact of WTO withdrawal
on U.S. businesses, consumers, federal agencies, laws and regulations, and foreign on U.S. businesses, consumers, federal agencies, laws and regulations, and foreign policy. policy.
Through resolutionsThrough resolutions, some Members have expressed support for ongoing WTO reform efforts some Members have expressed support for ongoing WTO reform efforts
(H.Res. (H.Res. ~~746,~~382 introduced introduced ~~December 2019~~May 2021) and advocated for specific reforms and U.S. leadership ) and advocated for specific reforms and U.S. leadership
(S.Res. (S.Res. ~~651,~~101 introduced introduced ~~July 2020~~March 2021). S.Res. ). S.Res. ~~651~~101, for example, cautioned that the United States , for example, cautioned that the United States
“achieved its trade policy objectives through active leadership at the WTO, and that an absence of “achieved its trade policy objectives through active leadership at the WTO, and that an absence of
that leadership would be fil ed by nonmarket economies that are hostile to a host of United States that leadership would be fil ed by nonmarket economies that are hostile to a host of United States
interests.” Congress could also hold broader debate over WTO participation in considering a interests.” Congress could also hold broader debate over WTO participation in considering a
disapproval resolution of U.S. membership under the URAA disapproval resolution of U.S. membership under the URAA.
~~H.Res. 746~~, which may occur every five years. H.Res. 382
Expressing the sense of the House of Representatives that the United States should reaffirm its commitment as a Expressing the sense of the House of Representatives that the United States should reaffirm its commitment as a
member of the member of the ~~WTO~~World Trade Organization (WTO) and work with other WTO members to achieve reforms at the WTO that improve the and work with other WTO members to achieve reforms at the WTO that improve the
speed and predictability of dispute settlement, address longstanding concerns with the speed and predictability of dispute settlement, address longstanding concerns with the ~~WTO’s~~ WTO's Appel ate Body, Appel ate Body,
increase transparency at the WTO,increase transparency at the WTO, ensure that WTO members invoke special and ensure that WTO members invoke special and ~~differential~~ differential treatment reservedtreatment reserved
for developing countries only in fair and appropriate circumstances, and update the WTO rules to address the for developing countries only in fair and appropriate circumstances, and update the WTO rules to address the
needs of the United States and other free and open economies in the 21st century.needs of the United States and other free and open economies in the 21st century.
S.Res. ~~651~~ 101
Expressing the sense of the Senate that, while the United States finds value and usefulness in the Expressing the sense of the Senate that, while the United States finds value and usefulness in the ~~WTO~~World Trade Organization in fulfil ing in fulfil ing
the needs of the United States and other free and open economies in the 21st century, significant reforms at the the needs of the United States and other free and open economies in the 21st century, significant reforms at the
~~WTO~~World Trade Organization are needed and the United States must therefore continue to are needed and the United States must therefore continue to ~~demonstrate leadership~~ demonstrate leadership to achieve those to achieve those
reforms. reforms.
R Respect for the Rules and Credibility of the WTO
The founding of the GATT and WTO were premised on the notion that an open, transparent and The founding of the GATT and WTO were premised on the notion that an open, transparent and
rules-based multilateral trading system was necessary to avoid a return to the nationalistic rules-based multilateral trading system was necessary to avoid a return to the nationalistic
interwar trade policies of the 1930s. There arguably are substantial reasons for the United States interwar trade policies of the 1930s. There arguably are substantial reasons for the United States
and other countries to uphold the rules and enforce their commitments. A liberalized, rules-based and other countries to uphold the rules and enforce their commitments. A liberalized, rules-based
global trading system increases competition for companies domestical y, but also helps to ensure global trading system increases competition for companies domestical y, but also helps to ensure

~~229 For example, see Delegation of the European Union to China, “Joint statement of the 21 st EU-China summit,” April~~
~~10, 2019, https://eeas.europa.eu/delegations/china_en/60836/Joint%20statement%20of%20the%2021st%20EU-~~
~~China%20summit ; and Government of Canada, “ Ottawa Group and WT O reform,” https://www.canada.ca/en/global-~~
~~affairs/news/2019/05/ottawa-group-and-wto-reform.html.~~
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that companies and their workers have access and opportunity to compete in foreign markets with that companies and their workers have access and opportunity to compete in foreign markets with
the certainty of a stable, rules-based system. A system for enforcing the rules and resolving the certainty of a stable, rules-based system. A system for enforcing the rules and resolving
disputes that inevitably arise from repeated commercial interactions also helps ensure such trade disputes that inevitably arise from repeated commercial interactions also helps ensure such trade
frictions do not spil over into broader international relations. frictions do not spil over into broader international relations.
However, certain actions by the However, certain actions by the ~~Trump Administration~~United States and other countries have raised questions and other countries have raised questions
about about respect for the trading system, and could weaken the credibility of the WTO. In particular, respect for the trading system, and could weaken the credibility of the WTO. In particular,
~~recent U.S.~~ U.S. 223 Doug Palmer, “New ruling quashes Hawley’s hope for Senate WT O withdrawal vote,” Politico, July 1, 2020. Congressional Research Service 57 World Trade Organization: Overview and Future Direction actions to raise tariffs against major trading partners and obstruct the functioning of actions to raise tariffs against major trading partners and obstruct the functioning of
the DS system have prompted concerns from some that the United States may undermine the the DS system have prompted concerns from some that the United States may undermine the
effectiveness and credibility of the institution that it helped to create.effectiveness and credibility of the institution that it helped to create.~~230~~224 Moreover, the outcomes Moreover, the outcomes
of controversial dispute cases over U.S. tariffs could set important related precedents (see below). of controversial dispute cases over U.S. tariffs could set important related precedents (see below).
Some are concerned that U.S. actions may embolden other countries to protect their own Some are concerned that U.S. actions may embolden other countries to protect their own
industries under claims of protecting national security interests. At the same time, other countries’ industries under claims of protecting national security interests. At the same time, other countries’
retaliatory tariff actions may violate WTO commitments and are pending DS resolution. If the DS retaliatory tariff actions may violate WTO commitments and are pending DS resolution. If the DS
process cannot satisfactorily resolve the conflicts, further unilateral actions and tit-for-tat process cannot satisfactorily resolve the conflicts, further unilateral actions and tit-for-tat
~~retaliation could escalate. More broadly, many observers view the future of the trading system as~~
~~deeply intertwined with how the United States and China manage their ongoing trade frictions.~~retaliation could escalate. Notably, the U.S. and EU negotiators aim to resolve the steel and aluminum tariffs and counter-tariffs in a bilateral manner outside of the WTO DS process, but have agreed that any solution wil be WTO-compatible, showing a measure of support for the system.225
In recent years, countries have also been accused of imposing new trade restrictions and taking In recent years, countries have also been accused of imposing new trade restrictions and taking
actions that are not in line with either the spirit or letter of WTO agreements—in particular, actions that are not in line with either the spirit or letter of WTO agreements—in particular,
China’s state-led industrial policies, including subsidies, IPR violations, and forced technology China’s state-led industrial policies, including subsidies, IPR violations, and forced technology
transfer practices.transfer practices.~~231~~226 In part, the WTO’s perceived inability to address Chinese policies and gaps In part, the WTO’s perceived inability to address Chinese policies and gaps
in rules led to the United States resorting to Section 301 actions. Many in rules led to the United States resorting to Section 301 actions. Many ~~increasingly~~ view WTO view WTO
relevance as waning, absent more concerted efforts to tackle systemic non-market practices, relevance as waning, absent more concerted efforts to tackle systemic non-market practices,
which have driven recent U.S. and other’s efforts to explore new rules in and outside the WTO—which have driven recent U.S. and other’s efforts to explore new rules in and outside the WTO—
efforts largely efforts largely resisted by China. More broadly, countries’ pursuit of such measures in the name resisted by China. More broadly, countries’ pursuit of such measures in the name
of national or economic security appears to further cal into question the viability of the rules-of national or economic security appears to further cal into question the viability of the rules-
based system. While WTO agreements offer ample flexibility for temporary measures justified by based system. While WTO agreements offer ample flexibility for temporary measures justified by
national security or health crises, the spread of export restrictions following COVID-19 have national security or health crises, the spread of export restrictions following COVID-19 have
further further amplified such concerns. amplified such concerns.
U.S. Sovereignty and the WTO
Under the Trump Administration, USTR Under the Trump Administration, USTR ~~has~~ put new emphasis on “preserving national put new emphasis on “preserving national
sovereignty” within the U.S. trade policy agenda, emphasizing that any multinationalsovereignty” within the U.S. trade policy agenda, emphasizing that any multinational system to system to
resolve trade disputes “must not force Americans to live under new obligations to which the resolve trade disputes “must not force Americans to live under new obligations to which the
United States and its elected officials never agreed.”United States and its elected officials never agreed.”~~232 The~~ 227 A key question is how the Biden Administration wil seek to resolve differences with other WTO members over the WTO dispute settlement system. The question of sovereignty is not a new question of sovereignty is not a new
one. The Uruguay Round Agreements Act provided that U.S. law would prevail against an one. The Uruguay Round Agreements Act provided that U.S. law would prevail against an
inconsistent provision or an application of a provision in a WTO agreement. Further, it specified inconsistent provision or an application of a provision in a WTO agreement. Further, it specified
that no U.S. law could be modified or amended by the agreements, including in areas of public that no U.S. law could be modified or amended by the agreements, including in areas of public
health, environment, worker safety, or U.S. trade laws, unless specified in the implementing health, environment, worker safety, or U.S. trade laws, unless specified in the implementing
legislation.legislation.~~233~~228 In other words, an adverse DS decision In other words, an adverse DS decision against the United States would not change against the United States would not change

~~230~~U.S. law; Congress would need to make the change to 224 CRS Report R45529, CRS Report R45529, Trump Administration Tariff Actions ~~(Sections 201, 232, and 301)~~: Frequently Asked
Questions, coordinated by Brock R. Williams. , coordinated by Brock R. Williams.
~~231~~ 225 Jenny Leonard and Alberto Nardelli, “U.S. Moves T oward Ending Steel-T ariff Fight With Offer to EU,” Bloom berg, September 10, 2021. 226 In 2018, trade-restrictive measures imposed by G20 economies “hit a new high” between mid- and late 2018, In 2018, trade-restrictive measures imposed by G20 economies “hit a new high” between mid- and late 2018,
compared to the previous reporting period, and was the largest recorded since 2012. “WT O report shows sharp rise in compared to the previous reporting period, and was the largest recorded since 2012. “WT O report shows sharp rise in
trade-restrictive measures from G20 economies,” November 27, 2018, https://www.wto.org/english/news_e/news18_e/trade-restrictive measures from G20 economies,” November 27, 2018, https://www.wto.org/english/news_e/news18_e/
trdev_22nov18_e.htm. trdev_22nov18_e.htm.
~~232~~227 UST R, UST R, 2018 Trade Policy Agenda, March 2018, p. 3. , March 2018, p. 3.
~~233~~228 P.L. 103-465, Sec. 102. P.L. 103-465, Sec. 102.
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~~U.S. law; Congress would need to make the change to~~ come into compliance with a DS decision come into compliance with a DS decision
or decline to do so, as Congress has done in the past. In that case, however, the other disputing or decline to do so, as Congress has done in the past. In that case, however, the other disputing
party may impose retaliatory tariffs on the United States in compensation. In addition, the party may impose retaliatory tariffs on the United States in compensation. In addition, the
withdrawal procedures in the URAA responded to the same withdrawal procedures in the URAA responded to the same sovereignty concerns expressed in the sovereignty concerns expressed in the
language above.language above.~~234~~229
While U.S. concerns regarding al eged “judicial overreach” in WTO dispute findings are long- While U.S. concerns regarding al eged “judicial overreach” in WTO dispute findings are long-
standing, the standing, the ~~Trump Administration~~United States in recent years has also emphasized unilateral has also emphasized unilateral action outside the WTO as a action outside the WTO as a
means of defending U.S. interests, including national security. Some observers fear that means of defending U.S. interests, including national security. Some observers fear that
disagreements at the WTO on issues related to national security (e.g., Section 232 tariffs) may be disagreements at the WTO on issues related to national security (e.g., Section 232 tariffs) may be
difficult to resolve through the existing DS procedures, given current disagreements related to the difficult to resolve through the existing DS procedures, given current disagreements related to the
WTO AB and concerns over national sovereignty.WTO AB and concerns over national sovereignty.~~235~~230 WTO members and parties to the GATT WTO members and parties to the GATT
have invoked Article XXI al owing measures to protect “essential security interests,” in a handful have invoked Article XXI al owing measures to protect “essential security interests,” in a handful
of other trade disputes. These parties, including the United States, have often argued that each of other trade disputes. These parties, including the United States, have often argued that each
country is the sole judge of questions relating to its own security interests.country is the sole judge of questions relating to its own security interests.
~~The outcome of a recent case could have implications for~~ Pending panel decisions in the adjudication of disputes the adjudication of disputes ~~involving~~
~~U.S.~~ with several countries over U.S. Section 232 steel and ~~steel and~~ aluminum tariffsaluminum tariffs~~. In April 2019, a panel ruling in a~~ may be il ustrative in this regard. The outcome of a recent Russia-Ukraine dispute Russia-Ukraine dispute
clarified the WTO’s role in evaluating the use of clarified the WTO’s role in evaluating the use of the national security exception, finding that DS the national security exception, finding that DS
panels are competent to review member actions justified under Article XXI.panels are competent to review member actions justified under Article XXI.~~236~~231 The panel The panel
determined that it had jurisdiction to review whether a WTO member’s actions were justified determined that it had jurisdiction to review whether a WTO member’s actions were justified
under Article XXI’s national security exception and that Russia satisfied the requirements for under Article XXI’s national security exception and that Russia satisfied the requirements for
invoking the exception.invoking the exception.~~237~~232 The United States voiced concerns with the panel report, finding it The United States voiced concerns with the panel report, finding it
“insufficient,” and maintaining that Article XXI is “self-“insufficient,” and maintaining that Article XXI is “self- judging” and not subject to panel review. judging” and not subject to panel review.
Role of Emerging Markets
The broadened membership of the WTO over the past two decades has promoted greater The broadened membership of the WTO over the past two decades has promoted greater
integration of emerging markets such as Brazil, China, India, and Russia in the global economy, integration of emerging markets such as Brazil, China, India, and Russia in the global economy,
and helped ensure that developing country interests are represented on the global trade agenda. At and helped ensure that developing country interests are represented on the global trade agenda. At
the same time, many observers have attributed the inability of WTO members to collectively the same time, many observers have attributed the inability of WTO members to collectively
reach compromise over new rules and trade liberalization to differing priorities for reforms and reach compromise over new rules and trade liberalization to differing priorities for reforms and
market opening among developed countries and emerging markets. market opening among developed countries and emerging markets.
One question is to what extent economies like China, with significant economic clout, wil take One question is to what extent economies like China, with significant economic clout, wil take
on greater leadership to play a more constructive role, advance the global trade agenda, and on greater leadership to play a more constructive role, advance the global trade agenda, and
facilitate compromise among competing interests. China has voiced support for globalization and facilitate compromise among competing interests. China has voiced support for globalization and

~~234~~229 During congressional debate over URAA, some Members proposed to create extra review mechanisms of WT O DS, During congressional debate over URAA, some Members proposed to create extra review mechanisms of WT O DS,
and many Members stressed that only Congress can change U.S. laws as a result of dispute findings.and many Members stressed that only Congress can change U.S. laws as a result of dispute findings.
~~235~~ 230 For more information, see CRS Report R45249, For more information, see CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress, ,
coordinated by Rachel F. Fefer. coordinated by Rachel F. Fefer.
~~236~~231 WT O, “ WT O, “ Members adopt national security ruling on Russian Federation’s transit restrictions,” April 26, 2019. Members adopt national security ruling on Russian Federation’s transit restrictions,” April 26, 2019.
Ukraine argued that Russia’s restrictions and bans on the traffic of certain goods crossing its territory from Ukraine Ukraine argued that Russia’s restrictions and bans on the traffic of certain goods crossing its territory from Ukraine
violated the GAT T and Russia’s Accession Protocol. Russia invoked the national security exception in GAT T Article violated the GAT T and Russia’s Accession Protocol. Russia invoked the national security exception in GAT T Article
XXI(b)(iii) in its defense, arguing that the panel lacked jurisdiction to evaluate the merits of Ukraine’s claims, and that XXI(b)(iii) in its defense, arguing that the panel lacked jurisdiction to evaluate the merits of Ukraine’s claims, and that
deterioration in relations and conflict between Russia and Ukraine was a threat to its security interests. deterioration in relations and conflict between Russia and Ukraine was a threat to its security interests.
~~237~~232 T he panel determined requirements were met because: (1) Russia’s relations with Ukraine had deteriorated to the T he panel determined requirements were met because: (1) Russia’s relations with Ukraine had deteriorated to the
point that they constituted an “emergency in international relations”; (2) Russia’s trade restrictions qualified as point that they constituted an “emergency in international relations”; (2) Russia’s trade restrictions qualified as
measures “taken in time of this emergency”; and (3) Russia met all other requirements for invoking the exception. Ibid, measures “taken in time of this emergency”; and (3) Russia met all other requirements for invoking the exception. Ibid,
Para. 8.1(d)(i)-(iv). Para. 8.1(d)(i)-(iv).
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the multilateral trading system under which it has thrived. the multilateral trading system under which it has thrived.~~238~~233 The Chinese government’s 2018 The Chinese government’s 2018
white paper on the WTO stated that: “The multilateral trading system, with the WTO at its core, white paper on the WTO stated that: “The multilateral trading system, with the WTO at its core,
is the cornerstone of international trade and underpins the sound and orderly development of is the cornerstone of international trade and underpins the sound and orderly development of
global trade. China firmly observes and upholds the WTO rules, and supports the multilateral global trade. China firmly observes and upholds the WTO rules, and supports the multilateral
trading system that is open, transparent, inclusive and nondiscriminatory.”trading system that is open, transparent, inclusive and nondiscriminatory.”~~239~~234 At the same time, At the same time,
China has blocked progress in certain initiatives, including the WTO’s stal ed plurilateral on China has blocked progress in certain initiatives, including the WTO’s stal ed plurilateral on
environmental goods, is seeking to limit the scope of ongoing e-commerce negotiations, and has environmental goods, is seeking to limit the scope of ongoing e-commerce negotiations, and has
not put forward a sufficiently robust offer on procurement to join the GPA, a longstanding not put forward a sufficiently robust offer on procurement to join the GPA, a longstanding
promise. More broadly, growing scrutiny of Chinese industrial policies and non-market practices promise. More broadly, growing scrutiny of Chinese industrial policies and non-market practices
are chal enging China’s role in the system, raising questions about the country’s wil ingness in are chal enging China’s role in the system, raising questions about the country’s wil ingness in
practice to take on meaningful leadership responsibility in the WTO context. practice to take on meaningful leadership responsibility in the WTO context.
Another related concern voiced by the United States, including some Members of Congress, and Another related concern voiced by the United States, including some Members of Congress, and
other WTO members is the role of large emerging markets and use of developing country status other WTO members is the role of large emerging markets and use of developing country status
by those and other countries to ensure by those and other countries to ensure SDT treatment and flexibility in implementing flexibility in implementing commitments. The United commitments. The United
~~States is seeking~~States has sought to work with other members to set qualifications to work with other members to set qualifications or other conditions for such status, but the issue for such status, but the issue
remains controversial. Members could be given incentives to graduate from developing country remains controversial. Members could be given incentives to graduate from developing country
status; moreover, different WTO agreements status; moreover, different WTO agreements could offer different incentives or other flexibilities. Some proposed legislation in the 116th Congress related to China’s status. For example, H.R. 7007 sought to remove China’s designation as a developing country in international bodies, including at the WTO. Other bil s (S. 3978/H.R. 6627) sought to reform how developing country status is designated at the WTO, laying out criteria that may be directed at China. Any future congressional consideration of renewing TPA could also be an additional avenue for setting developing country status related objectives~~could offer different incentives or other flexibilities~~. .
Priorities for WTO Reforms and Future Negotiations
~~Reform~~Working with like-minded trading partners to implement reform of the multilateral trading system remains among the of the multilateral trading system remains among the Biden Administration’s trade policy Administration’s trade policy
~~objectives.240~~ objectives.235 Key questions for Congress include how the new Administration’s priorities may take shape in ongoing and future negotiations, including as members use MC12 to debate potential paths forward for reform. Congress can take a number of steps to direct, influence, and signal support for U.S. Congress can take a number of steps to direct, influence, and signal support for U.S.
priorities for priorities for ongoing and future WTO negotiations and reform. The primary legislative vehicle ongoing and future WTO negotiations and reform. The primary legislative vehicle
for establishing negotiating objectives is TPA. Congress could consider establishing specific or for establishing negotiating objectives is TPA. Congress could consider establishing specific or
enhanced negotiating objectives for multilateral or plurilateral trade negotiations, possibly enhanced negotiating objectives for multilateral or plurilateral trade negotiations, possibly
through legislation to through legislation to ~~amend TPA during its potential reauthorization after July 2021~~reauthorize TPA. Congress . Congress
could also consider specific reporting requirements in TPA, related to providing updates to could also consider specific reporting requirements in TPA, related to providing updates to
Congress on progress toward meeting WTO Congress on progress toward meeting WTO objectives or on WTO reform efforts. objectives or on WTO reform efforts.
As discussed, some Members have expressed congressional views on reforms through “sense of As discussed, some Members have expressed congressional views on reforms through “sense of
Congress” resolutions and directed the executive branch to increase U.S. engagement in specific Congress” resolutions and directed the executive branch to increase U.S. engagement in specific
areas. Congress could hold oversight hearings or submit letters to ask USTR about specific areas. Congress could hold oversight hearings or submit letters to ask USTR about specific
actions, plans, or objectives regarding WTO reforms for the institution, dispute settlement actions, plans, or objectives regarding WTO reforms for the institution, dispute settlement
procedures, or in regards to updating existing agreements to address trade barriers and economic procedures, or in regards to updating existing agreements to address trade barriers and economic
233 See, for example, President Xi Jinping’s remarks at the World Economic Forum in 2017, http://www.china.org.cn/node_7247529/content_40569136.htm. 234 China’s State Council Information Office, “China and the World T rade Organization,” white paper, June 2018, http://english.gov.cn/archive/white_paper/2018/06/28/content_281476201898696.htm. 235 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 31, 2021, p. 4. Congressional Research Service 60 World Trade Organization: Overview and Future Direction practices not sufficiently covered by current rules. In July 2020, the Senate Finance Committee practices not sufficiently covered by current rules. In July 2020, the Senate Finance Committee
held a hearing on WTO reform, expressing bipartisan agreement on the importance of improving held a hearing on WTO reform, expressing bipartisan agreement on the importance of improving
the institution.the institution.~~241~~236 Congress could request that USTR provide an update of ongoing plurilateral Congress could request that USTR provide an update of ongoing plurilateral
talks at the WTO, such as on e-commerce and digital trade—specified by Congress as a principal talks at the WTO, such as on e-commerce and digital trade—specified by Congress as a principal
trade negotiating objective in TPA. Congress could also consider appropriating additional funds trade negotiating objective in TPA. Congress could also consider appropriating additional funds
dedicated to WTO reform efforts. dedicated to WTO reform efforts. Members have also expressed their views and engaged with the WTO directly such as when the WTO DG’s visited Washington, D.C., in September 2021, and met with House Ways and Means and Senate Finance Committees. More broadly, Congress may consider the long-term More broadly, Congress may consider the long-term
implications of recent U.S. and other countries’ restrictive and/or unilateral trade actions on implications of recent U.S. and other countries’ restrictive and/or unilateral trade actions on
current and future trade negotiations. Some experts argue that U.S. unilateral tariffs and blocking current and future trade negotiations. Some experts argue that U.S. unilateral tariffs and blocking
of AB appointments may limit other of AB appointments may limit other countries’ interest in engaging in negotiations to reduce trade ~~countries’ interest in engaging in negotiations to reduce trade~~

~~238 See, for example, President Xi Jinping’s remarks at the World Economic Forum in 2017, http://www.china.org.cn/~~
~~node_7247529/content_40569136.htm.~~
~~239 China’s State Council Information Office, “China and the World T rade Organization,” white paper, June 2018,~~
~~http://english.gov.cn/archive/white_paper/2018/06/28/content_281476201898696.htm.~~
~~240 UST R, 2018 Trade Policy Agenda, March 2018; and 2020 Trade Policy Agenda, February 2020.~~
~~241 Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, July 29,~~
~~2020.~~
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barriers and craft new rules. Such concerns are amplified with the proliferation of preferential barriers and craft new rules. Such concerns are amplified with the proliferation of preferential
FTAs outside the WTO, which may FTAs outside the WTO, which may have potentialhave potential discriminatory effects on non-participating discriminatory effects on non-participating
countries, including the United States. countries, including the United States.
Outlook
The future outlook of the multilateral trading system is the subject of growing debate, as it faces The future outlook of the multilateral trading system is the subject of growing debate, as it faces
serious chal enges, some longstanding and some emerging more recently. Some experts view the serious chal enges, some longstanding and some emerging more recently. Some experts view the
system as long stagnant and facing a crisis; others remain optimistic that the current state of system as long stagnant and facing a crisis; others remain optimistic that the current state of
affairs could spur new momentum toward reforms and alternative negotiating approaches moving affairs could spur new momentum toward reforms and alternative negotiating approaches moving
forward. forward. ~~Despite differing views, there is a growing consensus that the status quo is no longer~~
~~sustainable, and that there is urgent need to improve the system and find ground for new~~
~~compromises if the WTO is to remain the cornerstone of the trading system.~~
~~Debate about the path forward continues. Recent proposals for WTO reforms and for new rules~~
~~are under development and have provided the seeds for new ideas, though concrete solutions and~~
~~next steps have yet to be agreed among countries involved in discussions and broader WTO~~
~~membership. In the near term, several events on the horizon could provide added~~WTO members are facing several events which add impetus for ~~impetus for~~
resolving differences and assessing progress. The chal enges of COVID-19 have tested the resolving differences and assessing progress. The chal enges of COVID-19 have tested the
resilience of global resilience of global cooperation, disrupted global supply chains, and resulted in cooperation, disrupted global supply chains, and resulted in ~~widespread~~ trade trade
protectionism. At the same time, several countries have reaffirmed the trading system, lifted protectionism. At the same time, several countries have reaffirmed the trading system, lifted
restrictions and liberalized trade in response to the crisis, and view the WTO as playing an restrictions and liberalized trade in response to the crisis, and view the WTO as playing an
important role in tackling the trade policy chal enges. While some reform efforts are stal ed and important role in tackling the trade policy chal enges. While some reform efforts are stal ed and
the WTO DS system ceased to fully functionthe WTO DS system ceased to fully function ~~in December 2019~~, the alternate arbitration , the alternate arbitration
~~mechanism among the EU, China and some other WTO members began operations in 2020 and~~
~~wil test a key function of the WTO. In addition, several U.S. WTO disputes, including ones~~
~~involving China, are awaiting consequential decisions in 2020. More broadly, many observers~~
~~view the future of the global trading system as deeply intertwined with how the United States and~~
~~China manage their trade relationship and ongoing frictions.~~
~~WTO members also are to face their rescheduled Ministerial in 2021,~~ mechanism among the EU, China and some other WTO members is operating alongside the WTO. Despite differing views, there is a growing consensus that the status quo is no longer sustainable, and that there is urgent need to improve the system and find ground for new compromises if the WTO is to remain the cornerstone of the trading system. As WTO DG Okonjo-Iweala noted in advance of MC12, “everyone wants a WTO that can deliver, for people, for workers, for business and for the environment,” but “...for the WTO to succeed, it must change, it has to update its rule book, fix its dispute settlement system, resolve differences on outstanding issues and respond to the trade chal enges of the 21st century.”237 Debate about the path forward continues. Recent proposals for WTO reforms and for new rules are under development and have provided the seeds for new ideas, though concrete solutions and next steps have yet to be agreed among countries involved in discussions and broader WTO membership. As members face the 2021 Ministerial, which many view as a litmus test for the institution’s credibility and relevance, there is an opportunity~~which many view as a~~
~~critical action-forcing event. MC12 could provide an opportunity for countries~~ to announce to announce
completion of negotiations and concrete progress completion of negotiations and concrete progress ~~in other priority areas, including plurilateral~~
~~efforts. MC12 and more broadly, the WTO as an institution wil be shaped by the vision of a new~~
~~Director-General seeking to inject new momentum into ongoing efforts.~~
and define clear roadmaps in other priority areas for the WTO. 236 Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, July 29, 2020. 237 WT O DG Okonjo-Iweala, “DG Okonjo-Iweala encouraged by support voiced for WT O during US visit ,” September 23, 2021, https://www.wto.org/english/news_e/news21_e/dgno_27sep21_e.htm . Congressional Research Service 61 World Trade Organization: Overview and Future Direction
Author Information

Cathleen D. Cimino-Isaacs, Coordinator Cathleen D. Cimino-Isaacs, Coordinator
~~Ian F. Fergusson~~Rachel F. Fefer
Analyst in International Trade and Finance Analyst in International Trade and Finance
~~Specialist~~Analyst in International Trade and Finance in International Trade and Finance

~~Rachel F. Fefer~~

~~Analyst in International Trade and Finance~~

Acknowledgments
The authors thank Amber Hope Wilhelm, CRS Visual Information Specialist, who developed the graphics The authors thank Amber Hope Wilhelm, CRS Visual Information Specialist, who developed the graphics
for this reportfor this report.
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, and Ian Fergusson, Specialist in International Trade and Finance, who contributed to the report.
Disclaimer
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