Updated February 9, 2021
The World Trade Organization
Overview
The Doha Round
The World Trade Organization (WTO) was established on
The Doha Development Agenda, the latest “round” of
January 1, 1995, following the ratification of the Uruguay
multilateral trade negotiations, was launched in 2001 but
Round Agreements, and today includes 164 members. It
ended in stalemate, with no clear path forward. The WTO’s
succeeded the 1947 General Agreement on Tariffs and
large and diverse membership and the “single undertaking”
Trade (GATT), created as part of the post-WWII effort to
approach made consensus on the broad Doha mandate
build a stable, open international trading system. The WTO
difficult. The negotiations were characterized by persistent
has three basic functions: (1) administering existing
differences among the United States, European Union (EU),
agreements; (2) serving as a negotiating forum for new
and developing countries on major issues, such as
trade liberalization and rules; and (3) providing a
agriculture, industrial tariffs and nontariff barriers, services,
mechanism to settle disputes. The multiple WTO
and trade remedies. Developing countries sought the
agreements cover trade in goods, services, and agriculture;
reduction of agriculture tariffs and subsidies by developed
remove tariff and nontariff barriers; and establish rules on
countries, nonreciprocal market access for manufacturing
government practices that directly relate to trade—for
sectors, and protection for services industries. In contrast,
example, trade remedies, technical barriers to trade (TBT),
developed countries sought reciprocal trade liberalization,
intellectual property rights (IPR), and government
especially commercially meaningful access to advanced
procurement (Table 1). The agreements are based on the
developing countries’ industrial and services sectors, while
principles of nondiscrimination among countries—most-
retaining some protection for their own agricultural sectors.
favored nation (MFN) treatment, national treatment, fair
competition, and transparency of trade rules and
Agriculture, where multilateral solutions arguably remain
regulations. Some exceptions, such as preferential treatment
ideal, remains among the thorniest issues on the agenda left
for developing countries and regional and bilateral trade
over from Doha. In 2015, members agreed to limited deals,
agreements outside the WTO, are allowed.
including on phasing out export subsidies, minimizing
impacts of food aid on local markets, and several measures
The GATT/WTO system over time has led to a significant
for least developed countries.
reduction of trade barriers, supported trade expansion and
economic growth, and helped manage trade frictions. At the
The lasting legacy of Doha may be the successful
same time, the WTO faces serious challenges. One
negotiation of the Trade Facilitation Agreement (TFA),
fundamental concern is that the WTO could lose relevance
which entered into force in early 2017 and aims to remove
due to its inability to adapt to the modern global economy
customs obstacles and inefficiencies at the border.
by its members’ failure to negotiate a successful round of
Table 1. GATT/WTO Rounds
major trade liberalization since 1994. Several members
have proposed reforms to the institution in attempts to
Year Name Subjects covered
Countries
safeguard and improve it.
1947- Geneva, 5 rounds of tariff reductions
23 (1947);
In 2021, new leaders are to confront these challenges. The
1961 Annecy,
26 (1961)
selection process for a new WTO Director-General (DG)
Torquay,
entered its final stages in late 2020, with Nigeria’s Ngozi
Geneva
II, Dil on
Okonjo-Iweala emerging as the candidate with the majority
of member’s support. While the Trump Administration
1964- Kennedy Tariffs and antidumping measures
62
refused to back her candidacy, in early February 2021, the
1967
Biden Administration announced its support, removing a
1973- Tokyo
Tariffs, antidumping, subsidies, TBT,
102
major obstacle to her appointment.
1979
government procurement
Congress has recognized the WTO as the “foundation of the
1986- Uruguay Tariffs, nontariff measures, rules,
123
global trading system,” and plays a legislative and oversight
1994
services, IPR, dispute settlement,
role over WTO agreements. Some Members have expressed
textiles, agriculture, WTO institution
support for WTO reforms and U.S. leadership; others
2001- Doha
Tariffs, nontariff measures, agriculture, 142 (2001);
introduced joint resolutions in 2020 to withdraw
2015*
services, trade facilitation, trade
164
congressional approval of WTO agreements. As debates
remedies, and development
(current)
over the WTO’s future intensify, several issues may be of
Source: WTO.
interest to Congress, including WTO agreements’ effects on
Notes: * In 2015, WTO members failed to reaffirm Doha’s mandates
the U.S. economy, outcomes of reform and negotiation
and many observers considered the round to be effectively over.
efforts, and the value of U.S. membership and leadership.
At the most recent WTO Ministerial Conference in 2017,
no major deliverables were announced, leaving the stakes
high for the next meeting. In 2020, members were forced to
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The World Trade Organization
postpone the 12th Ministerial (MC12) to 2021 due to the
work to minimize disruptions to trade, and encouraged
Coronavirus Disease 2019 (COVID-19) pandemic. MC12
WTO members to notify new trade measures. At the same
was widely anticipated as an action-forcing event for the
time, many countries have reaffirmed the trading system,
WTO. Members have committed to make significant
lifted temporary restrictions, and view the WTO as playing
progress on ongoing talks, including on fisheries subsidies,
an important role in tackling trade policy challenges that
and advancing e-commerce and other areas.
have emerged. Some members have advocated for a
Plurilateral Initiatives
plurilateral agreement on medical goods. Delay in
production and distribution of COVID-19 vaccines has led
While multilateral efforts have progressed slowly, several
to calls by some developing countries to waive IPR on
plurilateral talks are underway within and around the WTO.
vaccines or to seek to issue compulsory licenses for them.
Past agreements with U.S. membership cover key sectors
WTO Reform. The Trump Administration indicated
and are viewed as successful models for other efforts.
interest in reform of the WTO, including in: (1) addressing
Government Procurement Agreement (GPA). The
“unanticipated challenges of non-market economies”; (2)
GPA provides market access for various nondefense
ensuring respect in DS rulings for members’ “sovereign
government projects to its signatories. In force since
policy choices”; (3) compelling members to adhere to WTO
April 2014, the revised GPA expanded market access
notification obligations; and (4) reassessing “developing
and covered entities, and currently has 48 members.
country status” that grants some
members flexibilities in
Information Technology Agreement (ITA). A subset
WTO commitments. Some U.S. frustrations are not new
of members agreed in 2015 to expand product coverage
and are shared by other WTO members and past
for tariff-free treatment in the 1996 ITA. The expansion
Administrations, but approaches to solutions differ. Several
is to eliminate tariffs over seven years on 201 additional
members have submitted proposals now under debate.
goods, applied on a MFN basis to all WTO members.
Dispute Settlement. To supporters, the DS system is
An ongoing plurilateral initiative of U.S. interest is the e-
considered a WTO success. The United States has been an
commerce negotiations, launched in 2019, including over
active user of the system (Table 2). However, some are
80 members. U.S. priorities include disciplines on cross-
concerned about the DS system’s continued legitimacy
border data flows and bans on data localization and forced
absent reforms and if no new WTO agreements are reached,
technology transfer. Other plurilaterals are currently stalled,
thus preventing new trade issues from being adjudicated.
related to services and environmental goods. Some raise
Table 2. WTO Dispute Settlement
concerns that plurilateral approaches, while useful, could
Total cases filed—all parties
600
potentially marginalize non-participating countries or allow
for free riders who benefit from others’ commitments.
U.S. as Complainant
124
Ongoing Challenges
U.S. as Respondent
156
U.S. as Third Party
162
Since the Doha Round, intractable issues and active debate
have characterized the WTO. Many members and observers
Source: WTO, as of February 2021.
concur that the WTO must adopt reforms to remain an
The Trump Administration voiced major concerns with DS,
effective institution, in terms of its negotiating, monitoring,
including what it considers “judicial overreach” in panel
and dispute settlement (DS) functions. Some members have
decisions, which, in effect, may create new obligations not
also called on the WTO to address the trade policy
specifically negotiated, especially in the area of trade
challenges that emerged from COVID-19.
remedies. To spur reform, the Administration blocked
Negotiating Agenda. Some issues on the Doha agenda,
appointment of new jurists to the seven-member Appellate
ideally negotiated multilaterally, remain contentious and
Body (AB), which reviews appeals of dispute cases. As a
may founder for want of a negotiating venue: for example,
result, the AB ceased to function in December 2019. While
attempts to discipline agricultural subsidies or resolve
the EU and others have proposed reforms to address U.S.
concerns on public stockholding programs. In addition,
concerns, thus far, they have been rejected by the United
since 1995, new trade barriers, technology advances, and
States. A key question is the impact of the AB’s absence on
other issues have emerged. Developed countries have
the effective enforcement of WTO rules moving forward.
sought to incorporate issues on the agenda, such as digital
Unilateral Enforcement Actions. Many observers are also
trade and state-owned enterprises that pose challenges to
concerned that recent U.S. tariffs and counter-tariffs by
the trading system. Some, including the United States, point
other countries, as well as escalating trade disputes are
to plurilaterals as the way forward to address new issues.
further straining the WTO. Several related WTO disputes
are pending DS decisions. In one involving U.S. tariffs on
More broadly, U.S. trade officials contend that WTO rules
China, a panel ruled against the United States. Observers
were not designed to effectively handle the challenges of
express concern that unilateral tariffs, some pursued in the
emerging markets like China that are not fully-fledged
name of national or economic security, may undermine the
market economies. To this end, U.S.-EU-Japan discussions
credibility of the WTO and its key rules and principles, and
aim to strengthen rules on subsidies and issues raised by
lead to new trade restrictions. While WTO agreements offer
non-market economies where the state plays a major role.
ample flexibility for temporary measures justified by
COVID-19. WTO members face challenges in responding
national security or health crises, the spread of export
to the global trade and economic slowdown from COVID-
restrictions following COVID-19 amplified such concerns.
19. The pandemic has tested cooperation and coordination
in global trade policies, disrupted global supply chains, and
Cathleen D. Cimino-Isaacs, Analyst in International Trade
resulted in trade protectionism. The WTO has committed to
and Finance
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The World Trade Organization
Ian F. Fergusson, Specialist in International Trade and
Rachel F. Fefer, Analyst in International Trade and
Finance
Finance
IF10002
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