98-928 - The World Trade Organization: Background and Issues
9-May-2007; Ian F. Fergusson; 15 p.
June 4, 2001
March 5, 2003
The World Trade Organization (WTO), which was established on January 1, 1995, is the principal organization for rules governing international trade. This report provides general background on the WTO: its establishment, principles, administrative bodies, and membership. It also includes a brief discussion of policy issues pertaining to the WTO agenda, U.S. sovereignty and membership in the WTO, the congressional role in U.S. participation in the WTO, and pursuit of U.S. trade goals in the WTO compared to other options. This report will be updated periodically.
Abstract: The World Trade Organization (WTO) was established on January 1, 1995, under an agreement reached during the Uruguay Round of multilateral trade negotiations. The Uruguay Round was the last of a series of periodic trade negotiations held under the auspices of the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT).
The WTO is the most important international organization that governs world trade. Decisions are made by the member countries. The WTO has 150 members and 31 observer governments (most of which have applied for membership), and members represent over 95% of world trade. The highest-level decisions are made at the Ministerial Conference, which is the meeting of trade ministers from member countries. The Ministerial Conference must meet at least every two years. The General Council is the body of national representatives that oversees the day-to-day operations of the WTO. The General Council meets approximately monthly. It also meets in two other capacities: it reviews national trade policies, and it oversees the dispute settlement process. Under the General Council are numerous committees, working groups, and other bodies.
Trade agreements administered by the WTO cover a broad range of goods and services trade and apply to virtually all government practices that directly relate to trade, for example tariffs, subsidies, government procurement, and trade-related intellectual property rights. The WTO agreements are based on the principle of non- discriminatory treatment among countries. Some exceptions however, such as preferential treatment for developing countries, are allowed. Other basic principles of the WTO are open information on rules and regulations, negotiated limits on trade barriers, and settlement of disputes under specific procedures.
The 110th Congress may examine the relationship between the United States and the WTO in two ways. Congress may consider implementing legislation for a potential Doha Round agreement. An agreement will not be reached prior to the expiration of U.S. Trade Promotion Authority (TPA); however, Congress may extend or reauthorize TPA to consider such an agreement. Secondly, Congress may consider changes to U.S. laws in response to WTO dispute settlement procedures.