November 13, 2014
The World Trade Organization at 20
Overview
Trade Facilitation Agreement (TFA)
The World Trade Organization (WTO) was established on
January 1, 1995, following the ratification of the Uruguay
One of the new commitments, the TFA, aims to remove
Round Agreements (URA). It succeeded the General
customs obstacles at the border. Its provisions:
Agreement on Tariffs and Trade (GATT), which was
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Establish “single window” procedures for accepting
created in 1947 as a part of the post-WWII effort to build a
trade documentation;
stable, open international economic framework. The WTO
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undertakes three basic functions: (1) administers existing
Require expedited release of goods into air cargo
facilities;
agreements; (2) serves as a negotiating forum for new trade
liberalization; and (3) provides a mechanism to settle trade
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Institute trusted trader programs for screened operators;
disputes among the parties.
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Provide for pre-clearance customs procedures and post-
WTO agreements cover goods, services and agricultural
clearance audit procedures;
trade, remove tariff and nontariff barriers, and establish
disciplines on government practices that directly relate to
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Establish electronic payment for customs duties and
trade—for example, trade remedies, technical barriers to
advanced rulings for tariff classifications; and
trade, customs valuation, intellectual property rights, and
government procurement. The WTO agreements are based
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Mandate binding commitments for countries
on the principles of nondiscrimination, national treatment
implementing reforms and countries providing trade
among countries, and transparency of trade rules and
capacity building.
regulations. Some exceptions, however, such as preferential
treatment for developing countries and regional and
Countries are to decide whether each commitment is to be
bilateral free trade agreements (RTAs), are allowed.
implemented upon the agreement’s entry into force; within
The Doha Round
a set time period after the entry into force; or implemented
subject to the provision of technical assistance by
developed countries and, where possible, advanced
The Doha Development Agenda “round” of multilateral
developing countries. Members were required to begin the
trade negotiations was launched in November 2001. The
ratification process by notifiying the WTO by July 31 of the
negotiations have been characterized by persistent
trade facilitation commitments they plan to implement upon
differences among the United States, the European Union
entry into force, with other commitments to follow.
(EU), and developing countries on major issues, such as
However, the future of the agreement was thrown into
agriculture, industrial tariffs and nontariff barriers, services,
doubt when India blocked this process from beginning due
and trade remedies. For example, developing countries
to its desire to protect its food security subsidy programs
(including emerging economic powerhouses such as China,
from WTO scrutiny. Subsequently, in November 2014, the
Brazil, and India) have sought the reduction of agriculture
United States and India negotiated a compromise creating a
tariffs and subsidies among developed countries,
“peace clause” to protect these programs from challenge
nonreciprocal market access for manufacturing sectors, and
pending negotiations on their future while allowing the
protection for their services industries. In contrast, the
overall agreement to be implemented.
United States, the EU, and other developed countries have
sought commercially meaningful access to developing
countries’ industrial and services sectors while attempting
"We have put the world back in the World Trade
to retain some measure of protection for their agricultural
Organization." Roberto Azevêdo, WTO Director
sectors. The growing clout of developing countries—which
General, December 7, 2013.
played a peripheral role in the early days of the GATT—as
well as the increasing complexity of the negotiations, have
Agriculture and Development
contributed to the stalemate.
The Bali Ministerial
The agriculture and developmental aspects of the Bali
agreements contain more hortatory commitments. These
The Bali package, an agreement reached at the WTO
include a temporary peace clause for a developing country’s
Ministerial in December 2013, consists of new
purchases of commodities for food-security stockholding
commitments on trade facilitation, agriculture, and
programs—which, to some, represents a backtracking from
development that were agreed by the Members.
previous Uruguay Round commitments; a reaffirmation to
eliminate export subsidies as part of the Doha Round;
www.crs.gov | 7-5700
The World Trade Organization at 20
commitment to a successful outcome in cotton negotiations
negotiations for an Environmental Goods Agreement
with least-developed countries (LDCs); a renewed pledge to
(EGA) were announced in January 2014 by 14 countries,
improve duty-free, quota-free (DFQF) market access for
including the United States and China, representing 86%
LDCs; the adoption of simplified rules-of-origin for
of global trade in such goods. The talks are expected to
be handled as an open plurilateral, i.e., the agreed tariff
preference programs; and a services waiver for service
reduction or elimination would be applied on a most-
exports from LDCs.
favored-nation (MFN) basis to all WTO members,
similar to the ITA
Figure 1. GATT/WTO Rounds
Year Name
Subjects
Future Challenges
covered
Countries
Geneva,
The successful conclusion of the Bali Ministerial has
infused new life into the Doha Round agenda. In Bali,
1947- Annecy,
5 Rounds of tariff
23 (1947);
1961 Torquay,
Ministers committed to revise their work program in 2014
Geneva II,
reductions
26 (1961)
to bring the negotiations to a conclusion. However, the
Dillon
WTO continues to face several challenges to its effective
1964-
stewardship of the global trading system.
1967 Kennedy
Tariffs and anti-
dumping measures
62
The Doha Round. After 13 years, many intractable issues
Tariffs, anti-dumping,
remain unresolved. While developing countries remain
1973-
subsidies, technical
focused squarely on agriculture, developed countries have
1979 Tokyo
barriers to trade,
102
government
linked ambition in agriculture to reciprocal ambition in
procurement
industrial tariffs and services liberalization, especially for
Tariffs, nontariff
advanced emerging market economies. These divisions
measures, rules,
have called into question the viability of the “single
1986-
services, intel ectual
undertaking” (one package) type of negotiation and the
1994 Uruguay
property, dispute
123
settlement, textiles,
need for institutional reform.
agriculture, WTO
institution
Dispute Settlement. The dispute settlement (DS) system is
considered a success of the existing WTO system. Some are
Tariffs, nontariff
concerned about the continued legitimacy of the DS system
Doha
measures,
142
if no further WTO agreements are reached.
2001- Development agriculture, services, (2001);
Agenda
trade facilitation,
160
Figure 2. WTO Dispute Settlement
trade remedies, and (current)
development
Total cases filed
479
Source: WTO.
U.S. as Complainant 107
Other Initiatives
U.S. as Respondent
121
U.S. as Third Party
114
Aside from the agreements reached at the Bali Ministerial,
several other initiatives are taking place within and around
Source: WTO.
the WTO. These include a new Government Procurement
Agreement and plurilateral negotiations on:
Regional Trade Agreements. RTAs have proliferated in
recent years. They have the advantage of willing
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participants, common goals, and the potential to negotiate
Expanded product coverage subject to tariff-free
more comprehensive liberalization. They may serve as
treatment in the 1996 Information Technology
Agreement (ITA). The impasse over China’s request for
trailblazers for talks on new issues and potentially could be
extensive exclusion of some goods from tariff cuts, and
linked up with the WTO system in the future. At present,
long phase-out periods for others, was tentatively
though, they call into question the role of the WTO in
resolved by bilateral U.S.-China consultations during the
negotiating new trade liberalization.
2014 Asia-Pacific Economic Conference (APEC)
New Issues. Since the launch of Doha Round 2001, new
summit in Beijing.
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A Trade in Services Agreement (TISA). Launched in
issues, such as digital trade (data flows, cybertheft, and
April 2013 among 23 countries, including the EU, it
trade secrets), state-owned enterprises, new nontariff
seeks to expand commitments to the WTO General
barriers, global supply chains, and the relationship between
Agreement on Trade in Services (GATS). While this
trade and environment rules are new challenges to the
negotiation is not presently being conducted under the
trading system. Some fear the WTO is falling behind, while
auspices of the WTO, it may be incorporated into it in
these issues are being left to plurilateral or regional FTAs.
the future. China has expressed interest in joining the
TISA negotiations, but the United States has sought
Ian F. Fergusson, ifergusson@crs.loc.gov, 7-4997
preconditions on China’s membership to assure an
ambitious outcome.
IF00028
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Tariff elimination for environmental goods.
Contemplated in the Doha Round for several years, new
www.crs.gov | 7-5700
Document Outline