Order Code RS22154
May 24, 2005
CRS Report for Congress
Received through the CRS Web
WTO Decisions and Their Effect in U.S. Law
Jeanne J. Grimmett
Legislative Attorney
American Law Division
Summary
Congress has comprehensively dealt with the legal effect of World Trade
Organization (WTO) agreements and dispute settlement results in the United States in
the Uruguay Round Agreements Act (URAA), P.L. 103-465, which provides that
domestic law prevails over conflicting provisions of WTO agreements and prohibits
private remedies based on alleged violations of these agreements. As a result, WTO
agreements and adopted WTO rulings in conflict with federal law do not have domestic
legal effect unless and until Congress or the Executive Branch, as the case may be, takes
action to modify or remove the statute, regulation, or regulatory practice at issue.
Violative state laws may be withdrawn by the state or, in rare circumstances, invalidated
through legal action by the federal government. In addition, the URAA places
requirements on federal regulatory action taken to implement WTO decisions and
contains provisions specific to the implementation of dispute settlement panel and
appellate reports that fault U.S. actions in trade remedy proceedings. This report will
be updated.
Uruguay Round Agreements Act: Statutory Requirements for
Implementing WTO Decisions
Congress approved and implemented the agreements resulting from the GATT
Uruguay Round of Multilateral Trade Negotiations — i.e., the World Trade Organization
(WTO) agreements — in the Uruguay Round Agreements Act, P.L. 103-465, 19 U.S.C.
§§ 3501 et seq. The legal effect of these agreements, as well as WTO dispute settlement
results, in the United States is comprehensively dealt with in the statute, which addresses
the relationship of WTO agreements to federal and state law and prohibits private
remedies based on alleged violations of WTO agreements.1 The statute also requires the
1 This report contains a shortened version of a discussion contained in CRS Report RL32014,
WTO Dispute Settlement: Status of U.S. Compliance in Pending Cases, by Jeanne J. Grimmett.
For background discussions regarding the effect of treaties and international agreements in
domestic law, see CRS Report RL32528, International Law and Agreements: Their Effect Upon
(continued...)
Congressional Research Service ˜ The Library of Congress

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United States Trade Representative (USTR) to keep Congress informed of disputes
challenging U.S. laws once a dispute panel is established, any U.S. appeal is filed, and
a panel or Appellate Body report is circulated to WTO Members.2 In addition, the URAA
places requirements on regulatory action taken to implement WTO decisions and contains
provisions specific to the implementation of panel and appellate reports that fault U.S.
actions in trade remedy proceedings.
Section 102 of the URAA: Domestic Legal Effect of WTO
Decisions
Section 102 of the URAA and its legislative history establish that domestic law
supersedes any inconsistent provisions of the agreements approved and implemented in
the statute and that congressional or administrative action, as the case may be, is required
to implement adverse decisions in WTO dispute settlement proceedings.
Federal Law. Section 102(a)(1), 19 U.S.C. § 3512(a)(1), provides that “[n]o
provision of any of the Uruguay Round Agreements, nor the application of any such
provision to any person or circumstance, that is inconsistent with any law of the United
States shall have effect.” The URAA further provides, at § 102(a)(2), 19 U.S.C. §
3512(a)(2), that nothing in the statute “shall be construed ... to amend or modify any law
of the United States ... or ... to limit any authority conferred under any law of the United
States ... unless specifically provided for in this act.”
As explained in Statement of Administrative Action (SAA) that accompanied the
WTO agreements when they were submitted to Congress in 1994, “[i]f there is a conflict
between U.S. law and any of the Uruguay Round agreements, section 102(a) of the
implementing bill makes clear that U.S. law will take precedence”3; moreover, section
102 is further intended to clarify that all changes to U.S. law “known to be necessary or
appropriate” to implement the WTO agreements are incorporated in the URAA and that
any unforeseen conflicts between U.S. law and the WTO agreements “can be enacted in
1 (...continued)
U.S. Law, by Michael Garcia and Arthur Traldi; Brand, “Direct Effect of International Economic
Law in the United States and the European Union,” Nw. J. Int’l L. & Bus. 556 (1996-97); and
Jackson, “Status of Treaties in Domestic Legal Systems: A Policy Analysis,” 86 Am. J. Int’l L.
310 (1992).
For general background on treaties and international agreements, see Congressional
Research Service, Treaties and Other International Agreements: The Role of the United States
Senate; A Study Prepared for the Senate Committee on Foreign Relations (January 2001)(S.Prt.
106-71), available at [http://www.access.gpo.gov/congress/senate/senate11cp106.html].
2 Uruguay Round Agreements Act (URAA), § 123(d)-(f), 19 U.S.C. § 3533(d)-(f).
3 Uruguay Round Agreements, Statement of Administrative Action, H.Doc. 103-316(I) at 659
(1994)[hereinafter cited as Uruguay Round SAA]. The SAA, which was expressly approved in
the URAA, is “regarded as an authoritative expression by the United States concerning the
interpretation and application of the Uruguay Round Agreements and ... [the URAA] in any
judicial proceeding in which a question arises concerning such interpretation or application.”
URAA, § 102(d), 19 U.S.C. § 3512(d).

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subsequent legislation.”4 This approach, which Congress has taken in addressing
potential conflicts between domestic law and prior GATT and free trade agreements, is
considered to be “consistent with the Congressional view that necessary changes in
Federal statutes should be specifically enacted, not preempted by international
agreements.”5
The implementation of WTO dispute settlement results is similarly treated,
explained as follows in the URAA legislative history:
Since the Uruguay Round agreements as approved by the Congress, or any subsequent
amendments to those agreements, are non-self-executing, any dispute settlement
findings that a U.S. statute is inconsistent with an agreement also cannot be
implemented except by legislation approved by the Congress unless consistent
implementation is permissible under the terms of the statute.6
State Law. Where State law is at issue in a WTO dispute, the URAA provides for
federal-state cooperation in the proceeding, requires the United States Trade
Representative to work with the state to “develop a mutually agreeable response” to an
adverse WTO ruling, and limits any domestic legal challenges to the state law to the
United States.7 The act’s general preclusion of private remedies (discussed below) further
centralizes the response to adverse WTO decisions involving State law in the federal
government.8
4 H.Rept. 103-826(I), at 25; see also S.Rept. 103-412, at 13.
5 H.Rept. 103-826(I), at 25; see also S.Rept. 103-412, at 13.
6 H.Rept. 103-826(I), at 25; see also S.Rept. 103-412, at 13, and the Uruguay Round SAA, supra
note 3, at 1032-33. The latter states as follows:
Reports issued by panels or the Appellate Body under the DSU have no binding effect
under the law of the United States and do not represent an expression of U.S. foreign
or trade policy. They are no different in this respect than those issued by GATT
panels since 1947. If a report recommends that the United States change federal law
to bring it into conformity with a Uruguay Round agreement, it is for the Congress to
decide whether any such change will be made.
7 Two recent WTO cases have involved the WTO-consistency of U.S. state laws. In the challenge
by Antigua and Barbuda to federal, state, and local laws that affect the cross-border supply of
gambling and betting services (WT/DS285), the United States prevailed on the issue of whether
state laws violated the General Agreement on Trade in Services (GATS), the WTO Appellate
Body having found that the complainants had not presented sufficient evidence and legal
arguments to establish a prima facie case on this point. United States — Measures Affecting the
Cross-Border Supply of Gambling and Betting Services; Report of the Appellate Body
(WT/DS285/AB/R) (April 7, 2005).
A challenge by Brazil to Florida’s equalizing excise tax on processed orange and grapefruit
products (WT/DS250) was resolved in 2004 without panelists having been appointed after
Florida amended its statute. United States — Equalizing Excise Tax Imposed by Florida on
Processed Orange and Grapefruit Products; Notification of Mutually Agreed Solution
(WT/DS250/3)(June 2, 2004); “U.S. Brazil Settle Long-standing Dispute Over Florida Tax to
Promote Citrus Products,” 21 Int’l Trade Rep. 945 (BNA 2004).
8 For further discussion, see Uruguay Round SAA, supra note 3, at 676.

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Section 102(b) provides as follows:
No State law, or the application of a such a State law, may be declared invalid as to
any person or circumstance on the ground that the provision or its application is
inconsistent with any of the Uruguay Round Agreements, except in an action brought
by the United States for the purposes of declaring such law or application invalid.9
According to legislative history, the provision “makes clear that the Uruguay Round
agreements do not automatically preempt State laws that do not conform to their
provisions, even if a WTO dispute settlement panel or the Appellate Body were to
determine that a particular State measure was inconsistent with one or more of the
Uruguay Round agreements.”10 The statute also contains restrictions on any such U.S.
legal action, including that the report of the WTO dispute settlement panel or the
Appellate Body may not be considered binding on the court or otherwise accorded
deference.11 Any such suit by the United States is expected to be a rarity.12
Preclusion of Private Remedies. Private remedies are prohibited under §
102(c)(1) of the URAA, 19 U.S.C. § 3512(c)(1), which provides that “[n]o person other
than the United States ... shall have a cause of action or defense under any of the Uruguay
Round Agreements or by virtue of congressional approval of such an agreements” or
“may challenge, in any action brought under any provision of law, any action or inaction
by any department, agency, or other instrumentality of the United States, any State, or any
political subdivision of a State, on the ground that such action or inaction is inconsistent
with such agreement.”
Congress has additionally stated in § 102(c)(2) of the URAA, 19 U.S.C. §
3512(c)(2), that it intends, through the prohibition on private remedies:
to occupy the field with respect to any cause of action or defense under or in
connection with any of the Uruguay Round Agreements, including by precluding any
person other than the United States from bringing any action against any State or
political subdivision thereof or raising any defense to the application of State law
under or in connection with any of the Uruguay Round Agreements —
9 URAA, § 102(b)(2)(A), 19 U.S.C. § 3512(b)(2)(A). The term “State law” is defined to include
“any law of a political subdivision of a State, as well as any State law that regulates or taxes the
business of insurance.” URAA, § 102(b)(3), 19 U.S.C. § 3512(b)(3). The term is intended to
encompass “any provision of a state constitution, regulation, practice or other state measure.”
Uruguay Round SAA, supra note 3, at 674.
10 S.Rept. 103-412, at 15; see also H.Rept. 103-826(I), at 25, and Uruguay Round SAA, supra
note 3, at 670.
11 URAA, § 102(b)(2)(A), 19 U.S.C. § 3512(b)(2)(A).
12 Uruguay Round SAA, supra note 3, at 674; H.Rept. 103-826(I), at 26; S.Rept. 103-412, at 15.
The SAA states, inter alia, that the Attorney General “will be particularly careful in considering
recourse to this authority where the state measure involved is aimed at the protection of human,
animal, or plant health or of the environment or the state measure is a state tax of a type that has
been held to be consistent with the requirements of the U.S. Constitution. In such a case, the
Attorney General would entertain use of this statutory authority only if consultations between the
President and the Governor of the State concerned failed to yield an appropriate alternative.”
Uruguay Round SAA, supra note 3, at 674.

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(A) on the basis of a judgment obtained by the United States in an action brought
under any such agreement; or
(B) on any other basis.
The House Ways and Means Committee report on the URAA discusses on the
rationale and implications of § 102(c) as follows:
For example, a private party cannot bring an action to require, preclude, or modify
government exercise of discretionary or general “public interest” authorities under the
other provisions of law. These prohibitions are based on the premise that it is the
responsibility of the Federal Government, and not private citizens, to ensure that
Federal or State laws are consistent with U.S. obligations under international
agreements such as the Uruguay Round agreements.13
The SAA notes, however, that § 102(c) “does not preclude any agency of
government from considering, or entertaining argument on, whether its action or proposed
action is consistent with the Uruguay Round agreements, although any change in agency
action would have to be authorized by domestic law.”14 In addition, federal courts have
not viewed the provision as precluding them from considering U.S. WTO obligations in
challenges to agency actions implicating WTO agreements.15
Implementation of WTO Decisions Involving Administrative
Action
In addition to the URAA provisions that limit the direct effect of WTO rules and
decisions in U.S. law, the URAA also addresses agency implementation of WTO panel
and Appellate Body reports. These provisions apply to (1) regulatory action in general
and (2) new agency determinations in response to WTO decisions involving trade remedy
proceedings and the implementation of such determinations.
Section 123 of the URAA: WTO Cases Involving Regulatory Action.
Section 123(g) of the URAA, 19 U.S.C. § 3533(g), provides that in any WTO case in
which a departmental or agency regulation or practice has been found to be inconsistent
with a WTO agreement, the regulation or practice may not be rescinded or modified in
implementation of the decision “unless and until” the USTR and relevant agencies meet
certain consultation requirements and the final rule or other modification has been
published in the Federal Register.16
13 H.Rept. 103-826(I), at 26.
14 Uruguay Round SAA, supra note 3, at 676.
15 E.g., SNR Roulements v. United States, 341 F.Supp.2d 1334, 1341 (Ct. Int’l Trade 2004);
Timken v. United States, 240 F.Supp. 2d 1228, 1238 (Ct. Int’l Trade 2002); Gov’t of Uzbekistan
v. United States, 2001 WL 1012780, at *3 (Ct. Int’l Trade Aug. 30, 2001).
16 An example of the use of the § 123 process may be found in the Commerce Department’s
issuance in 2003 of a modified privatization methodology for use in making subsidy
determinations in countervailing duty proceedings, i.e., determining whether a benefit has been
conferred on the recipient for purposes of the definition of “subsidy” under the WTO Agreement
(continued...)

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Section 129 of the URAA: WTO Cases Involving Trade Remedy
Proceedings. Section 129 of the URAA, 19 U.S.C. § 3538, sets forth authorities and
procedures to be used by the United States Trade Representative, the U.S. International
Trade Commission (ITC) and the Department of Commerce (DOC) in implementing
adverse WTO panel and Appellate Body (AB) reports involving agency determinations
in U.S. safeguards, antidumping, and countervailing duty proceedings.17
The Department of Commerce and the ITC each play a role in antidumping and
countervailing duty proceedings, which are provided for in Title VII of the Tariff Act of
1930. DOC makes determinations as to existence and level of dumping or subsidization,
while the ITC determines whether the dumped or subsidized imports, as the case may be,
cause material injury to domestic industry. The ITC is also charged with conducting
investigations under U.S. safeguards law, set forth in Title II of the Trade Act of 1974, to
determine whether or not increased imports are a substantial cause of serious injury to a
domestic industry. If the ITC makes an affirmative injury determination in a domestic
Section 201 proceeding, it recommends remedial measures to the President, who
ultimately determines whether or not to take action. U.S. actions in these types of trade
remedy proceedings are subject to obligations under the GATT 1994 and, as the case may
be, the WTO Agreement on Safeguards, the WTO Antidumping Agreement, and the
WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement).
In the event of an adverse WTO decision regarding an above-described
determination, the statute ultimately authorizes the USTR to request the agency involved
to issue a determination that would render the agency’s action “not inconsistent with the
findings” of the WTO panel or Appellate Body. The statute also requires consultation
with Congress at various stages of the implementation process. Where an antidumping
or countervailing duty order is no longer supported by an ITC affirmative injury
determination, the USTR may direct that the underlying antidumping or countervailing
duty order be revoked in whole or in part. Where a DOC determination is involved, the
USTR may direct the Department to implement, in part or in full, the Section 129
determination that it has made. Implemented § 129 determinations in antidumping and
countervailing duty cases are reviewable in the U.S. Court of International Trade or before
binational panels established under Chapter 19 of the North American Free Trade
Agreement (NAFTA).18
16 (...continued)
on Subsidies and Countervailing Measures. The modification was issued in response to adverse
panel and appellate reports in a challenge by the European Communities to 12 U.S.
countervailing duty orders based on what the EC alleged were WTO-inconsistent methodologies.
See Dep’t of Commerce, “Notice of Final Modification of Agency Practices Under Section 123
of the Uruguay Round Agreements Act; Modification of agency practice regarding privatization,”
68 Fed. Reg. 37125 (2003).
17 For further discussion of § 129, see CRS Report RL32014, WTO Dispute Settlement: Status
of U.S. Compliance in Pending Cases, by Jeanne J. Grimmett.
18 URAA, § 129(e), amending Tariff Act of 1930, § 516A, 19 U.S.C. § 1516a. See generally
Uruguay Round SAA, supra note 3, at 1026-27. Chapter 19 panels are available to review final
agency determinations in antidumping and countervailing duty investigations involving NAFTA
countries in lieu of judicial review in the country in which the determination is made.

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