Updated January 21, 2022
The World Trade Organization
Overview
developed countries, nonreciprocal market access for
The World Trade Organization (WTO) was established on
manufacturing sectors, and protection for services
January 1, 1995, following the ratification of the Uruguay
industries. In contrast, developed countries sought
Round Agreements, and today includes 164 members. It
reciprocal trade liberalization, especially commercially
succeeded the 1947 General Agreement on Tariffs and
meaningful access to more advanced developing countries’
Trade (GATT), created as part of the post-WWII effort to
industrial and services sectors, while retaining some
build a stable, open international trading system. The WTO
protection for their own agricultural sectors.
has three basic functions: (1) administering existing
Agriculture, where multilateral solutions arguably remain
agreements; (2) serving as a negotiating forum for new
ideal, continues to be among the thorniest issues on the
trade liberalization and rules; and (3) providing a
agenda left over from Doha. In 2015, members agreed to
mechanism to settle disputes. The multiple WTO
limited deals, including on phasing out export subsidies,
agreements cover trade in goods, services, and agriculture;
minimizing impacts of food aid on local markets, and
remove tariff and nontariff barriers; and establish rules on
several measures for least developed countries.
government practices that directly relate to trade—for
The lasting legacy of Doha may be the successful
example, trade remedies, technical barriers to trade (TBT),
negotiation of the Trade Facilitation Agreement (TFA),
intellectual property rights (IPR), and government
which entered into force in early 2017 and aims to remove
procurement. The agreements are based on the principles of
customs obstacles and inefficiencies at the border.
nondiscrimination among countries—most-favored nation
(MFN) treatment, national treatment, fair competition, and
Table 1. GATT/WTO Rounds
transparency of trade rules and regulations. Some
Year Name
Subjects covered
Countries
exceptions, such as preferential treatment for developing
countries and regional and bilateral trade agreements
1947- Geneva,
5 rounds of tariff reductions
23 (1947);
outside the WTO, are allowed.
1961 Annecy,
26 (1961)
Torquay,
The GATT/WTO system over time has led to a significant
Geneva II,
reduction of trade barriers, supported trade expansion and
Dil on
economic growth, and helped manage trade frictions. At the
1964- Kennedy
Tariffs and antidumping measures
62
same time, the WTO faces serious challenges. One
1967
fundamental concern is that the WTO could lose relevance
due to its inability to adapt to the modern global economy
1973- Tokyo
Tariffs, antidumping, subsidies, TBT,
102
by its members’ failure to negotiate a successful round of
1979
government procurement
major trade liberalization since 1994. Several members
1986- Uruguay
Tariffs, nontariff measures, rules,
123
have proposed reforms to the institution in attempts to
1994
services, IPR, dispute settlement,
safeguard and improve it.
textiles, agriculture, WTO institution
Congress has recognized the WTO as the “foundation of the
2001- Doha
Tariffs, nontariff measures, agriculture, 142 (2001);
2015*
services, trade facilitation, trade
164
global trading system,” and plays a legislative and oversight
remedies, and development
(current)
role over WTO agreements. Some Members have expressed
support for WTO reforms and U.S. leadership; others
Source: WTO.
introduced joint resolutions in 2020 to withdraw
Notes: * In 2015, WTO members failed to reaffirm Doha’s mandates
and many observers considered the round to be effectively over.
congressional approval of WTO agreements. As debates
over the WTO’s future intensify, several issues may be of
Ministerial Conferences (MC) are generally seen as action-
interest to Congress, including WTO agreements’ effects on
forcing events for the WTO. At the last MC11 in 2017, no
the U.S. economy, outcomes of reform and negotiation
major deliverables were announced, leaving the stakes high
efforts, and the value of U.S. membership and leadership.
for MC12. Due to the Coronavirus Disease 2019 (COVID-
The Doha Round
19) pandemic, the WTO postponed MC12, now scheduled
The Doha Development Agenda, the latest “round” of
for March 2022. In advance, some members want a virtual
multilateral trade negotiations, was launched in 2001 but
ministerial meeting to clarify political guidance on
ended in stalemate, with no clear path forward (Table 1).
particular issues. Members have committed to make
The WTO’s large and diverse membership and the “single
significant progress on certain topics, including on
undertaking” approach made consensus on the broad Doha
multilateral fisheries subsidies negotiations, health and
mandate difficult. The negotiations were characterized by
trade, and digital trade.
persistent differences among the United States, European
Plurilateral Initiatives
Union (EU), and developing countries on major issues, such
While multilateral efforts have progressed slowly, several
as agriculture, industrial tariffs and nontariff barriers,
plurilateral talks are underway within and around the WTO.
services, and trade remedies. Developing countries sought
the reduction of agriculture tariffs and subsidies by
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The World Trade Organization
Past agreements with U.S. membership cover key sectors
an important role in tackling trade policy challenges that
and are viewed as potential models for other efforts.
have emerged. Some members have advocated for a
Government Procurement Agreement (GPA). The
plurilateral agreement on medical goods. Delay in
GPA provides market access for various nondefense
production and distribution of COVID-19 vaccines has led
government projects to its signatories. In force since
to calls by some developing countries to waive IPR on
April 2014, the revised GPA expanded market access
vaccines or to seek to issue compulsory licenses for them.
and covered entities, and currently has 48 parties.
WTO Reform. The Biden Administration has indicated
Information Technology Agreement (ITA). A subset
interest in WTO reform efforts so that the institution
of members agreed in 2015 to expand product coverage
“empowers workers, protects the environment, and
for tariff-free treatment in the 1996 ITA. The expansion
promotes equitable development.” The Administration
eliminates tariffs on 201 additional technology goods,
points to the need to update all three WTO pillars to
applied on a MFN basis to all WTO members.
increase flexibility and strengthen transparency to address
global challenges. Some U.S. frustrations are not new and
Joint Initiative on Services Domestic Regulation.
are shared by other WTO members and past U.S.
Concluded in December 2021, 67 members agreed to
Administrations, but approaches to solutions differ. Several
facilitate services trade by improving transparency on
members have submitted proposals now under debate.
domestic processes and addressing regulatory barriers.
Other plurilateral negotiations of U.S. interest include the
Dispute Settlement. To supporters, the DS system is
joint initiative on e-commerce with over 80 members,
considered a WTO success. The United States has been an
aiming to conclude an agreement in 2022. U.S. priorities
active user of the system (Table 2). However, some are
concerned about the DS system’s continued legitimacy
include disciplines on cross-border data flows and bans on
data localization and forced technology transfer. Other
absent reforms and if no new WTO agreements are reached,
ongoing joint initiatives address investment facilitation;
thus preventing new trade issues from being adjudicated.
micro, small and medium-sized enterprises; and
Table 2. WTO Dispute Settlement
environmental issues. Some members raise concerns that
Total cases filed—all parties
607
plurilateral approaches, while useful, could potentially
U.S. as Complainant
124
marginalize non-participating countries or allow for free
riders who benefit from others’ commitments.
U.S. as Respondent
156
Ongoing Challenges
U.S. as Third Party
171
Since the Doha Round, intractable issues and active debate
Source: WTO, as of January 2022.
have characterized the WTO. Many members and observers
The Trump and Biden Administrations each voiced major
concur that the WTO must adopt reforms to remain an
concerns with DS, including what they consider “judicial
effective institution, in terms of its negotiating, monitoring,
overreach” in panel decisions, which, in effect, may create
and dispute settlement (DS) functions. Some members have
new obligations not specifically negotiated, especially in
also called on the WTO to address the trade policy
the area of trade remedies. To spur reform, the Trump
challenges that emerged from the COVID-19 pandemic.
Administration blocked appointment of new jurists to the
Negotiating Agenda. Some issues on the Doha agenda,
seven-member Appellate Body (AB), which reviews
ideally negotiated multilaterally, remain contentious and
appeals of dispute cases, a practice the Biden
may founder for want of a negotiating venue: for example,
Administration has continued. As a result, the AB ceased to
attempts to discipline agricultural subsidies or resolve
function in December 2019. While the EU and others have
concerns on public stockholding programs. In addition,
proposed reforms to address U.S. concerns, thus far, they
since 1995, new trade barriers, technology advances, and
have been rejected by the United States. In 2020, over 20
other issues have emerged. Developed countries have
members led by the EU put into effect an ad hoc arbitration
sought to incorporate issues on the agenda, such as digital
arrangement to hear appeals on cases amongst themselves.
trade and state-owned enterprises that pose challenges to
Unilateral Enforcement Actions. Many observers are
the trading system. Some, including the United States, point
concerned that recent U.S. tariffs and counter-tariffs by
to plurilaterals as the way forward to address new issues.
other countries, as well as escalating trade disputes, are
More broadly, U.S. trade officials contend that WTO rules
further straining the WTO. Several related WTO disputes
were not designed to effectively handle the challenges of
are pending DS decisions. In one involving U.S. tariffs on
emerging markets like China that are not fully-fledged
China, a panel ruled against the United States. Some
market economies. To this end, U.S.-EU-Japan discussions
observers express concern that unilateral tariffs, some
aim to strengthen rules on issues raised by non-market
pursued in the name of national or economic security, may
economies where the state plays a major role.
undermine the credibility of the WTO and its key rules and
principles, and lead to new trade restrictions. While WTO
COVID-19. WTO members face challenges in responding
agreements offer flexibility for temporary measures
to the global trade and economic slowdown from COVID-
justified by national security or health crises, the spread of
19. The pandemic has tested cooperation and coordination
export restrictions following COVID-19 amplified such
in global trade policies, disrupted global supply chains, and
concerns.
resulted in trade protectionism. The WTO has committed to
work to minimize disruptions to trade, and encouraged
Cathleen D. Cimino-Isaacs, Analyst in International Trade
WTO members to notify new trade measures. At the same
and Finance
time, many countries have reaffirmed the trading system,
lifted temporary restrictions, and view the WTO as playing
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The World Trade Organization
IF10002
Rachel F. Fefer, Analyst in International Trade and
Finance
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https://crsreports.congress.gov | IF10002 · VERSION 26 · UPDATED