World Trade Organization: Overview and Future Direction

November 29, 2018 – October 18, 2021 R45417

World Trade Organization:
October 18, 2021
Overview and Future Direction
Cathleen D. Cimino-Isaacs,
Historically, U.S. leadership of the global trading system has ensured the United States a seat at
Coordinator
the table to shape the international trade agenda in ways that both advance and defend U.S.
Analyst in International
interests. The evolution of U.S. leadership and the global trading system remain of interest to
Trade and Finance
Congress, which holds constitutional authority over foreign commerce and establishes U.S. trade

negotiating objectives through legislation. Congress has recognized the World Trade
Rachel F. Fefer
Organization (WTO) as the “foundation of the global trading system” within the latest trade
Analyst in International
promotion authority (TPA) and plays a direct legislative and oversight role over WTO
Trade and Finance
agreements. The statutory basis for U.S. WTO membership is the Uruguay Round Agreements

Act (P.L. 103-465), and U.S. priorities and objectives for the General Agreement on Tariffs and
Trade (GATT)/WTO have been reflected in various TPA legislation since 1974. Congress also

has oversight of the U.S. Trade Representative and other agencies that participate in WTO
meetings and enforce WTO commitments.
The WTO is a 164-member international organization that was created to oversee and administer global trade rules, serve as a
forum for trade liberalization negotiations, and resolve disputes. The United States was a major force behind the
establishment of the WTO in 1995, and the rules and agreements resulting from multilateral trad e negotiations since 1947.
The WTO encompassed and succeeded the GATT, established in 1947 among the United States and 22 countries. Through
the GATT and WTO, the United States, with other countries, sought to establish a more open, rules-based trading system in
the postwar era to foster international economic cooperation and prosperity. Today, 98% of global trade is among WTO
members.
The WTO is a consensus and member-driven organization. Its core principles include nondiscrimination (most-favored
nation treatment and national treatment), freer trade, fair competition, transparency, and encouraging development. These are
enshrined in WTO agreements covering goods, agriculture, services, intellectual property rights (IPR), and trade facilitation,
among other issues. Many countries have been motivated to join the WTO not just to expand access to foreign markets, but
also to spur domestic economic reforms, transition to market economies, and promote the rule of law.
The WTO dispute settlement (DS) mechanism provides an enforceable means for members to resolve disputes over WTO
commitments and obligations. The WTO has processed more than 600 disputes, and the United States has been an active user
of the system. Supporters of the multilateral trading system consider the DS mechanism an important success, and an
enforceable DS process was a priority negotiating objective for the United States in establishing the WTO. More recently,
some members, notably the United States, contend it has procedural shortcomings and has exceeded its mandate in deciding
certain cases. The United States has thus vetoed appointments to the WTO’s Appellate Body (AB) and, in December 2019,
the terms of remaining jurists expired, leaving the AB unable to function. This action could render the DS system ineffective,
as appealed disputes remain pending resolution and members struggle to agree to solutions that address U.S. concerns.
More broadly, many observers are concerned that the WTO’s effectiveness has diminished since the collapse of the Doha
Round of multilateral trade negotiations, which began in 2001, and believe the WTO needs to negotiate new rules and adopt
reforms to continue its role as the foundation of the trading system. To date, members have been unable to reach consensus
for a new comprehensive agreement on trade liberalization and rules. While global supply chains and technology have
transformed global trade and investment, WTO rules have not kept up with the pace of change. Many countries have turned
to negotiating free trade agreements outside the WTO and plurilateral agreements involving subsets of WTO members .
The WTO’s 12th Ministerial Conference (MC12) is to be held in November 2021, after being postponed due to the
Coronavirus Disease 2019 (COVID-19) pandemic. The biennial meeting, which usually involves active U.S. participation,
has been widely anticipated as an action-forcing event for the WTO. At the previous ministerial in December 2017, no major
deliverables were announced, leaving the stakes high for MC12. Members have committed to finalize multilateral talks on
fisheries subsidies and make progress on ongoing talks, such as e-commerce, while other areas remain largely stalled.
Another potential deliverable involves a framework to better equip the WTO to support efforts against the COVID-19
pandemic. In August 2021, the WTO reported a sustained rebound in global merchandise trade, after a sharp decline in global
trade growth in 2020 in the aftermath of the pandemic. The WTO has committed to work to minimize disruptions to trade and
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World Trade Organization: Overview and Future Direction

global supply chains, and encouraged WTO members to notify trade restrictions and measures taken in response to COVID-
19, which surged in the beginning of 2020, causing concern for many observers. Some members have called on the WTO to
address the trade policy challenges that emerged from COVID-19, such as through a dedicated “health and trade” initiative.
Others are seeking an agreement among members to waive IPR related to vaccines and other medical products. Meanwhile,
WTO members continue to explore broader aspects of reform and future negotiations. Potential reforms concern the
administration of the organization, its procedures and practices, dispute settlement, and attempts to address the inability of
WTO members to conclude new agreements. Among U.S. priorities are improving transparency and compliance with WTO
notification requirements and addressing the treatment of developing country status for members in future WTO negotiations.
The Biden Adminis tration has pledged to reengage in multilateral cooperation, be a leader in the WTO, and work
constructively towards reforms. Some U.S. government frustrations with the WTO are not new and are shared with other
trading partners. Under the previous Administration, U.S. actions to unilaterally raise tariffs under U.S. trade laws and to
impede the functioning of the WTO DS system raised concerns among some stakeholders about the U.S. commitment to the
multilateral system and potential undermining of the WTO’s credibility.
Ongoing debate over the role and future direction of the WTO is of interest to Congress. Some Members in the 117th
Congress have expressed support for WTO reform efforts and U.S. leadership through resolutions, while others have been
skeptical of the merits of the WTO. Issues Congress may address include the effects of current and future WTO agreements
on the U.S. economy and workers, the value of U.S. membership and leadership in the WTO, and the possibility of
establishing new U.S. negotiating objectives or oversight hearings on prospects for WTO reforms and rulemaking. The WTO
Ministerial Conference in 2021 presents the United States and WTO members with an opportunity to address pressing
concerns over ongoing and new negotiations, reform efforts, a nonfunctioning DS system, and the future role of the
multilateral trading system more broadly, as members grapple with economic recovery from COVID-19 and other global
challenges.

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Introduction
The World Trade Organization (WTO) is an international organization that administers the trade
rules and agreements negotiated by its 164 members to eliminate trade barriers and create
transparent and nondiscriminatory rules to govern trade. It also serves as an important forum for
resolving trade disputes. The United States was a major force behind the establishment of the
WTO in 1995 and the rules and agreements that resulted from the Uruguay Round of multilateral
trade negotiations (1986-1994). The WTO encompassed and expanded on the commitments and
institutional functions of the General Agreement on Tariffs and Trade (GATT), established in
1947 by the United States and 22 other countries. Through the GATT and the WTO, the United
States and others sought to establish a more open, rules-based trading system in the postwar era,
with the goal of fostering international economic cooperation, stability, and prosperity worldwide.
Today, the vast majority of world trade, 98%, takes place among WTO members.
The evolution of U.S. leadership in the WTO and the institution’s future agenda have been of
interest to Congress. The terms set by the WTO agreements govern the majority of U.S. trading
relationships. The majority of U.S. global trade is with countries that do not have free trade
agreements (FTAs) with the United States, including China, the European Union (EU), India, and
Japan,1 and thus relies primarily on the terms of WTO agreements. Congress has recognized the
WTO as the “foundation of the global trading system” within U.S. trade legislation and plays a
direct legislative and oversight role over WTO agreements.2 U.S. FTAs also build on core WTO
agreements. While the U.S. Trade Representative (USTR) represents the United States at the
WTO, Congress holds constitutional authority over foreign commerce and establishes U.S. trade
negotiating objectives and priorities and implements major U.S. trade agreements through
legislation. U.S. priorities and objectives for the GATT/WTO are reflected in trade promotion
authority (TPA) legislation since 1974. Congress also has oversight of the USTR and other
executive branch agencies that participate in WTO meetings and enforce WTO commitments.
The WTO’s effectiveness as a negotiating body for broad-based trade liberalization has come
under intensified scrutiny, as has its role in resolving trade disputes. WTO members have
struggled to reach consensus over issues that can place developed country members against
developing country members (such as agricultural subsidies, industrial goods tariffs, and
intel ectual property rights protection). The institution has also struggled to address newer trade
barriers, such as digital trade restrictions and the role of state-owned enterprises in international
commerce, which have become more prominent issues in recent years. Global supply chains and
advances in technology have transformed global commerce, but trade rules have failed to keep up
with the pace of change; since 1995, WTO members have been unable to reach consensus for a
new comprehensive multilateral agreement. As a result, many have turned to negotiating FTAs
with one another outside the WTO to build on core WTO agreements; in some of these bilateral
and regional agreements, including those pursued by the United States and EU, newer rules may
vary significantly. Plurilateral negotiations, involving subsets of WTO members rather than al
members, are also becoming a popular forum for tackling newer issues on the trade agenda.
The most recent round of WTO negotiations, the Doha Round, began in November 2001, but
concluded with no clear path forward, leaving several unresolved issues after the 10th Ministerial
Conference in 2015. Efforts to build on current WTO agreements outside of the Doha agenda
continue. While WTO members have made some progress, no major deliverables were announced
at the last Ministerial in 2017, leaving the stakes high for the next meeting in November 2021.

1 T he United States has a partial trade agreement with Japan covering some goods liberalization and digital trade rules.
2 Section 102(b)(13), Bipartisan Congressional T rade Priorities and Accountability Act of 2015 (T itle I, P.L. 114-26).
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Members were forced to reschedule the Ministerial from 2020 due to the Coronavirus Disease
2019 (COVID-19) pandemic. COVID-19 has tested cooperation and coordination in global trade
policies, disrupted global supply chains, and spurred some trade protectionism. At the same time,
several countries have reaffirmed the trading system, lifted restrictions, and view the WTO as
playing an important role in tackling the trade policy chal enges that have emerged.
The Biden Administration has pledged to reengage in multilateral cooperation, be a leader in the
WTO, and work constructively towards reforms.3 A key question for Congress is defining U.S.
priorities under the Administration for improving the multilateral trading system. Under the
previous Administration, overal skepticism of the value of the WTO institution,4 and actions to
unilateral y raise tariffs under U.S. trade laws and to impede the functioning of the DS system had
raised questions among some stakeholders about U.S. leadership and potential y undermining the
WTO’s credibility. Observers remain concerned that China’s statist trade and investment
practices as the top global trader are stressing the current WTO system and related rules and
principles of free trade. Some say that the U.S. policy response so far to China concerns—such as
U.S. tariff actions and China’s counterretaliation—are further straining the system. Unresolved
trade disputes between major economies, including between the United States and European
Union, have strained the trading system. In the near term, the WTO is faced with resolving
pending disputes, many of which involve the United States, as wel as debate about the role of its
Appel ate Body.
At the same time, many U.S. fundamental concerns regarding the WTO predate the Trump
Administration and are shared by other trading partners. The United States remains committed to
reform of the trading system and is engaged in several WTO negotiations and initiatives. USTR
Tai has emphasized that a “successful” ministerial in November must deliver on a meaningful
agreement on fisheries subsidies, members’ response to the COVID-19 pandemic, and the
importance of WTO reform.5
With growing debate over the role and future direction of the WTO, Congress may have interest
in several issues, including: the value of U.S. membership and leadership in the WTO, the
possibility of establishing new U.S. trade negotiating objectives, or holding oversight hearings to
address prospects of new WTO reforms and rulemaking. This report provides background history
of the WTO, its organization, and current status of negotiations and reform efforts. The report
also explores concerns regarding the WTO’s future direction and key policy issues for Congress.
Background
Following World War II, countries throughout the world, led by the United States and several
other developed countries, sought to establish a more transparent and nondiscriminatory trading
system with the goal of raising the economic wel -being of al countries. Aware of the role of tit-
for-tat trade barriers resulting from the U.S. Smoot-Hawley tariffs in exacerbating the economic
depression in the 1930s, including severe drops in world trade, global production, and

3 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 31, 2021.
4 White House, “Remarks by President T rump to the 74th Session of the United Nations General Assembly,” September
25, 2019, https://www.whitehouse.gov/briefings-statements/remarks-president -trump-74th-session-united-nations-
general-assembly/.
5 UST R, “Readout of Ambassador Katherine T ai’s meeting with World T rade Organization Director -General Dr. Ngozi
Okonjo-Iweala,” September 22, 2021.
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employment, the countries that met to discuss the new trading system considered more open trade
as essential for peace and economic stability.6
The intent of these negotiators was to establish an International Trade Organization (ITO) to
address not only trade barriers but other issues indirectly related to trade, including employment,
investment, restrictive business practices, and commodity agreements. Unable to secure approval
for such a comprehensive agreement, however, they reached a provisional agreement on tariffs
and trade rules, known as the GATT, which went into effect in 1948.7 This provisional agreement,
subject to several rounds of trade liberalization negotiations, became the principal set of rules
governing international trade for the next 47 years, until the establishment of the WTO.
General Agreement on Tariffs and Trade (GATT)
The GATT was neither a formal treaty nor an international organization, but an agreement
between governments, to which they were contracting parties. The GATT parties established a
secretariat based in Geneva, but it remained relatively smal , especial y compared to the staffs of
international economic institutions created by the postwar Bretton Woods conference—the
International Monetary Fund and World Bank. Based on a mission to promote trade liberalization,
the GATT became the principal set of rules and disciplines governing international trade.
The core principles and articles of the GATT
GATT/WTO Principles
(which were carried over to the WTO)
of Nondiscrimination
committed the original 23 members, including
Most-favored nation (MFN) treatment (also
the United States, to lower tariffs on a range of
cal ed normal trade relations by the United States).
Requires each member country to grant each other
industrial goods and to apply tariffs in a
member country treatment at least as favorable as it
nondiscriminatory manner—the so-cal ed
grants to its most-favored trade partner.
most-favored nation or MFN principle (see text
National treatment. Obligates each country not to
box). By having to extend the same benefits
discriminate between domestic and foreign products;
and concessions to members, the economic
once an imported product has entered a country, the
gains from trade liberalization were magnified.
product must be treated no less favorably than a
“like” product produced domestical y.
Exceptions to the MFN principle were al owed,
however, including for preferential trade
agreements outside the GATT/WTO covering “substantial y” al trade among members and for
nonreciprocal preferences for developing countries.8 GATT members also agreed to provide
“national treatment” for imports from other members. For example, countries could not establish
one set of health and safety regulations on domestic products while imposing more stringent
regulations on imports.
Although the GATT mechanism for the enforcement of these rules or principles was general y
viewed as largely ineffective, the agreement nonetheless brought about a substantial reduction of
tariffs and other trade barriers.9 The eight “negotiating rounds” of the GATT succeeded in

6 Barry Eichengreen and Douglas A. Irwin, “T he Slide to Protectionism in the Great Depression: Who Succumbed and
Why?” The Journal of Economic History, vol. 70, no. 4 (December 2010), pp. 871-897.
7 One major reason the IT O lost momentum was the U.S. government’s announcement in 1950 that it would no longer
seek congressional ratification of the IT O Charter, due to opposition in the U.S. Congress. WT O, “T he GAT T years:
from Havana to Marrakesh,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm.
8 GAT T Article XXIV. For more information see CRS Report R45198, U.S. and Global Trade Agreements: Issues for
Congress, by Brock R. Williams.
9 For more detail on perceived shortcomings of GAT T dispute settlement, see “Historic development of the WT O
dispute settlement system,” https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c2s1p1_e.htm.
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reducing average tariffs on industrial products from between 20%-30% to just below 4%, and
later establishing agreements to address certain non-tariff barriers, facilitating a 14-fold increase
in world trade over its 47-year history (see Table 1).10 When the first round concluded in 1947, 23
countries had participated, which accounted for a majority of global trade at the time. When the
Uruguay Round establishing the WTO concluded in 1994, 123 countries had participated and the
amount of trade affected was nearly $3.7 tril ion. There are currently 164 WTO members and
trade flows totaled $22 tril ion in 2020.11
Table 1. Summary of GATT Negotiating Rounds
Round
Negotiating
Major
(Year: Location)
Countries (#)
Accomplishments
1947: Geneva, Switzerland
23
 GATT established
 Tariff reduction of about 20% negotiated
1949: Annecy, France
13
 Accession of 11 new contracting parties
 Tariff reduction of about 2%
1950-51: Torquay, UK
38
 Accession of 7 new contracting parties
 Tariff reduction of about 3%
1955-56: Geneva
26
 Tariff reduction of about 2.5%
1960-61: Geneva (Dillon)
26
 Tariff reduction of about 4% and negotiations
involving the external tariff of the European
Community
1964-67: Geneva (Kennedy)
62
 Tariff reduction of about 35%
 Negotiation of antidumping measures
1973-79: Geneva (Tokyo)
102
 Tariff reduction of about 33%
 Several nontariff barrier codes negotiated,
including subsidies, customs valuation, standards,
and government procurement
1986-1994: Geneva (Uruguay)
123
 WTO created a new dispute settlement system
 Liberalization of agriculture, textiles, and apparel
 Rules adopted in new areas such as services, trade-
related investment, and intel ectual property
Sources: Douglas A. Irwin, Free Trade Under Fire, p. 225, and Stephen D. Cohen et al., Fundamentals of U.S.
Foreign Trade Policy, p. 185.
During the first trade round held in Geneva in 1947, members negotiated a 20% reciprocal tariff
reduction on industrial products, and made further cuts in subsequent rounds. The Tokyo Round
represented the first attempt to reform the trade rules that had existed unchanged since 1947, by
including issues and policies that could distort international trade. As a result, Tokyo Round
negotiators established several plurilateral codes dealing with nontariff issues such as
antidumping, subsidies, standards or technical barriers to trade, import licensing, customs
valuation, and government procurement.12 Countries could choose which, if any, of these codes

10 WT O, World Trade Report 2007, pp. 201-209.
11 WT O, World Trade Statistical Review 2021.
12 WT O, “Pre-WTO legal texts,” https://www.wto.org/english/docs_e/legal_e/prewto_legal_e.htm.
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they wished to adopt. While the United States agreed to al of the codes, the majority of GATT
signatories, including most developing countries, chose not to sign the codes.13
The Uruguay Round, which took eight years to negotiate (1986-1994), proved to be the most
comprehensive GATT round. This round further lowered tariffs and liberalized trade in areas that
had eluded previous negotiators, notably agriculture and textiles and apparel. Several codes were
amended and turned into multilateral commitments accepted by al members.14 It also extended
rules to new areas such as services, trade-related investment measures, and intel ectual property
rights. It created a trade policy review mechanism, which periodical y examines each member’s
trade policies and practices. Significantly, the Uruguay Round created the WTO as a legal
international organization charged with administering a revised and stronger dispute settlement
mechanism—a principal U.S. negotiating objective (see text box)—as wel as many new trade
agreements adopted during the long negotiation. For the most part, the Uruguay Round
agreements were accepted as a single package or single undertaking, meaning that al participants
and future WTO members were required to subscribe to al the multilateral agreements.
U.S. Trade Negotiating Objectives for Uruguay Round
U.S. trade negotiating objectives for the Uruguay Round were set by Congress in the Omnibus Trade and
Competitiveness Act of 1988 (P.L. 100-418), including the fol owing:

Market access. Obtain more open, equitable, and reciprocal market access in other countries;
reduced tariffs and nontariff barriers; and more effective system of international trade disciplines.

Dispute settlement. Adopt more effective and expeditious DS mechanisms and procedures, and
enable better enforcement of U.S. rights.

Transparency. Ensure broader application of the principle of transparency and clarification of the
costs and benefits of other countries’ trade policy actions.

Development. Ensure developing countries promote the “ful est possible measure of responsibility”
for maintaining an open trading system by providing reciprocal benefits and assuming equal obligations.

Agriculture. Obtain more open and fair conditions of trade in agriculture, and increase U.S. exports
by reducing barriers to trade and production subsidies.

Unfair trade practices. Discourage use of trade-distorting practices, nontariff measures, and other
unfair trading practices, such as subsidies in several sectors.

Services. Develop international rules in trade in services and reduce or eliminate barriers.

Intellectual property. Establish GATT obligations on adequate protection and effective
enforcement for IP, including copyrights, patents, and trade secrets.

Foreign direct investment. Reduce trade-distorting barriers to FDI, expand principle of national
treatment, and develop international y agreed rules.

Worker rights. Promote respect for worker rights.
World Trade Organization
The WTO succeeded the GATT in 1995. In contrast to the GATT, the WTO was created as a
permanent organization. But as with the GATT, the WTO Secretariat and support staff is smal by
international standards and lacks independent power. The power to write rules and negotiate

13 Douglas A. Irwin, Free Trade Under Fire, Princeton University Press, 2009, p. 226.
14 Four agreements remained “plurilateral,” including on government procurement, bovine meat, civil aircraft and dairy
products. See https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm.
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future trade liberalization resides specifical y with the member countries, and not the WTO
director-general (DG) or staff. Thus, the WTO is referred to as a member-driven organization.15
The Secretariat’s primary role is to provide technical and professional support to members on
WTO activities and negotiations, monitor and analyze global trade developments, and organize
Ministerial Conferences. Notwithstanding the lack of formal power of the Secretariat, the DG is
an advocate for the global trading system and often wields “soft power,” relying on diplomatic
and political heft in helping members build consensus or break stalemates—an increasingly
difficult task in recent years.16 As a result, some observers have argued that the Secretariat should
be granted more authority to table proposals and advance new rules.17
Decisions within the WTO are made by consensus of members, although majority voting can be
used in limited circumstances. The highest-level body in the WTO is the Ministerial Conference,
which is the body of political representatives (trade ministers) from each member country
(Figure 1). The General Council is the body that oversees day-to-day operations and it consists of
representatives from each member country. Many other councils and committees deal with
particular issues, and members of these bodies are also national representatives.
In general, the WTO has three broad functions: administering the rules and disciplines of the
trading system; establishing new rules through negotiations; and resolving disputes between
member states.

15 Ibid, p. 239.
16 David T inline and T atiana Lacerda Prazeres, “5 reasons why the role of WT O Director -General matters,” World
Economic Forum, June 5, 2020.
17 Doug Palmer, “U.S. dismisses ‘invalid’ WT O Appellate Body ruling,” Politico Pro Trade, April 23, 2020.
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Figure 1. WTO Structure

Source: WTO, https://www.wto.org/english/thewto_e/whatis_e/tif_e/organigram_e.pdf.
Administering Trade Rules
The WTO administers the global rules and principles negotiated and signed by its members. The
main purpose of the rules is “to ensure that trade flows as smoothly, predictably, and freely as
possible.”18 WTO rules and agreements are essential y contracts that bind governments to keep
their trade policies within agreed limits. A number of fundamental principles guide WTO rules. In
general, as with the GATT, these key principles are nondiscrimination (MFN treatment and
national treatment) and the notion that freer trade through the gradual reduction of trade barriers
strengthens the world economy and increases prosperity for each member. The trade barriers
concerned include tariffs, quotas, and a growing range of nontariff measures, such as product
standards, food safety measures, subsidies, and discriminatory domestic regulations. The
fundamental principle of reciprocity is also behind members’ overal aim of “entering into
reciprocal and mutual y advantageous arrangements directed to the substantial reduction of tariffs

18 “T he WT O,” https://www.wto.org/english/thewto_e/thewto_e.htm.
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and other barriers to trade and to the elimination of discriminatory treatment in international trade
relations.”19
Transparency is another key principle of the WTO, which aims to reduce information asymmetry
in markets, ensure trust, and, therefore, foster greater stability in the global trading system.
Transparency commitments are incorporated into individual WTO agreements. Active
participation in various WTO committees also aims to ensure that agreements are monitored and
that members are held accountable for their actions. For example, members are required to
publish their trade practices and policies and notify new or amended regulations to WTO
committees. Regular trade policy reviews of each member’s trade policies and practices provide a
deeper dive into an economy’s implementation of its commitments—see “Trade Policy Review
Mechanism (Annex 3).”20 In addition, the WTO’s annual trade monitoring report takes stock of
trade-restrictive and trade-facilitating measures of the collective body of WTO members.
While opening markets can encourage competition, innovation, and growth, it can also entail
adjustments for workers and firms. Trade liberalization can also be more difficult for the least-
developed countries (LDCs) and countries transitioning to market economies. WTO agreements
thus al ow countries to lower trade barriers gradual y. Developing countries and sensitive sectors
in particular are usual y given longer transition periods to fulfil their obligations. Developing
countries make up about two-thirds of the WTO membership, and members self-designate their
developing country status, which has become a point of contention in recent years.21 The WTO
also supplements so-cal ed “special and differential” treatment (SDT) for developing countries
with trade capacity-building measures to provide technical assistance and help implement WTO
obligations, and with permissions for developed countries to extend nonreciprocal, trade
preference programs.
In WTO parlance, when countries agree to open their markets further to foreign goods and
services, they “bind” their commitments or agree not to raise them. For goods, these bindings
amount to ceilings on tariff rates.22 As shown in Figure 2, one of the achievements of the
Uruguay Round was to increase the amount of trade under binding commitments. Bound tariff
rates are not necessarily the rates WTO members apply in practice to imports from trading
partners; applied MFN rates can be and are often lower than bound rates, as reflected in tariff
reductions under the GATT. A key issue in the Doha Round for the United States was lowering
major developing countries’ relatively high bound tariffs to below their applied rates in order to
achieve commercial y meaningful new market access. Figure 3 shows average applied MFN
tariffs worldwide. In 2019, the United States simple average MFN tariff was 3.3%.
Promising not to raise a trade barrier can have a significant economic effect because the promise
provides traders and investors certainty and predictability in the commercial environment. A
growing body of economic literature suggests certainty in the stability of tariff rates may be just
as important for increasing global trade as reduction in trade barriers.23 This proved particularly

19 Preamble to the Marrakesh Agreement Establishing the World T rade Organization, https://www.wto.org/english/
docs_e/legal_e/04-wto_e.htm.
20 For more information, see https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm11_e.htm.
21 T he WT O does not specify criteria for “developing” country status, though a sub-group, least-developed countries,
are defined under United Nations criteria. See, “Who are the developing countries in the WT O?” https://www.wto.org/
english/tratop_e/devel_e/d1who_e.htm.
22 A country can change its bindings, but only after negotiating with its trading partners, which could entail
compensating them for loss of trade.
23 See for example, Kyle Handley and Nuno Limao, “Policy Uncertainty, T rade, and Welfare: T heory and Evidence for
China and the United States,” American Economic Review, vol. 107, no. 9 (2017).
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important during the 2009 global economic downturn. Unlike in the 1930s, when countries
reacted to slumping world demand by raising tariffs and other trade barriers, the WTO reported
that its 153 members (at the time), accounting for 90% of world trade, by and large did not resort
to protectionist measures in response to the crisis.24
Figure 2. Uruguay Round Impact on Tariff Bindings

Source: Data from WTO, Understanding the WTO: Basics, http://www.wto.org. Created by CRS.
Notes: Percentages reflect shares of total tariff lines; not trade-weighted. The Uruguay Round was 1986-1994.
Figure 3. Average Applied Most-Favored Nation (MFN) Tariffs

Source: WTO, 2020, https://www.wto.org/english/res_e/reser_e/tariff_profiles_e.htm. Created by CRS.
The promotion of fair and undistorted competition is another important principle of the WTO.
While the WTO is often described as a “free trade” organization, numerous rules are concerned
with ensuring transparent and non-discriminatory competition. In addition to nondiscrimination,
MFN treatment and national treatment concepts aim to promote “fair” conditions of trade. WTO

24 WT O, “ Overview of Developments in the International Trading Environment,” WT/TPR/OV/12, November 18,
2009, p. 4.
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rules on subsidies and antidumping for example, were designed to promote a more level field of
competition in trade through recourse to trade remedies, or temporary restriction of imports, in
response to al eged unfair trade practices—see “Trade Remedies.”25
The scope of the WTO is broader than the GATT because, in addition to goods, it administers
multilateral agreements on agriculture, services, intel ectual property, and certain trade-related
investment measures. These newer rules in particular are forcing the WTO and its DS system to
deal with complex issues that go beyond tariff border measures.
Establishing New Rules and Trade Liberalization through Negotiations
As the GATT did for 47 years, the WTO provides a negotiating forum where members reduce
barriers and try to sort out their trade problems. Negotiations can involve a few countries, many
countries, or al members, and may target specific sectors. As part of the post-Uruguay Round
agenda at the WTO, negotiations covering basic telecommunications and financial services were
completed in 1997. Groups of WTO members also negotiated deals to eliminate tariffs on certain
information technology products and improve rules and procedures for government procurement.
A more recent significant accomplishment was the WTO Trade Facilitation Agreement (TFA) in
2017, addressing customs and logistics barriers.
The latest round of multilateral negotiations, the Doha Development Agenda (DDA), or Doha
Round, launched in 2001, achieved limited progress, as the agenda proved difficult and
contentious. Despite a lack of consensus on its future, many view the round as effectively over.26
Broadly, the negotiations stal ed over issues such as reducing domestic subsidies and opening
markets further in agriculture, industrial tariffs, nontariff barriers, services, intel ectual property
rights, and SDT for developing countries. The negotiations exposed fissures between developed
countries, led by the United States and EU, and developing countries, led by China, Brazil, and
India, who have come to play a more prominent role in global trade.
The inability of countries to achieve the objectives of the Doha Round prompted many to
question the utility of the WTO as a negotiating forum, as wel as the practicality of conducting a
large-scale negotiation involving 164 participants with consensus and the single undertaking as
guiding principles. At the same time, members have advanced several proposals for moving
forward from Doha and making the WTO a stronger forum for negotiations in the future.27 (See
“Policy Issues and Future Direction.”)
With some exceptions, such as the TFA, the WTO arguably has been more successful in the
negotiation of discrete items to which not al parties must agree or be bound (see “Plurilateral
Agreements (Annex 4)”). Some view these plurilaterals as a more promising negotiating
approach for the WTO moving forward given their flexibility, as they can involve subsets of more
“like-minded” partners and advance parts of the global trade agenda. Some experts have raised
concerns, however, that this approach could lead to “free riders”—those who benefit from the
agreement but do not make commitments—as agreements on an MFN basis, or otherwise, could
isolate some countries who do not participate and may face trade restrictions or disadvantages as
a result. Others argue that only through the single undertaking approach with multiple issues
under negotiation can there be trade-offs sufficient to bring al members on board.

25 WT O, “Anti-dumping, subsidies, safeguards: contingencies, etc.” https://www.wto.org/english/thewto_e/whatis_e/
tif_e/agrm8_e.htm.
26 For example, see “T he Doha round finally dies a merciful death,” Financial Times, December 21, 2015.
27 See CRS Report RL32060, World Trade Organization Negotiations: The Doha Development Agenda, by Ian F.
Fergusson; and CRS Report RS22927, WTO Doha Round: Im plications for U.S. Agriculture, by Randy Schnepf.
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Resolving Disputes
The third overal function of the WTO is to provide a mechanism to enforce its rules and settle
trade disputes. A central goal of the United States during the Uruguay Round negotiations was to
strengthen the DS mechanism that existed under the GATT. While the GATT’s process for
settling disputes between member countries was informal, ad hoc, and voluntary, the WTO DS
process is more formalized and enforceable.28 Under the GATT, panel proceedings could take
years to complete; any defending party could block an unfavorable ruling; failure to implement a
ruling carried no consequence; and the process did not cover al the agreements. Under the WTO,
there are strict timetables—though not always followed—for panel proceedings; the defending
party cannot block rulings; there is one comprehensive DS process covering al the agreements;
and the rulings are enforceable. WTO adjudicative bodies can authorize retaliation if a member
fails to implement a ruling or provide compensation. Yet, under both systems, considerable
emphasis is placed on having the member countries attempt to resolve disputes through
consultations and negotiations, rather than relying on formal panel rulings. See “Dispute
Settlement Understanding (DSU)” for more detail on WTO procedures and dispute trends.
The United States and the WTO
The statutory basis for U.S. membership in the WTO is the Uruguay Round Agreements Act
(URAA, P.L. 103-465), which approved the trade agreements resulting from the Uruguay Round.
The legislation contained general provisions on:
 approval and entry into force of the Uruguay Round Agreements, and the
relationship of the agreements to U.S. laws (Section 101 of the act);
 authorities to implement the results of current and future tariff negotiations
(Section 111 of the act);
 oversight of activities of the WTO (Sections 121-130 of the act);
 procedures regarding implementation of DS proceedings affecting the United
States (Section 123 of the act);
 objectives regarding extended Uruguay Round negotiations;
 statutory modifications to implement specific agreements, including:
 Antidumping Agreement;
 Agreement on Subsidies and Countervailing Measures (ASCM);
 Safeguards Agreement;
 Agreement on Government Procurement (GPA);
 Technical Barriers to Trade (TBT) (product standards);
 Agreement on Agriculture; and
 Agreement on Trade-Related Aspects of Intel ectual Property Rights (TRIPS).
U.S. priorities and objectives for the GATT/WTO have been reflected in various trade promotion
authority (TPA) legislation since 1974. For example, the Omnibus Trade and Competitiveness Act
of 1988 specifical y contained provisions directing U.S. negotiators to negotiate disciplines on
agriculture, DS, intel ectual property, trade in services, and safeguards, among others, that

28 T his stronger DS system was created, in part due to demands from Congress based on concerns that the GAT T
approach was ineffective in eliminating barriers to U.S. exports. In fact, it was first principal trade negotiating objective
set out in the Omnibus T rade and Competitiveness Act of 1988, P.L. 100-418, §1101(b)(1), 19 U.S.C. 2901(b)(1).
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resulted in WTO agreements in the Uruguay Round. The Trade Act of 2002 provided U.S.
objectives for the Doha Round, including seeking to expand commitments on e-commerce and
clarifications to the WTO DS system. The 2015 TPA (which expired in July 2021) perhaps
reflecting the impasse of the Doha Round, was more muted, seeking full implementation of
existing agreements, enhanced compliance by members with their WTO obligations, and new
negotiations to extend commitments to new areas.29
Section 125(b) of the URAA sets procedures for congressional disapproval of WTO participation.
It specifies that Congress’s approval of the WTO agreement shal cease to be effective “if and
only if” Congress enacts a privileged joint resolution cal ing for withdrawal. Congress may vote
every five years on withdrawal; resolutions were introduced in 2000 and 2005, however neither
passed.30 The debates in 2000 and 2005 were characterized by concerns about certain dispute
settlement cases, especial y adverse decisions on trade remedies, and beliefs that WTO
membership impinges U.S. sovereignty. WTO supporters emphasized the economic benefits and
value of an open and rules-based trading system. Several factors shaped past debates. China did
not join the WTO until December 2001 and was not yet very active in setting the WTO agenda at
that time. More recently, U.S. concerns with the WTO have grown in some quarters and
perception of WTO’s benefits have dimmed among some Members.31 In May 2020, withdrawal
resolutions were introduced during the 116th Congress by Representatives DeFazio and Pal one
(H.J.Res. 89) and by Senator Hawley (S.J.Res. 71); the measures did not proceed to a vote,
however.32
WTO Agreements
The WTO member-led body negotiates, administers, and settles disputes for agreements that
cover goods, agriculture, services, certain trade-related investment measures, and intel ectual
property rights, among other issues. The WTO core principles are enshrined in a series of trade
agreements that include rules and commitments specific to each agreement, subject to various
exceptions. The GATT/WTO system of agreements has expanded rulemaking to several areas of
international trade, but does not extensively cover some key areas, including multilateral
investment rules, trade-related labor or environment issues, and emerging issues like digital trade
or the commercial role of state-owned enterprises.
Marrakesh Agreement Establishing the World Trade Organization
The Marrakesh Agreement is the umbrel a agreement under which the various agreements,
annexes, commitment schedules, and understandings reside. The Marrakesh Agreement itself
created the WTO as a legal international organization and sets forth its functions, structure,
secretariat, budget procedures, decisionmaking, accession, entry-into-force, withdrawal, and other
provisions. The Agreement contains four annexes. The three major substantive areas of
commitments undertaken by the members are contained in Annex 1.

29 See CRS Report R43491, Trade Promotion Authority (TPA): Frequently Asked Questions, by Ian F. Fergusson and
Christopher M. Davis.
30 For the 2000 and 2005 resolutions, see https://www.congress.gov/bill/106th-congress/house-joint-resolution/90/
actions and https://www.congress.gov/bill/109th-congress/house-joint -resolution/27/actions.
31 For example, see Senator Josh Hawley’s op-ed, “T he WT O Should be Abolished,” New York Times, May 5, 2020.
32 CRS Insight IN11399, The WTO Withdrawal Resolutions, by Ian F. Fergusson and Christ opher M. Davis.
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Multilateral Agreement on Trade in Goods (Annex 1A)
The Multilateral Agreement on Trade in Goods establishes the rules for trade in goods through
sectoral or issue-specific agreements (see Table 2). Its core is the GATT 1994, which includes
GATT 1947, the amendments, understanding, protocols, and decisions of the GATT from 1947 to
1994, cumulatively known as the GATT-acquis, as wel as six Understandings on Articles of the
GATT 1947 negotiated in the Uruguay Round. In addition to clarifying the core WTO principles,
each agreement contains sector- or issue-specific rules and principles. The schedule of
commitments identifies each member’s specific binding commitments on tariffs for goods in
general, and combinations of tariffs and quotas for some agricultural goods. Through a series of
negotiating rounds, members agreed to the current level of trade liberalization (Figure 2 above).
Table 2. Marrakesh Protocol to the GATT 1994

Agreement on
Agreement on
Agreement on Import
Agreement on Trade-
Agriculture
Implementation of
Licensing Procedures
Related Aspects of
Article VI (Anti-
Intel ectual Property
dumping)
Rights (TRIPS)

Agreement on the
Agreement on
Agreement on Subsidies
Understanding on Rules
Application of Sanitary and
Implementation of
and Countervailing
and Procedures Governing
Phytosanitary Measures
Article VII (Customs
Measures
the Settlement of Disputes
(SPS)
Valuation)

Agreement on Technical
Agreement on
Agreement on
Agreement on Trade
Barriers to Trade (TBT)
Preshipment Inspection
Safeguards
in Civil Aircraft

Agreement on Trade-
Agreement on Rules of
General Agreement
Agreement on
Related Investment
Origin (ROO)
on Trade in Services
Government
Measures (TRIMS)
(GATS)
Procurement
Source: CRS based on WTO.
In the last four rounds of negotiations, WTO members aimed to expand international trade rules
beyond tariff reductions to tackle barriers in other areas. For example, agreements on technical
barriers to trade (TBT) and sanitary and phytosanitary (SPS) measures aim to protect a country’s
rights to implement domestic regulations and standards, while ensuring they do not discriminate
against trading partners or unnecessarily restrict trade.33

33 T BT refers to technical regulations, standards and certification and conformity assessment procedures; while SPS
refers to food safety and animal and plant health measures.
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Agreement on Agriculture (AoA)
The Agreement on Agriculture (AoA) includes rules and commitments on market access and
disciplines on certain domestic agricultural support programs and export subsidies. Its objective
was to provide a framework for WTO members to reform certain aspects of agricultural trade and
domestic farm policies to facilitate more market-oriented and open trade.34 Regarding market
access, members agreed not to restrict agricultural imports by quotas or other nontariff measures,
converting them to tariff-equivalent levels of protection, such as tariff-rate quotas—a process
cal ed “tariffication.” Developed countries committed to cut tariffs (or out-of-quota tariffs, those
tariffs applied to any imports above the agreed quota threshold) by an average of 36% in equal
increments over six years; developing countries committed to 24% tariff cuts over 10 years.
Special safeguards to temporarily restrict imports were permitted for products considered
sensitive by a member in certain events, such as fal ing prices or surges of imports.
The AoA also categorizes and restricts agricultural domestic support programs, according to their
potential to distort trade. Members agreed to limit and reduce the most distortive forms of
domestic subsidies over 6 to 10 years, referred to as “amber box” subsidies and measured by the
Aggregate Measure of Support (AMS) index.35 Subsidies considered to cause minimal distortion
on production and trade are not subject to spending limits and are exempted from obligations as
“green box” and “blue box” subsidies or under de minimis (below a certain threshold) or SDT
provisions. A so-cal ed “peace” clause protected members using domestic subsidies that comply
with the agreement from being chal enged under other WTO agreements, such as through use of
countervailing duties; the clause expired after nine years in 2003. In addition, AoA commitments
required that export subsidies were to be capped and subject to incremental reductions.
Members are required to submit notifications regularly on the implementation of AoA
commitments on market access, domestic subsidies, and export competition—though some
countries, including the United States, have raised concerns that these requirements are not
abided by in a consistent manner.
Further agricultural trade reform was a major priority under the Doha Round, but to date,
negotiations have seen limited progress on resolving major issues. Members have advanced some
areas for reform, however, for example, in 2015 members reached an agreement to fully eliminate
export subsidies for agriculture.36
Trade-Related Investment Measures (TRIMS)
The framework of the GATT did not address the growing linkages between trade and investment.
During the Uruguay Round, the Agreement on Trade-Related Investment Measures (TRIMS) was
drafted to address certain investment measures that may restrict and distort trade. The agreement
did not address the regulation or protection of foreign investment, but focused on investment
measures that may violate basic GATT disciplines on trade in goods, such as nondiscrimination.
Specifical y, members committed not to apply any TRIM that is inconsistent with provisions on
national treatment or a prohibition of quantitative restrictions on imports or exports. TRIMS
includes an annex with an il ustrative list of prohibited measures, such as local content
requirements—requirements to purchase or use products of domestic origin. The agreement also

34 WT O, “Agriculture: fairer markets for farmers,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm3_e.htm.
35 T he United States committed to spend no more than $19.1 billion annually on amber box programs. For more detail,
see CRS Report R45305, Agriculture in the WTO: Rules and Lim its on U.S. Dom estic Support, by Randy Schnepf.
36 For more information, see CRS Report R46456, Reforming the WTO Agreement on Agriculture, by Anita Regmi,
Nina M. Hart, and Randy Schnepf.
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includes a safeguard measure for balance of payment difficulties, which permits developing
countries to temporarily suspend TRIMS obligations.
While TRIMS and other WTO agreements, such as the GATS (see below), include some
provisions pertaining to investment, the lack of comprehensive multilateral rules on investment
led to several efforts under the Doha Round to consider proposals, which to date have been
unfruitful (see “Future Negotiations on Selected Issues”). In December 2017, 70 WTO members
announced new discussions on developing a multilateral framework on investment facilitation, in
part to complement the successful negotiation of rules on trade facilitation.
General Agreement on Trade in Services (GATS) (Annex 1B)
The GATT agreements focused solely on trade in goods. Services were eventual y covered in the
GATS as a result of the Uruguay Round.37 The GATS provides the first and only multilateral
framework of principles and rules for government policies and regulations affecting services
trade. It has served as a foundation for bilateral and regional trade agreements covering services.
The services trade agenda is complex due to the characteristics of the sector. “Services” refers to
a growing range of economic activities, such as audiovisual, construction, computer and related
services, express delivery, e-commerce, financial, professional (e.g., accounting and legal
services), retail and wholesaling, transportation, tourism, and telecommunications. Advances in
information technology and the growth of global supply chains have reduced barriers to trade in
services, expanding the services tradable across national borders. But liberalizing trade in services
can be more complex than for goods, since the impediments faced by service providers occur
largely within the importing country, as so-cal ed “behind the border” barriers, some in the form
of government regulations. While the right of governments to regulate service industries is widely
recognized as prudent and necessary to protect consumers from harmful or unqualified providers,
a main focus of WTO members is whether these regulations are applied to foreign service
providers in a discriminatory and unnecessarily trade restrictive manner that limits market access.
The GATS contains multiple parts, including definition of scope (excluding government-provided
services); principles and obligations, including MFN treatment and transparency; market access
and national treatment obligations; annexes listing exceptions that members take to MFN
treatment; as wel as various technical elements. Members negotiated GATS on a positive list
basis, which means that the commitments only apply to those services and modes of delivery
listed in each member’s schedule of commitments.38 WTO members adopted a system of
classifying four modes of delivery for services to measure trade in services and classify
government measures that affect trade in services, including cross-border supply, consumption
abroad, commercial presence, and temporary presence of natural persons. Under GATS, unless a
member country has specifical y committed to open its market to suppliers in a particular service,
the national treatment and market access obligations do not apply.
In addition to the GATS, some members made specific sectoral commitments in financial services
and telecommunications. Negotiations to expand these commitments were later folded into the
broader services negotiations. WTO members aimed to update GATS provisions and market
access commitments as part of the Doha Round, but the talks have failed to advance. A subset of
WTO members is involved in negotiations on domestic regulation of services (see “Services”).

37 For more analysis, see CRS Report R43291, U.S. Trade in Services: Trends and Policy Issues, by Rachel F. Fefer.
38 Within U.S. FT As, the United States has sought a more comprehensive negative list approach, in which obligations
are to apply to all types of services, unless explicitly excluded by a country in its list of nonconforming measures.
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Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) (Annex 1C)
The TRIPS Agreement marked the first time multilateral trade rules incorporated intel ectual
property rights (IPR)—legal, private, enforceable rights that governments grant to inventors and
artists to encourage innovation and creative output.39 Like the GATS, TRIPS was negotiated as
part of the Uruguay Round and was a major U.S. objective for the round. TRIPS sets minimum
standards of protection and enforcement for IPR. Much of the agreement sets out the extent of
coverage of the various types of intel ectual property, including patents, copyrights, trademarks,
trade secrets, and geographical indications. TRIPS includes provisions on nondiscrimination and
on enforcement measures, such as civil and administrative procedures and remedies.
The TRIPS Agreement’s newly placed requirements on many developing countries elevated the
debate over the relationship between IPR and development. At issue is the balance of rights and
obligations between protecting private right holders and securing broader public benefits, such as
access to medicines and the free flow of data, especial y in developing countries. TRIPS includes
flexibilities for developing countries al owing longer phase-in periods for implementing
obligations and, separately, for pharmaceutical patent obligations—these were subsequently
extended for LDCs until January 2033 or until they no longer qualify as LDCs, whichever is
earlier.40 The 2001 WTO “Doha Declaration” committed members to interpret and implement
TRIPS obligations in a way that supports public health and access to medicines.41 In 2005,
members agreed to amend TRIPS to al ow developing and LDC members that lack production
capacity to import generic medicines from third country producers under “compulsory licensing”
arrangements.42 The amendment entered into force in January 2017.43 The COVID-19 pandemic
renewed debate in the WTO over potential exceptions to TRIPS rules for public health
emergencies. Some members have proposed a TRIPS waiver for COVID-related health products
and technologies, including vaccines. Negotiations remain contentious and ongoing.44
Trade Remedies
While WTO agreements uphold MFN principles, they also al ow exceptions to binding tariffs in
certain circumstances. The WTO Agreement on Subsidies and Countervailing Measures (ASCM),
the WTO Agreement on Safeguards, and articles in the GATT, commonly known as the
Antidumping Agreement, al ow for trade remedies in the form of temporary measures (e.g.,
primarily duties or quotas) to mitigate the adverse impact of various trade practices on domestic
industries and workers. These include actions taken against dumping (sel ing at an unfairly low

39 For more detail, see CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias
Akhtar and Ian F. Fergusson.
40 WT O, “Intellectual property: protection and enforcement,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/
agrm7_e.htm.
41 Declaration on the T RIPS Agreement and Public Health, (WT /MIN(01)/DEC/2), November 14, 2001,
http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm. For more on T RIPS, see CRS Report
RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias Akhtar and Ian F. Fergusson .
42 WT O, “ WT O IP rules amended to ease poor countries’ access to affordable medicines,” January 23, 2017,
https://www.wto.org/english/news_e/news17_e/trip_23jan17_e.htm.
43 Notably, this marked the first time that a WT O agreement was amended since the WT O’s inception (WTO 2017).
44 CRS In Focus IF11858, Potential WTO TRIPS Waiver and COVID-19, by Shayerah I. Akhtar and Ian F. Fergusson.
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price) or to counter certain government subsidies, and emergency measures to limit “fairly”-
traded imports temporarily, designed to “safeguard” domestic industries.
Supporters of trade remedies view them as necessary to shield domestic industries and workers
from unfair competition and to level the playing field. Others, including some importers and
downstream consuming industries, voice concern that antidumping (AD) and countervailing duty
(CVD) actions can serve as disguised protectionism and create inefficiencies in the global trading
system by raising prices on imported goods. How trade remedies are applied to imports has
become a major source of disputes under the WTO (see below).
The United States has enacted trade remedy laws that conform to the WTO rules:45
 U.S. antidumping laws (19 U.S.C. §1673 et seq.) provide relief to domestic
industries that have been, or are threatened with, the adverse impact of imports
sold in the U.S. market at prices that are shown to be less than fair market value.
The relief provided is an additional import duty placed on the dumped imports.
 U.S. countervailing duty laws (19 U.S.C. §1671 et seq.) give similar relief to
domestic industries that have been, or are threatened with, the adverse impact of
imported goods that have been subsidized by a foreign government or public
entity, and can therefore be sold at lower prices than U.S.-produced goods. The
relief provided is a duty placed on the subsidized imports.
 U.S. safeguard laws give domestic industries relief from import surges of goods;
no al egation of “unfair” practices is needed to launch a safeguard investigation.
Although used less frequently than AD/CVD laws, Section 201 of the Trade Act
of 1974 (19 U.S.C. §2251 et seq.), is designed to give domestic industry the
opportunity to adjust to import competition and remain competitive. The relief
provided is general y a temporary import duty and/or quota. Unlike AD/CVD,
safeguard laws require presidential action for relief to be put into effect.
Members are currently engaged in negotiating rules on subsidies related to fisheries (see
“Fisheries Subsidies”).
Dispute Settlement Understanding (DSU) (Annex 2)
The DS system, often cal ed the “crown jewel” of the WTO, has been considered by some
observers to be one of the most important successes of the multilateral trading system.46 WTO
agreements contain provisions that are either binding or nonbinding. The WTO Understanding on
Rules and Procedures Governing the Settlement of Disputes—Dispute Settlement Understanding
or DSU—provides an enforceable means for WTO members to resolve disputes arising under the
binding provisions.47 The DSU commits members not to determine violations of WTO obligations
or impose penalties unilateral y, but to settle complaints about al eged violations under DSU rules
and procedures. In recent years, there have been some cal s by members for reform of the DS

45 For more detail, see CRS Report R46296, Trade Remedies: Antidumping, by Christopher A. Casey, CRS In Focus
IF10018, Trade Rem edies: Antidum ping and Countervailing Duties, by Vivian C. Jones and Christopher A. Casey , and
CRS In Focus IF10786, Safeguards: Section 201 of the Trade Act of 1974, by Vivian C. Jones.
46 WT O, “T he Place of the WT O in the International Legal Order,” Speeches—DG Pascal Lamy, June 15, 2008,
https://www.wto.org/english/news_e/sppl_e/sppl94_e.htm.
47 For more information, see CRS In Focus IF10436, Dispute Settlement in the World Trade Organization: Key Legal
Concepts, by Brandon J. Murrill.
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system to deal with procedural delays and new strains on the system, including the growing
volume and complexity of cases and disagreement over the role of the Appel ate Body (AB).
The Dispute Settlement Body (DSB) is a plenary committee of the WTO, which oversees the
panels and adopts the recommendation of a DS panel or AB panel (see below). Panels are
composed of three (or five in complex cases) panelists—not citizens of the members involved—
chosen through a roster of “wel qualified governmental and/or non-governmental individuals”
maintained by the Secretariat. WTO members must first attempt to settle a dispute through
consultations, but if these fail, a member seeking to initiate a dispute may request that a panel
examine and report on its complaint. A respondent party is able to block the establishment of a
panel at the DSB once, but if the complainant requests its establishment again at a subsequent
meeting of the DSB, a panel is established. At its conclusion, the panel recommends a decision to
the DSB that it wil adopt unless al parties agree to block the recommendation. The DSU sets out
a timeline of approximately one year for the initial resolution of disputes (see Figure 4); however,
cases are rarely resolved in this timeframe.
The DSU also provides for AB review of panel reports in the event a decision is appealed. The
AB is composed of seven rotating panelists, appointed by the DSB, that serve four-year terms,
with the possibility of a one-term reappointment. According to the DSU, appeals are to be limited
to questions of law or legal interpretation developed by the panel in the case (Article 17.6). The
AB is to make a recommendation, and the DSB is to ratify that recommendation within 120 days
of the ratification of the initial panel report, but again, such timely resolution rarely occurs. The
United States has raised several issues regarding the practices of the AB and has blocked the
appointments of several judges—for more on the debate, see “Proposed Institutional Reforms.”
Figure 4. WTO Dispute Settlement Procedure
Stages and Time Periods

Source: Created by CRS. Based on information from Madhur Jha, Samantha Amerasinghe, and Philippe Dauba -
Pantanacce, Global trade: Trade first! (Avoiding an own goal), Standard Chartered, 2017, p. 17.
Notes: Alternating colors indicate a different stage of the procedure. Time periods displayed are approximate.
The WTO establishes timelines for each stage with one year total for the initial resolution of disputes; however,
in practice, cases are rarely resolved within this timeframe.
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Following the adoption of a panel or appel ate report, the DSB oversees the implementation of the
findings. The losing party is then to propose how it is to bring itself into compliance “within a
reasonable period of time” with the DSB-adopted findings. A reasonable period of time is
determined by mutual agreement with the DSB, among the parties, or through arbitration. If a
dispute arises over the manner of implementation, the DSB may form a panel to judge
compliance. If a party declines to comply, the parties negotiate over compensation pending full
implementation. If there is stil no agreement, the DSB may authorize retaliation in the amount of
the determined cost of the offending party’s measure to the aggrieved party’s economy.
Filing a DS case provides a way for countries to resolve disputes through a legal process and to
do so publicly, signaling to domestic and international constituents the need to address
outstanding issues. DS procedures can serve as a deterrent for countries considering not abiding
by WTO agreements, and rulings can help build a body of case law to inform countries when they
implement new regulatory regimes or interpret WTO agreements.
That said, WTO agreements and decisions of panels are not self-executing and cannot directly
modify U.S. law. If a case is brought against the United States and the panel renders an adverse
decision, the United States would be expected to remove the offending measure within a
reasonable period of time or face the possibility of either paying compensation to the complainant
or be subject to sanctions, often in the form of higher tariffs on imports of certain U.S. products.
As of mid-2021, the WTO has initiated more than 600 disputes on behalf of its members and
issued more than 350 rulings.48 Nearly two-thirds of WTO members have participated in the DS
system. Not al complaints result in formal panel proceedings; about half were resolved during
consultations. Complainants have usual y won their cases, in large part because they tend to only
initiate disputes that they have a higher chance of winning. In the words of former WTO DG
Roberto Azevêdo, the widespread use of the DS system is evidence it “enjoys tremendous
confidence among the membership, who value it as a fair, effective, efficient mechanism to solve
trade problems.”49
The United States is an active user of the DS system. Among WTO members, the United States
has been a complainant in the most dispute cases since the system was established in 1995,
initiating 124 disputes.50 The two largest targets of complaints initiated by the United States are
China and the EU, which, combined, account for more than one-third (Figure 5).

48 WT O, “Dispute settlement activity—some figures,” https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm.
49 WT O, “WT O disputes reach 500 mark,” November 10, 2015, https://www.wto.org/english/news_e/news15_e/
ds500rfc_10nov15_e.htm.
50 Dispute count as of early August 2020. WT O, https://www.wto.org/english/tratop_e/dispu_e/
find_dispu_cases_e.htm.
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Figure 5. WTO Disputes Involving the United States

Source: WTO, https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm. Created by CRS.
Notes: Does not include cases with U.S. participation as a third party. Dispute count as of September 1, 2021.
As a respondent in 156 dispute cases since 1995, the United States has also had the most disputes
filed against it by other WTO members, followed by the EU (89 disputes) and China (47
disputes). The EU has filed the most cases against the United States, followed by Canada, China,
South Korea, Brazil, and India. A large number of complaints concern trade remedies, in
particular methodologies used for calculating and imposing antidumping duties on U.S. imports.
Several pending WTO disputes are of significance to the United States. These include chal enges
to the tariff measures imposed by the Trump Administration under U.S. trade laws, including
Section 201 (safeguards), Section 232 (national security), and Section 301 (“unfair” trading
practices).51 Nine WTO members, including China, the EU, Canada, and Mexico, initiated
complaints at the WTO, based on al egations that U.S. Section 232 tariffs on steel and aluminum
imports are inconsistent with WTO rules. In May 2019, the cases involving Canada and Mexico
were withdrawn, due to a negotiated settlement with the United States.52 Consultations were
unsuccessful in resolving the remaining disputes and panel decisions are expected in 2021. Most
countries notified their complaints pursuant to the Agreement on Safeguards, though some also
al ege that U.S. tariff measures and related exemptions are contrary to U.S. obligations under
several provisions of the GATT.
The United States filed its own WTO complaints over retaliatory tariffs imposed by seven
countries (Canada, China, EU, India, Mexico, Russia, and Turkey) in response to U.S. actions,
and decisions are pending.53 The United States has invoked the GATT national security exception
(Article XXI) in defense of its tariffs (see “Key Exceptions under GATT/WTO”), and claims that
the tariffs are not safeguards as claimed by other countries.
Trade Policy Review Mechanism (Annex 3)
Annex 3 sets the procedures for regular trade policy reviews that are conducted by the Secretariat
to report on the trade policies of members. These reviews are carried out by the Trade Policy
Review Body (TPRB) and are conducted periodical y with the largest economies (United States,
EU, Japan, and China) evaluated every three years, the next 16 largest economies every five

51 See CRS Report R45529, Trump Administration Tariff Actions: Frequently Asked Questions, coordinated by Brock
R. Williams.
52 T he three countries announced a joint monitoring and consultation system to replace the tariffs. See https://ustr.gov/
about-us/policy-offices/press-office/press-releases/2019/may/united-states-announces-deal-canada-and.
53 With the exception of resolved cases with Mexico and Canada.
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years, and remaining economies every seven years. These reviews are meant to increase
transparency of a country’s trade policy and enable a multilateral assessment of the effect of
policies on the trading system. The reviews also al ow each member country to question specific
practices of other members, and may serve as a forum to flag, and possibly avoid, future disputes.
To take one example, the most recent trade policy review of China occurred in 2018 and its next
review is slated for October 2021.54 During the review members noted and commended some
recent initiatives of China to open market access and liberalize its foreign investment regime.
Several concerns were also raised, including “the preponderant role of the State in general, and of
state-owned enterprises in particular,” and “China’s support and subsidy policies and local
content requirements, including those that may be part of the 2025 [Made in China] plan.”55 The
United States also had its latest review in 2018 (see text box).
2018 Trade Policy Review of the United States
The most recent trade policy review of the United States culminated in December 2018 under the Trump
Administration.56 The Secretariat’s report issued in November is a factual description of a country’s policy and of
significant developments since the last review. It does not pass judgement on the consistency of a country’s
policies with WTO agreements. Subsequently, the TPRB met on December 17-19 to assess the report, pose
questions, and al ow other members to opine on specific aspects of U.S. policy. In his statement, U.S. Ambassador
to the WTO Dennis Shea contended that U.S. trade policy is “steadfastly focused on the national interest
including retaining and using US sovereign power to act in defense of that interest.” He described U.S. trade policy
as resting on five major pil ars: “supporting U.S. national security, strengthening the U.S. economy, negotiating
better trade deals, aggressive enforcement of U.S. trade laws, and reforming the multilateral trading system.” 57
While WTO members general y lauded the United States on a free and open trade policy, and recognized its
traditional role as a pil ar of the multilateral trading system, some countries voiced their displeasure at recent U.S.
trade actions. Members took issue with the imposition of tariffs on steel and aluminum as a result of the Section
232 national security determinations; the imposition of Section 301 tariffs on China; increased use of trade
remedies; and rising levels of trade-distorting farm subsidies, including the aid package for agricultural producers
hit by retaliatory tariffs; as wel as perennial irritants, such as Buy American policies and Jones Act maritime and
cabotage restrictions.58 According to the EU Ambassador to the WTO Marc Vanheukelen, “the multilateral
trading system is in a deep crisis and the United States is in the epicenter for a number of reasons.”59
Plurilateral Agreements (Annex 4)
Most WTO agreements in force have been negotiated on a multilateral basis, meaning the entire
body of WTO members subscribes to them. By contrast, plurilateral agreements are negotiated by
a subset of WTO members and often focus on a specific sector. A handful of such agreements
supplement the main WTO agreements discussed previously.60

54 For the text of the report, see https://www.wto.org/english/tratop_e/tpr_e/tp475_e.htm. For more information on the
T PR schedule, see https://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm .
55 WT O, “T rade Policy Review: China: Concluding remarks by the Chairperson,” July 11 and 13, 2018,
https://www.wto.org/english/tratop_e/tpr_e/tp475_crc_e.htm. Also see, CRS In Focus IF10964, “Made in China 2025”
Industrial Policies: Issues for Congress, by Karen M. Sutter.
56 See https://www.wto.org/english/tratop_e/tpr_e/tp482_e.htm.
57 “U.S. Statement by Ambassador Shea at the 14th T rade Policy Review of the United States,” December 17, 2018,
https://geneva.usmission.gov/2018/12/17/u-s-statement-by-ambassador-shea-at-the-14th-wto-tpr-of-the-united-states-
of-america/.
58 “Concluding Remarks of the Chairperson, Ambassador Sunanta Kangvalkulkij” T rade Policy Review Body,
December 19, 2018, https://www.wto.org/english/tratop_e/tpr_e/tp482_crc_e.htm.
59 “U.S. Criticized at WT O,” Washington Trade Daily, December 18, 2018.
60 One example is the Agreement on T rade in Civil Aircraft , which entered into force in 1980 between 32 WT O
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Within the WTO, members have two ways to negotiate on a plurilateral basis, also known as
“variable geometry.”61 A group of countries can negotiate with one another provided that the
group extends the benefits to al other WTO members on an MFN basis—the foundational
nondiscrimination principle of the GATT/WTO. Because the benefits of the agreement are to be
shared among all WTO members and not just the participants, the negotiating group likely would
include those members forming a critical mass of world trade in the product or sector covered by
the negotiation in order to avoid the problem of free riders—those countries that receive trade
benefits without committing to liberalization. An example of this type of plurilateral agreement
granting unconditional MFN is the Information Technology Agreement (ITA), in which tariffs on
selected information technology goods were lowered to zero, as negotiated by WTO members
comprising more than 90% of world trade in these goods (see below).
A second type of plurilateral is the non-MFN agreement, often referred to as “conditional-MFN.”
In this type, participants undertake obligations among themselves, but do not extend the benefits
to other WTO members, unless they directly participate in the agreement. Also known as the
“club” approach, non-MFN plurilaterals al ow for wil ing members to address policy issues not
covered by WTO disciplines. However, these agreements require a waiver from the entire WTO
membership to commence negotiations. Some countries are reluctant to al ow other countries to
negotiate for fear of being left out, even while not being ready to commit themselves to new
disciplines. Yet, according to one commentator, these members are “simply outsmarting
themselves” by encouraging more ambitious members to take negotiations out of the WTO.
Government Procurement Agreement
The Government Procurement Agreement (GPA) is an early example of a plurilateral agreement
with limited WTO membership—first developed as a code in the 1979 Tokyo Round.62 Currently,
48 WTO members (including EU members separately and the United States) participate in the
GPA; non-GPA signatories do not enjoy rights under the agreement.63 The GPA provides market
access for various nondefense government projects to contractors of its signatories.64 Each
member specifies government entities and goods and services (with thresholds and limitations)
that are open to procurement bids by foreign firms of the other GPA members. For example, the
U.S. GPA market access schedules of commitments cover 85 federal-level entities and voluntary
commitments by 37 states.65 Negotiations to expand the GPA were concluded in 2012, and a
revised GPA entered into force in 2014. Several countries, including China—which committed to
pursuing GPA participation in its 2001 WTO accession process—are in long-pending negotiations
to accede to the GPA. The growing role of the state in China’s economy may make China’s
interest in joining and ability to meet requirements increasingly difficult, however. China’s
position outside the GPA has given the U.S. government and other WTO members flexibility to
address a range of China concerns through procurement measures. According to estimates by the

members, including the United States. T he agreement eliminates import duties on all aircraft, other than military
aircraft, and other specified products. See https://www.wto.org/english/tratop_e/civair_e/civair_e.htm.
61 Peter Sutherland et al., “T he Future of the WT O: Addressing institutional challenges in the new millennium,” World
T rade Organization, 2004, p. 64.
62 CRS In Focus IF11651, WTO Agreement on Government Procurement (GPA), by Andres B. Schwarzenberg.
63 In November 2018, WT O members approved in principle the UK’s market access offer to continue GPA
membership as a separate member, following its pending withdrawal from the EU. See WT O, https://www.wto.org/
english/news_e/news18_e/gpro_28nov18_e.htm.
64 For more information on the GPA, see https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm.
65 For the U.S. GPA schedule, see https://www.wto.org/english/tratop_e/gproc_e/gp_app_agree_e.htm.
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U.S. Government Accountability Office (GAO), from 2008 to 2012, 8% of total global
government expenditures, and approximately one-third of U.S. federal government procurement,
was covered by the GPA or similar commitments in U.S. FTAs.66
Information Technology Agreement
Unlike the GPA, the Information Technology Agreement (ITA) is a plurilateral agreement that is
applied on an unconditional MFN basis. In other words, al WTO members benefit from the tariff
reductions enacted by parties to the ITA regardless of their own participation.67 Original y
concluded in 1996 by a subset of WTO members, the ITA provides tariff-free treatment for
covered IT products; however, the agreement does not cover services or digital products like
software. In December 2015, a group of 51 WTO members, including the United States,
negotiated an expanded agreement to cover an additional 201 products and technologies, valued
at over $1 tril ion in annual global exports.68 Members committed to reduce the majority of tariffs
by 2019. In June 2016, the United States initiated the ITA tariff cuts.
Analysts point to how China's reticence to make concessions prolonged negotiations, jeopardized
outcomes, and raised concerns about how China might undermine future negotiations.69 China
began its cuts in mid-September 2016, with plans to reduce tariffs over five to seven years but
maintains high tariff peaks.
Trade Facilitation Agreement
The Trade Facilitation Agreement (TFA) is the newest WTO multilateral trade agreement,
entering into force on February 22, 2017, and perhaps the lasting legacy of the Doha Round, since
it is the only major concluded component of the negotiations.70 The TFA aims to address multiple
trade barriers confronted by exporters and importers and reduce trade costs by streamlining,
modernizing, and speeding up the customs processes for cross-border trade, as wel as making it
more transparent. Some analysts view the TFA as evidence that achieving new multilateral
agreements is possible and that the design, including special and differential treatment provisions,
could serve as a template for future agreements.

66 U.S. GAO, United States Reported Opening More Opportunities to Foreign Firms T han Other Countries, but Better
Data Are Needed, GAO-17-168, February 9, 2017, p. 10. Also, see CRS In Focus IF11580, U.S. Governm ent
Procurem ent and International Trade, by Andres B. Schwarzenberg.
67 For more information on the ITA, see https://www.wto.org/english/tratop_e/inftec_e/inftec_e.htm and
https://www.wto.org/english/tratop_e/inftec_e/itaintro_e.htm.
68 UST R, “U.S. and WT O Partners Announce Final Agreement on Landmark Expansion of Information T echnology
Agreement,” December 2015, https://go.usa.gov/xPftt.
69 For example, see Phil Muncaster, "China Stalls WT O T rade T alks on T ariff Free IT Goods," The Register, July 18,
2013, https://www.theregister.co.uk/2013/07/18/wto_trade_talks_dut y_ita_stall_china/.
70 See CRS Report R44777, WTO Trade Facilitation Agreement, by Rachel F. Fefer and Vivian C. Jones.
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The TFA has three sections. The first is the
heart of the agreement, containing the main
Impact of the WTO Trade Facilitation
provisions, of which many, but not al , are
Agreement
binding and enforceable. Mandatory articles
According to WTO estimates, global export gains from
include requiring members to publish
ful implementation of the TFA could range from $750
information, including publishing certain
bil ion to more than $3.6 tril ion dol ars per year and,
for the 2015-2030 time period, could increase world
items online; issue advance rulings in a
export growth by 2.7% a year and world GDP growth
reasonable amount of time; and provide for
by over 0.5% a year.
appeals or reviews, if requested. The second
The Organisation for Economic Co-operation and
section provides for SDT for developing
Development (OECD) estimates that TFA
country and LDC members, al owing them
implementation could lower the costs of doing trade as
more time and assistance to implement the
much as 12.5%-17.5% global y.
agreement. The TFA is the first WTO
agreement in which members determine their own implementation schedules and in which
progress in implementation is explicitly linked to technical and financial c apacity. The TFA
requires that “donor members,” including the United States, provide the needed capacity building
and support. Final y, the third section sets institutional arrangements for administering the TFA.
As of August 2021, 94% of the membership have ratified the agreement.71 Members have been
actively notifying their commitments and progress—as of August 2021, 70% of implementation
commitments have been notified72—and capacity-building activities are ongoing to support full
implementation.
Key Exceptions under GATT/WTO
Under WTO agreements, members general y cannot discriminate among trading partners, though
specific market access commitments can vary significantly by agreement and by member. WTO
rules permit some broad exceptions, which al ow members to adopt trade policies and practices
that may be inconsistent with WTO disciplines and principles such as MFN treatment, granting
special preferences to certain countries, and restricting trade in certain sectors, provided certain
conditions are met. Some of the key exceptions follow.
General exceptions. GATT Article XX grants WTO members the right to take certain measures
necessary to protect human, animal, or plant life or health, or to conserve exhaustible natural
resources, among other aims. The measures, however, must not entail “arbitrary” or
“unjustifiable” discrimination between countries, or serve as “disguised restriction on
international trade.” GATS Article XIV provides for similar exceptions for trade in services.
National security exception. GATT Article XXI protects the right of members to take any action
considered “necessary for the protection of essential national security interests,” as related to (i)
fissionable materials; (i ) traffic in arms, ammunition, and implements of war, and such traffic in
other goods and materials carried out to supply a military establishment; and (i i) taken in time of
war or other emergency in international relations. Similar exceptions relate to trade in services
(GATS Article XIV bis) and intel ectual property rights (TRIPS Article 73).
More favorable treatment to developing countries. The so-cal ed “enabling clause” of the
GATT—cal ed the “Decision on Differential and More Favorable Treatment, Reciprocity and
Fuller Participation of Developing Countries” of 1979—enables developed country members to
grant differential and more favorable treatment to developing countries that is not extended to

71 WT O T rade Facilitation Agreement Database, https://tfadatabase.org/ratifications.
72 Ibid., https://tfadatabase.org/implementation.
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other members. For example, this permits granting unilateral and nonreciprocal trade preferences
to developing countries under special programs, such as the U.S. Generalized System of
Preferences (GSP), and also relates to regional trade agreements outside the WTO (see below).
Exceptions for regional trade agreements (RTAs). WTO countries are permitted to depart from
the MFN principle and grant each other more favorable treatment in trade agreements outside the
WTO, provided certain conditions are met. Three sets of rules general y apply. GATT Article
XXIV applies to goods trade, and al ows the formation of free trade areas and customs unions
(areas with common external tariffs). These provisions require that RTAs be notified to the other
WTO members, cover “substantial y al trade,” and do not effectively raise barriers on imports
from third parties. GATS Article V al ows for economic integration agreements related to s ervices
trade, provided they entail “substantial sectoral coverage,” eliminate “substantial y al
discrimination,” and do not “raise the overal level of barriers to trade in services” on members
outside the agreement. Paragraph 2(c) of the “enabling clause,” which deals with special and
differential treatment, al ows for RTAs among developing countries in goods trade, based on the
“mutual reduction or elimination of tariffs.” RTA provisions in the GATS also al ow greater
flexibility in sectoral coverage within services agreements that include developing countries.
Joining the WTO: The Accession Process
There are currently 164 members of the WTO. Another 22 countries are seeking to become
members.73 Joining the WTO means taking on the commitments and obligations of al the
multilateral agreements. Governments are motivated to join not just to expand access to foreign
markets but also to spur domestic economic reforms, help transition to market economies, and
promote the rule of law.74 While any state or customs territory fully in control of its trade policy
may become a WTO member, a lengthy process of accession involves a series of documentation
of a country’s trade regime and market access negotiation requirements (see Figure 6).75 For
example, Kazakhstan joined the WTO on November 30, 2015, after a 20-year process.
Afghanistan became the 164th WTO member on July 29, 2016, after nearly 12 years of
negotiating its accession terms. Other countries have initiated the process but face delays.

73 For the current status of accessions, see https://www.wto.org/english/thewto_e/acc_e/status_e.htm.
74 Uri Dadush and Chiedu Osakwe, ed., WTO Accessions and Trade Multilateralism: Case Studies and Lessons from
the WTO at Twenty, Cambridge University Press and the World T rade Organization, 2015.
75 For more information on WT O accessions, see https://www.wto.org/english/thewto_e/acc_e/acces_e.htm and
https://www.wto.org/english/thewto_e/acc_e/cbt_course_e/c4s1p1_e.htm.
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Figure 6. WTO Accession Process

Source: WTO. Created by CRS.
Note: The Working Party is a group of members negotiating multilateral y with a country applying to join.
As the WTO general y operates by member consensus, any single member could block the
accession of a prospective new member. As part of the process, a prospective member must
satisfy specific market access conditions of other WTO members by negotiating on a bilateral
basis. The United States has been a central arbiter of the accession process for countries like
China (joined in 2001, see below), Vietnam (2007), and Russia (2012), with which permanent
normal trade relations had to be established concurrently under U.S. law for the United States to
receive the full benefits of their membership.
China’s Accession and Membership
China joined the WTO in December 2001. China has emerged as a major global trader and is the
largest merchandise exporter, and second-largest merchandise importer worldwide. China’s
accession into the WTO on commercial y meaningful terms was a major U.S. trade objective
during the late 1990s. Entry into the WTO was viewed by many as an important catalyst for
spurring additional economic and trade reforms and the opening of China’s economy in a market,
rules-based direction.76 China’s entry into the WTO helped it to become an increasingly
significant market for U.S. exporters, a central factor in global supply chains, and a major source
of low-cost goods for U.S. consumers. At the same time, China has failed to implement key
commitments in areas such as services and has shifted toward a more statist economic
development path. Many of the areas in which Chinese firms are expanding offshore remain
highly restricted or closed to foreign firms in China. This growing asymmetry in market
conditions and access has been spurring debate about options to address China’s practices of
concern both within and outside the WTO.

76 Written testimony by Nicholas R. Lardy, “Issues in China’s WT O Accession,” May 9, 2001, Brookings Institution,
https://www.brookings.edu/testimonies/issues-in-chinas-wto-accession/.
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Negotiations for China’s accession to the GATT and then the WTO began in 1986 and took more
than 15 years to complete. China sought to enter the WTO as a developing country, while U.S.
trade officials insisted that China’s entry had to be based on “commercial y meaningful terms”
that would require China to significantly reduce trade and investment barriers within a relatively
short time. In the end, a compromise was reached that required China to make immediate and
extensive reductions in various trade and investment barriers, while allowing it to maintain some
protection (or a transitional period of protection) for certain sensitive sectors and to reconcile
various laws, regulations, and policies following accession (see text box).77
Selected Terms of China’s 2001 WTO Accession

Reduce the average tariff for industrial goods from 17% to 8.9%, and average tariffs on U.S.
priority agricultural products from 31% to 14%.

Limit subsidies for agricultural production to 8.5% of the value of farm output, eliminate
export subsidies on agricultural exports, and regularly notify WTO of al state subsidies.

Grant full trade and distribution rights to foreign enterprises within three years (with some
exceptions, such as for certain agricultural products, minerals, and fuels).

Provide nondiscriminatory treatment to all WTO members, such as treating foreign firms
no less favorably than Chinese firms for trade purposes.

End discriminatory trade policies against foreign invested firms, such as domestic content
rules and technology transfer requirements.

Implement the TRIPS Agreement (which sets minimum standards on IPR protection and rules
for enforcement) upon accession.

Fully open the banking system to foreign financial institutions within five years.

Allow joint ventures in insurance and telecommunications sectors (with various degrees of
foreign ownership al owed).
After joining the WTO, China began to implement economic reforms that facilitated its transition
toward a market economy and increased its openness to trade and foreign direct investment
(FDI). China also general y implemented its tariff cuts on schedule. However, by 2006, U.S.
officials and companies noted evidence of some trends toward a more restrictive trade regime and
more state intervention in the economy.78 In particular, observers have voiced concern about
various Chinese industrial policies, such as those that foster indigenous innovation based on
forced technology transfer, domestic subsidies, and IP theft. Some stakeholders have expressed
concerns over China’s mixed record of implementing certain WTO obligations and asserted that,
in some cases, China appeared to be abiding by the letter but not the “spirit” of the WTO.79
The United States and other WTO members have used dispute set lement (DS) procedures on a
number of occasions to address China’s al eged noncompliance with certain WTO commitments.
As a respondent, China accounts for about 12% of total WTO disputes since 2001. The United
States has brought 23 dispute cases against China at the WTO on issues, including IPR protection,
subsidies, and discriminatory industrial policies, and has largely prevailed in most cases. Though

77 For more detail on the terms, see CRS Report RL33536, China-U.S. Trade Issues, by Wayne M. Morrison.
78 See UST R, 2016 Report to Congress on China’s WTO Compliance, January 2017, and the annual UST R National
Trade Estim ate Reports for specific examples.
79 For example, see Written testimony by the U.S.-China Business Council, “China’s Implementation of its World
T rade Organization Commitments,” Submitted in response to the Office of the U.S. T rade Representative’s Request for
Comments and Notice of Public Hearing Concerning China’s Compliance with WT O Commitments, September 21,
2016; and Atkinson et al., Stopping China’s Mercantilism : A Doctrine of Constructive, Alliance-Backed Confrontation,
Information Technology and Innovation Foundation, March 16, 2017.
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some issues remain contested, China has largely complied with most WTO rulings.80 China has
also increasingly used DS to confront what it views as discriminatory measures; to date, it has
brought 16 cases against the United States.
More broadly, the Trump Administration has questioned whether WTO rules are sufficient to
address the chal enges that China’s economy presents. USTR Lighthizer expressed this view in
remarks in September 2017: “The sheer scale of their coordinated efforts to develop their
economy, to subsidize, to create national champions, to force technology transfer, and to distort
markets in China and throughout the world is a threat to the world trading system that is
unprecedented. Unfortunately, the World Trade Organization is not equipped to deal with this
problem.”81 USTR views efforts to resolve concerns over Chinese trade practices to date as
limited in effectiveness, including through WTO DS, as wel as recent proposals by WTO
members to craft new rules and WTO reforms.82 In its latest annual report to Congress on China’s
WTO compliance for 2020, USTR stated:
[The WTO DS] mechanism is not designed to address a trade regime that broadly conflicts
with the fundamental underpinnings of the WTO system. No amount of WTO DS by other
WTO members would be sufficient to remedy this systemic problem. Indeed, many of the
most harmful policies and practices being pursued by China are not even directly
disciplined by WTO rules.83
Another related U.S. concern is China’s claim that it is a “developing country” under the WTO,
and, in particular, implications for concessions under ongoing and future WTO negotiations.84
Through developing country status, which countries self-designate, countries are entitled to
certain rights under special and differential treatment (SDT), among other provisions in WTO
agreements (for more discussion, see “Treatment of Developing Countries” and text box). The
Trump Administration directed USTR to seek WTO reform in this area, claiming “the United
States has never accepted China’s claim to developing-country status,” and the WTO should
change its approach to affording flexibilities based on such status.85 (See “Treatment of
Developing Countries”.) In the view of USTR Katherine Tai, “If the WTO is going to succeed in
promoting equitable economic development, it is critical that the institution rethink the ability of
countries to self-select developing country status. The rules for special and differential treatment
should be reserved for those countries whose development indicators and global competitiveness
actual y warrant such flexibilities; they should not be abused by countries that are already major
trading powers.”86 Some Members of Congress also view this issue as a priority for WTO reform
in order to address what they perceive as China’s “predatory trade practices and abuse.”87 Chinese

80 James Bacchus, Simon Lester, and Huan Zhu, “Disciplining China at the WT O,” CAT O Institute, Policy Analysis
No. 856, November 15, 2018.
81 “U.S. T rade Policy Priorities: Robert Lighthizer, United States T rade Representative,” September 18, 2017, CSIS,
https://www.csis.org/events/us-trade-policy-priorities-robert -lighthizer-united-states-trade-representative.
82 See UST R, 2020 Report to Congress on China’s WTO Compliance, January 2021.
83 Ibid, p. 23.
84 See “U.S. Statement at the T rade Policy Review of the People’s Republic of China,” Statement as delivered by
Ambassador Dennis C. Shea on Behalf of the United States of America, July 11, 2018, Geneva.
85 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July
26, 2019.
86 U.S. Congress, Senate Finance Committee, Questions for the Record, Hearing to Consider the Nomination of
Katherine C. T ai, of the District of Columbia, to be United States T rade Representative, February 25, 2021.
87 Rep. Darin LaHood and Rep. Anthony Gonzalez, “Reforming China’s unfair practices at the WT O will level the
global playing field,” Op-ed, Washington Examiner, August 4, 2020.
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officials assert that despite being the world’s second-largest economy, China remains a
developing country, due to its relatively low GDP per capita and other economic chal enges.88
Building concerns in the U.S. government and business community over China’s economic
practices and trade actions led the Trump Administration to resort to unilateral mechanisms
outside the WTO, such as the Section 301 investigation of Chinese IPR and technology transfer
practices that in its view more effectively addressed Chinese “unfair trade practices.”89 Prior to
the establishment of the WTO, the United States resorted to Section 301 relatively frequently, in
particular due to concerns that the GATT lacked an effective DS system.90 When the United
States joined the WTO in 1995, it agreed to use the DS mechanism rather than act unilateral y;
many analysts contend that the United States has violated its WTO obligations by imposing tariffs
against China under Section 301. Following its investigation, the United States also initiated a
WTO DS case against China’s “discriminatory technology licensing” in 2018. Subsequently,
China filed its own complaints at the WTO over U.S. tariff actions, which remain in effect under
the Biden Administration (see above).
The United States has pursued some cooperation with other countries with similar concerns over
Chinese non-market policies and practices, and the need to clarify and improve WTO rules on
industrial subsidies and state-owned enterprises (SOEs) in particular.91 Since 2017, the United
States, EU, and Japan have been engaged in trilateral talks to cooperate on issues related to
government-supported excess capacity, unfair competition caused by market-distorting subsidies
and SOEs, forced technology transfer, and local content requirements.92 In January 2020, the
three sides advanced a proposal to strengthen existing WTO rules on industrial subsidies.93 (See
“Competition with SOEs and Non-Market Practices”.)
Current Status and Ongoing Negotiations
Buenos Aires Ministerial MC11, 2017
The last WTO Ministerial Conference (MC11) in December 2017, in Buenos Aires, Argentina,
resulted in few major outcomes but served as an opportunity for members to take stock of

88 “China remains largest developing country: economist,” Xinhua, April 15, 2018. As per the World Bank, China is
considered a developed country, though it is often distinguished as an “ emerging market.” However, based on World
Bank classifications of countries by income groupings, using gross national income (GNI) per capita, China is
considered an upper-middle income economy. See World Bank, https://www.worldbank.org/en/country/china/overview
and https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
89 CRS In Focus IF11346, Section 301 of the Trade Act of 1974, by Andres B. Schwarzenberg and CRS In Focus
IF11284, U.S.-China Trade Relations, by Karen M. Sutter.
90 CRS Report R46604, Section 301 of the Trade Act of 1974: Origin, Evolution, and Use, by Andres B.
Schwarzenberg; Chad P. Bown, “ Rogue 301: T rump to Dust Off Another Outdated US T rade Laws,” Peterson Institute
for International Economics, August 3, 2017, https://piie.com/blogs/trade-investment-policy-watch/rogue-301-trump-
dust-another-outdated-us-trade-law.
91 Some experts suggest that the United States should pursue a comprehensive, multilateral case at the WT O with a
broad coalition of countries sharing concerns about certain Chinese practices that either violate one or mo re specific
WT O commitments or that “nullify or impair” a benefit provided to WT O members (known as a non -violation claim
under Article XXIII of the GAT T ). See U.S.-China Economic and Security Review Commission, Hearing on U.S.
Tools to Address Chinese Market Distortions, written testimony of Jennifer Hillman, June 8, 2018.
92 UST R, “Joint Statement by the United States, European Union and Japan at MC11,” December 11, 2017.
93 UST R, “Joint Statement on T rilateral Meeting of the T rade Ministers of the United States, Japan, and the European
Union,” press release, January 2020.
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ongoing talks and further define priority work areas. Although WTO members worked intensively
to build consensus over proposals in several areas, MC11 did not result in major breakthroughs.
Subsets of WTO members issued statements committing to new work programs or open-ended
talks for interested parties to potential y conclude plurilateral agreements in areas. These Joint
Statement Initiatives (JSI) include:94
 Domestic regulation of services: among 65 members, the United States stated
plans to join;
 E-commerce: among 86 WTO members, including the United States;
 Investment facilitation: among 98 WTO members; and
 Micro, small and medium-sized enterprises: among 90 WTO members.
The lack of concrete multilateral outcomes at MC11 was a reminder of the continued resistance of
some countries to a new agenda outside of the original 2001 Doha mandate. In the view of former
EU Trade Commissioner Cecilia Malmström, the Ministerial “laid bare the deficiencies of the
negotiating function at the WTO” and she blamed the lack of progress on “procedural excuses
and vetoes” and “cynical hostage taking.”95 Some developing country members, including India,
attempted to block multilateral progress in a range of areas absent more progress on Doha issues,
such as agricultural stockholding for food security. Such “hostage-taking” tactics, widely
acknowledged to have hindered progress in the Doha Round, further highlight the difficulty of
achieving future consensus among al 164 members. In contrast, the United States general y
viewed the Ministerial outcome and launch of plurilateral talks positively—that it signaled “the
impasse at the WTO was broken,” paving the way for like-minded countries to pursue new work
in other areas.96

What Happened to the Doha Round
The Doha Round launched in November 2001, but after nearly two decades of negotiations, members did not
achieve its agenda and in 2015 were unable to reach consensus to reaffirm its mandate.
Put simply, the large and diverse membership of the WTO made consensus on the broad Doha mandate
difficult. At the root of the stalemate were persistent differences among the United States, EU, and developing
countries on major issues including agricultural market access, subsidies, industrial tariffs and nontariff barriers,
services, and trade remedies. Developing countries, including large emerging markets like China, Brazil, and
India, sought reduction of agricultural tariffs and subsidies by developed countries, nonreciprocal market access
for manufacturing sectors, and continued protection for services sectors. In contrast, developed country
members sought reciprocal trade liberalization, especial y commercial y meaningful market access in advanced
developing countries, while retaining protection for agriculture.
Procedural rigidities inherent in the WTO negotiating approach also complicated negotiations. In particular, the
“single undertaking” approach, which means “nothing is agreed until everything is agreed,” prevented progress
in select areas where consensus might be easier to achieve. However, some experts view a big package as the
best approach to securing major new trade liberalization where every member has to give and take. Countries
have disagreed about how to learn best from the perceived failure of Doha, leaving the path forward unclear as
members continue to negotiate both at a multilateral and plurilateral level.

94 Number of countries in the talks reflects current participants, which expanded since the original announcements.
WT O, “New initiatives on electronic commerce, investment facilitation and MSMEs,” December 13, 2017,
https://www.wto.org/english/news_e/news17_e/minis_13dec17_e.htm.
95 European Commission, “EU Statement at the Heads of Delegations meeting,” Buen os Aires, Argentina, December
13, 2017, http://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156464.pdf.
96 UST R, “UST R Robert Lighthizer Statement on the Conclusion of the WT O Ministerial Conference,” press release,
December 2017.
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Outlook for MC12, 2021
The Ministerial general y convenes every two years to make decisions and announce progress on
multilateral trade agreements. Due to the COVID-19 pandemic, the 12th Ministerial (MC12) was
postponed until November 2021.97 During the pandemic, some WTO activities have continued
virtual y, including General Council meetings, and some negotiations, while others stal ed as
members reevaluated whether it is viable and appropriate for talks to be conducted virtual y.
While the virtual format may al ow for more representatives to participate and facilitate
consultations with national ministries, the missing element of face-to-face consultations and side
conversations may make it harder to conclude highly contentious issues.
Following the mixed results of MC11, WTO members hope MC12 wil be an action-forcing event
to conclude key negotiations and make progress on multiple initiatives, demonstrating the value
of the WTO. The ministerial wil also serve as a critical forum for taking stock of various WTO
reform proposals and the crisis in the DS system. MC12, to be held in a hybrid format of in-
person as wel as virtual participation, wil be the first Ministerial meeting to be chaired by the
new WTO DG Ngozi Okonjo-Iweala, who was selected by WTO members in February 2021,
after the Biden Administration formal y supported her candidacy.
Okonjo-Iweala has cal ed on WTO members to focus efforts and show flexibility to conclude
longstanding negotiations on agriculture and fisheries subsidies (see below). In particular, she has
urged members to work together and find ways forward to address proposals on: access to
medical products for combatting the pandemic; special and differential treatment; and dispute
settlement (see “Proposed Institutional Reforms”). The DG has expressed frustration with
inertia in ongoing negotiations,98 and said she is seeking breakthroughs in the impasses to
produce two or three concrete deliverables at MC-12 and announcements on progress on the
multiple ongoing plurilateral negotiations launched at the end of MC11.99
At the same time, WTO leadership and U.S. trade officials have tempered expectations for major
outcomes at MC12.100 USTR Tai has emphasized that a “successful” ministerial must at least
deliver a meaningful agreement on fisheries subsidies, on members’ response to the COVID-19
pandemic, and the importance of WTO reform.101 In a later speech, she stated that “We can use
the upcoming ministerial to deliver results on achievable outcomes,” pointing to specific
opportunities in trade and health, trade facilitation, the ongoing fisheries negotiations, reforming
the WTO’s monitoring function, and revitalizing dispute settlement.102 At the October 2021 G-20
Trade and Investment Ministerial meeting, the ministers noted that the G-20 members “commit to
a successful and productive WTO 12th Ministerial Conference as an important opportunity to
advance WTO reform to revitalize the organization.”103

97 For more information on MC12, see https://www.wto.org/english/thewto_e/minist_e/mc12_e/mc12_e.htm .
98 Bryce Baschuk, “Okonjo-Iweala Grows Frustrated With WT O Inertia, Floats Quitting,” Bloomberg, September 30,
2021.
99 WT O General Council, “ Chair urges members to focus on priorities, outcomes for MC12 ,” July 28, 2021.
100 Doug Palmer, “ WT O chief outlines modest goals for ministerial meeting,” Politico, September 23, 2021;
101 UST R, “Readout of Ambassador Katherine T ai’s meeting with World T rade Organization Director -General Dr.
Ngozi Okonjo-Iweala,” September 22, 2021.
102 UST R, “ Ambassador Katherine T ai's Remarks As Prepared for Delivery on the World T rade Organization ,” October
14, 2021.
103 G20, Ministerial Statement on T rade and Investment, October 12, 2021, https://www.g20.org/wp-
content/uploads/2021/10/G20-TIMM-statement-PDF.pdf.
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Selected Ongoing WTO Negotiations
In anticipation of MC12, WTO members continue to make progress and seek concrete outcomes
on some ongoing talks, including fisheries subsidies and e-commerce. In other areas, such as
agriculture, prospective outcomes remain limited. In addition to ongoing negotiations for new
rules and trade liberalization, other talks among members involve responses to the COVID-19
pandemic (see “COVID-19 and WTO Reactions”).
Agriculture
While plurilaterals have become the negotiating approach for several issues, for some issues,
multilateral solutions arguably remain ideal, such as achieving longstanding objectives on
disciplines for agricultural subsidies, which are widely used by developed and advanced
developing countries alike. While members were largely unable to achieve the Doha Round’s
comprehensive negotiating mandate to lower agricultural tariffs and subsidies, negotiations more
limited in scope have continued.104 For example, in 2015, members agreed to eliminate export
subsidies for agriculture; at the same time, other issues where members have agreed to interim
solutions, such as regarding public stockholding for ensuring food security remain seemingly
intractable. Public stockholding—otherwise known as price support or supply control programs—
is used by governments, especial y in developing countries to purchase and stockpile food to
bolster domestic farm prices by removing surplus stocks from the market.105 Reaching an
agreement on public stockholding continues to be a priority for some developing countries such
as India.
The MC12 negotiating text on agriculture released in July 2021 seeks an agreement on
“principles” that WTO members would further negotiate to continue the reform process.106
Priority areas cover key pil ars of the AoA, such as domestic support, market access, and export
competition, as wel as areas that emerged during the Doha Round, including reform to the cotton
sector, export restrictions, a special safeguard mechanism to protect farmers in developing
countries, and public stockholding. Upcoming discussions aimed at addressing domestic support
for agriculture could have implications for the United States; recent ad hoc U.S. domestic support
programs in response to international trade retaliation and economic disruption caused by the
COVID-19 pandemic added to existing programs has caused the United States to approach its
committed spending limits.107 Establishing commitments to “cap and reduce” existing trade and
domestic production-distorting entitlements by at least half by 2030 remains a priority for several
WTO member nations including those represented by the so-cal ed Cairns Group (including
Australia, Brazil, and Canada, among others).108

104 For more detailed analysis, see CRS Report R46456, Reforming the WTO Agreement on Agriculture, by Anita
Regmi, Nina M. Hart, and Randy Schnepf.
105 Some governments may release portions of these government -owned stocks to the public during periods of market
volatility or shortage, but a major concern is that some of these stocks may be exported at below their purchase price,
thus acting as indirect export subsidies. T hese programs can also become problematic when governments purchase food
at a price and quantity that effectively become trade-distorting domestic support.
106 WT O, “ Agriculture negotiations chair introduces draft text for ministerial outcome on farm trade,” July 29, 2021.
For other background, see CRS Report R46918, Key Issues in WTO Agriculture Negotiations, by Anita Regmi.
107 Under the AoA, the United States is committed to spend no more than $19.1 billion annually on domestic farm
support programs most likely to distort trade under the WT O. For 2019 -2020 crop year, the United States reports it
spent $18.2 billion in agricultural subsidies.
108 Argentina, et al, “ Framework for Negotiations on Domestic Support,” JOB/AG/177/Rev.2, July 15, 2021.
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Another major objective seen as a potential MC12 outcome is enhancing transparency. As part of
WTO reform efforts, the United States has flagged the broader issue of the importance of
notifications and transparency.109 WTO agreements require members to notify subsidies and
trade-distorting support to ensure transparency and consistency with a member’s WTO
obligations. Compliance with WTO notifications has been notoriously lax, with some countries
years behind on their reporting. In advance of MC12, the United States with other WTO members
(including Canada, the EU, and Japan) submitted a proposal cal ing for enhanced transparency
obligations, along with other reporting commitments on market access and domestic support.110 If
implemented, this proposal would establish a new, single streamlined notification process
covering export subsidies, export financing, international food aid, and exporting State Trading
Enterprises. It would also specify and explain calculations in WTO notifications related to
domestic agricultural support. The United States sees enhanced transparency and a streamlined
notification process as feasible MC12 outcomes.
The United States and other countries are also raising issues of non-tariff barriers, seeking to
establish a work program to identify chal enges and impacts of emerging issues related to the
implementation and application of the SPS Agreement. The program’s goals include promoting
the adoption and use of safe, innovative plant-protection products and veterinary medicines, and
encourage the use of international standards and recommendations developed by recognized
standard-setting organizations as the basis for harmonizing SPS measures. The declaration also
cal s for basing SPS measures on scientific evidence and principles; incorporating scientific
uncertainty in risk analysis; supporting access and use of “innovative tools and technologies”
(such as plant breeding innovations); and addressing disease transmission and pest control.111
The prospects for achieving any of these outcomes at the MC12 remain uncertain however, given
the highly contentious nature of ongoing negotiations involving food and agriculture.
Fisheries Subsidies
WTO members have been engaged in multilateral negotiations on disciplines related to fisheries
subsidies that contribute to overcapacity and overfishing since 2001, and in recent years
accelerated talks with a view toward reaching an agreement by 2020.112 Members missed that
goal due to persistent disagreements on key issues and delays to negotiations caused by the
pandemic. Members have committed to finish negotiations by MC12, and many consider an
achievement critical to upholding the WTO’s legitimacy as a negotiating forum, in part, as it is
the only current multilateral negotiation involving al countries. An agreement on fisheries
subsidies aims to meet the goals outlined in the UN Sustainable Development Goal 14, including
with respect to il egal, unregulated, and unreported (IUU) fishing.
In June 2021, the chair of the negotiations released a revised draft negotiating text, which
outlined key provisions such as:
 prohibition of subsidies to vessels or operators engaged in IUU fishing;

109 United States, “Notification of Select Domestic Support Variables in the WT O,” JOB/AG/181, February 19, 2020.
110 Argentina, et al, “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O
Agreements,” JOB/GC/204/Rev.6, JOB/CT G/14/Rev.6, July 15, 2021. For other background, see CRS In Focus
IF11906, Agriculture in the WTO’s 12th Ministerial Conference (MC12 ), by Renée Johnson.
111 Argentina, et al, “Sanitary and Phytosanitary Declaration for the T welfth WTO Ministerial Conference,”
G/SPS/GEN/1758/Rev.7, July 13, 2021. For other background, see CRS In Focus IF11903, Addressing Nontariff
Barriers to Agricultural Trade at the WTO, by Renée Johnson
112 For more detail, see CRS In Focus IF11929, World Trade Organization Fisheries Subsidies Negotiations, by Liana
Wong.
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 prohibition of subsidies supporting fishing or fishing related activities for
overfished stock and subsidies contributing to overcapacity and overfishing (e.g.,
subsidies for building or upgrading vessels, fuel subsidies, price support for fish
cost, etc.) with some exceptions;
 SDT for developing and LDC members, including delayed implementation of
certain provisions, technical assistance and capacity building; and
 strengthened notification requirements of fisheries subsides to improve
transparency.
The extent of flexibilities offered in SDT provisions and the scope of exceptions to certain
subsidies continue to be major points of contention among members. The United States has
emphasized notification requirements and the need for subsidy caps that “can combine
transparent and accountable policy space with serious constraints on major subsidizers.”113 The
United States has sought application of the commitments to the majority of countries, while some
developing country members have sought flexibilities in implementing commitments.114
In May 2021, USTR Tai submitted a proposal that the agreement include provisions addressing
the use of forced labor on fishing vessels, often linked to IUU fishing. The proposal would
require explicit recognition of the problem of forced labor, and additional transparency with
respect to those vessels or operators engaging in forced labor.115 The proposed language was not
included in the latest revised text, though some WTO members, such as the EU, have expressed
support for addressing forced labor in the negotiations.
Electronic Commerce/Digital Trade
Digital trade has emerged as a major force in world trade since the Uruguay Round, creating end
products (e.g., email or social media), enabling trade in services (e.g., consulting), and facilitating
goods trade through services, such as logistics and supply chain management that depend on
digital data flows. While the GATS contains explicit commitments for telecommunications and
financial services that underlie e-commerce, trade barriers related to digital trade, information
flows, and other related issues are not specifical y included. The WTO Work Program on
Electronic Commerce was established in 1998 to examine trade-related issues for e-commerce
under existing agreements.116 Under the work program, members agreed to continue a temporary
moratorium on e-commerce customs duties, and have renewed the moratorium at each ministerial
meeting. Members had extended the moratorium on customs duties on electronic transmissions
until MC12, but it is unclear if the extension wil be sustained after the delayed Ministerial, given
the opposition of some developing countries who see a potential new revenue stream and a lack
of agreement on what would constitute the scope of electronic transmissions.117

113 Hannah Monicken, “WTO to start fisheries text negotiations in fall; U.S. sees ‘missing pieces’,” Inside U.S. Trade,
July 21, 2020.
114 “WT O Polarized over Fisheries Subsidies,” Washington Trade Daily, July 2020.
115 UST R, “Members to Address Forced Labor on Fishing Vessels in Ongoing Fisheries Subsidies Negotiations,” Press
release, May 26, 2021.
116 WT O, “Electronic Commerce,” https://www.wto.org/english/tratop_e/ecom_e/ecom_e.htm.
117 T he countries cite a United Nations report showing increased volumes of electronic transmissions replace trade in
physical goods cause governments to forego as much as $3.4 billion in tariffs for developing countries. In contrast,
others cite an OECD study that found foregone revenue of the moratorium is likely to be relatively small and that its
lapse would come at the expense of wider gains in the economy including export competitiveness and productivity. For
more information, see UNCT AD, Rising Product Digitalisation and Losing T rade Competitiveness, 2017; Growing
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Separate from the work program, over 85 WTO members are participating in negotiations
launched at the MC11 that aim to establish a global framework and obligations that enable digital
trade in a nondiscriminatory and less trade restrictive manner. Australia, Japan, and Singapore are
the co-conveners of the JSI on E-commerce, and participants include the United States, the EU,
and several developing countries, including China and Brazil. India and South Africa are not
participating in the negotiations and are actively chal enging the legal status of the “Joint
Statement Initiative” talks because they are not being conducted on a multilateral basis (see
“Plurilateral Agreements”).118
The initial U.S. proposal was based on most recent U.S. trade agreements and seeks a high
standard agreement include removing and reducing barriers and developing rules and disciplines
on market access, data flows, nondiscriminatory treatment of digital products, protection of
intel ectual property and digital security measures, and intermediary liability, among others.119
The co-conveners aim to have ten areas of “clean text” before MC12. To date, they have
announced finalized text on: unsolicited messages (spam), electronic signatures and
authentication, and e-contracts, open government data, and online consumer protection.120 Other
areas such as cross-border data flows and data protection remain contentious. The outlook may be
chal enging, given the different national approaches and policies, especial y among the United
States, EU, and China. There is not yet agreement on whether the final obligations wil be subject
to dispute settlement, which could affect the scope, depth, and enforceability of commitments that
participants are wil ing to agree to. In addition, capacity building and technical assistance, as wel
as transition periods, in addition to other flexibilities may be required to get less developed
countries on board.
Services
Since the GATS, the scope of global trade in services has increased tremendously, spurred by
advances in IT and the growth of global supply chains. Yet, these advances are largely not
reflected in the GATS. WTO members committed to further services negotiations, which began in
2000 and were incorporated into the Doha Round. Further talks were spurred by recognition
among many observers that GATS, while extending the principles of nondiscrimination and
transparency to services trade, did not provide much actual liberalization, as many countries
simply bound existing practices.121 However, services talks during Doha also succumbed to
developing countries’ resistance to open their markets in response to developed country demands,
as wel as dissatisfaction with other aspects of the single undertaking.

T rade in Electronic T ransmissions: Implications for the South, 2019; Andrenelli, A. and J. López González (2019),
"Electronic transmissions and international trade - shedding new light on the moratorium debate", OECD T rade Policy
Papers, No. 233, OECD Publishing, Paris, https://doi.org/10.1787/57b50a4b-en.
118 India and South Africa submission to the WT O General Council, “T he Legal Status of ‘Joint Statement Initiatives’
and T heir Negotiated Outcomes,” WT /GC/W/819, February 19, 2021. India stated it will not join, preferring to
maintain its policy flexibility to favor domestic firms, limit foreign market access, and raise revenue in the future
through potential customs duties. Subhayan Chakraborty, “ India refuses to join e-commerce talks at WT O, says rules to
hurt country,” The Business Standard, February 25, 2019.
119 T he United States, “Joint Statement on Electronic Commerce Initiative,” WT O, April 12, 2018.
120 WT O, “ E-commerce talks: two “foundational” articles cleaned; development issues discussed,” press release,
September 13, 2021.
121 Gary Clyde Hufbauer, “Liberalization of Services T rade,” in Trans-Pacific Partnership: An Assessment, ed.
Cathleen Cimino-Isaacs and Jeffrey J. Schott, (Washington, DC: Peterson Institute of International Economics, 2016).
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Aside from increased market access, several issues are ripe for future negotiations at the WTO,
such as transition from the current positive list schedule of commitments to a negative list.122
Instead of a member declaring which services are open for competition, it would need to declare
which sectors are exempted. This exercise in itself could force members to reexamine their
approximately 25-year-old commitments and decide whether current market access barriers wil
be maintained. The issue of “servicification” of traditional goods industries—for example,
services that are sold with a good, such as insurance or maintenance services, or enabling
services, such as distribution, transportation, marketing, or retail—has also attracted attention as
the subject of possible WTO negotiations.123 Other issues of interest to members include services
facilitation (transparency, streamlining administrative procedures, simplifying domestic
regulations),124 and emergency safeguards, envisioned in GATS (Article X) as an issue for future
negotiation. Recently, members have focused on the economic impact of COVID-19 on sectors
such as tourism, transport and distribution services, as wel as the chal enges and opportunities
presented for digital services delivery and digital trade facilitation.
Given the lack of concrete progress in the GATS negotiations, some WTO members signed on to
the JSI on Services Domestic Regulation launched at the end of MC11.125 The negotiations focus
on licensing and qualification requirements and processes, and technical standards, aiming to
increase transparency, legal certainty and predictability, and facilitate businesses’ participation in
global services trade. In July 2021, the Biden Administration announced that the United States
would join the talks, noting that “improved transparency and regulatory processes can support
democratic values, open societies, and a worker-centric trade agenda.”126 The current
participating parties account for over 90% of global services trade and aim to reach a significant
outcome by MC12. The coordinator announced the conclusion of text-based negotiations,127
noting that the parties were finalizing their schedules of commitments with the aim of completing
the process in advance of MC12, providing the WTO with a concrete deliverable for the
Ministerial.128 The parties aim to incorporate their commitments into members’ GATS schedules
to be applied on an MFN basis. There is a maximum transitional period of seven years for
developing countries to implement disciplines for specific services sectors; notably, China did not
ask for developing country status for the this agreement.

122 U.S. FT As use a negative list approach, and the proposed T iSA negotiations use a hybrid approach to apply a
negative list to national treatment commitments and a positive list for market access.
123 International Centre for T rade and Sustainable Development (ICT SD), “Negotiating Disciplines on Domestic
Regulations in Services,” June 2018, https://www.ictsd.org/themes/services-and-digital-economy/research/negotiating-
disciplines-on-domestic-regulations-in.
124 Marta Soprana, “ Services facilitation in regional trade agreements and opportunities for convergence,” The E15
Initiative, October 2018, http://e15initiative.org/blogs/services-facilitation-in-regional-trade-agreements-and-
opportunities-for-convergence/.
125 WT O, Joint Ministerial Statement on Services Domestic Regulation, WT /MIN(17)/61, December 13, 2017.
126 UST R, United States Announces Intention to Join WTO Initiative on Services Domestic Regulation, Support
Conclusion of Negotiations by MC12, July 20, 2021.
127 T he negotiated text is available at: WT O, Joint Initiative on Services Domestic Regulation, Reference Paper on
Services Domestic Regulation, INF/SDR/1, September 27, 2021.
128 WT O, “ Participants in domestic regulation talks conclude text negotiations, on track for MC12 deal,” news item,
September 27, 2021.
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Environment
Environmental provisions were not included in the Uruguay Round agreements apart from GATT
exceptions,129 leading several WTO members to seek to ensure trade policies are more responsive
to climate and environmental chal enges. In November 2020, more than 50 countries launched the
WTO Trade and Environmental Sustainability Structured Discussions (TESSD), which broadly
aims to “promote transparency and information sharing, identifying areas for future work within
the WTO, support technical assistance and capacity building needs, particularly for least-
developed countries, and work on deliverables for environmental sustainability in the various
areas of the WTO.”130 Members suggest various topics may be included in future talks, such as
climate change, plastics waste, biodiversity, fossil fuel subsidies, decarbonizing supply chains,
and carbon border adjustment mechanisms.131 Possible deliverables considered for MC12 largely
entail defining the agenda, such as a declaration setting parameters for negotiations on
liberalizing trade in environmental goods and services and a future work program for addressing
other priority issues.132 While the United States did not join the initiative when launched, the
Biden Administration has pledged to be an active and constructive participant moving forward.133
The United States was an original participant in the now-stal ed plurilateral Environmental Goods
Agreement (EGA) negotiation, launched in 2014 to eliminate tariffs on a range of environmental
goods. The EGA involved 18 participants, including the United States, the EU, and China, and
represented nearly 90% of global trade in covered environmental goods.134 Like the ITA, the EGA
had been envisioned as an open plurilateral agreement so that the benefits achieved through
negotiations would be extended on an MFN basis to al WTO members. Despite 18 rounds of
negotiations, members were unable to conclude the agreement by the meeting of the General
Council in December 2016. Since then, talks have stal ed and the Trump Administration did not
prioritize reviving the EGA. Several stakeholders blamed China for the lack of progress, as it
rejected the list of products to be included and requested lengthy tariff phaseout periods which
other countries refused to accept.135 Some Members of Congress support reviving the EGA talks
and have urged the Biden Administration to prioritize relaunching negotiations.136
Policy Issues and Future Direction
The inability of WTO members to conclude a comprehensive agreement during the Doha Round
raised new questions about the WTO’s future direction. Many intractable issues from Doha
remain unresolved, and members have yet to reach consensus on a way forward. Persistent
differences about the extent and balance of trade liberalization continue to limit progress, as
indicated by the outcomes of recent ministerial meetings. Further, members remain divided over

129 GAT T Article XX on General Exceptions states that WTO members may adopt policy measures that are
inconsistent with GAT T disciplines, but necessary to protect human, animal or plant life or health (paragr aph (b)), or
relating to the conservation of exhaustible natural resources (paragraph (g)).
130 WT O, “ Members review draft MC12 declaration on trade and environmental sustainability ,” July 19, 2021.
131 “U.S. pledges active participation in WT O environmental sustainability talks,” Inside U.S. Trade, March 5, 2021.
132 WT O, “ First meeting held to advance work on trade and environmental sustainability ,” March 5, 2021.
133 “U.S. pledges active participation in WT O environmental sustainability talks,” Inside U.S. Trade, March 5, 2021.
134 WT O, “ Azevêdo welcomes launch of plurilateral environmental goods negotiations,” July 8, 2014.
135 “EU blames China for WT O environmental trade talks collapse,” Reuters, December 4, 2016; “Key Lawmaker, EU
and industry all blame China for torpedoing EGA deal,” Inside U.S. Trade, December 7, 2016.
136 See, e.g., H.Res. 295. See also “Ways & Means Republicans to T ai: Relaunch Environmental Goods Agreement
talks,” Inside U.S. Trade, April 22, 2021, and “ House Democrats to Biden: Relaunch Environmental Goods Agreement
talks,” Inside U.S. Trade, April 7, 2021.
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adopting new issues on the agenda, amid concerns that the WTO could lose relevance if its rules
are not updated to reflect the modern global economy. More broadly, these persistent divisions
have cal ed into question the viability of the “single undertaking,” or one-package approach in
future multilateral negotiations, and suggest broader need for institutional reform if the WTO is to
remain a relevant negotiating body.
As a result of slow progress at the WTO, countries have increasingly turned to other venues to
advance trade liberalization and rules, namely plurilateral agreements and preferential FTAs
outside the WTO. While plurilaterals are viewed as having the potential to resurrect the WTO’s
relevance as a negotiating body, at the same time they have also been seen as possibly
undermining multilateralism, if the agreements are not extended to al WTO members on an MFN
basis. Similarly, regional trade agreements have also been seen as potential laboratories for new
rules, absent multilateral progress. How these negotiations and agreements wil ultimately affect
the WTO’s status as the preeminent global trade institution is widely debated.
The fundamental longstanding chal enges facing the WTO are compounded by recent
developments that have further strained the trading system. In the near-term, in addition to the
health crisis, COVID-19 has highlighted serious economic and trade policy chal enges, and has
spurred protectionist trade and investment policies and caused disruptions to supply chains that
may have lasting effects.137 Many observers have cal ed for better global coordination in policy
responses, with some advocating for a dedicated trade and health initiative. Whether the WTO is
equipped to play a meaningful role in the crisis is also tied to broader questions about the need for
systemic reform of the institution.
Prior to the crisis, concerns had been mounting about the growing use of trade protectionism by
both developed and developing countries, U.S. unilateral tariff actions and counterretaliation by
other countries, and escalating trade disputes between major economies. Many countries have
questioned whether the WTO is equipped to effectively handle the chal enges of large economies
and markets like China, where the state may play a central role in international trade, as wel as
the deepening trade tensions between major economic players. Some experts view the multilateral
trading system as facing a potential crisis, while others remain hopeful that the current state of
affairs could spur renewed focus on reforms of the system. The United States and other WTO
members are exploring areas for reform and have submitted various proposals.
As DG Okonjo-Iweala expressed optimism for the role of trade and the WTO to tackle global
problems:138
But even as we fight to end the pandemic, making full use of trade's power to tackle vaccine
inequity, we must engage in serious thinking about what it will take to build back a better
world economy. A world economy that is greener, more prosperous and more inclusive. A
world economy that is more responsive to problems of the global commons. A WTO that
is more responsive to changing economic realities and the evolving needs of the people we
serve.

137 See for example, OECD, COVID-19 and International Trade: Issues and Actions, June 12, 2020,
http://www.oecd.org/coronavirus/policy-responses/covid-19-and-international-trade-issues-and-actions-494da2fa/;
Chad P. Bown, “COVID-19 Could Bring Down the T rading System: How to Stop Protectionism From Running
Amok,” Foreign Affairs, April 28, 2020, https://www.foreignaffairs.com/articles/united-states/2020-04-28/covid-19-
could-bring-down-trading-system.
138 WT O, “ Public Forum 2021: Introductory remarks by DG Okonjo-Iweala,” September 28, 2021.
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COVID-19 and WTO Reactions
As countries across the world grapple with COVID-19, trade policy chal enges have emerged
with some cal ing for enhanced global coordination. Experts have emphasized trade policies as
playing a major role in helping respond to COVID-19 and in assisting in the recovery. The WTO
committed to work with other international organizations to minimize disruptions to cross-border
trade and global supply chains—in particular those central to combatting the virus. The WTO has
also sought to inform members of the impact of the pandemic, and cal ed on members to abide by
notification obligations on trade-related measures taken in response. Many countries, including
the United States, imposed temporary restrictions on exports of certain medical goods and some
foodstuffs to mitigate potential shortages.139 At the same time, several countries have since lifted
restrictions or implemented measures to liberalize trade.140 A WTO report in April 2020 warned of
the policies’ long-term costs, in terms of lower supply and higher prices.141 WTO leadership urged
careful consideration of ripple effects of export curbs, as most major countries are both exporters
and importers of medical supplies, and emphasized the use of WTO-consistent tools to address
critical shortages, such as unilateral y eliminating tariffs or other taxes, expediting customs
procedures, and using subsidies to generate production.
WTO agreements have flexibilities in permitting emergency measures related to national security
or health that may contravene WTO obligations. They broadly require, however, that such
restrictions be targeted, temporary, and transparent, and do not unnecessarily restrict trade. GATT
Article XI prohibits export bans and restrictions, other than duties, taxes or other charges, but
al ows members to apply restrictions temporarily “to prevent or relieve critical shortages of
foodstuffs or other products essential” to the exporting country, among other circumstances. In
the case of foodstuffs, members must give “due consideration to the effects on food security” of
importers. As previously discussed, general exceptions providing policy flexibility require that
restrictions are not “a means of arbitrary or unjustifiable discrimination,” or “disguised restriction
on international trade,” among other conditions.
Several WTO agreements have relevance to health-related policy, such as TBT, SPS, GATS and
TRIPS. Other WTO agreements guide implementation of policies, including the WTO’s core
principle of nondiscrimination and rules on subsidies. Specific commitments have contributed to
liberalized trade in medical products: (1) tariff negotiations during the Uruguay Round; (2) a
plurilateral Agreement on Pharmaceutical Products, updated in 2011; and (3) the expanded ITA in
2015. These have improved market access for medical products, but tariff and non-tariff barriers
remain. An April 2020 WTO report estimates there is nearly $600 bil ion in annual trade in
critical medical products with limited availability during COVID-19.142 For these products, the
average applied MFN tariff is 4.8%, but certain products, such as hand soap and face masks, have
relatively high tariffs in some countries.
As measures to restrict trade spread in early 2020, some countries, including members of the G-
20, recommitted to WTO guidance that measures be targeted, temporary, and transparent; while
other groups of members committed to maintain open and connected supply chains.143 A group of

139 CRS In Focus IF11551, Export Restrictions in Response to the COVID-19 Pandemic, by Christopher A. Casey and
Cathleen D. Cimino-Isaacs.
140 WT O, “ WT O report on G20 shows moves to facilitate imports even as trade restrictions remain widespread,” June
29, 2020, https://www.wto.org/english/news_e/news20_e/trdev_29jun20_e.htm.
141 WT O, Export Prohibitions and Restrictions, Information Note, April 23, 2020.
142 WT O, Trade in Medical Goods in the Context of Tackling COVID-19, Information Note, April 3, 2020.
143 See https://www.international.gc.ca/gac-amc/news-nouvelles/2020-03-25-joint-ministerial-statement-declaration-
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42 WTO members pledged to lift emergency measures as soon as possible; the United States, EU,
and China did not join the pledge. Some countries are considering principles for a COVID-19
trade response and advocate for a plurilateral agreement to further liberalize and promote trade on
medical goods. Experts have advocated for more coordinated trade policies worldwide or
concrete action in the WTO.144
WTO DG Okonjo-Iweala has, in particular, emphasized the important role of the WTO in
contributing to solutions to trade-related obstacles to ramping up global production of, and to
equitably distributing and administering COVID-19 vaccines.145 Delay in production and
distribution of vaccines has led to cal s by some countries to issue compulsory licenses to
manufacture generic versions—authorized under certain conditions under the WTO TRIPS
Agreement—or to waive related IPR obligations. A proposal by India and South Africa for a
temporary waiver of certain TRIPS Agreement obligations for al coronavirus-related medical
products, vaccines, and treatments has yet to achieve consensus among WTO members, being
largely opposed by some members with research oriented pharmaceutical industries.146 In May
2021, USTR Katherine Tai announced the Biden Administration’s support for the concept of an
IPR waiver for COVID-19 vaccines, and pledged to “actively participate in text-based
negotiations at the [WTO] to make that happen.”147 Though the United States has not put forward
a specific text proposal, it continues to engage in discussions that “have not been easy.”148 Various
bil s have been introduced in the 117th Congress to al ow for more congressional input or
approval before the Biden Administration can agree to a waiver.
Negotiating Approaches
Plurilateral Agreements
In contrast to the consensus-based agreements of the WTO, some members, including the United
States, point to the progress made in sectoral or plurilateral settings as the way forward for the
institution. By assembling coalitions of interested parties, negotiators may more easily and
quickly achieve trade liberalizing objectives, as shown by the ITA. Sectoral agreements are
viewed as one way to pursue new agreements and extend WTO disciplines and commitments in
new areas, including, for example, U.S. trade priorities in digital trade and SOEs. To be effective,
it is critical that plurilateral agreements include a critical mass of negotiating parties to cover a
meaningful share of global trade of the goods or services covered. For example, in the plurilateral

ministerielle-commune.aspx?lang=eng.
144 For example, see Richard E. Baldwin and Simon J. Evenett ed., COVID-19 and Trade Policy: Why Turning Inward
Won’t Work, Centre for Economic Policy Research, April 2020; Wendy Cutler, “Coronavirus: T he Need to Adjust and
Reshape Our T rade Agenda,” March 17, 2020, https://asiasociety.org/policy-institute/coronavirus-need-adjust-and-
reshape-our-trade-agenda; Jennifer Hillman, “ Six Proactive Steps in a Smart T rade Approach to Fighting COVID-19,”
Think Global Health, March 20, 2020, https://www.thinkglobalhealth.org/article/six-proactive-steps-smart-trade-
approach-fighting-covid-19; and Anabel Gonzalez, “ A memo to trade ministers on how trade policy can help fight
COVID-19,” T rade and Investment Policy Watch blog, https://www.piie.com/blogs/trade-and-investment -policy-
watch/memo-trade-ministers-how-trade-policy-can-help-fight-covid.
145 WT O, “Chair Summary following ‘COVID-19 and Vaccine Equity: What Can the WT O Contribute?’” Speeches,
April 14, 2021, and WT O, “ Public Forum 2021: Introductory remarks by DG Okonjo-Iweala,” September 28, 2021.
146 For more detail and analysis, see CRS In Focus IF11858, Potential WTO TRIPS Waiver and COVID-19, by
Shayerah I. Akhtar and Ian F. Fergusson.
147 UST R, “ Statement from Ambassador Katherine T ai on the Covid-19 T rips Waiver,” May 5, 2021.
148 UST R, “ Ambassador Katherine T ai's Remarks As Prepared for Delivery on the World T rade Organization ,” October
14, 2021.
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negotiations on the domestic regulation of services, the 60-plus members account for 85% of
global services trade.
Plurilateral negotiations, however, stil involve resolving divisions among developed and
advanced developing countries. Members were able ultimately to overcome their differences in
the ITA negotiation, but such divisions were a major contributing factor to the stal ed EGA. At the
same time, some members, such as India and South Africa have chal enged the use of plurilateral
initiatives, raising concerns that the current set of JSIs launched during MC11 are “legal y
inconsistent” with WTO rules and principles. In their view, JSI leaders must either: seek
consensus from the entire WTO membership to add the new plurilateral agreements, pursue the
agreements outside of the WTO, or amend the underlying Marrakesh Agreement, which
established the WTO.149 The JSI proponents argue that if these are “open” plurilateral agreements
applied on an MFN basis, approval by the full membership is not required. The legal debate
remains unresolved.
USTR Tai voiced support for the use of plurilateral agreements, as the Administration seeks to
support the WTO while also employing new tools to resolve trade issues.150 On the other hand,
there is also a concern that plurilateral agreements not applied on an MFN basis could lead
nonparticipating countries to become marginalized from the trading system and face new trade
restrictions. To attract a critical mass of participants and lower barriers for developing countries
and LDCs who may be hesitant to agree to ambitious commitments, agreements could al ow
flexibility in implementation timeframes and provide additional assistance, as in the TFA.
Preferential Free Trade Agreements
Given that the WTO al ows its members to establish preferential FTAs outside the WTO that are
consistent with WTO rules, many countries have formed bilateral or regional FTAs and customs
areas; since 1990, the number of RTAs in force has increased seven-fold, with around 300
agreements notified to the WTO and in force.151 FTAs have often provided more negotiating
flexibility for countries to advance new trade liberalization and rulemaking that builds on WTO
agreements; however, the agreements vary widely in terms of scope and depth. Like plurilaterals,
many view comprehensive FTAs as having potential for advancing the global trade agenda.
However, like plurilaterals, FTAs can also have downsides compared to multilateral deals.
The United States currently has 14 FTAs in force with 20 countries, with some new partial
agreements completed or in progress. Most recently, the Trump Administration negotiated the
U.S.-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020, replacing
the North American Free Trade Agreement (NAFTA). The United States also negotiated a limited
trade agreement with Japan, covering some tariff liberalization and rules on digital trade, which
entered into effect in 2020. In general, U.S. FTAs are considered to be “WTO-plus” in that they
reaffirm the WTO agreements, but also eliminate most tariff and nontariff barriers and contain
rules and obligations in areas not covered by the WTO. For example, most U.S. FTAs include
access to services markets beyond what is contained in the GATS or, more recently, digital trade
obligations and disciplines to address distortions from state-led trade practices.

149 India and South Africa, “T he Legal Status of “Joint Statement Initiatives” and T heir Negotiated Outcomes,” WT O
WT /GC/W/819, February 19, 2021.
150 UST R T ai speaking at “ A Conversation with Ambassador Katherine T ai, U.S. T rade Representative,” CSIS, October
4, 2021.
151 As of the end of 2019. WT O RT A database, https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.
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The recent U.S. limited agreements with Japan, however, represented a significant shift in
approach from recent U.S. FTAs, which typical y involve one comprehensive negotiation and
agenda. Several analysts questioned the extent to which the agreement, as wel as some non-U.S.
trade agreements, adhere to GATT Article XXIV, requiring that FTAs cover “substantial y al
trade,” in particular given the exclusion of U.S.-Japan auto trade.152 Whether or not the agreement
violates the letter or spirit of this provision may depend on whether the two countries seek second
stage talks on a comprehensive agreement, and whether another WTO member would chal enge it
via dispute settlement.153 In practice, however, WTO members have rarely chal enged other
trading partners’ agreements for consistency with these requirements in DS proceedings.154
While U.S. FTAs cover some major trading partners, the majority of U.S. trade, including with
significant trade partners such as China and the EU, continues to rely solely on the terms of
market access and rulemaking in WTO agreements. In 2019, the United States traded $3.6 tril ion
with non-FTA partners, compared to $2 tril ion with its FTA partners (Figure 7).
Figure 7. U.S. Trade in the WTO

Sources: Data from the Census Bureau and Bureau of Economic Analysis. Figure created by CRS.
Notes: Includes exports and imports of goods and services. U.S. trade with non-FTA partners is covered under
WTO rules. Since the U.S.-Japan trade agreement, which entered into effect in January 2020 covers a portion
(5%), but not al bilateral goods trade and second-stage talks remain incomplete, Japan is not included as a ful
FTA partner for il ustrative purposes.
More recently, groups of countries have also been pursuing so-cal ed “mega-regional” trade
agreements that have broad membership and cover significant shares of global trade. These
include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

152 “Analysts question WT O compliance of U.S.-Japan deal,” Inside U.S. Trade, September 17, 2019. In addition, the
GAT S includes a similar provision.
153 U.S. negotiating objectives, released at the outset of the talks in December 2018, suggested a broad range of issues
beyond tariffs and digital trade would be covered. See https://ustr.gov/countries-regions/japan-korea-apec/japan/us-
japan-trade-agreement -negotiations.
154 Petros C. Mavroidis, “If I Don’t Do It, Somebody Else Will (or Won't),” Journal of World Trade, vol. 40, no. 1
(February 2006): 187-214.
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signed in March 2018 between 11 countries in the Asia-Pacific region, and the Regional
Comprehensive Economic Partnership (RCEP), signed in November 2020 between the
Association of Southeast Asian Nations (ASEAN) and five of its FTA partners, including
China.155 Such agreements could help to consolidate trade rules across regions, especial y as new
parties join, and, to a varying extent, address new issues not covered by the WTO. With U.S.
withdrawal from the TPP in 2017, some view the United States as likely to play a more limited
role in shaping rules in such fora.
Experts have widely debated the relationship of preferential FTAs to the WTO and multilateral
trading system.156 Some argue that crafting new rules through mega-regionals could undermine
the trading system, create competing regional trade blocs and rules, lead to trade diversion, and
marginalize countries not participating in the initiatives.157 On the other hand, some view such
agreements as potential y spurring new momentum at the global level. For example, in support of
that view, former WTO DG Azevêdo expressed that “RTAs [regional trade agreements] are blocks
which can help build the edifice of global rules and liberalization.”158 Many analysts have viewed
the CPTPP through this lens.159 Some experts view plurilateral agreements, in particular, as
potential vehicles for bringing new rulemaking from RTAs into the multilateral trading system, as
NAFTA did for the groundbreaking Uruguay Round in 1994.160 While RTAs may propagate
precisely what the multilateral system—with MFN and national treatment at its underpinnings—
was designed to prevent, namely trade diversion and fragmented trading blocs, some observers
believe it may be the only way trade may be liberalized in the future as additional interested
parties could join the over time.
Future Negotiations on Selected Issues
Since the founding of the WTO, the landscape of global trade has changed dramatical y. The
commercial internet, the growth of supply chains, and increasing trade in services have al
contributed to the tremendous expansion of trade. However, WTO disciplines have not been
significantly modernized or expanded since 1995, aside from the TFA and renegotiation of the
ITA and GPA. In addition to ongoing WTO efforts to negotiate new trade liberalization and rules
in areas like e-commerce and digital trade, the following selected areas of trade policy could be
subjects for future negotiations multilateral y within the WTO, or as plurilaterals, and help
increase the relevance of the WTO as a negotiating body. More recently, the COVID-19 pandemic
and subsequent disruption to supply chains and spread of new trade restrictions have also led to
some cal s for a dedicated plurilateral agreement on medical goods trade.

155 CRS In Focus IF11891, Regional Comprehensive Economic Partnership (RCEP), coordinated by Cathleen D.
Cimino-Isaacs.
156 For example, see World Economic Forum, Regional Trade Agreements: Game Changers or Costly Distractions for
the World Trading System , July 2014.
157 For more on the debate, see CRS Report R45198, U.S. and Global Trade Agreements: Issues for Congress, by
Brock R. Williams.
158 WT O, “Regional trade agreements ‘cannot substitute’ the multilateral trading system,” September 25, 2014,
https://www.wto.org/english/news_e/spra_e/spra33_e.htm.
159 See CRS Report R44489, The Trans-Pacific Partnership (TPP): Key Provisions and Issues for Congress,
coordinated by Ian F. Fergusson and Brock R. Williams.
160 For example, see Chad P. Bown, Mega-Regional Trade Agreements and the Future of the WTO, Council on Foreign
Relations, Part of Discussion Paper Series on Global and Regional Governance, September 2016.
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Competition with SOEs and Non-Market Practices
The United States and other members of the WTO see an increased need to discipline state-owned
or state-dominated enterprises engaged in international commerce, and designated monopolies,
whether through the WTO or through regional or bilateral FTAs. However, WTO rules on
competition with state-owned or state-dominated enterprises are limited to state trading
enterprises (STE)—enterprises, such as agricultural marketing boards, that influence the import
or export of a good. GATT Article XVII requires them to act consistently with GATT
commitments on nondiscrimination, to operate in accordance with commercial considerations,
and to abide by other GATT disciplines, such as disciplines on import and export restrictions. The
transparency obligations consist of reporting requirements describing the reason and purpose of
the STE, products covered, a description of its functions, and pertinent statistical information. 161
Meanwhile, countries desiring disciplines on SOEs have turned to FTAs. The CPTPP and the
USMCA have dedicated chapters on SOEs. The USMCA includes commitments that SOEs of a
party act in accordance with commercial considerations; requires parties to provide
nondiscriminatory treatment to like goods or services to those provided by SOEs; and prohibits
most noncommercial assistance to SOEs, among other issues. The USMCA SOE chapter could
also be aimed at countries other than the three USMCA parties, such as China, to signal their
negotiating intentions going forward. While there could be a desire to multilateralize these
disciplines, they likely would face objections from those members engaged in such practices.
State support provided to SOEs, including subsidies, is a closely related issue, as it can play a
major role in market-distorting behavior under current rules. The WTO Agreement on Subsidies
and Countervailing Measures (ASCM) covers the provision of specified subsidies granted to
SOEs, including by the government or any “public body.” Some members, including the United
States and EU, have contested past interpretations by the Appel ate Body of what qualifies as a
public body as too narrow, and remain concerned that a large share of Chinese and other SOEs in
effect have avoided being subject to disciplines.162 As discussed, the United States, EU, and Japan
are engaged in ongoing discussions to strengthen WTO rules. A January 2020 joint statement by
the trilateral proposed areas for changes to the existing WTO ASCM rules on industrial
subsidies.163 Recommended changes include expanding the types of prohibited subsidies,
reversing the burden of proof to the subsidizing country, and incentives for subsidy notifications,
among others. China opposes the proposal and stated it wil not negotiate new rules on industrial
subsidies.164
It is unclear if the trilateral members or others wil pursue a plurilateral agreement on subsidy
disciplines; moreover, analysts emphasize that such efforts must ultimately achieve buy-in from
China and others to have a lasting impact.165 China’s Ambassador to the WTO, however, stated

161 WT O, “T echnical Information on State T rading Enterprises,” https://www.wto.org/english/tratop_e/statra_e/
statra_info_e.htm.
162 European Commission, WTO Modernization, Concept Paper, September 2018, pp. 4-5; and UST R, Statement by the
U.S. to the Dispute Settlement Body, March 2011, https://ustr.gov/sites/default/files/uploads/
Mar25%20Stmt%20US%20AD-CVD%20fin.pdf.
163 “Joint Statement of the T rilateral Meeting of the T rade Ministers of Japan, the United States and the European
Union,” January 14, 2020, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/january/joint-
statement -trilateral-meeting-trade-ministers-japan-united-states-and-european-union.
164 Doug Palmer, “ Envoy: China can't support WT O talks on industrial subsidies,” Politico Pro, May 12, 2020.
165 Wendy Cutler and Andrew Chatzky, Curbing State-Driven Trade Policies: How to Craft New & Effective
Approaches to Counter Distortive Practices, Asia Society Policy Institute, July 2020.
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that that more “collective research” into both industrial and agriculture subsidies is needed before
discussing potential rules updates.166 Regardless, members may seek to revisit multilateral
competition rules if market distortions emerge in the post-pandemic economic recovery, given
many governments have provided subsidies and other forms of support to domestic industries
during the economic downturn.
Investment
With limited provisions under TRIMS and GATS, rules and disciplines covering international
investment are not part of the WTO. More extensive protection for investors was one of the
“Singapore issues” proposed at the 1996 WTO Ministerial as a topic for future negotiations, but
then dropped under opposition from developing countries at the 2003 Cancun Ministerial. The
OECD also attempted to liberalize investment practices and provide investor protections through
a Multilateral Agreement on Investment, however, that effort was abandoned in 1998 in the face
of widespread campaigns by nongovernment organizations in developed countries.
While multilateral attempts to negotiate investment disciplines have not borne fruit, countries
have agreed to investment protections within bilateral investment treaties (BITs) and chapters in
bilateral and regional FTAs. The U.S. “model BIT” serves as the basis for most recent U.S.
FTAs.167 These provisions are often negotiated between developed countries and developing
countries—often viewed as having less robust legal systems—that want to provide assurance that
incoming FDI wil be protected in the country. Developed countries themselves have begun to
diverge on the use and inclusion of provisions on investor-state dispute settlement (ISDS).168
Incorporating investment issues more fully in the WTO would recognize that trade and
investment issues are increasingly interlinked. Moreover, bringing coherence to the nearly 3,000
BITs or trade agreements with investment provisions could be a role for the WTO. In addition,
agreement on investment disciplines could help to resolve the thorny issue of investment
adjudication between the competing models of ISDS and an investment court, as proposed by the
EU in its recent FTAs, given that disputes likely would remit to WTO DS. While it remains
unclear whether developing countries would be more amenable to negotiating investment
disciplines multilateral y than they were in 2003, this area could be ripe for plurilateral activity.
In the meantime, since MC11 some WTO members have been pursuing the development of a
multilateral framework on investment facilitation. The group is comprised of a mix of developed
and developing economies, including the EU, Canada, China, Japan, Mexico, Singapore, and
Russia, but not the United States.169

166 Sarah Anne Aarup, “‘Not the right time’ to launch WT O talks on industrial subsidies, China says,” Politico Pro,
September 30, 2021.
167 CRS In Focus IF10052, U.S. International Investment Agreements (IIAs), by Martin A. Weiss and Shayerah Ilias
Akhtar, and CRS Report R43052, U.S. International Investm ent Agreem ents: Issues for Congress, by Shayerah Ilias
Akhtar and Martin A. Weiss.
168 T he United States has pursued ISDS in most of its FT As. In the proposed USMCA, the T rump Administration
restricted recourse to ISDS in the case of Mexico and ended the application of ISDS with Canada. Recent EU
agreements contain an investment court model with a standing body replacing ad hoc tribunals common to ISDS.
169 “Joint Ministerial Statement on Investment Facilitation for Development,” WT/MIN(17)/59, December 13, 2017.
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Proposed Institutional Reforms
Many observers, including some Members of Congress, believe the WTO needs to adopt reforms
to continue its role as the foundation of the world trading system.170 In particular, its negotiating
function has atrophied following the collapse of the Doha Round. Its DS mechanism, while
functioning, is viewed by some WTO members as cumbersome and time consuming. Moreover,
some observers, including U.S. officials, contend it has exceeded its mandate when deciding
cases.
Potential changes described below address institutional and negotiation reform, as wel as reforms
to the DS system. Reforms concern the administration of the organization, including its
procedures and practices, and attempts to address the inability of WTO members to conclude new
agreements. DS reforms attempt to improve the working of the DS system, particularly the
Appel ate Body (AB), which fel below its three-member quorum in 2019, chal enging the
WTO’s ability to effectively enforce DS decisions.
Several WTO members have been exploring key aspects of reform.171 In February 2021, the
European Commission issued its Trade Policy Review, with a dedicated annex on reform of the
WTO.172 Specified priorities for reform include: the WTO’s contribution to sustainable
development; restoring a fully functioning DS system with a reformed Appel ate Body; more
effective negotiating function, through modernizing rules, including addressing state
interventions, imbalances between market access commitments, and progress on agricultural
negotiations; and improving the WTO’s monitoring function. As noted, the United States, EU,
and Japan have issued scoping papers on strengthening WTO disciplines on industrial subsidies
and SOEs.
The Ottawa Group of “like-minded” countries interested in WTO reform, organized by Canada in
2018, including Australia, Brazil, Chile, the EU, Japan, Kenya, Mexico, New Zealand, Norway,
Singapore, South Korea, and Switzerland have held a number of meetings since 2018 and issued
various proposals.173 In a joint communiqué, the group of 13 countries emphasized that “the
current situation at the WTO is no longer sustainable,” and identified three areas in particular
requiring “urgent consideration.” These include: (1) safeguarding and strengthening the DS
system; (2) reinvigorating the WTO’s negotiating function; including how the development
dimension can be best pursued in rulemaking; and (3) strengthening the monitoring and
transparency of WTO members’ trade policies.174
The Ottawa Group has put forward various proposals, most recently on a “trade and health”
initiative for temporary and permanent actions of WTO members in response to the pandemic that

170 For congressional views for example, see S.Res. 101 and H.Res. 382.
171 For a database listing of ongoing reform efforts by country, see CSIS, “WT O Reform T racker,”
https://tradeguys.csis.org/trade-explained/wto-tracker/.
172 European Commission, Trade Policy Review – An Open, Sustainable and Assertive Trade Policy, COM(2021) 66
final, February 2, 2021.
173 Canadian officials said that “starting small has allowed us to address problems head-on and quickly develop
proposals,” while acknowledging that a larger effort must include the United States and China. Janyce McGregor,
“Global trade reform must include China, U.S., Jim Carr says after hosting WT O meeting,” CBC News, October 25,
2018.
174 “Joint Communiqué of the Ottawa Ministerial on WT O Reform,” October 15, 2018, https://www.canada.ca/en/
global-affairs/news/2018/10/joint -communique-of-the-ottawa-ministerial-on-wto-reform.html; Government of Canada,
“Summary of Ottawa Group Meeting in Paris, May 2019,” May 23, 2019, https://www.canada.ca/en/global-affairs/
news/2019/05/summary-of-ottawa-group-meeting-in-paris-may-2019.html.
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includes a range of actions relating to exports, trade facilitation, technical regulations, tariffs, and
transparency.175 Some Members of Congress have expressed support for these efforts to address
longstanding concerns of the United States.176 Separately, some Members of Congress have
pointed the need for the WTO to address other issues, such as labor and worker rights to support
the Biden Administration’s worker-centered trade policy.177
Institutional Issues
Consensus in Decisionmaking
While consensus in decisionmaking is a long-standing core practice at the GATT/WTO, voting on
a nonconsensus basis is authorized for certain activities on a one member-one vote basis. For
example, interpretations of the WTO agreements and country waivers from certain provisions
require a three-fourths affirmative vote for some matters, while a two-thirds affirmative vote is
required for an amendment to an agreement. However, even when voting is possible, the practice
of consensus decisionmaking remains the norm.
As an organization of sovereign entities, some observers believe the practice of consensus
decisionmaking gives legitimacy to WTO actions. Consensus assures that actions taken are in the
self-interest of al its members. Consensus also reassures smal countries that their concerns must
be addressed. However, the practice of consensus has often led to deadlock, especial y in the
Doha Round negotiations. The ability to block consensus also has perpetuated so-cal ed “hostage
taking,” in which a country can block consensus over an unrelated matter. In order to attempt to
expedite institutional decisionmaking, some expert observers have proposed alternatives to the
current system, such as:
 Use the voting procedures currently prescribed in the WTO agreements.
 Adopt a weighted voting system based on a formula that includes criteria relating
to a member’s GDP, trade flows, population, or a combination thereof.
 Establish an executive committee composed of a combination of permanent and
rotating members, or composed based on a formula as above or representatives of
differing groups of countries.
 Maintain current consensus voting but require a member stating an objection to
explain why it is doing so, or why it is a matter of vital national interest.178
The Single Undertaking Approach
The “single undertaking” method by which WTO members negotiate agreements means that
during a negotiating round, al issues are up for negotiation until everything is agreed. On one

175 Government of Canada, “ Minister Ng announces tabling of Ottawa Group’s T rade and Health Initiative at WTO
General Council,” News Release, December 17, 2020.
176 House Ways and Means Chairman Kevin Brady noted, “I am pleased that some of the key trading partners appear to
be engaged in serious discussion of the concerns the United States has raised for many years about the need for reform
... the WT O urgently needs to reform to keep the organization well-functioning and viable, including with respect to
negotiations towards new agreements as well as improving dispute resolution.” See “Brady Calls for Serious WT O
Reform,” October 25, 2018, https://waysandmeans.house.gov/brady-calls-for-serious-wto-reform/.
177 Rep. Blumenauer, “Chairman Blumenauer Leads Colleagues in Encouraging Biden Administration to Continue to
Advocate for Worker Protections at Upcoming World T rade Organization Conference,” October 12, 2021.
178 Peter Sutherland et al., The Future of the WTO: Addressing institutional challenges in the new millennium , World
T rade Organization, 2004, p. 64.
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hand, this method, in which nothing is agreed until everything is agreed, is suited for large,
complex rounds in which rules and disciplines in many areas of trade (goods, services,
agriculture, IPR, etc.) are discussed. It permits negotiation on a cross-sectoral basis, so countries
can make a concession in one area of negotiation and receive a concession elsewhere. The
method is intended to prevent smal er countries from being “steamrolled” by the demands of
larger economies, and helps ensure that each country sees a net benefit in the resulting agreement.
On the other hand, arguably, the single undertaking has contributed to the breakdown of the
negotiating function under the WTO, exemplified by the never-completed Doha Round, as issues
of importance to one country or another served to block consensus at numerous points during the
round. Some members, including the EU, have cal ed for “flexible multilateralism,” based on
continued support for full multilateral negotiations where possible, but pursuit of plurilateral
agreements on an MFN basis where multilateral consensus is not possible.179
Transparency/Notification
An important task of the WTO is to monitor each member’s compliance with various agreements.
A WTO member is required to notify the Secretariat of certain relevant domestic laws or practices
so that other members can assess the consistency of WTO members’ domestic laws, regulations,
and actions with WTO agreements. Required notifications include measures concerning
subsidies, agricultural support, quantitative restrictions, TBT, and SPS standards.
Compliance with the WTO agreement’s notification requirements, especial y regarding
government subsidy programs, has become a serious concern among certain members, including
the United States. Many WTO members are late in submitting their required notifications or do
not submit them at al . This effectively prevents other members from fully examining the policies
of their trading partners.
In November 2018, the United States, EU, and others put forward a joint proposal that addresses
several of these elements, including penalties for noncompliance.180 The Biden Administration
revised the proposal to eliminate financial penalties for missed notifications, relying more on
“name and shame” tactics, and focused on providing capacity building and technical assistance to
those members who request it.181 The revised proposal, which attracted multiple co-sponsors, also
cal s for a new Working Group on Notification Obligations and Procedures.
Treatment of Developing Countries
A country’s development status can affect the pace at which a country undertakes its WTO
obligations. Given that WTO members self-designate their status, some members hold on to
developing-country status even after their economies begin more to resemble their developed-
country peers.182 In addition, some of the world’s largest economies, including China and India,
may justify developing country status because their per capita incomes more closely resemble
those of a developing country than those of developed countries. Developing country status

179 European Commission, “WT O modernization,” Concept Paper, September 2018.
180 “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O Agreements,”
JOB/GC/204, November 1, 2018.
181 “Procedures to Enhance T ransparency and Strengthen Notification Requirements Under WT O Agreements,”
JOB/GC/204/Rev.6, July 15, 2021.
182 T he WT O does not specify criteria for “developing” or “developed” country status, but least-developed countries
are defined under U.N. criteria.
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enables a country to claim special and differential treatment (SDT) both in the context of existing
obligations and in negotiations for new disciplines (see text box).183 The WTO specifies,
however, that while the designated status is based on self-selection, it is “not necessarily
automatical y accepted in al WTO bodies.”184
Several developed countries, including the EU and United States, have expressed frustration at
this state of affairs. In January 2019, the United States circulated a paper warning that the WTO is
at risk of becoming irrelevant due to the practice of allowing members to self-designate their
development status to obtain special and differential treatment.185 In July 2019, President Trump
issued a “Memorandum on Reforming Developing-Country Status in the World Trade
Organization,” instructing the USTR to work to reform the WTO self-declaration practice.186 The
President stated that the WTO dichotomy between developed and developing countries is
outdated and “has al owed some WTO Members to gain unfair advantages in the international
trade arena.” He specifical y mentioned China, stating that “the United States has never accepted
China’s claim to developing-country status, and virtual y every current economic indicator belies
China’s claim.”
Defending its developing country status and the availability of SDT, Chinese officials insist that
the principle of SDT “reflects the core values and basic principles of the WTO” and “must be
safeguarded no matter how the WTO is reformed.”187 China, India, South Africa, and others have
defended the relevance of development status, claiming that, “the persistence of the enormous
development divide between the developing and developed Members of the WTO is reflected on
a wide range of indicators.”188 Developed countries, such as Norway and others, also have
emphasized the importance of SDT as a “tool for enabling development and greater participation
in the multilateral trading system.”189 Further, in their view, “negotiating criteria for designating
Members’ access to S&D is unlikely to be productive. What matters is responding adequately to
the specific development needs of Members.” On the other hand, some countries, like South
Korea, Brazil, and Singapore, agreed not to seek SDT,190 and Taiwan previously changed its
status to “developed” in 2018.191

183 For examples of types of the SDT provisions in WT O agreements, see https://www.wto.org/english/tratop_e/
devel_e/teccop_e/s_and_d_eg_e.htm.
184 “Understanding the WT O: T he Organization,” https://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm.
185 “An undifferentiated WT O: Self-declared development status risk institutional irrelevance,” Communications from
the United States, WT /GC/W/757, January 16, 2019.
186 T he White House, “Memorandum on Reforming Developing-Country Status in the World T rade Organization,” July
26, 2019.
187 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying’s Regular Press
Conference,” July 29, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/
t1684227.shtml.
188 “T he Continued Relevance of Special and Differential T reatment in Favour of Developing Members to Promote
Development and Ensure Inclusiveness,” Communication from China, India, South Africa and the Bolivarian Republic
of Venezuela, WT /GC/W/765, February 18, 2019.
189 “Pursuing the Development Dimension in WT O Rule-making Efforts,” Communication from Norway, Iceland, New
Zealand, Singapore and Switzerland, WT /GC/W/770/Rev.2, May 6, 2019.
190 “S. Korea Has ‘Little to Gain’ in Maintaining Developing-Nation Status,” KBSWorld, September 5, 2019;
“Singapore does not take advantage of WT O special provisions for developing nations in negotiating agreements:
MT I,” can, July 27, 2019; and Iana Dreyer, “ Beyond Brussels: Brazil accepts to forego WT O developing country
status,” Borderlex, March 20, 2019.
191 Joseph Yeh, “T aiwan will benefit from ‘developed’ country status in WT O: Deng,” Focus Taiwan, October 14,
2018.
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Several other suggestions have been made, including encouraging countries to graduate from
developing country status; setting quantifiable criteria for development status; targeting SDT in
future agreements on a needs-driven, differential basis; and requiring full eventual
implementation of al new agreements.192 Some of these steps were implemented in the WTO
Trade Facilitation Agreement.
The Meaning of “Developing Country” Status
The WTO does not apply established definitions of “developed” and “developing” countries to its
members; in practice, most WTO members select their designation as “developing.” In general,
this status means countries are entitled to certain rights under so-cal ed “special and differential
treatment” (SDT). Broadly, these provisions include the fol owing:193

Measures that aim to increase trading opportunities for developing countries.

Requirements that WTO members safeguard the interests of developing countries.

Transitional time periods for implementing WTO agreements and commitments.

Flexibility of commitments, action, and use of certain policy instruments.

Technical assistance to build capacity to carry out WTO work, handle disputes, and
implement technical standards.

Specific provisions for least-developed countries.
These provisions are general y nonreciprocal, meaning that developed country members agree to
unilateral y grant additional preferences or flexibilities to developing countries. According to the
WTO, there are 145 SDT provisions across core WTO agreements including on goods,
agriculture, services, intel ectual property, government procurement, and DS.194 Most recently,
SDT provisions were also included in the Trade Facilitation Agreement. Certain ministerial
declarations and General Council decisions al ow for SDT as wel . The Bali Ministerial in
December 2013 established a monitoring mechanism to review implementation of SDT provisions.
Dispute Settlement
Supporters of the multilateral trading system consider the dispute settlement mechanism (DSM)
not only a success of the system, but essential to maintain the relevance of the institution,
especial y while the WTO has struggled as a negotiating body. However, the DSM is facing
increased pressure for reform, in part due to long-standing U.S. objections over certain rules and
procedures—as former USTR Lighthizer contended, the WTO has become a “litigation-centered
organization,” which has lost its focus on negotiations.195 While WTO members have actively
used the DSM since its creation, some have also voiced concerns about various aspects, including
procedural delays and compliance, and believe the current system could be reformed to be fairer
and more efficient.
The Doha Round included negotiations to reform the DS system through “improvements and
clarifications” to DSU rules.196 A framework of 50 proposals was circulated in 2003 but countries

192 For example, see European Commission, “EU proposals on WT O modernization,” July 5, 2018.
193 See WT O, “Special and differential treatment provisions,” https://www.wto.org/english/tratop_e/devel_e/
dev_special_differential_provisions_e.htm, and “ Examples of provisions for differential and more favourable treatment
of developing countries,” https://www.wto.org/english/tratop_e/devel_e/teccop_e/s_and_d_eg_e.htm.
194 WT O Committee on T rade and Development, Special and Differential Treatment Provisions in WTO Agreements
and Decisions, Note by the Secretariat, WT /COMT D/W/219, September 22, 2016.
195 UST R Robert Lighthizer, “Opening Plenary Statement,” December 11, 2017.
196 “Doha WT O Ministerial 2001: Ministerial Declaration,” WT /MIN(01)/DEC/1, November 20, 2001,
https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm.
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were unable to reach consensus.197 Discussions continued beyond Doha with a primary focus on
12 issues, including third-party rights, panel composition, and remand authority of the Appel ate
Body. Under prior Administrations, the United States proposed greater control for WTO members
over the process, guidelines for the adjudicative bodies, and greater transparency, such as public
access to proceedings. However, these negotiations have yet to achieve results.
Some experts suggest that enhancing the capabilities and legitimacy of the DS system wil likely
require several changes, including improving mechanisms for oversight, narrowing the scope of
and diverting sensitive issues from adjudication, improving institutional support, and providing
WTO members more input over certain procedures.198 Other analysts point to major chal enges
facing the DS system that could have the potential to either dismantle the current system or
further catalyze change. These include most notably, the Appel ate Body ceasing to operate in
December 2019 and forthcoming rulings in 2021 on WTO disputes over U.S. Section 232
tariffs.199 Many analysts point to the impasse over reform of the DS system as also reflecting
deeper systemic issues concerning the inability of the WTO to keep up with structural changes in
the global economy. One report concludes, the WTO’s “dispute settlement function cannot be
safeguarded unless, at the same time, the WTO’s rule-making function is also strengthened and
the substantive trade rules are modernized.”200
Appellate Body (AB) Vacancies
The immediate flashpoint to the system is the refusal of the United States to consent to the
appointment of new AB jurists. The United States has long-standing objections to decisions
involving the AB’s interpretation of certain U.S. trade remedy laws in particular—the subject of
the majority of complaints brought by other WTO members against the United States.201 The
AB’s seven jurists are appointed to four-year terms on a rolling basis, with the possibility of a
one-term reappointment. The prior two U.S. Administrations blocked the process to appoint new
jurists as their term’s expired, leaving the AB unable to function after December 2019.202 To date,
the Biden Administration has not altered U.S. policy.
WTO members and other stakeholders are exploring a number of options, in the absence of a
functioning AB, that may support the current system (see below), to forestal collapse of dispute
settlement altogether. Most notably, in 2020, a group of members led by the EU put into effect an
ad hoc Multi-Party Interim Appeal Arbitration Arrangement (MPIA), pursuant to Article 25 of the
DSU, as a temporary measure to arbitrate disputes, which mirrors the main functions of the WTO
appeals system.203 The MPIA took a final step toward becoming operational when members
formal y decided on the pool of 10 standing arbitrators to hear appeals. To date, 22 WTO

197 T here have been some cases of past DSU procedural reforms, such as the decisions to accept outside counsel and
am icus curiae briefs in panel deliberations. See Craig VanGrasstek, The History and Future of the World Trade
Organization, World T rade Organization, 2013.
198 Robert McDougall, “Crisis in the WT O: Restoring the WT O Dispute Settlement Function ,” Centre for International
Governance Innovation, CIGI Papers No. 194, October 2018.
199 Jack Caporal et al., The WTO at a Crossroad, Center for Strategic and International Studies, September 2019.
200 CIGI Expert Consultation on WTO Reform , Special Report: Spring 2019, Centre for International Governance
Innovation (CIGI), September 12, 2019.
201 Adam Behsudi, “T he man getting ready to take on the WTO,” Politico, February 15, 2017.
202 T he Obama Administration blocked the reappointment of a Korean AB jurist in May 2016.
203 See European Commission, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2143.
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members, including China, are part of the MPIA; it does not apply to cases involving members
who have not joined, including the United States.
The Trump Administration criticized these efforts as “endorsing and legitimizing” the Appel ate
Body practices that “breached the rules set by WTO members,” that have been central to U.S.
concerns.204 One study considers the merits of interim solutions, suggesting that “no-appeal and
appeal-arbitration agreements can preserve rights for some members, but solutions that attempt to
exclude the United States are not in the interests of most members.”205 In the view of Japan, one
major economy that has not joined the MPIA, “attempts to adopt measures of provisional nature
must serve the ultimate purpose of achieving a long-lasting reform” of the DS system.206 Some
analysts argue that the experience of the MPIA wil likely lead to new approaches to handling
appeals, but without engagement the United States wil have no ability to shape its direction.207
More broadly, some are also concerned that the perceived U.S. disinterest or lack of leadership in
resolving the impasse over the AB may undermine other U.S. efforts to advance WTO reforms
and new rules beset by a lack of trust among members. Other experts have cautioned against a
quick agreement to restart the AB without deeper engagement from members on U.S. critiques,
arguing that the U.S. risks losing its leverage, and that DS and WTO reforms should be done
together.208
Proposed DS Reforms
The United States expounded on some of the perceived shortcomings of the DS system in a
lengthy report on the AB issued in February 2020.209 Arguably, the main U.S. complaint is that
the system, particularly the AB has “overreached on substantive issues, engaged in impermissible
gap-fil ing, and read into the WTO agreements rules that are simply not there… adding to or
diminishing the rights and obligations of WTO Members.”210 This is particularly so in the areas of
subsidies, AD and CVDs, standards, and safeguards. At its crux, the current controversy is over
the autonomy of the AB, its deference to the DSB, and its obligations to implement the provisions
of the DSU. The United States has been the most vocal in its criticisms, yet other WTO members
have expressed similar concerns. While the United States has not tabled specific reforms for these
complaints to the WTO membership, it has criticized aspects of the DS system in various General
Council meetings and reports. Meanwhile, several members, singly or in groups, have tabled
proposals or suggestions on how to reform AB procedures and practices. The General Council
launched an informal process on the functioning of the AB in December 2018. This group’s
facilitator, Ambassador David Walker of New Zealand, proposed in October 2019 a list of items

204 “U.S.: EU-Canada interim plan would ‘legitimize’ bad Appellate Body practices,” Inside U.S. Trade, September 30,
2019.
205 CIGI Expert Consultation on WTO Reform , Special Report: Spring 2019, Centre for International Governance
Innovation (CIGI), September 12, 2019, p. 18.
206 Permanent Mission of Japan to the International Organizations in Geneva, “T rade Policy Review: Japan,”
Statement, July 8, 2020, https://www.geneve-mission.emb-japan.go.jp/itpr_en/statement_trade_20200708.html.
207 Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, written
testimony by Jennifer Hillman, July 29, 2020.
208 Ibid.
209 UST R called the report the “the first comprehensive study of the Appellate Body’s failure to comply with WT O
rules and interpret WTO agreements as written,” and published it “to examine and explain the problem, not dictate
solutions.” See Report on the Appellate Body of the World Trade Organization, February 2020. Also see CRS Report
R46852, The World Trade Organization’s (WTO’s) Appellate Body: Key Disputes and Controversies, by Nina M. Hart
and Brandon J. Murrill.
210 UST R, Report on the Appellate Body, pp. 8-9.
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of convergence among its participants as a draft decision of the General Council—the United
States ultimately declined to back the draft decision. Under each of the following issues, U.S.
concerns are raised along with Ambassador Walker’s proposals to address them.211
Disregard for the 90-day, DSU-mandated deadline for AB appeals. USTR claims that the AB
does not have the authority to fail to meet the deadline without consulting the DSB, maintaining
that the deadline “helps ensure that the AB focuses its report on the issue on appeal.” The
facilitator found convergence on the following issues:
 The AB is obligated to issue its report no later than 90 days from the date a party
to the dispute notifies its intention to appeal.
 The parties may agree with the Appel ate Body to extend the timeframe for
issuance of the Appel ate Body report beyond 90 days in cases of unusual
complexity or periods of numerous appeals. The parties wil notify such
agreement to the DSB and the Chair of the AB.
 Extension of service by former AB jurists on cases continuing after their
four-year terms have expired. The United States maintains that the AB does
not have the authority unilateral y to extend the terms of jurists, rather that
authority lies with the DSB and that it is a matter of adherence to the DSU.212
In actual practice, however, it may be the case that having former jurists stay
on to finish an appeal may be more efficient than having a new jurist join the
case. The DSB has the authority and responsibility to determine the
membership of the AB and must fil vacancies as they arise.
 The DSB shal launch the selection process for a new member 180 days
before the expiration of the term of an outgoing AB member. If a vacancy
arises before the expiration of an AB jurist’s mandate, the DSB shal launch
an immediate selection process.
 AB members may be assigned a new appeal until 60 days prior to the
expiration of their term.
 An AB panel may complete an appeal after expiration of the member’s term
if the oral hearing is held prior to the expiration.
During the Obama Administration, the United States blocked the reappointment of a South
Korean jurist to the AB in May 2016. The United States cited what it considered “abstract
discussions” in prior decisions by the jurist that went beyond the legal scope of the WTO.213 This
action has led to the concern that the prospect of non-reappointment could affect the
independence of the AB system.214 However, one former AB jurist opines that, “reappointment is
an option, not a right,” and cal s for the WTO members to determine if a more formal process
similar to initial appointment of AB jurists is needed for reappointment.215

211 WT O General Council, “Informal Process Related to the Functioning of the Appellate Body – Report by the
Facilitator, H.E. David Walker (New Zealand), (Job /GC/222), T uesday October 15, 2019.
212 UST R indicates this plank requires immediate attention, noting “the United States is resolute in its view that
Members need to resolve this issue before moving on to the issue of replacing Appellate Body Members.” See UST R
2018 Annual Report, March 2018, p. 26.
213 Shawn Donnan, “US accused of undermining WT O,” Financial Times, May 30, 2016.
214 European Commission, “EU proposals on WT O modernization,” (WK8329/2018 INIT), July 5, 2018, p. 16.
215 WT O, “Farewell Speech of Appellate Body Member Ricardo Ramirez-Hernandez, May 28, 2018,
https://www.wto.org/english/tratop_e/dispu_e/ricardoramirezfarwellspeech_e.htm.
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Dispute Settlement Understanding, Article 3.2
The dispute settlement system of the WTO is a central element in providing security and predictability to
the multilateral trading system. The members recognize that it serves to preserve the rights and obligations
of members under the covered agreements, and to clarify the existing provisions of those agreements in
accordance with customary rules of interpretation of public international law. Recommendations and
rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.
Other criticisms of the AB involve the extent to which it can interpret WTO agreements. The
United States, in arguing for a more restrictive view of the power of the DSB, points to Article
3.2 that “recommendations and rulings of the DSB cannot add to or diminish the rights and
obligations provided in the covered agreements” (see text box above). However, those supporting
a more expansive view of the DSU’s role can point to the same article, which highlights the role
“to clarify the existing provisions of those agreements in accordance with customary rules of
interpretation of public international law.” The scope and reach of the AB’s activities is an
enduring controversy for the organization, not limited to the Trump Administration. USTR has
flagged several specific practices relating to these issues, such as the following:
Issuing advisory opinions on issues not relevant to the issue on appeal. This point relates to the
U.S. concern that the AB is engaged in “judicial overreach” by going beyond deciding the case at
hand. USTR contends that the ability to issue advisory opinions or interpretations of text rests
with the Ministerial Conference or General Council. The facilitator found convergence on the
following issues:
 The AB should not rule on issues not raised by either party.
 The AB shal address issues raised by parties only to the extent necessary to
assist the DSB in making a decision.
The following two suggestions, while not part of the Walker recommendations, have also been
raised in this context:
 Rather than issue advisory opinions, the AB also could “remand” issues of
uncertainty to the standing committees of the WTO for further negotiation.
Canada has suggested this could al ow for more interaction between the
panel and appeal level.216
 Members could also use a provision of the WTO Agreement (Article IX.2) to
seek an “authoritative interpretation” of a WTO text at the General Council
or Ministerial Conference, which could be adopted by a three-fourths vote.
De novo review of facts or domestic law in cases on appeal. The United States al eges that the AB
is not giving the initial panel due deference on matters of fact, including regarding the panel’s
interpretation of domestic law. This point derives from USTR’s view that a country’s domestic or
municipal law should be considered as fact, and that the panel’s interpretation of the domestic law
is thus not reviewable by the AB. The facilitator found convergence on the following issues:
 The meaning of a party’s municipal (domestic) laws is a matter of fact, and
not reviewable by the AB.
 The DSU does not permit de novo review or ‘to complete the analysis’ of
facts in a dispute.

216 See, for example, Joost Pauwelyn, Appeal without Remand: A Design Flaw in WTO Dispute Settlement and How to
Fix It, International Centre for Trade and Sustainable Development, June 2007; Canada submission, JOB/GC/201, p. 3.
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Treatment of AB decisions as precedent. Like the previous two concerns, this complaint speaks to
the al eged overreach of the AB. USTR asserts that while AB reports can provide “valuable
clarification” of covered agreements, they cannot be considered or substituted for the WTO
agreements and obligations negotiated by members. However, according to one former DG of the
WTO, “the precedent concept used in the WTO jurisprudence is ... central y important to the
effectiveness of the WTO dispute settlement procedure goals of security and predictability.”217 A
related concern some WTO members have is “gap-fil ing” by the DS system, where the legal
precedent is unclear or ambiguous or there are no or incomplete WTO rules regarding a contested
issue. Here there are diametrical y opposite beliefs: a U.S. trade practitioner asks, “Is fil ing gaps
and construing silences real y not the creation of rights and obligations through disputes vs.
leaving such function to negotiations by the members?”218 The former DG, however, contends
that “every juridical institution has at least some measure of gap-fil ing responsibility as part of
its efforts to resolve ambiguity.”219 The issue of the legitimacy of precedence or gap-fil ing may
be one of the thorniest issues of al with few solutions proposed that would potential y satisfy
differences among members. The facilitator found convergence on the following issues:
 DS proceedings do not create precedent.
 Members find value in the consistency and predictability of the interpretation
of rights and obligations under the covered agreements.
 Panels and the AB should take previous panel/Appel ate Body reports into
account to the extent they find them relevant to a dispute they are
considering.
 Reaffirms that findings and recommendations of panels and the AB and
recommendations and rulings of the DSB cannot add to or diminish the rights
and obligations provided in the covered agreements.
 Reaffirms Article 17.6 of the Antidumping Agreement, which states that
“where the panel finds that a relevant provision of the Agreement admits of
more than one permissible interpretation, the panel shal find the [domestic
administrative] authorities’ measure to be in conformity with the Agreement
if it rests upon one of those permissible interpretations.”
The Walker process also found consensus to establish a mechanism for regular dialogue between
WTO members and the AB in an informal setting to discuss issues related to the functioning of
the AB, but unrelated to particular cases.
It is likely that many of the issues that could arise from proposed reforms to the WTO system
would require clarification of or amendment to the language of the Marrakesh Agreement or the
DSU. Clarification could take the form of interpretation of the agreements. As noted above,
interpretation can be undertaken by the Ministerial Conference (held every two years), General
Council, or DSB, with a three-fourths vote of the WTO membership. Amending the decision-
making provisions of the Marrakesh Agreement (Article IX) or the DSU would require consensus
of the membership at the Ministerial Conference (Marrakesh Agreement, Article X.8).
Amendments to the Marrakesh Agreement would require a two-thirds vote of the membership. As
noted above, negotiations related to reforms of the DSM occurred during the Doha Round, and

217 Peter Sutherland et al., The Future of the WTO: Addressing institutional challenges in the new millennium , World
T rade Organization, 2004, p. 55.
218 T erence Stewart, “T he Broken Multilateral T rade Dispute System,” Asia Society Policy Institute, February 7, 2018.
219 Sutherland, 2004, p. 52.
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despite the criticism of the DSM by the United States and others, the General Council or the DSB
has not undertaken serious consideration of these reforms.
The Trump Administration criticized some of the Walker proposals as seeking to change WTO
DS rules to fit the practices objectionable to the United States, rather than adhering to the rules as
original y negotiated. U.S. Ambassador to the WTO Dennis Shea proposed that WTO members
“engage in a deeper discussion” of why the Appel ate Body has “felt free to depart from what
WTO Members agreed to,” and that “without this understanding, there is no reason to believe that
simply adopting new or additional language, in whatever form, wil be effective in addressing the
concerns shared by several Members.”220
Selected Challenges and Issues for Congress
Value of the Multilateral System and U.S. Leadership and Membership
The United States has served as a leader in the WTO and the GATT since their creation, and
played a major role in shaping subsequent negotiations and rulemaking, many of which reflect
U.S. laws and norms. It was a leading advocate in the Uruguay Round for expanding negotiations
to include services and IPR, key sources of U.S. competitiveness, as wel as binding DS to ensure
new rules were enforceable. Many stakeholders across the United States rely on WTO rules to
open markets for importing and exporting goods and services, and to defend and advance U.S.
economic interests.
In a shift from the previous administration, the Biden Administration has emphasized
reengagement in the multilateral trading system with U.S. trading partners, and its commitment to
be a leader in the WTO. Many observers questioned U.S. commitment to the system under the
Trump Administration, which had variously expressed doubt over the value of the WTO and
multilateral trade negotiations to the U.S. economy, emphasizing bilateral negotiations and
unilateral action to address “unfair trading practices.” While some U.S. frustrations with the WTO
are not new and are maintained by the Biden Administration, as wel as shared by other trading
partners, the Trump Administration’s overal approach spurred questions regarding the future of
U.S. leadership. While many view U.S. concerns as justified, the U.S. continued practice of
blocking appointments of the AB and reticence to debate specific reforms in particular could cede
U.S. leadership to others. At the same time, the Biden Administration’s stated commitment to
restoring U.S. leadership and engaging in reform of the multilateral trading system and in certain
initiatives and plurilateral efforts at the WTO could reassert the United States’ as a perceived
constructive player in the institution.221
Some Members of Congress have also questioned the benefits of U.S. participation in the WTO,
with some advocating for withdrawing from the institution. Most observers maintain that the
possibility of U.S. withdrawal from the WTO remains unlikely for procedural and substantive
reasons. Procedural y, a withdrawal resolution would have to pass the House and Senate; it has
also been debated what legal effect the resolution would have if adopted.222 While resolutions
were introduced in May 2020 during the 116th Congress, votes did not proceed on the

220 Ambassador Dennis Shea, “Statements delivered by Ambassador Shea at the Meeting of the WT O General Council,
July 23, 2019, https://geneva.usmission.gov/2019/07/23/statements-delivered-by-ambassador-dennis-shea-wto-general-
council-meeting-july-23-2019/.
221 UST R, Fact Sheet: 2021 Trade Agenda and 2020 Annual Report, March 2021.
222 For a discussion of the debate, see Jack Caporal et al., The WTO at a Crossroad, Center for Strategic and
International Studies, September 2019.
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measures.223 Moreover, if the United States were to consider such a step, withdrawal would have
a number of practical consequences. The United States would face economic costs, since absent
WTO membership, remaining members would no longer be obligated to grant the United States
MFN status under WTO agreements, or uphold WTO rules on IPR and restrictions on the use of
regulations, trade-related investment measures, or subsidies. Consequently, U.S. goods and
services could face significant disadvantages in other markets, as members without FTAs with the
United States could raise tariffs or other trade barriers on U.S. exports at wil . More broadly, the
United States would stand to lose influence over the writing of future global trade rules. Another
question is whether the WTO would flounder without continued U.S. leadership, or whether other
members like the EU and China would expand their roles as advocates for the system.
Ongoing congressional oversight could examine the value, both economic and political, of U.S.
WTO membership and leadership. For example, Congress could consider, or ask the U.S.
International Trade Commission to investigate the value of the WTO or potential impact of WTO
withdrawal on U.S. businesses, consumers, federal agencies, laws and regulations, and foreign
policy. Through resolutions, some Members have expressed support for ongoing WTO reform
efforts (H.Res. 382 introduced May 2021) and advocated for specific reforms and U.S. leadership
(S.Res. 101 introduced March 2021). S.Res. 101, for example, cautioned that the United States
“achieved its trade policy objectives through active leadership at the WTO, and that an absence of
that leadership would be fil ed by nonmarket economies that are hostile to a host of United States
interests.” Congress could also hold broader debate over WTO participation in considering a
disapproval resolution of U.S. membership under the URAA, which may occur every five years.
H.Res. 382
Expressing the sense of the House of Representatives that the United States should reaffirm its commitment as a
member of the World Trade Organization (WTO) and work with other WTO members to achieve reforms at
the WTO that improve the speed and predictability of dispute settlement, address longstanding concerns with the
WTO's Appel ate Body, increase transparency at the WTO, ensure that WTO members invoke special and
differential treatment reserved for developing countries only in fair and appropriate circumstances, and update the
WTO rules to address the needs of the United States and other free and open economies in the 21st century.
S.Res. 101
Expressing the sense of the Senate that, while the United States finds value and usefulness in the World Trade
Organization in fulfil ing the needs of the United States and other free and open economies in the 21st century,
significant reforms at the World Trade Organization are needed and the United States must therefore continue to
demonstrate leadership to achieve those reforms.
Respect for the Rules and Credibility of the WTO
The founding of the GATT and WTO were premised on the notion that an open, transparent and
rules-based multilateral trading system was necessary to avoid a return to the nationalistic
interwar trade policies of the 1930s. There arguably are substantial reasons for the United States
and other countries to uphold the rules and enforce their commitments. A liberalized, rules-based
global trading system increases competition for companies domestical y, but also helps to ensure
that companies and their workers have access and opportunity to compete in foreign markets with
the certainty of a stable, rules-based system. A system for enforcing the rules and resolving
disputes that inevitably arise from repeated commercial interactions also helps ensure such trade
frictions do not spil over into broader international relations.
However, certain actions by the United States and other countries have raised questions about
respect for the trading system, and could weaken the credibility of the WTO. In particular, U.S.

223 Doug Palmer, “New ruling quashes Hawley’s hope for Senate WT O withdrawal vote,” Politico, July 1, 2020.
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actions to raise tariffs against major trading partners and obstruct the functioning of the DS
system have prompted concerns from some that the United States may undermine the
effectiveness and credibility of the institution that it helped to create.224 Moreover, the outcomes
of controversial dispute cases over U.S. tariffs could set important related precedents (see below).
Some are concerned that U.S. actions may embolden other countries to protect their own
industries under claims of protecting national security interests. At the same time, other countries’
retaliatory tariff actions may violate WTO commitments and are pending DS resolution. If the DS
process cannot satisfactorily resolve the conflicts, further unilateral actions and tit-for-tat
retaliation could escalate. Notably, the U.S. and EU negotiators aim to resolve the steel and
aluminum tariffs and counter-tariffs in a bilateral manner outside of the WTO DS process, but
have agreed that any solution wil be WTO-compatible, showing a measure of support for the
system.225
In recent years, countries have also been accused of imposing new trade restrictions and taking
actions that are not in line with either the spirit or letter of WTO agreements—in particular,
China’s state-led industrial policies, including subsidies, IPR violations, and forced technology
transfer practices.226 In part, the WTO’s perceived inability to address Chinese policies and gaps
in rules led to the United States resorting to Section 301 actions. Many view WTO relevance as
waning, absent more concerted efforts to tackle systemic non-market practices, which have driven
recent U.S. and other’s efforts to explore new rules in and outside the WTO—efforts largely
resisted by China. More broadly, countries’ pursuit of such measures in the name of national or
economic security appears to further cal into question the viability of the rules-based system.
While WTO agreements offer ample flexibility for temporary measures justified by national
security or health crises, the spread of export restrictions following COVID-19 have further
amplified such concerns.
U.S. Sovereignty and the WTO
Under the Trump Administration, USTR put new emphasis on “preserving national sovereignty”
within the U.S. trade policy agenda, emphasizing that any multinational system to resolve trade
disputes “must not force Americans to live under new obligations to which the United States and
its elected officials never agreed.”227 A key question is how the Biden Administration wil seek to
resolve differences with other WTO members over the WTO dispute settlement system. The
question of sovereignty is not a new one. The Uruguay Round Agreements Act provided that U.S.
law would prevail against an inconsistent provision or an application of a provision in a WTO
agreement. Further, it specified that no U.S. law could be modified or amended by the
agreements, including in areas of public health, environment, worker safety, or U.S. trade laws,
unless specified in the implementing legislation.228 In other words, an adverse DS decision
against the United States would not change U.S. law; Congress would need to make the change to

224 CRS Report R45529, Trump Administration Tariff Actions: Frequently Asked Questions, coordinated by Brock R.
Williams.
225 Jenny Leonard and Alberto Nardelli, “U.S. Moves T oward Ending Steel-T ariff Fight With Offer to EU,”
Bloom berg, September 10, 2021.
226 In 2018, trade-restrictive measures imposed by G20 economies “hit a new high” between mid- and late 2018,
compared to the previous reporting period, and was the largest recorded since 2012. “WT O report shows sharp rise in
trade-restrictive measures from G20 economies,” November 27, 2018, https://www.wto.org/english/news_e/news18_e/
trdev_22nov18_e.htm.
227 UST R, 2018 Trade Policy Agenda, March 2018, p. 3.
228 P.L. 103-465, Sec. 102.
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come into compliance with a DS decision or decline to do so, as Congress has done in the past. In
that case, however, the other disputing party may impose retaliatory tariffs on the United States in
compensation. In addition, the withdrawal procedures in the URAA responded to the same
sovereignty concerns expressed in the language above.229
While U.S. concerns regarding al eged “judicial overreach” in WTO dispute findings are long-
standing, the United States in recent years has also emphasized unilateral action outside the WTO
as a means of defending U.S. interests, including national security. Some observers fear that
disagreements at the WTO on issues related to national security (e.g., Section 232 tariffs) may be
difficult to resolve through the existing DS procedures, given current disagreements related to the
WTO AB and concerns over national sovereignty.230 WTO members and parties to the GATT
have invoked Article XXI al owing measures to protect “essential security interests,” in a handful
of other trade disputes. These parties, including the United States, have often argued that each
country is the sole judge of questions relating to its own security interests. Pending panel
decisions in the adjudication of disputes with several countries over U.S. Section 232 steel and
aluminum tariffs may be il ustrative in this regard.
The outcome of a recent Russia-Ukraine dispute clarified the WTO’s role in evaluating the use of
the national security exception, finding that DS panels are competent to review member actions
justified under Article XXI.231 The panel determined that it had jurisdiction to review whether a
WTO member’s actions were justified under Article XXI’s national security exception and that
Russia satisfied the requirements for invoking the exception.232 The United States voiced
concerns with the panel report, finding it “insufficient,” and maintaining that Article XXI is “self-
judging” and not subject to panel review.
Role of Emerging Markets
The broadened membership of the WTO over the past two decades has promoted greater
integration of emerging markets such as Brazil, China, India, and Russia in the global economy,
and helped ensure that developing country interests are represented on the global trade agenda. At
the same time, many observers have attributed the inability of WTO members to collectively
reach compromise over new rules and trade liberalization to differing priorities for reforms and
market opening among developed countries and emerging markets.
One question is to what extent economies like China, with significant economic clout, wil take
on greater leadership to play a more constructive role, advance the global trade agenda, and
facilitate compromise among competing interests. China has voiced support for globalization and

229 During congressional debate over URAA, some Members proposed to create extra review mechanisms of WT O DS,
and many Members stressed that only Congress can change U.S. laws as a result of dispute findings.
230 For more information, see CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress,
coordinated by Rachel F. Fefer.
231 WT O, “Members adopt national security ruling on Russian Federation’s transit restrictions,” April 26, 2019.
Ukraine argued that Russia’s restrictions and bans on the traffic of certain goods crossing its territory from Ukraine
violated the GAT T and Russia’s Accession Protocol. Russia invoked the national security exception in GAT T Article
XXI(b)(iii) in its defense, arguing that the panel lacked jurisdiction to evaluate the merits of Ukraine’s claims, and that
deterioration in relations and conflict between Russia and Ukraine was a threat to its security interests.
232 T he panel determined requirements were met because: (1) Russia’s relations with Ukraine had deteriorated to the
point that they constituted an “emergency in international relations”; (2) Russia’s trade restrictions qualified as
measures “taken in time of this emergency”; and (3) Russia met all other requirements for invoking the exception. Ibid,
Para. 8.1(d)(i)-(iv).
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the multilateral trading system under which it has thrived.233 The Chinese government’s 2018
white paper on the WTO stated that: “The multilateral trading system, with the WTO at its core,
is the cornerstone of international trade and underpins the sound and orderly development of
global trade. China firmly observes and upholds the WTO rules, and supports the multilateral
trading system that is open, transparent, inclusive and nondiscriminatory.”234 At the same time,
China has blocked progress in certain initiatives, including the WTO’s stal ed plurilateral on
environmental goods, is seeking to limit the scope of ongoing e-commerce negotiations, and has
not put forward a sufficiently robust offer on procurement to join the GPA, a longstanding
promise. More broadly, growing scrutiny of Chinese industrial policies and non-market practices
are chal enging China’s role in the system, raising questions about the country’s wil ingness in
practice to take on meaningful leadership responsibility in the WTO context.
Another related concern voiced by the United States, including some Members of Congress, and
other WTO members is the role of large emerging markets and use of developing country status
by those and other countries to ensure SDT treatment and flexibility in implementing
commitments. The United States has sought to work with other members to set qualifications or
other conditions for such status, but the issue remains controversial. Members could be given
incentives to graduate from developing country status; moreover, different WTO agreements
could offer different incentives or other flexibilities. Some proposed legislation in the 116th
Congress related to China’s status. For example, H.R. 7007 sought to remove China’s designation
as a developing country in international bodies, including at the WTO. Other bil s (S. 3978/H.R.
6627) sought to reform how developing country status is designated at the WTO, laying out
criteria that may be directed at China. Any future congressional consideration of renewing TPA
could also be an additional avenue for setting developing country status related objectives.
Priorities for WTO Reforms and Future Negotiations
Working with like-minded trading partners to implement reform of the multilateral trading system
remains among the Biden Administration’s trade policy objectives.235 Key questions for Congress
include how the new Administration’s priorities may take shape in ongoing and future
negotiations, including as members use MC12 to debate potential paths forward for reform.
Congress can take a number of steps to direct, influence, and signal support for U.S. priorities for
ongoing and future WTO negotiations and reform. The primary legislative vehicle for
establishing negotiating objectives is TPA. Congress could consider establishing specific or
enhanced negotiating objectives for multilateral or plurilateral trade negotiations, possibly
through legislation to reauthorize TPA. Congress could also consider specific reporting
requirements in TPA, related to providing updates to Congress on progress toward meeting WTO
objectives or on WTO reform efforts.
As discussed, some Members have expressed congressional views on reforms through “sense of
Congress” resolutions and directed the executive branch to increase U.S. engagement in specific
areas. Congress could hold oversight hearings or submit letters to ask USTR about specific
actions, plans, or objectives regarding WTO reforms for the institution, dispute settlement
procedures, or in regards to updating existing agreements to address trade barriers and economic

233 See, for example, President Xi Jinping’s remarks at the World Economic Forum in 2017, http://www.china.org.cn/
node_7247529/content_40569136.htm.
234 China’s State Council Information Office, “China and the World T rade Organization,” white paper, June 2018,
http://english.gov.cn/archive/white_paper/2018/06/28/content_281476201898696.htm.
235 UST R, 2021 Trade Policy Agenda and 2020 Annual Report, March 31, 2021, p. 4.
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practices not sufficiently covered by current rules. In July 2020, the Senate Finance Committee
held a hearing on WTO reform, expressing bipartisan agreement on the importance of improving
the institution.236 Congress could request that USTR provide an update of ongoing plurilateral
talks at the WTO, such as on e-commerce and digital trade—specified by Congress as a principal
trade negotiating objective in TPA. Congress could also consider appropriating additional funds
dedicated to WTO reform efforts. Members have also expressed their views and engaged with the
WTO directly such as when the WTO DG’s visited Washington, D.C., in September 2021, and
met with House Ways and Means and Senate Finance Committees.
More broadly, Congress may consider the long-term implications of recent U.S. and other
countries’ restrictive and/or unilateral trade actions on current and future trade negotiations. Some
experts argue that U.S. unilateral tariffs and blocking of AB appointments may limit other
countries’ interest in engaging in negotiations to reduce trade barriers and craft new rules. Such
concerns are amplified with the proliferation of preferential FTAs outside the WTO, which may
have potential discriminatory effects on non-participating countries, including the United States.
Outlook
The future outlook of the multilateral trading system is the subject of growing debate, as it faces
serious chal enges, some longstanding and some emerging more recently. Some experts view the
system as long stagnant and facing a crisis; others remain optimistic that the current state of
affairs could spur new momentum toward reforms and alternative negotiating approaches moving
forward. WTO members are facing several events which add impetus for resolving differences
and assessing progress. The chal enges of COVID-19 have tested the resilience of global
cooperation, disrupted global supply chains, and resulted in trade protectionism. At the same
time, several countries have reaffirmed the trading system, lifted restrictions and liberalized trade
in response to the crisis, and view the WTO as playing an important role in tackling the trade
policy chal enges. While some reform efforts are stal ed and the WTO DS system ceased to fully
function, the alternate arbitration mechanism among the EU, China and some other WTO
members is operating alongside the WTO.
Despite differing views, there is a growing consensus that the status quo is no longer sustainable,
and that there is urgent need to improve the system and find ground for new compromises if the
WTO is to remain the cornerstone of the trading system. As WTO DG Okonjo-Iweala noted in
advance of MC12, “everyone wants a WTO that can deliver, for people, for workers, for business
and for the environment,” but “...for the WTO to succeed, it must change, it has to update its rule
book, fix its dispute settlement system, resolve differences on outstanding issues and respond to
the trade chal enges of the 21st century.”237 Debate about the path forward continues. Recent
proposals for WTO reforms and for new rules are under development and have provided the seeds
for new ideas, though concrete solutions and next steps have yet to be agreed among countries
involved in discussions and broader WTO membership. As members face the 2021 Ministerial,
which many view as a litmus test for the institution’s credibility and relevance, there is an
opportunity to announce completion of negotiations and concrete progress and define clear
roadmaps in other priority areas for the WTO.

236 Senate Finance Committee, Hearing on WTO Reform: Making Global Rules Work For Global Challenges, July 29,
2020.
237 WT O DG Okonjo-Iweala, “DG Okonjo-Iweala encouraged by support voiced for WT O during US visit ,” September
23, 2021, https://www.wto.org/english/news_e/news21_e/dgno_27sep21_e.htm .
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Author Information

Cathleen D. Cimino-Isaacs, Coordinator
Rachel F. Fefer
Analyst in International Trade and Finance
Analyst in International Trade and Finance

Acknowledgments
The authors thank Amber Hope Wilhelm, CRS Visual Information Specialist, who developed the graphics
for this report, and Ian Fergusson, Specialist in International Trade and Finance, who contributed to the
report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

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