Order Code RL32060
CRS Report for Congress
Received through the CRS Web
World Trade Organization Negotiations:
The Doha Development Agenda
Updated July 10, 2006
Ian F. Fergusson
Analyst in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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World Trade Organization Negotiations:
The Doha Development Agenda
Summary
The World Trade Organization was established in 1995 and is the principal
international organization governing world trade. It has 149 member countries,
representing over 95% of world trade.
On November 9-14, 2001, trade ministers from WTO countries met in Doha,
Qatar for its 4th Ministerial Conference. At that meeting, members agreed to a work
program for a new round of multilateral trade negotiations. The work program folds
on-going negotiations on agriculture and services into a broader agenda that includes
industrial tariffs, topics of interest to developing countries, changes in WTO rules,
and other provisions numbering 19 in all. Because of the influence that developing
countries had in setting the work program, the round has become known as the Doha
Development Agenda. Negotiations were to conclude by January 1, 2005, but this
deadline was breached and the expiration of U.S. trade promotion authority in July
2007 has become the de facto deadline for the round.
Agriculture has been the linchpin in the Doha Development Agenda. U.S. goals
are substantial reduction of trade-distorting domestic support; elimination of export
subsidies, and improved market access. Industrial trade barriers and services are
other market access topics in the negotiations.
Three issues are among the most important to developing countries, in addition
to concessions on agriculture. One issue, now resolved, pertained to compulsory
licensing of medicines and patent protection. A second deals with a review of
provisions giving special and differential treatment to developing countries. A third
addresses problems that developing countries are having in implementing current
trade obligations.
In other areas, negotiators are meeting to clarify and improve disciplines under
the antidumping and subsidies agreements. These talks on trade remedies are being
observed closely by some Members of Congress, who did not want the issue on the
agenda at all.
The 5th Ministerial Conference was held September 10-14, 2003 in Cancun,
Mexico, but broke up without agreement. On July 31, 2004, WTO members
approved a Framework Agreement to guide remaining negotiations. The July 31
framework included important terms on agriculture and began new negotiations on
trade facilitation. The 6th Ministerial was held in Hong Kong from December 13-18,
2005. Although an original goal of the Ministerial was to agree on a package of
modalities for the ongoing Doha Development Agenda (DDA) round of trade
negotiations, this aim was dropped and members agreed to some modest
advancements in agriculture, industrial tariffs, and duty and quota-free access for
least developed countries. Subsequent attempts to achieve modalities have not been
successful.

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Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
What Began at Doha? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Progress of the Negotiations: The Search for Modalities . . . . . . . . . . . . . . . 3
The Cancun Ministerial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The WTO Framework Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Hong Kong Ministerial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Significance of the Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Doha Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Market Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Non-Agricultural Market Access (NAMA) . . . . . . . . . . . . . . . . . . . . . 11
Development Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Access to Patented Medicines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Special and Differential (S&D) Treatment . . . . . . . . . . . . . . . . . . . . . 13
Implementation Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trade Facilitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
WTO Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Rules Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Dispute Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Congressional Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
This report was originally written with Lenore M. Sek, Specialist in International
Trade and Finance, FDT.

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World Trade Organization Negotiations:
The Doha Development Agenda
Background
The World Trade Organization (WTO) is the principal international
organization governing world trade. It has 149 member countries,1 representing over
95% of world trade. It was established in 1995 as a successor institution to the
General Agreement on Tariffs and Trade (GATT). The GATT was a post-World
War II institution intended to promote nondiscrimination in trade among countries,
with the view that open trade was crucial for economic stability and peace.
Decisions within the WTO are made by member countries, not WTO staff2, and
they are made by consensus, not formal vote. High-level policy decisions are made
by the Ministerial Conference, which is the body of political representatives (trade
ministers) from each member country. The Ministerial Conference must meet at least
every two years. Operational decisions are made by the General Council, which
consists of a representative from each member country. The General Council meets
monthly, and the chair rotates annually among national representatives.
The United States was an original signatory to the GATT and a leading
proponent of the GATT’s free-market principles. It continues to be among the
countries urging further discussions on opening markets to trade. Although decisions
in the WTO are by consensus, the United States has a highly influential role in the
WTO, because it is the largest trader in the world.
Periodically, member countries agree to hold negotiations to revise existing
rules or establish new ones. These periodic negotiations are commonly called
“rounds.” The broader the negotiations, the greater the possible trade-offs, and thus
theoretically the greater the potential economic benefits to countries. The
multilateral negotiations are especially important to developing countries, which
might otherwise be left out of more selective agreements. It must be remembered,
however, that trade liberalization also results in job losses and other economic
dislocations as well.
1 The accession package for the Kingdom of Tonga was accepted at the Hong Kong
Ministerial in December 2005 and it will become the WTO’s 150th member after domestic
ratification of the accession package.
2 The WTO staff is based in Geneva and numbers about 550. The organization is headed
by a Director-General, currently Pascal Lamy of France.

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CRS-2
What Began at Doha?
On November 9-14, 2001, trade ministers from member countries met in Doha,
Qatar for the fourth WTO Ministerial Conference. At that meeting, they agreed to
undertake a new round of multilateral trade negotiations.3
Before the Doha Ministerial, negotiations had already been underway on trade
in agriculture and trade in services. These on-going negotiations had been required
under the last round of multilateral trade negotiations (the Uruguay Round, 1986-
1994). However, some countries, including the United States, wanted to expand the
agriculture and services talks to allow trade-offs and thus achieve greater trade
liberalization.
There were additional reasons for the negotiations. Just months before the Doha
Ministerial, the United States had been attacked by terrorists on September 11, 2001.
Some government officials called for greater political cohesion and saw the trade
negotiations as a means toward that end. Some officials thought that a new round of
multilateral trade negotiations could help a world economy weakened by recession
and terrorism-related uncertainty. According to the WTO, the year 2001 showed
“...the lowest growth in output in more than two decades,” and world trade actually
contracted that year.4
In addition, countries increasingly have been seeking bilateral or regional trade
agreements. In 2004, 160 regional trade arrangements had been notified to the WTO
and many more are under negotiation.5 There is disagreement on whether these more
limited trade agreements help or hurt the multilateral system. Some experts say that
regional agreements are easier to negotiate, allow a greater degree of liberalization,
and thus are effective in opening markets. Others, however, argue that the regional
agreements violate the general nondiscrimination principle of the WTO (which
allows some exceptions), deny benefits to many poor countries that are often not
party to the arrangements, and distract resources away from the WTO negotiations.6
With the backdrop of a sagging world economy, terrorist action, and a growing
number of regional trade arrangements, trade ministers met in Doha. At that
meeting, they adopted three documents that provided guidance for future actions.
The Ministerial Declaration includes a preamble and a work program for the new
round and for other future action. This Declaration folded the on-going negotiations
in agriculture and services into a broader agenda. That agenda includes industrial
tariffs, topics of interest to developing countries, changes to WTO rules, and other
3 For information on the results of the Doha Ministerial Conference, see CRS Report
RL31206, The WTO Doha Ministerial: Results and Agenda for a New Round of
Negotiations, coordinated by William H. Cooper.
4 World Trade Organization (WTO), Annual Report 2002. p. 10.
5 WTO, Annual Report 2005, p. 59.
6 For a discussion of the effect of free-trade agreements, see CRS Report RL31356, Free
Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy, by
William H. Cooper.

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CRS-3
provisions. The Declaration on the TRIPS Agreement and Public Health presents
a political interpretation of the WTO Agreement on Trade-Related Intellectual
Property Rights (TRIPS).7 A document on Implementation-Related Issues and
Concerns includes numerous decisions of interest to developing countries.8
Especially worth noting is how the role of developing countries changed at the
Doha Ministerial. Since the beginning of the GATT, the major decision-makers were
almost exclusively developed countries. At the preceding Ministerial Conference
(Seattle, 1999), developing countries became more forceful in demanding that their
interests be addressed. Some developing countries insisted that they would not
support another round of multilateral negotiations unless they realized some
concessions up-front and the agenda included their interests. Because of the greater
influence of developing countries in setting the plan of action at Doha, the new round
became known as the Doha Development Agenda.
At the Doha meeting, trade ministers agreed that the 5th Ministerial, to be held
in 2003, would “take stock of progress, provide any necessary political guidance, and
take decisions as necessary,” and that negotiations would be concluded not later than
January 1, 2005. With the exception of actions on the Dispute Settlement
Understanding, trade ministers agreed that the outcome of the negotiations would be
a single undertaking, which means that nothing is finally agreed until everything is
agreed. Thus, countries agreed they would reach a single, comprehensive agreement
containing a balance of concessions at the end of the negotiations.
Progress of the Negotiations: The Search for Modalities
Negotiations have proceeded at a slow pace and have been characterized by lack
of progress on significant issues, and persistent disagreement on nearly every aspect
of the agenda. Some issues have been resolved, notably in agriculture. However, the
first order of business for the round, the negotiation of modalities, or the methods and
formulas by which negotiations are conducted, still remain elusive four years after
the beginning of the round.
The Cancun Ministerial. An important milepost in the Doha Development
Agenda round was the 5th Ministerial Conference, which was held in Cancún,
Mexico on September 10-14, 2003. The Cancún Ministerial ended without
agreement on a framework to guide future negotiations, and this failure to advance
the round resulted in a serious loss of momentum and brought into question whether
the January 1, 2005 deadline would be met.9
7 See CRS Report RS21609, The WTO, Intellectual Property Rights, and the Access to
Medicines Controversy, by Ian F. Fergusson.
8 The Ministerial Declaration (WT/MIN(01)/DEC/1), the Declaration on the TRIPS
Agreement and Public Health (WT/MIN(01)/DEC/2), and the Implementation-Related
Issues and Concerns (WT/MIN(01)/DEC/17) are available through the WTO home page at
[http://www.wto.org/].
9 For more detailed information on the Cancún Ministerial, see CRS Report RS21664, The
WTO Cancún Ministerial, by Ian F. Fergusson; and General Accounting Office. Cancun
(continued...)

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CRS-4
The Cancun Ministerial collapsed for several reasons. First, differences over
the Singapore issues seemed irresolvable. The EU had retreated on some of its
demands, but several developing countries refused any consideration of these issues
at all. Second, it was questioned whether some countries had come to Cancun with
a serious intention to negotiate. In the view of some observers, a few countries
showed no flexibility in their positions and only repeated their demands rather than
talk about trade-offs. Third, the wide difference between developing and developed
countries across virtually all topics was a major obstacle. The U.S.-EU agricultural
proposal and that of the Group of 21, for example, show strikingly different
approaches to special and differential treatment. Fourth, there was some criticism of
procedure. Some claimed the agenda was too complicated. Also, Cancun Ministerial
chairman, Mexico’s Foreign Minister Luis Ernesto Derbez, was faulted for ending
the meeting when he did, instead of trying to move the talks into areas where some
progress could have been made.
At the end of their meeting in Cancun, trade ministers issued a declaration
instructing their officials to continue working on outstanding issues. They asked the
General Council chair, working with the Director-General, to convene a meeting of
the General Council at senior official level no later than December 15, 2003, “...to
take the action necessary at that stage to enable us to move towards a successful and
timely conclusion of the negotiations.”
The Cancun Ministerial did result in the creation of the so-called Derbez text.
Ministerial chairman Derbez invited trade ministers to act as facilitators in Cancun
and help with negotiations in five groups: agriculture, non-agricultural market access,
development issues, Singapore issues, and other issues. The WTO Director-General
served as a facilitator for a sixth group on cotton. The facilitators consulted with
trade ministers and produced draft texts from their group consultations. The
Ministerial chairman compiled the texts into a draft Ministerial Declaration10 and
circulated the revised draft among participants for comment.
The Derbez text was widely criticized at Cancun and it was not adopted, but in
the months following that meeting, members looked increasingly at this text as a
possible negotiating framework. On agriculture, the Derbez text drew largely on both
the U.S.-EU and Group of 21 proposals. It included a larger cut from domestic
support programs than the U.S.-EU proposal made, contained the blended tariff
approach of the U.S.-EU proposal but offered better terms for developing countries,
and provided for the elimination of export subsidies for products of particular interest
to developing countries. On the Singapore issues, it included a decision to start new
negotiations on government procurement and trade facilitation, but not investment
or competition.
9 (...continued)
Ministerial Fails to Move Global Trade Negotiations Forward; Next Steps Uncertain.
Report to the Chairman, Committee on Finance, U.S. Senate, and to the Chairman,
Committee on Ways and Means, House of Representatives. GAO-04-250. January 2004.
10 WTO document JOB(03)/150/Rev.2.

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CRS-5
The WTO Framework Agreement. The aftermath of Cancun was one of
standstill and stocktaking. Negotiations were suspended for the remainder of 2003.
However, in early 2004, then-U.S. Trade Representative (USTR) Robert Zoellick
offered proposals on how to move the round forward.11 The USTR called for a focus
on market access, including an elimination of agricultural export subsidies. He also
said that the Singapore issues could progress by negotiating on trade facilitation,
considering further action on government procurement, and possibly dropping
investment and competition. This intervention was credited at the time with reviving
interest in the negotiations, and negotiations resumed in March 2004.
On July 31, 2004, WTO members approved a Framework Agreement that
includes major developments in the most contentious and crucial issue —
agriculture.12 Because agriculture is the linchpin in the negotiations, the Framework,
which provides guidelines but not specific concessions, was regarded as a major
achievement. With a broad agreement on agriculture and on other issues, negotiators
were given a clearer direction for future discussions. However, the talks settled back
into a driftless stalemate, where few but the most technical issues were resolved.
The Hong Kong Ministerial. The stalemate in 2005 increased the perceived
importance of the 6th Ministerial in Hong Kong as potentially the last opportunity to
settle key negotiating issues that could produce an agreement by 2007, the de facto
deadline resulting from the expiration of U.S. trade promotion authority. Although
a flurry of negotiations took place in the fall of 2005, WTO Director-General Pascal
Lamy announced in November 2005 that a comprehensive agreement on modalities
would not be forthcoming in Hong Kong, and that the talks would “take stock” of the
negotiations and would try to reach agreements in negotiating sectors where
convergence was reported. The final Ministerial Declaration of December 18, 2005,
reflected areas of agreement in agriculture, industrial tariffs, and duty-free and tariff-
free access for least developed countries (see sectoral negotiations section below for
details). Generally, these convergences reflect a step beyond the July Framework
Agreement, but fall short of full negotiating modalities.13
Deadlines were established at Hong Kong for concluding negotiations by the
end of 2006. These deadlines included an April 30, 2005 date to establish modalities
for the agriculture and NAMA negotiations. Further deadlines set for July 31, 2006,
include the submission of tariff schedules for agriculture and NAMA, the submission
of revised services offers, the submission of a consolidated texts on rules and trade
facilitation, and for recommendations to implement the “aid for trade”language in the
Hong Kong declaration. On April 21, 2006, WTO Director-General Pascal Lamy
11 Summary of USTR letter at [http://www.ustr.gov/wto/2004-01-12-doha_advance.pdf].
Actual letter at Inside U.S. Trade. Text: Zoellick Letter to Trade Ministers. January 16,
2004.
12 See CRS Report RL32645, The Doha Development Agenda: The WTO Framework
Agreement, coordinated by Ian F. Fergusson.
13 The final Ministerial Declaration (WT/MIN(05)/DEC), December 18, 2005 is available
at [http://www.wto.org/english/thewto_e/minist_e/min05_e/final_text_e.pdf]. For more
information, see CRS Report RL33176, The World Trade Organization: The Hong Kong
Ministerial, coordinated by Ian F. Fergusson.

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CRS-6
announced there was no consensus for agreement on modalities by the April 30
deadline.
Trade negotiators likewise failed to reach agreement at a high-level meeting in
Geneva on June 30-July 1, 2006. It was agreed at those meetings, however, that
Director-General Pascal Lamy would undertake a more proactive role as a catalyst
“to conduct intensive and wide-ranging consultations” to achieve agricultural and
industrial modalities.14 Prior to the summit, Lamy for the first time in his tenure
suggested the outline of a possible compromise. Known as the “20-20-20 proposal,”
the offer (1) called on the United States to accept a ceiling on domestic farm
subsidies under $20 billion, (2) proposed the negotiations use the G20 proposal of
54% as the minimum average cut to developed country agricultural tariffs, and (3)
set a tariff ceiling of 20 for developing country industrial tariffs. This suggestion was
roundly criticized by all sides and was not adopted at the Geneva meetings.15
However, World Bank President Paul Wolfowitz supported this compromise in a
letter to G-8 + 5 leaders prior to the G-8 summit in St. Petersburg.16
As mentioned before, the de facto deadline for the round has become the
expiration of trade promotion authority in the United States on July 1, 2007. Because
of the deadlines contained in TPA, a completed agreement must be submitted to
Congress by March 31, 2007, and the administration must consult with Congress on
the likely result of the Rules negotiations by December 31, 2006. It is commonly
assumed that even if the talks were moving forward in reaching their deadlines, it
would take many months to produce a final schedule of concessions through bilateral
negotiations and to verify the schedules of others. Thus, this time schedule is
contributing to a belief among some that the fate of the round hinges on what
happens in the negotiations this summer.
Significance of the Negotiations
Trade economists argue that the reduction of trade barriers allows a more
efficient exchange of products among countries and encourages economic growth.
Multilateral negotiations offer the greatest potential benefits by obliging countries
throughout the world to reduce barriers to trade. The gains to the United States and
to the world from multilateral trade agreements have been calculated in the billions
of dollars. For example, a recent study by the International Trade Commission found
that if the tariff cuts from the Uruguay Round were removed, the welfare loss to the
United States would be about $20 billion.17 A study by the University of Michigan
found that if all trade barriers in agriculture, services, and manufactures were reduced
14 Bridges Weekly Trade News Digest, Special Update, July 3, 2006. [http://www.ictsd.org].
15 “Lamy Outline of Possible Deal Meets U.S. Criticism As Talks Begin,” Inside U.S. Trade,
June 30, 2006.
16 “World Bank President Urges G-8+5 Leaders to Reach Trade Deal,” World Bank Press
Release, July 9, 2006.
17 U.S. International Trade Commission. The Impact of Trade Agreements: Effect of the
Tokyo Round, U.S.-Israel FTA, U.S.-Canada FTA, NAFTA, and the Uruguay Round on the
U.S. Economy. Publication 3621. August 2003.

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CRS-7
by 33% as a result of the Doha Development Agenda, there would be an increase in
global welfare of $574.0 billion.18 Other studies present a more modest outcome
predicting world net welfare gains ranging from $84 billion to $287 billion by the
year 2015.19
Multilateral negotiations are especially important to developing countries that
might otherwise be left out of a regional or bilateral trade agreement. Developing
country blocs can improve trade and economic growth among its members, but the
larger share of benefits are from the trade agreements that open the markets of the
world. Multilateral trade negotiations are also an exercise in international
cooperation and encourage economic interdependence, which offers political benefits
as well.
When a country opens its markets, however, increased imports might cause
economic dislocations at the local or regional level. Communities might lose
factories. Workers might lose their jobs. For those who experience such losses,
multilateral trade agreements do not improve their economic well-being. Also, if a
country takes an action that is not in compliance with an agreement to which it is a
party, it might face some form of sanction. Further, some oppose WTO rules that
restrict how a country is permitted to respond to imports of an overseas product that
employs an undesirable production method, for example a process that might use
limited resources or impose unfair working conditions. Thus, while multilateral trade
agreements have been found to offer broad economic benefits, they are opposed for
a variety of reasons as well.
The Doha Agenda
Doha Round talks are overseen by the Trade Negotiations Committee (TNC),
whose chair is Director-General Lamy. The negotiations are being held in five
working groups and in other, existing bodies in the WTO. Selected topics under
negotiation are discussed below in five groups: market access, development issues,
WTO rules, trade facilitation, and other issues.20
18 Brown, Drusilla K., Deardorff, Alan V. and Robert M. Stern. Computational Analysis of
Multilateral Trade Liberalization in the Uruguay Round and Doha Development Round.
Discussion Paper No. 489. School of Public Policy. The University of Michigan.
December 8, 2002.
19 Thomas W. Hertel and Roman Keeney, “What is at Stake: The Relative Importance of
Import Barriers, Export Subsidies and Domestic Support,” in Anderson and Martin, eds.,
Agricultural Trade Reform in the Doha Agenda (Washington: World Bank, 2005); and
Kym Anderson, Will Martin, and Dominique van der Mensbrugge, “Doha Merchandise
Trade Reform: What’s At Stake for Developing Countries,” July 2005, available at
[http://www.worldbank.org/trade/wto]. The different outcomes in these studies are due
substantially to differing assumptions concerning liberalization resulting from the Doha
Round as well as from differences in the econometric models themselves. For example, the
World Bank studies do not attempt to quantify services liberalization.
20 For a detailed ‘state of play’ of the DDA following the Hong Kong Ministerial, see CRS
(continued...)

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CRS-8
Market Access
Agriculture. The Uruguay Round Agreement on Agriculture called for
continued negotiations toward “...the long-term objective of substantial progressive
reductions in support and protection....” By early 2001, WTO members had achieved
some preliminary work in those sectoral negotiations, and later that year, agriculture
was wrapped into the broader Doha agenda.
Agriculture has become the linchpin in the Doha Development Agenda.21 U.S.
goals in the new round were elimination of agricultural export subsidies, easing of
tariffs and quotas, and reductions in trade-distorting domestic support. The Doha
Ministerial Declaration included language on all of these three pillars of agricultural
support. It stated that the members committed to “comprehensive negotiations aimed
at substantial improvements in market access; reductions of, with a view to phasing
out, all forms of export subsidies; and substantial reductions in trade distorting
support.”
The course of the negotiations in the lead up to Cancun were influenced by the
reform of the EU’s Common Agricultural Policy (CAP). A major issue for the EU
was whether or not to approve separation (“decoupling”) of payments to farmers
based on production. Those types of payments are among the most trade-distorting
(“amber box”). On June 26, 2003, EU agriculture ministers approved a reform
package that included partial decoupling for certain products. The action was seen
by many as a positive step for advancing the trade negotiations.22
The EU reform largely addressed one of the three pillars of agricultural reform
— domestic support — but did little in a second pillar — market access. In the
WTO negotiations on market access, the United States and the Cairns Group support
a leveling, or harmonizing, of tariff peaks, or high rates. In comparison, the EU and
Japan want flexibility to cut some items less than others to arrive at an average total
rate cut.
Another difficulty is “geographical indications,” or the protection of product
names that reflect the original location of the product. An example is the use of
“Bordeaux wine” for wines from the Bordeaux region only. Europeans, joined by
India and some other countries, want a mandatory registry of geographical indications
that would prevent other countries from using the names. The United States and yet
other countries refuse to negotiate a mandatory list, but will accept a voluntary list
20 (...continued)
Report RL33176, The World Trade Organization: The Hong Kong Ministerial, coordinated
by Ian F. Fergusson.
21 See CRS Report RL33144, WTO Doha Round: The Agricultural Negotiations, by Charles
E. Hanrahan and Randy Schnepf.
22 See Buck, Tobias, Guy de Jonquieres and Frances Williams. “Fischler’s New Era for
Europe’s Framers: Now the Argument Over Agriculture Moves to the WTO.” Financial
Times. June 27, 2003.

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CRS-9
with no enforcement power. The EU says it will not accept an agriculture agreement
without a geographical registry.23
Developing countries view reform in agricultural trade as one of their most
important goals. They argue that their own producers cannot compete against the
surplus agricultural goods that the developed countries, principally the EU and the
United States, are selling on the world market at low, subsidized prices. Some
African countries also are calling for an end to cotton subsidies, claiming that such
subsidies are destroying markets for the smaller African producers.
The July 2004 Framework Agreement provided a basis for which to continue
the agriculture talks. On domestic subsidies, subsidies are to be reduced by means
of a “tiered” or “banded” approach applied to achieve “harmonization” in the levels
of support. Subsidizing countries will make a down-payment of a 20% reduction in
levels of support in the first year of the agreement. Tariff reduction will utilize a
tiered formula with a harmonization component, but with some exceptions for
“import sensitive products.” The European Union finally agreed to the elimination
of export subsidies, considered a major negotiating goal of the United States.
While there was no breakthrough at the December 2005 Hong Kong Ministerial,
members agreed to eliminate export subsidies, and “export measures with equivalent
effect” by 2013, a date favored by the European Union (EU). Members agreed to cut
domestic support programs with a three band methodology. As the largest user of
domestic agricultural subsidies, the EU was placed in the highest band. The United
States and Japan were placed in the second band and lesser subsidizing countries
were placed in the third band. However, the actual percentage cuts that these bands
represent remain subject to negotiation. Members also renewed a commitment to
achieve a tariff cutting formula by April 30, 2006. This deadline was not met. In the
parallel negotiations on Cotton, members agreed to eliminate export subsidies for
cotton and to provide duty-free and quota-free access for LDC cotton producers by
year-end 2006. Members also agreed to reduce domestic support for cotton in a more
ambitious manner than for other agricultural commodities as an “objective” in the
ongoing agricultural negotiations.
Talks to reach modalities at an June 30-July 1, 2006 mini-ministerial in Geneva
were likewise unsuccessful. Sources of the stalemate in the Geneva talks included
U.S. concerns about the magnitude of deviations from market access commitments
stemming from the so-called “3-S flexibilities”: sensitive products, special products,
and the special safeguard mechanism. While each of these flexibilities were
incorporated into the July Framework Agreement as negotiating modalities that
would allow countries to exempt certain products from the banded tariff formula, the
United States contends that the scope envisioned by some countries for these
modalities would unacceptably diminish the overall market access gains from the
agreement.24 Also, the United States was under pressure at the summit from the EU
and the G-20 to improve its subsidy reduction offer, but it is uncertain as to whether
23 For further information, see CRS Report RS21569, Geographical Indications and WTO
Negotiations, by Charles E. Hanrahan.
24 For specifics on these flexibilities, see CRS Report RL33144, p. 3.

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or how the United States might respond to that pressure. The United States has
insisted that it will not improve its offer on domestic subsidy reduction unless the EU
improves considerably its market access offer and the G-20 countries show a
willingness to open their markets not only to agricultural products but to industrial
products and services as well.
Services. Along with agriculture, services were a part of the “built-in agenda”
of the Uruguay Round.25 The General Agreement on Trade In Services (GATS),
which was concluded in that Round, directs Members to “...enter into successive
rounds of negotiations, beginning not later than five years from the date of entry into
force of the WTO Agreement [January 1, 1995]...[to achieve] a progressively higher
level of liberalization.”
Those negotiations began in early 2000. Negotiating guidelines and procedures
were established by March 2001. Under the request-offer approach being used,
countries first request changes in other countries’ practices, other countries then
respond by making offers of changes, and finally the countries negotiate bilaterally
on a final agreement. The Doha Ministerial Declaration recognized the work already
undertaken and reaffirmed the March 2001 guidelines as the basis for continuing the
negotiations. It directed participants to submit initial requests for specific
commitments by June 30, 2002 and initial offers by March 31, 2003.
The services talks are going slowly. By July 2005 the WTO had received 68
initial commitment offers representing 92 countries (the EU represents 25 members)
and 24 offers remained outstanding from non-LDC members (55 if LDCs are
included). Only 28 revised offers had been tendered by November 2005, although the
July Framework stipulated a March 31, 2005 deadline. All members were to have
submitted their initial offers by March 31, 2003. Many have also decried the poor
quality of offers, many of which only bind existing practices, rather than offer new
concessions and excluded some sectors entirely.
At Hong Kong, members committed to submit a second round of revised offers
by July 31, 2006, and to submit a final schedule of commitments by October 31,
2006. In order to expedite the negotiating process, members also agreed to employ
plurilateral requests to other members covering specific sectors and modes of supply
to be completed by February 28, 2006. In response to this deadline, twenty-three
plurilateral requests concerning 16 sectors and 3 modes of supply were submitted.
One area of controversy is so-called “Mode IV” services. Mode IV relates to
the temporary movement of business persons to another country in order to perform
a service on-site. Developing countries want easier movement of their nationals
under Mode IV. They claim that the services negotiations have centered on the
establishment of businesses in other countries, which has been a focus of developed
countries, while there has been no negotiation on Mode IV, which would help them.
Developed countries, especially the United States, have opposed discussions on
Mode IV services trade. Congress might oppose easier entry for business persons,
25 See CRS Report RL33085, Trade in Services: The Doha Development Agenda
Negotiations and U.S. Goals, by William H. Cooper.

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based on Senate approval of a resolution (S.Res. 211) in the 108th Congress
expressing the sense of the Senate that future U.S. trade agreements and
implementing legislation should not contain immigration-related provisions. Mode
IV services will be a difficult issue to resolve. Fifteen countries have joined a
plurilateral request for Mode IV services liberalization to the United States and other
developed countries.
Non-Agricultural Market Access (NAMA). In the Doha Declaration, trade
ministers agreed to negotiations to reduce or eliminate tariffs on industrial or primary
products, with a focus on “tariff peaks, high tariffs, and tariff escalation.” Tariff
peaks are considered to be tariff rates of above 15% and often protect sensitive
products from competition. Tariff escalation is the practice of increasing tariffs as
value is added to a commodity. The talks are also seeking to reduce the incidence of
non-tariff barriers, which include import licensing, quotas and other quantitative
import restrictions, conformity assessment procedures, and technical barriers to trade.
The sectoral elimination of tariffs for specific groups has also be forwarded as an area
of negotiation. Negotiators accepted the concept of less than full reciprocity in
reductions for developing and least-developed countries.
Doha negotiators agreed to reach modalities for the reduction or elimination of
tariffs and non-tariff barriers by the end of May 2003. This deadline was, as were
subsequent ones, not met. NAMA issues were not discussed at Cancun, and there
was no agreement on the draft texts proposed for consideration at that Ministerial.
The July 2004 Framework Agreement adopted the use of a non-linear tariff reduction
formula applied on a line-by-line basis, (i.e. one that it can work towards evening out
or harmonizing tariff levels), and the Hong Kong Ministerial did agreed to use a
Swiss formula. The Ministerial did not agree on the specific equation or coefficients,
but negotiators did agreed on an April 30, 2006 deadline to resolve these modalities.
The Framework Agreement also agreed that tariff reductions would be calculated
from bound, rather than the applied, tariff rates.
Negotiators are also grappling with the concept of “flexibility,” or the nature and
extent of developing country-special and differential treatment, as it relates to
formula cuts. In addition to longer implementation times, the July Framework
Agreement allows for less than formula cuts for a certain (undetermined) amount
tariff lines, keeping a percentage of tariff lines unbound, or not applying formula
cuts for an (undetermined) percentage of tariff lines (the so-called Paragraph 8
flexibilities). At Hong Kong, negotiators did agree to provide tariff-free and quota-
free access for LCDs by 2008. However, this agreement provides the caveat that 3%
of tariff lines can be exempted as sensitive products such as textiles, apparel, and
footwear.
Both the United States and the EU have favored using sectoral tariff elimination
as an alterative modality for the NAMA negotiations, but negotiations have stalled
on which products to cover and the extent of participation (i.e. whether developing
countries or LDCs would be able exempt themselves from commitments). As noted
above, the industrial market access talks also encompass negotiations on the
reduction of non-tariff barriers (NTBs). No agreements have been reached on what
modalities are to be used in negotiating reductions of NTBs.

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The April 30 deadline, like so many before, was breached without agreement
on the NAMA formula or on other issues. The end of June Geneva summit also
failed to reach agreement on NAMA modalities. The United States, Canada, and
Switzerland proposed a 5 percentage point differential between the Swiss formula
coefficients of developed and developing countries, which is consistent with the EU
proposal of a 10 coefficient for developed countries and a 15 coefficient for
developing countries. A group of developing countries known as the NAMA-11
proposed that the differential should be at least 25 percentage points.26 The NAMA
talks are being linked more and more to the agricultural talks, with some movement
on one becoming increasingly necessary on the other. Developing countries have
been unwilling to commit on NAMA without agreement on agriculture, but now
some developed countries are tying further agriculture progress to NAMA.
Development Issues
Three development issues are most noteworthy. One pertains to compulsory
licensing of medicines and patent protection. A second deals with a review of
provisions giving special and differential treatment to developing countries. A third
addresses problems that developing countries were having in implementing current
trade obligations.
Access to Patented Medicines. A major topic at the Doha Ministerial
regarded the WTO Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS).27 The issue involves the balance of interests between the
pharmaceutical companies in developed countries that held patents on medicines and
the public health needs in developing countries. Before the Doha meeting, the United
States claimed that the current language in TRIPS was flexible enough to address
health emergencies, but other countries insisted on new language.
Section 6 of the Doha document Declaration on the TRIPS Agreement and
Public Health (TRIPS Declaration), recognized that “...WTO Members with
insufficient or no manufacturing capabilities in the pharmaceutical sector could face
difficulties in making effective use of compulsory licensing under the TRIPS
Agreement.” In Section 6, the trade ministers instructed the WTO TRIPS Council
“...to find an expeditious solution to this problem and to report to the [WTO] General
Council before the end of 2002.”
On December 16, 2002, then-TRIPS Council chairman Eduardo Perez Motta
produced a draft that would allow countries that lack the manufacturing capacity to
produce medicines to issue compulsory licenses for imports of the medicines. All
WTO members approved of the chairman’s draft except the United States. The U.S.
position, representing the interests of the pharmaceutical industry, was that the
chairman’s draft did not include enough protections against possible misuse of
compulsory licenses. The United States sought a limit on the diseases that would be
covered by the chairman’s text, but other countries refused this initiative. The United
26 Bridges Weekly Trade News Digest, Special Update, July 3, 2006.
27 See CRS Report RS21609, The WTO, Intellectual Property Rights, and the Access to
Medicines Controversy, by Ian F. Fergusson.

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States decided to oppose the chairman’s draft and unilaterally promised not to bring
a dispute against any least-developed country that issued compulsory licenses for
certain medicines.
One concern of the pharmaceutical industry was that the medicines sent to the
developing country might be diverted instead to another country. To address this
problem, it was suggested that the medicines be marked so that they can be tracked.
Another concern was that more advanced developing countries might use the generic
medicines to develop their own industries. For this problem, it was proposed that
countries voluntarily “opt-out,” or promise not to use compulsory licensing.
On August 30, 2003, WTO members reached agreement on the TRIPS and
medicines issue. Voting in the General Council, member governments approved a
decision that offered an interim waiver under the TRIPS Agreement allowing a
member country to export pharmaceutical products made under compulsory licences
to least-developed and certain other members. An accompanying statement
represented several “key shared understandings” of Members regarding the Decision,
including the recognition that the decision should be used to protect public health and
not be an instrument to pursue industrial or commercial policy objectives, and the
recognition that products should not be diverted from the intended markets. The
statement listed a number of countries that either agreed to opt out of using the
system as importers or agreed that they would only use the system in national
emergencies or extreme urgency. At the Hong Kong Ministerial, members agreed to
a permanent amendment to incorporate the 2003 Decision, which will become
effective when it is ratified by two-thirds of the member states.
Special and Differential (S&D) Treatment. In the Doha Ministerial
Declaration, the trade ministers reaffirmed special and differential (S&D) treatment
for developing countries and agreed that all S&D treatment provisions “...be
reviewed with a view to strengthening them and making them more precise, effective
and operational.” In the Declaration, the trade ministers endorsed the work program
on S&D treatment presented in another Doha document, Decision on
Implementation-Related Issues and Concerns (Implementation Decision). That
document called on the WTO Committee on Trade and Development to identify the
S&D treatment provisions that are already mandatory and those that are non-binding,
and to consider the implications of “...converting [S&D] treatment measures into
mandatory provisions, to identify those that Members consider should be made
mandatory, and to report to the General Council with clear recommendations for a
decision by July 2002.” It also called for the Committee on Trade and Development
“to examine additional ways in which S&D treatment provisions can be made more
effective, to consider ways...in which developing countries...may be assisted to make
best use of [S&D] treatment provisions, and to report to the General Council with
clear recommendations for a decision by July 2002.”
The negotiations have been split along a developing-country/developed-country
divide. Developing countries wanted to negotiate on changes to S&D provisions,
keep proposals together in the Committee on Trade and Development, and set shorter
deadlines. Developed countries wanted to study S&D provisions, send some
proposals to negotiating groups, and leave deadlines open. Developing countries
claimed that the developed countries were not negotiating in good faith, while

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developed countries argued that the developing countries were unreasonable in their
proposals.
By the Cancun Ministerial, developing countries had offered about 85 proposals
on S&D provisions, but developed countries had agreed to only a handful of these.
At Hong Kong, members agreed to five S&D provisions for LDCs, including the
tariff-free and quota-free access for LDC goods described in the NAMA section.
Implementation Issues. Developing countries claim that they have had
problems with the implementation of the agreements reached in the earlier Uruguay
Round because of limited capacity or lack of technical assistance. They also claim
that they have not realized certain benefits that they expected from the Round, such
as increased access for their textiles and apparel in developed-country markets. They
seek a clarification of language relating to their interests in existing agreements.
Before the Doha Ministerial, WTO Members resolved a small number of these
implementation issues. At the Doha meeting, the Ministerial Declaration directed a
two-path approach for the large number of remaining issues: (a) where a specific
negotiating mandate is provided, the relevant implementation issues will be
addressed under that mandate; and (b) the other outstanding implementation issues
will be addressed as a matter of priority by the relevant WTO bodies. Outstanding
implementation issues are found in the area of market access, investment measures,
safeguards, rules of origin, and subsidies and countervailing measures, among others.
Little progress has been made on implementation issues. The Hong Kong
Ministerial Declaration reiterates previous instructions adopted in August 2004, and
instructs the negotiating bodies and others to “redouble” their efforts to find solutions
to implementation issues. At Hong Kong, a deadline of July 31, 2006, was given for
the General Council to review progress on implementation issues, and take
appropriate action.
Trade Facilitation
The first WTO Ministerial Conference, which was held in Singapore in 1996,
established permanent working groups on four issues: transparency in government
procurement, trade facilitation (customs issues), trade and investment, and trade and
competition. These became known as the Singapore issues. This issues were pushed
at successive Ministerials by the European Union, Japan and Korea, and opposed by
most developing countries. The United States was lukewarm about the inclusion of
these issues, indicating that it could accept some or all of them at various times, but
preferring to focus on market access.
In 2001, the Doha Ministerial Declaration called for further clarification to be
undertaken on the four Singapore issues before the 5th Ministerial in 2003 (at
Cancún), and for negotiations will take place on the basis of a decision to be taken
by explicit consensus [italics added] at the 5th Ministerial. At Cancún, deadlock over
the Singapore issues was a contributing factor in the breakup of that summit. After
further negotiations during 2004, a compromise was reached in the July 2004
Framework Agreement: three of the Singapore issues (government procurement,

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investment, and competition) were dropped and negotiations would begin on trade
facilitation.
Trade facilitation aims to improve the efficiency of international trade by
harmonizing and streamlining customs procedures such as duplicative documentation
requirements, customs processing delays, and nontransparent or unequally enforced
importation rules and requirements. Although negotiations are still in their infancy,
the talks have thus far revolved around the scope and obligations of the new
disciplines. The scope has thus far revolved around proposals dealing with freedom
of transit, fees and formalities, and administrative transparency. Discussions have
also occurred concerning the technical assistance and trade capacity building needed
by developing countries to implement any subsequent agreement. Developed
countries, including the United States and the European Union, favor the negotiation
of a concrete rules-based system with appropriate accountability, while some
developing countries prefer optional guidelines with “policy flexibility.”

Although negotiations have proceeded in a constructive manner, no major
breakthroughs in trade facilitation were announced in Hong Kong and the Ministerial
declaration did not agree on a date for beginning text-based negotiations. The
ministerial served as a review of progress and a discussion of plans for future work.
WTO Rules
Rules Negotiations. The Doha Round negotiations included an objective of
“clarifying and improving disciplines” under the WTO Agreements on Antidumping
(AD) and on Subsidies and Countervailing Measures (ASCM).28 The United States
sought to keep negotiations on trade remedies outside of the Doha Round, but found
many WTO partners insistent on including them for discussion. U.S. negotiators did
manage to insert language asserting that “...basic concepts, principles and
effectiveness of these Agreements and their instruments and objectives” would be
preserved. However, Congressional leaders were highly critical of this concession
by U.S. trade negotiators.29
The Doha Ministerial Declaration also calls for clarifying and improving
disciplines on fisheries subsidies, and both the Ministerial Declaration and the
Implementation Decision have special provisions on trade remedies and developing
countries. In addition to trade remedies, the Declaration calls for clarifying and
improving WTO disciplines and procedures on regional trade agreements.
The Declaration identified two phases for the work on trade remedies: “In the
initial phase of the negotiations, participants will indicate the provisions, including
disciplines on trade distorting practices, that they seek to clarify and improve in the
subsequent phase.” No deadlines were set for these phases. So far, countries are still
essentially in the first phase.
28 See CRS Report RL32810, WTO: Antidumping Issues in the Doha Development Agenda,
by Vivian C. Jones.
29 “Zoellick Stance on Trade Remedy in WTO Provokes Criticism.” Inside U.S. Trade.
November 13, 2001.

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The United States has primarily been on the defensive in the rules talks. Many
countries have attacked the use of antidumping actions by the United States and other
developed nations as disguised protectionism. However, many developing countries
are now using antidumping actions themselves, which may goad some countries to
reexamine the necessity for discipline. Most of the proposals on trade remedies focus
on providing more specificity or restrictions to the AD/ASCM Agreements in terms
of definitions and procedures. Yet, no agreements have been reached, even on what
is to be negotiated.
The leading proponents of such changes have been a group of 15 developed and
developing countries known as the “Friends of Antidumping” (Brazil, Chile,
Colombia, Costa Rica, Hong Kong, Israel, Japan, Mexico, Norway, Singapore, South
Korea, Switzerland, Taiwan, Thailand, and Turkey; though not all countries sign onto
every proposal). They have made numerous proposals, and in essence their proposals
would reduce the incidence and amount of duties. Many of their proposals would
require a change in U.S. laws. Although the EU is a major user of trade remedies and
not a member of the “Friends” group, it has agreed with some of the group’s
proposals.
The United States itself has sought some changes in the WTO rules, submitting
papers on antidumping proposals on issues such as transparency, foreign practices to
circumvent a duty order, and the WTO standard used by dispute panels in reviewing
national applications of trade remedy laws. The United States also has submitted
proposals on subsidies, such as expanding a list of prohibited subsidies and imposing
disciplines on support to sales of natural resources. The United States and the EU
support limits on fisheries subsidies, but Japan strongly opposes such limits.
Dispute Settlement. At the end of the Uruguay Round, trade ministers called
for a full review of WTO dispute settlement rules and procedures within four years
after entry into force of the agreement establishing the WTO. That deadline, January
1, 1999, passed without a review being completed.30
At Doha, trade ministers continued to call for a review of dispute rules. The
Ministerial Declaration directed that negotiations be held on improvements and
clarifications of the Dispute Settlement Understanding (DSU). They stated that the
negotiations should be based on work done so far and on any additional proposals.
They set a deadline of May 2003. They directed that these DSU negotiations would
be separate from the rest of the negotiations and would not be a part of the single
undertaking.
Members are examining nearly all of the 27 Articles in the DSU. In early April
2003, the chair of the working group circulated a framework document that included
over 50 proposals. There was some dissatisfaction that the document needed more
focus. On May 16, 2003, the chair issued another text that was accepted by most
countries. The United States and the EU favored additional reforms that were not a
30 See CRS Report RS20088, Dispute Settlement in the World Trade Organization: An
Overview, by Jeanne Grimmett.

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part of the text. For example, the United States has called for open public access to
proceedings, and the EU had sought a roster of permanent dispute panelists.
Environment. The Ministerial Declaration included several provisions on
trade and environment. Among the provisions, the trade ministers agreed to the
following: (1) negotiations on the relationship between existing WTO rules and trade
obligations in multilateral environmental agreements (MEAs); (2) procedures for the
exchange of information between MEA Secretariats and WTO committees, and the
criteria for granting observer status; and (3) the reduction or elimination of trade
barriers to environmental goods and services. It was agreed at Doha that the WTO’s
Committee on Trade and Environment would report on these and other issues to the
fifth Ministerial (Cancun) and to make recommendations where appropriate.
The EU has said that its priorities include observer status for MEAs. The
United States is pushing for rules on fisheries subsidies, as mentioned above, and
tariff reductions on environmental products.
Congressional Role
Although the executive branch conducts trade negotiations in the WTO, the
Congress has constitutional responsibility for regulation of U.S. foreign commerce.
As part of this constitutional role, Congress conducts oversight of the negotiations.
Oversight might be in the forms of hearings or meetings with executive branch
officials. Members often communicate their positions through public statements and
letters. They may also act as advisors at trade negotiations.
Under legislation on trade promotion authority that was passed in 2002 (P.L.
107-210), Congress prescribed trade objectives for U.S. negotiators in the Doha
Development Agenda and in other trade negotiations. These objectives give
direction to negotiators on U.S. priorities. In the 2002 Act, Congress also outlined
requirements that the executive branch must meet, as a condition for expedited
procedures for legislation to implement trade agreements, including those reached in
the Doha Development Agenda. Among the conditions for expedited legislative
procedures, the executive branch must consult with Congress at various stages of the
negotiations, notify Congress before taking specified actions, and submit reports as
outlined. Expedited procedures would apply to any trade agreement entered into
(signed) before July 1, 2005. A two-year extension to that deadline was written in
to the 2002 Act if the President requested the extension and Congress did not
disapprove it. The President requested the extension on March 30, 2005, and
Congress took no action to disapprove it by the June 30, 2005 deadline. Thus any
trade agreement will be considered under TPA until June 30, 2007, which has
become a de facto deadline for the Doha Round.
If agreements are reached at the end of the negotiations, Congress will face a
decision on whether to approve statutory changes to implement those agreements.
If all requirements are met by the executive branch, and unless Congress decides
otherwise, the trade agreements will be considered under trade promotion procedures
(fast-track procedures). Under those procedures, an implementing bill is

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automatically introduced, considered in committee and on the floor under specified
deadlines, and not amendable. As the negotiations progress, Congress will also likely
hold oversight hearings to gauge the progress in the negotiations.

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