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2002.



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Report to Congressional Requesters:



September 2002:



WORLD TRADE ORGANIZATION:



Early Decisions Are Vital to Progress in Ongoing Negotiations:



GAO-02-879:



Letter:



Results in Brief:



Background:



Several Factors Led to Successful Doha Launch:



Early Decisions on Key Sensitive Issues Vital to Progress

in Round:



WTO Negotiations Face Several Overarching Challenges:



Concluding Observations:



Agency Comments and Our Evaluation:



Appendixes:



Appendix I: Additional Issues on the Doha Negotiating Agenda:



WTO Rules:



Nonagricultural Market Access:



Trade in Services:



Trade and the Environment:



Dispute Settlement:



Registry for Geographical Indications for Wines and Spirits:



Issues Negotiated Outside New Negotiating Groups or Special Sessions of 

WTO Bodies:



Appendix II: Work Mandated by the Doha Declaration, but not Part of

Negotiations:



Appendix III: Objectives, Scope and Methodology:



Appendix IV: GAO Contacts and Acknowledgements:



GAO Contacts:



Acknowledgments:



Figures:



Figure 1: Organization of the WTO Negotiations:



Figure 2: Key Events through the Fifth Ministerial Conference:



Figure 3: Agricultural Export Subsidies, 1998:



Figure 4: EU, Japanese, and U.S. Agricultural Domestic Support, 1998:



Figure 5: Organization of the WTO Negotiations:



Figure 6: Organization of the WTO Negotiations, and WTO Work Not 
Subject 

to Negotiations but Called for in the Doha Declaration:



Abbreviations:



ACP: African, Caribbean, and Pacific:



AFL-CIO: American Federation of Labor-Congress of Industrial 

Organizations:



CAP: Common Agricultural Policy:



DSU: Dispute Settlement Understanding:



EU: European Union:



GATS: General Agreement on Trade in Services:



GATT: General Agreement on Tariffs and Trade:



MFN: Most Favored Nation:



MEA: Multilateral Environmental Agreement:



STE: State Trading Enterprise:



TRIPS: Agreement on Trade-Related Aspects of Intellectual Property 

Rights:



USTR: Office of the U.S. Trade Representative:



WTO: World Trade Organization:



Letter September 4, 2002:



The Honorable Charles E. Grassley

Ranking Minority Member

Committee on Finance

United States Senate:



The Honorable William H. Thomas

Chairman, Committee on Ways and Means

House of Representatives:



The Honorable Philip M. Crane

Chairman, Subcommittee on Trade

Committee on Ways and Means

House of Representatives:



In November 2001, the World Trade Organization launched a new set of 

multilateral negotiations at its ministerial conference in Doha, Qatar. 

The ministerial conference was important, because it laid out an 

ambitious agenda for a broad set of new multilateral trade negotiations 

set forth in the Doha Ministerial Declaration.[Footnote 1] The 

declaration calls for a continuation of discussions on liberalizing 

trade in agriculture and services, which began in 2000. In addition, it 

provides for new talks on market access for nonagricultural products, 

trade and the environment, trade-related aspects of intellectual 

property rights, and other issues. The negotiations on these issues are 

scheduled to conclude by January 1, 2005.



Because the Doha ministerial conference successfully launched new 

multilateral trade negotiations, you asked us to analyze the nature of 

those negotiations and their future prospects. In this report, we (1) 

analyze the factors that contributed to the Doha ministerial 

conference’s successful launch of new World Trade Organization 

negotiations, (2) analyze the key interim deadlines for the most 

sensitive issues from the present time through the next ministerial 

conference in 2003, and (3) evaluate the most significant challenges 

facing the World Trade Organization in the overall negotiations. 

Appendix I contains a brief synopsis of remaining issues on the Doha 

negotiating agenda. Appendix II identifies the working groups that the 

Doha Declaration established on issues that are not formally part of 

the negotiations.



To address these objectives, we met with and obtained documents from a 

wide variety of World Trade Organization, U.S., and foreign government 

officials. In addition, we met with private sector, nongovernmental, 

and intergovernmental organization representatives in Washington, 

D.C., Geneva, and Brussels. This report, however, is not meant to be a 

comprehensive review of all the issues in the negotiations. For a 

detailed account of the issues and their progress in the negotiations, 

refer to the World Trade Organization Web site http://www.wto.org. A 

full description of our scope and methodology can be found in appendix 

III.



Results in Brief:



Four main factors led to the World Trade Organization’s successful 

launch of new multilateral trade negotiations in Doha. First, the U.S. 

and the European Union’s clear support for the launch, bolstered by the 

strong personal relationship between the U.S. Trade Representative and 

the European Union Commissioner for Trade, facilitated agreement on the 

agenda for new negotiations. Second, World Trade Organization members 

applied an effective preparation strategy before the Doha ministerial 

conference. For example, trade ministers from developed and developing 

countries met throughout the year to rebuild relationships damaged 

during the World Trade Organization’s failed attempt to launch 

negotiations at its 1999 Seattle ministerial conference.[Footnote 2] In 

addition, Organization members used as a starting point for discussions 

in Doha a broad set of generally agreed-upon objectives for new 

negotiations and deferred debate on the details to the actual 

negotiations being launched. In contrast, before the 1999 Seattle 

ministerial, World Trade Organization members had tried to reconcile a 

long list of divergent positions on every issue to be negotiated. 

Third, some key developments at the Doha conference helped gain support 

from the developing countries for launching negotiations. Last, 

Organization officials and member country representatives told us that 

the tragic events of September 11THgalvanized Organization members to 

show their support for a strong and healthy worldwide trading system.



The Doha Declaration requires negotiators to make early, crucial 

decisions, as it mandates several important interim deadlines. One of 

these deadlines involves decisions on agricultural trade, where World 

Trade Organization members must agree on modalities, or methodologies, 

timetables, and desired targets for reducing agricultural export 

subsidies, domestic support, and agricultural tariffs by March 31, 

2003. This will be difficult, because the European Union, World Trade 

Organization members’ main target for reducing export subsidies, faces 

stiff opposition at home to changing its agricultural policies. The 

second interim deadline concerns the “Singapore issues,”[Footnote 3] 

which Organization members must decide whether to include in the 

negotiations by the next ministerial conference in September 2003. This 

decision is highly contentious, most notably the negotiations on 

investment and competition policy. The European Union considers 

negotiations on investment and competition essential to a successful 

conclusion of the negotiations, while developing countries have 

consistently and vehemently opposed including these issues in the 

talks.



The overriding challenge for the World Trade Organization in the 

negotiations will be to forge consensus within its large and diverse 

membership and to deal with several difficult organizational issues. In 

addition, the Organization will need to overcome the negative effects 

of outside events such as disputes among its key members. Achieving 

consensus will be challenging, because the Organization’s developing 

country members, now representing 73 percent of the membership, have 

divergent views on trade liberalization--the main objective for the 

negotiations--both compared with developed country members and among 

each other. For example, some developing country members are willing to 

lower their barriers to trade provided they can gain greater access to 

markets where they can be most competitive, such as agriculture and 

textiles and apparel. Others argue that, given their developing status, 

they should be allowed special exceptions to protect their markets, 

such as the ability to retain higher tariffs. In fact, the importance 

of the developing country members is embodied in the negotiations’ 

name--the Doha Development Agenda. Thus, among other challenges, the 

World Trade Organization’s most difficult organizational task will be 

to fulfill some developing country members’ high expectations, 

particularly among African nations, not only for receiving technical 

assistance, such as for understanding World Trade Organization 

agreements--the Organization’s traditional role--but also for 

increasing their capacity to export. This latter role would require the 

Organization to expand its activities to include providing development 

assistance. However, the Organization lacks the resources and 

experience to deliver this type of assistance and thus will be hard 

pressed to meet developing countries’ expectations. Further, outside 

events such as ongoing trade disputes among key Organization members 

could hamper the negotiators’ willingness to reach agreement on the 

issues. On a positive note, however, the granting in August of trade 

promotion authority to the U.S. President has provided a boost for the 

negotiations, according to the World Trade Organization’s Director 

General and several member countries.



Background:



The Uruguay Round, the seventh in a series of multilateral negotiations 

known as “rounds,” established the World Trade Organization (WTO) on 

January 1, 1995, as the successor to the General Agreement on Tariffs 

and Trade (GATT). This round resulted in over a dozen separate 

agreements that, among others, covered intellectual property rights and 

trade in services and strengthened existing disciplines on agriculture. 

It also established a stronger dispute settlement process than had been 

available under the GATT. Moreover, unlike previous trade rounds, the 

Uruguay Round agreements were part of a “single undertaking,” meaning 

that all GATT members had to agree to all their provisions, with no 

discretion as to which accords they wished to accept.



The WTO administers rules for international trade, provides a mechanism 

for settling disputes, and provides a forum for conducting trade 

negotiations. WTO membership has increased since its creation to 144 

members, up from 90 GATT members when the Uruguay Round was launched in 

1986. WTO membership is also diverse in terms of economic development, 

consisting of all developed countries and a large percentage of 

developing countries, from the more advanced to the very poor. 

Specifically, while the WTO has no formal definition of a “developing 

country,” the World Bank classifies 105 current WTO members, or 

approximately 73 percent, as developing countries. In addition, 30 
members, 

or 21 percent of the total, are designated as “least developed 

countries.”[Footnote 4]



The ministerial conference is the highest decisionmaking authority in 

the WTO, convenes at least once every 2 years, and consists of trade 

ministers from all WTO member countries. The WTO General Council, made 

up of representatives from all WTO member governments, implements 

decisions adopted by the members in between ministerial conferences. 

Decisionmaking in the WTO is largely based on consensus among its 

members rather than on a majority of member votes as it is in many 

other international organizations.



Four ministerial conferences have taken place since the WTO’s creation. 

Prior to the third ministerial conference, held in Seattle in December 

1999, WTO members announced their intention to launch a new round of 

multilateral trade negotiations. However, the Seattle conference ended 

without launching negotiations. Following four days of intensive talks, 

the conference was suspended without issuing a ministerial declaration. 

The failure to launch a new round in Seattle resulted from a 

combination of circumstances, including a lack of agreement among 

members on the issues to be discussed in a new round, the sensitivity 

and complexity of trade issues under consideration, and inherent 

difficulties in the negotiation process.[Footnote 5]



Ultimately, at the fourth ministerial conference in Doha, Qatar, in 

November 2001, WTO members were able to reach consensus on a new 

negotiating effort, officially called the Doha Development Agenda. The 

Doha Declaration sets forth a work program for the negotiations to be 

concluded by January 1, 2005. Figure 1 illustrates the organizational 

structure that the WTO has established to conduct the negotiations 

mandated by the Doha Declaration.



Figure 1: Organization of the WTO Negotiations:



[See PDF for image]



Note 1: Agriculture, highlighted above, is a key issue focused on in 

this report.



Note 2: Special and differential treatment is also discussed in this 

report. Some WTO members, including the United States, contend that 

this special session is not a negotiating body but rather is part of 

the general Doha work program.



Note 3: For a discussion of other issues shown in this figure, see 

appendix I.



Source: GAO analysis, based on WTO documents.



[End of figure]



The new negotiating effort will encompass agriculture and trade in 

services, two critical areas where negotiations have been ongoing since 

2000, under an existing Uruguay Round mandate. Special sessions of 

standing WTO bodies will also address the relationship between trade 

and the environment; attempt to clarify and improve provisions of the 

WTO Dispute Settlement Understanding; and negotiate the establishment 

of a multilateral notification and registration system for 

geographical indications for wines and spirits.[Footnote 6] The WTO 
also called for 

a special session of the Trade and Development Committee to identify 

and attempt to strengthen special and differential treatment provisions 

for developing countries. The status of this body has been the subject 

of debate and is unclear. While some countries consider it to be a 

legitimate negotiating group, the United States and several other 

countries contend that it belongs under the general Doha work program. 

In addition to the special sessions, two new negotiating groups have 

been created to review and propose revisions to WTO disciplines dealing 

with trade rules and to recommend cuts in tariffs and other steps to 

facilitate market access for nonagricultural products. Chairpersons of 

special sessions and new negotiating groups have been appointed by the 

WTO membership to serve up to the fifth ministerial conference in 2003, 

at which time all appointments will be reviewed. The Doha Declaration 

also mandated negotiations on numerous issues related to difficulties 

that developing countries face in implementing their Uruguay Round 

commitments. However, the declaration did not create a separate 

negotiating group for these implementation issues.



Several Factors Led to Successful Doha Launch:



Several factors contributed to the WTO’s successful launch of new trade 

negotiations, which was a difficult feat, considering the lingering 

uncertainty about launching such a round among WTO members since their 

failure to do so 2 years earlier in Seattle.[Footnote 7] First, a 

strong relationship between the United States and the European Union, 

particularly the U.S. Trade Representative (USTR) and the European 

Union (EU) Commissioner for Trade, helped forge consensus among other 

WTO members. Second, WTO members used an effective strategy to prepare 

for the Doha ministerial conference. Third, two key developments 

occurring during the Doha ministerial greatly contributed to the 

developing countries’, particularly African countries’, willingness to 

launch negotiations. Finally, the tragic events of September 11THhelped 

galvanize WTO members to show their support for a strong and healthy 

worldwide trading system.



U.S.-EU Relationship Was Critical:



The strong support on the part of the United States and the European 

Union for the negotiations, bolstered by the positive relationship 

between the U.S. Trade Representative and the EU Commissioner for 

Trade, helped bring together other WTO members on specific issues and 

on the overall goal of launching a new set of global trade 

negotiations. WTO members did not agree to launch a new set of trade 

negotiations at the 1999 ministerial conference in Seattle due, in 

part, to a lack of consensus among major trading countries, especially 

the United States and the European Union. In Doha, by contrast, the 

United States and the European Union, while not agreeing on all of the 

key issues, were united behind a common goal of launching a new round. 

According to some member country representatives, the long-standing 

friendship between the U.S. Trade Representative and the EU Trade 

Commissioner, dating back to the 1980s, was a positive force in 

launching the negotiations. They noted that the two officials used 

their personal rapport to garner support for an agenda for these 

negotiations. Examples cited included their efforts to build bridges 

with developing countries and to work together to devise compromise 

language on trade and the environment, which allowed the European Union 

to make crucial concessions in agriculture. Several WTO member country 

representatives told us that agreement between the United States and 

the European Union was essential to forging a consensus to launch 

negotiations.



Preparation Strategy Was Effective:



According to U.S. officials and foreign government representatives, a 

key strategy for achieving consensus to launch negotiations was holding 

two informal “mini-ministerials,” or informal meetings, among a cross 

section of developed and developing country members, in the months 

before the Doha ministerial conference. According to U.S. and foreign 

officials, these meetings helped to rebuild personal relationships 

among ministers that were crucial to overcoming the negative atmosphere 

evidenced by the WTO’s failure to launch negotiations in Seattle in 

1999. Further, throughout 2001, trade ministers from major trading 

countries met individually with other ministers, especially from 

developing countries. In addition, developing countries, including many 

in Africa, participated in a network of informal meetings to prepare 

for the ministerial. Some developing country representatives said that 

in contrast to preparations before the Seattle ministerial, these 

efforts showed willingness on the part of developed countries to better 

understand and address their concerns. For example, several foreign 

representatives cited the fact that the U.S. Trade Representative spent 

a great deal of time before the Doha ministerial listening to 

developing countries’ views, particularly those of African nations. 

They added that this was a positive step in relations between developed 

and developing WTO member countries. According to U.S. and WTO 

officials and foreign representatives, this effort was significant, as 

negotiations could not have been launched without the developing 

countries’ support.



Another preparatory strategy that helped WTO members reach consensus on 

an agenda for new negotiations was the nature of the text used as the 

basis for discussion at the ministerial meeting. Before the Doha 

ministerial, the General Council chair produced his own text based on 

input he received during exhaustive meetings with small groups of WTO 

members. This text reflected the consensus views of members on the 

issues, based on the chair’s own best judgment. In contrast, before the 

Seattle ministerial conference, specific proposals from various member 

countries on each issue drove the discussions on what should be 

included in the draft declaration. This led to a lengthy (32 page) 

draft declaration text that was a compendium of member country 

positions, including nearly 400 bracketed items, indicating 

disagreement among members.



Key Developments in Doha Won Developing Country Support:



WTO officials and foreign representatives said that two developments at 

the Doha ministerial conference were crucial to gaining developing 

countries’ support to launch a new set of negotiations. First, the WTO 

granted the European Union a waiver from WTO’s most-favored-nation 

clause (MFN)[Footnote 8] to continue providing preferential market 

access to African, Caribbean, and Pacific (ACP) countries through its 

Cotonou Agreement, which was signed in 2000.[Footnote 9] The Cotonou 

Agreement will be valid for 20 years, during which time the European 

Union and ACP countries can enter into additional economic integration 

agreements, progressively removing barriers to trade. In addition, the 

agreement includes a pledge of 13.5 billion euros in development 
assistance 

to ACP countries for the initial 5-year period. The Secretary General 
of 

the ACP group has concluded that the Cotonou Agreement will help 

integrate ACP countries into the world economy by reinforcing regional 

integration, thus helping them to benefit from globalization.



Second, WTO officials and U.S. and foreign country representatives said 

the adoption at Doha of a declaration clarifying the relationship 

between the WTO’s Agreement on Trade-Related Aspects of Intellectual 

Property Rights (TRIPS) and public health was critical to gaining the 

support of many African nations. The Declaration on the TRIPS Agreement 

and Public Health states that the TRIPS agreement “does not and should 

not prevent Members from taking measures to protect public health.” 

Prior to the ministerial, African nations, nongovernmental 

organizations, and others had argued that TRIPS could prevent 

developing countries from gaining access to medicines needed to fight 

HIV/AIDS, tuberculosis, malaria, and other epidemics (see app. I for a 

further discussion of this declaration).



September 11TH Tragedy Galvanized Support for Negotiations:



The final major factor that U.S. and WTO officials and member country 

representatives cited as contributing to the ministerial’s success was 

the tragic events of September 11TH. They said that after September 

11TH, many WTO members felt that it was essential for there to be a 

successful major international meeting to demonstrate the strength of 

the international community. Further, given the potential impact of the 

attacks on the world economy, which was already in recession, the 

ministerial would be an important barometer of the strength of the 

multilateral trading system. The combination of these factors led one 

official to remark that after September 11TH, the ministerial had to 

succeed because “the price of failure was too high.”:



Early Decisions on Key Sensitive Issues Vital to Progress in Round:



The most important interim deadlines in the negotiations involve early 

key decisions on agricultural trade and the Singapore issues, including 

competition and investment in particular. Meeting the interim deadlines 

on these issues will be crucial to achieving overall progress in the 

negotiations and will provide a good indication of the ultimate 

prospects for the negotiations’ successful conclusion. The following 

section discusses the nature of these key decisions and analyzes the 

importance of these particular issues and what makes them sensitive and 

difficult to negotiate. Figure 2 shows the main interim deadlines and 

key events in the negotiations through the fifth ministerial conference 

in 2003.



Figure 2: Key Events through the Fifth Ministerial Conference:



[See PDF for image]



[A] Modalities include numerical targets, timetables, and formulas for 

countries’ commitments.



Source: GAO.



[End of figure]



Meeting Interim Deadline on Agricultural Trade Crucial but Difficult:



According to several WTO member country representatives and senior WTO 

officials, whether WTO members meet the March 31, 2003, interim 

deadline for establishing the agricultural modalities (that is, 

numerical targets, timetables, and formulas for countries’ commitments) 

specified in the Doha Declaration will be a crucial indicator of the 

likelihood of success in the overall negotiations.[Footnote 10] This is 

attributable to the extreme importance of agricultural trade reform for 

a large number of WTO member countries, many of which want to see 

progress in the agriculture talks before coming to agreement on other 

issues. However, meeting this deadline will be difficult, because it 

necessitates reaching agreement on areas of long-standing dispute, 

particularly with regard to agricultural export subsidies and domestic 

support payments, which have generated strong domestic constituency 

concerns. Specifically, it is the negotiators’ intention to agree on a 

target and timetable for phasing out agricultural export subsidies. 

They will also need to agree on a definition of the types of domestic 

agricultural support payments that should be considered trade-

distorting. Agricultural modalities also include devising a formula for 

WTO members to reduce tariffs, which, while important, is less 

controversial.[Footnote 11]



Achieving agricultural trade reform in the negotiations is critical 

because improving access to countries’ agricultural markets is a major 

priority for a wide range of WTO member countries, including major 

agricultural exporters such as Canada, Australia, and Brazil, who want 

to expand their overseas markets. Proponents also include many 

developing countries, among them Colombia, the Philippines, South 

Africa, and Thailand, who wish to take advantage of their natural 

competitive advantage in the agricultural sector. Agricultural reform 

is also critical to the United States, whose farmers have faced a 

finite domestic market over the past several years, falling 

international commodity prices, and a strong dollar that had 

effectively inflated the cost of their exports to foreign markets. 

Because agricultural trade is such a top priority to so many WTO 

members, the chair of the special session of the Committee on 

Agriculture has called it a key to completion of the negotiations, 

stating that without progress in agriculture, there will be no progress 

in the overall round.



Meeting the March 2003 interim deadline on modalities for export 

subsidies[Footnote 12] and domestic support payments[Footnote 13] will 

be difficult, as these areas have been particularly contentious, 

generating intense domestic constituency concerns in the European 

Union, Japan, and the United States. For the European Union, the goals 

set out in the Doha Declaration for phasing out export subsidies 

present a serious challenge. Over the years, European farmers have come 

to rely on the generous support and subsidies provided under the Common 

Agricultural Policy (CAP).[Footnote 14] In fact, the CAP has become the 

single biggest expenditure in the EU budget, representing approximately 

42 percent of its budget. In recent years, the European Union has begun 

to reform the CAP and lower costs. Nevertheless, EU farmers in certain 

countries, such as France, wield considerable political power and could 

challenge the positions taken by governments that would agree to 

eliminate export subsidies. Similarly, in Japan, accepting substantial 

cuts in domestic support for agriculture and reduced tariffs on 

agricultural imports could jeopardize farmers’ support for the current 

government. Meanwhile, in May 2002, the United States enacted the Farm 

Security and Rural Investment Act of 2002 (P.L. 107-171), which will 

raise U.S. spending on domestic support for agriculture by about $73.5 

billion over the next 10 years.[Footnote 15]



Many WTO member countries are aggressively pursuing the goal of 

reducing and eventually eliminating export subsidies, including the 18-

country coalition known as the Cairns Group,[Footnote 16] which 

accounts for one-third of the world’s agricultural exports, as well as 

India, Mexico, Nigeria, and the United States.[Footnote 17] The 

European Union is the main target of the Doha mandate regarding export 

subsidies, as its subsidies far exceed those of other countries. As 

shown in figure 3, in 1998 the European Union was responsible for about 

90 percent ($6.6 billion) of all agricultural export subsidies used 

worldwide. In 2000, EU expenditures on export subsidies were about 170 

times the amount paid by the United States.[Footnote 18] The European 

Union has stated that it cannot agree to eliminate export subsidies 

completely. The European Union and other WTO member countries maintain 

that disciplining export subsidies without addressing other programs 

affecting export competition, such as U.S. export credit guarantees, 

would be discriminatory.[Footnote 19]



Figure 3: Agricultural Export Subsidies, 1998:



[See PDF for image]



Note 1: 1998 is latest year for which official WTO data are available 

for all WTO countries’ export subsidy payments.



Note 2: Percentages do not add to 100 because of rounding.



Source: Congressional Research Service analysis based on WTO, Export 

Subsidies: Background Paper by the Secretariat (Geneva, Switzerland: 

May 2000).



[End of figure]



Like export subsidies, the Doha mandate of reducing domestic support 

payments to farmers is highly controversial. The Cairns Group maintains 

that only non-trade-distorting support payments, such as for pest and 

disease control measures, should be allowed. Non-trade-distorting 

domestic support programs are government funded and typically are not 

directed at particular products or related to production levels or 

prices. Although Japan and the European Union are willing to reduce 

support payments to their farmers, they want to maintain some types of 

payments linked to production. EU officials, for example, argue that 

certain payments to farmers, based on measurement such as acreage or 

number of animals, should continue to be allowed, provided they are 

tied to limits on production and serve worthwhile goals. These goals 

include stewardship of the rural environment and more humane treatment 

of farm animals. The United States has called for simplifying the rules 

for domestic support and establishing a ceiling on trade-distorting 

support that applies proportionately to all countries. As shown in 

figure 4, the European Union has provided much higher levels of support 

to its farmers than have other WTO members, and it also enjoys a much 

higher allowable ceiling for such support under its Uruguay Round 

commitments.



Figure 4: EU, Japanese, and U.S. Agricultural Domestic Support, 1998:



[See PDF for image]



Note 1: “Ceiling” refers to each country’s domestic support limit under 

the Uruguay Round.



Note 2: The latest year for which official WTO data are available for 

members’ domestic support payments is 1998.



Source: GAO analysis based on WTO, Domestic Support: Background Paper 

by the Secretariat (Geneva, Switzerland: March 2002).



[End of figure]



A third aspect of the decision on modalities is to devise a formula for 

reducing tariffs on agricultural products. While less contentious than 

attempts to reach agreement on modalities for export subsidies and 

domestic support payments, agreeing on how to reduce agricultural 

tariffs is important, particularly to the United States. According to 

the U.S. Undersecretary of Agriculture, the average tariff for U.S. 

agricultural products is 12 percent, while the average global tariffs 

for food and agricultural products worldwide are 62 percent. Japan’s 

tariffs average 59 percent, while the Cairns Group’s and the EU’s are 

30 percent. Tariff reductions are a sensitive issue for many developing 

countries. Some developing countries are reluctant to bring tariffs 

down to a level that might compromise the livelihood of significant 

segments of their populations who depend on agricultural production. 

Once WTO members agree on agricultural tariff modalities, they must 

submit tariff schedules detailing their proposed new tariff levels by 

the fifth ministerial conference in September 2003. Accomplishing this 

task 6 months after the March modalities deadline could be difficult 

for some WTO members. For example, some developing countries have 

limited staff, experience, and resources. In addition, the European 

Union must create tariff schedules not only for its current members but 

also for the 10 countries that are candidates to become EU 

members.[Footnote 20]



Meeting Interim Deadline on Singapore Issues Is Highly Contentious:



A second critical decision point in the Doha Development Agenda 

involves whether negotiations should proceed on what are generally 

referred to as the Singapore issues, which include issues related to 

investment, competition, trade facilitation, and transparency in 

government procurement. Because of the extreme sensitivity of these 

issues, particularly regarding competition and investment, WTO members 

decided in Doha to delay the start of formal negotiations on these 

topics until they could make certain decisions at the fifth ministerial 

conference in 2003. These decisions are of key importance, because 

they, along with progress in agriculture, are likely to drive the rest 

of the negotiations. EU officials insist that moving forward with 

negotiations on competition and investment is essential to the 

successful conclusion of the overall negotiations, while developing 

countries have consistently opposed including them in the talks.



Basic disagreement among WTO members on the meaning of the language in 

the Doha Declaration is likely to make the upcoming decision on the 

Singapore issues difficult, particularly in the areas of trade and 

investment and trade and competition.[Footnote 21] The language in the 

declaration is ambiguous on this issue. It states that for each of the 

four areas, negotiations should take place after the fifth ministerial 

conference “on the basis of a decision to be taken, by explicit 

consensus, at that Session on modalities of negotiations.” In the view 

of developed countries, including the United States and the European 

Union, the declaration calls for negotiations on these issues to be 

launched after the fifth ministerial in September 2003. However, India, 

with the support of some other developing countries, maintains that no 

such consensus was reached at Doha. In Doha, India held up consensus 

until it obtained a statement from the ministerial conference chair 

that each WTO member would have “the right to take a position on 

modalities that would prevent negotiations from proceeding …until that 

member is prepared to join in an explicit consensus.” The general view 

among WTO member representatives in Geneva is that the Doha Declaration 

does not mandate that negotiations on the Singapore issues be launched 

after the fifth ministerial conference. Instead, a decision on whether 

to proceed with these negotiations will have to be made at that 2003 

ministerial meeting.



The main controversy surrounding the Singapore issues deals with the 

EU’s strong advocacy for negotiations on trade and investment and trade 

and competition. Japan and South Korea also support negotiating these 

issues. The European Union argues that investment rules based on the 

principles of national treatment,[Footnote 22] MFN treatment, 

transparency, and the right to establish businesses overseas are 

necessary to contribute to a stable and predictable global business 

climate for foreign direct investment. Regarding trade and competition 

policy, the European Union advocates incorporating basic principles 

into domestic law, including nondiscrimination, transparency, due 

process, judicial review, a ban on certain cartels, and sufficient 

enforcement powers.



Many developing countries, on the other hand, led by a group of 

countries known as the Like-Minded Group,[Footnote 23] have 

consistently expressed their strong opposition to the inclusion of the 

Singapore issues in the negotiating agenda. For example, India has 

acted to prevent any discussions in the applicable WTO working groups 

on these issues. India is concerned that any discussion might be 

construed as a negotiation, rather than as an effort to clarify the 

issues. India argued that undertaking new obligations in these areas 

would present too great a burden on developing countries. In fact, many 

developing countries maintain that they are still having difficulty 

implementing their Uruguay Round obligations (see app. I for a 

discussion of implementation issues). Some developing countries want to 

see progress on other issues, particularly improving the adequacy of 

the WTO’s technical assistance and capacity building efforts, before 

agreeing to launch negotiations on the Singapore issues.



WTO Negotiations Face Several Overarching Challenges:



The overarching challenges facing the WTO in the negotiations launched 

in Doha will be (1) building consensus within its large and diverse 

membership, (2) overcoming various organizational difficulties, and (3) 

avoiding tensions generated by controversial events occurring outside 

the negotiations.



Diverse Membership Makes Consensus More Difficult:



The WTO’s large and diverse membership makes reaching agreement by 

consensus more difficult, particularly between developed and developing 

country members. Developing countries are taking on a more active role 

in these negotiations as compared with those under the Uruguay Round, 

and in some cases they express different views about trade 

liberalization. For instance, some developing country members are 

concerned that commitments they make in the current negotiations could 

put them at a disadvantage as compared with their developed country 

counterparts. They argue that they should not be held to the same 

standard of trade liberalization as the developed country members. 

Balancing these different views will be a challenge in the 

negotiations. Further, China’s recent membership in the WTO could 

affect the dynamics of the organization, partly because of the size of 

its economy.



WTO members include high-income countries like the United States, which 

alone accounts for about 13 percent of world trade; large, low-income 

countries like China and India, each having populations of over 1 

billion; and members like Dominica, with fewer than 71,000 inhabitants, 

and Mongolia, which accounts for less than 0.01 percent of world trade. 

As mentioned earlier, the World Bank classifies 105 current WTO 

members, or approximately 73 percent, as developing countries, and 

about 21 percent of these as least developed countries. One WTO 

official pointed out that 80 percent of the WTO membership represents 

only 1.7 percent of world trade.



Developing countries are taking a more active role in the current 

negotiations as compared with the Uruguay Round, and they will 

scrutinize more closely the commitments they agree to make. Notably, 

WTO members are calling the current negotiations the Doha Development 

Agenda, symbolizing the special emphasis on meeting the needs of 

developing countries. According to a WTO official and a developing 

country representative in Geneva, many developing country members have 

maintained that they had not fully realized that, under the Uruguay 

Round, all WTO members were obligated to implement the complete package 

of agreements and were to be held accountable by the WTO’s dispute 

settlement system. (Prior to the completion of the Uruguay Round, 

parties to GATT could opt out of agreements if they so chose.) One WTO 

official believed that, because WTO developing country members now 

better understand the WTO dispute settlement process, they are less 

likely to accept vague language in order to reach a consensus, as 

compared with the previous round. He said that this could make it 

harder to reach consensus, as negotiators demand more clarity. Finally, 

some developing country members have had difficulty implementing their 

Uruguay Round obligations.[Footnote 24]



Some developing country members have views on trade liberalization that 

are different from those of their developed country counterparts. 

Although many developing countries are willing to liberalize their 

markets to gain concessions in areas in which they are most 

competitive, particularly in agricultural trade, others maintain that 

they need special exceptions to trade liberalization to help them 

develop. For example, some of these developing country members want to 

opt out of lowering tariffs for certain products, reevaluate existing 

tariff bindings for food security reasons, or continue to use export 

subsidies to promote development.



The WTO’s challenge lies in the fact that the Doha Declaration calls 

for strengthening the ability of developing countries to argue for 

exceptions to trade liberalization through the WTO’s “special and 

differential treatment” provisions.[Footnote 25] By the end of July 

2002, the Committee on Trade and Development was to identify those 

special and differential treatment provisions that are mandatory and 

those that are nonbinding in character, and to examine ways in which 

these provisions could be made more precise and effective. On July 24, 

2002, the committee recommended that the General Council agree to set 

up a monitoring mechanism, whose details would be worked out later. It 

further asked the General Council to approve extending until December 

31, 2002, the committee’s deadline for making clear recommendations for 

decisions on special and differential treatment. According to a WTO 

official, this exercise will be difficult, given the potential for such 

exceptions to undermine the overall negotiations’ goal to increase 

trade liberalization.



China’s entry as a new member of the WTO in 2001 is another sign of the 

diversity of the WTO’s membership. Because China is a large economy and 

a significant trader, as well as a developing country under World Bank 

standards,[Footnote 26] the role it chooses to take in the WTO could 

affect the dynamics of the organization and therefore the negotiations. 

In fact, one high-level WTO official noted that China’s new mission to 

the WTO in Geneva is the fourth largest among the membership. WTO 

officials and member country representatives with whom we spoke 

generally believed that China would act in its own national interest 

and not necessarily side in all cases with any one bloc of WTO member 

countries. One WTO representative from a developing country predicted 

that China would form alliances where it made sense for China. Many WTO 

country representatives predicted that China would be active in the 

negotiations and would be likely to support further trade 

liberalization by other WTO members. However, it has been reported that 

Chinese officials have recently taken the position that China should 

not be expected to make significant concessions in the negotiations 

given the substantial commitments it has already made in joining the 

WTO, particularly in the area of market access for nonagricultural 

products. In addition, one WTO country representative predicted that 

China’s membership might have an impact on the outcome of the WTO 

negotiations on trade remedies. Specifically, WTO member countries may 

be less inclined to weaken WTO antidumping provisions because of the 

possibility of China’s dumping products on their markets.[Footnote 27]



WTO Faces Organizational Challenges:



The WTO will face several organizational challenges during the 

negotiations. First, the WTO will face pressure to meet many developing 

country members’ high expectations for receiving technical assistance 

to help them fully participate and benefit from the negotiations. 

Second, some aspects of the WTO’s guiding principles for conducting the 

negotiations have the potential for slowing progress in the 

negotiations. Finally, uncertainties associated with the change in WTO 

leadership could potentially affect negotiations as a new WTO Director 

General took office in September 2002.



High Expectations for Technical Assistance Must Be Met:



The WTO’s most difficult organizational task will be to meet some 

developing country members’ high expectations for receiving technical 

assistance mandated in the Doha Declaration. While the WTO has recently 

been allocated additional funds to meet these needs, a WTO official 

suggested that the WTO might lack the staff and resources to 

effectively utilize the funds. In addition, according to foreign 

country and WTO officials, some developing countries are expecting the 

WTO to expand its activities not only to play its traditional role of 

explaining WTO agreements but also to provide broader assistance, such 

as helping countries to increase their capacity to export. The latter 

involves providing development assistance, a role for which the WTO 

lacks the resources and expertise. Many developing countries have 

indicated that the adequacy of these efforts will affect their 

willingness to accept many of the developed countries’ priorities in 

the negotiations, according to WTO and foreign government officials.



The WTO’s delivery of technical assistance to developing countries has 

become critical to the successful outcome of the Doha Development 

Agenda. The Doha Declaration calls for firm commitments to provide 

technical assistance and capacity building, which it identifies as 

“core elements of the development dimension of the multilateral trading 

system.” The WTO Director General has repeatedly highlighted the 

importance of these commitments, stating that further progress in trade 

liberalization is conditional on capacity building.



The WTO is also highlighting the importance of coordination among other 

international organizations in providing trade-related development 

assistance to developing countries, particularly least developed 

countries. The focus of these efforts is through an enhanced Integrated 

Framework for Trade-Related Technical Assistance to the Least Developed 

Countries.[Footnote 28] The six core international agencies of the 

integrated framework, which include the WTO, issued a joint communiqué 

in February 2002 committing them to helping least developed countries 

and low-income economies to “stimulate supply-side responses to improve 

market access opportunities, diversify their production and export 

base, and enhance their trade-supporting institutions.” The Doha 

Declaration directs the WTO Director General to provide an interim 

report to the General Council in December 2002 and a full report to the 

fifth ministerial conference in 2003 on the implementation and adequacy 

of commitments made to provide technical assistance and capacity 

building to developing countries, including WTO efforts to enhance the 

integrated framework on behalf of least developed countries.



However, despite a significant increase in funding from the WTO and 

commitments for a coordinated effort from other international 

organizations to expand technical assistance, several WTO and foreign 

government officials were concerned that developing countries’ 

expectations for these efforts may be unrealistic. These officials 

worried that developing countries may view such assistance as a 

condition to their agreeing to move forward in the negotiations. 

According to both a WTO official and a foreign government 

representative in Geneva, some developing countries expect to obtain 

assistance from the WTO with infrastructure projects to facilitate 

their capacity to export. However, the Deputy U.S. Trade Representative 

stated in April 2002 that the WTO’s mandate for providing technical 

assistance and capacity building relates “strictly to assisting these 

countries in negotiations and does not require broader development 

aid.” He further stated that the extent of these activities and what 

they should accomplish must soon be clarified. Some WTO member country 

representatives whom we interviewed agreed with the U.S. view that this 

clarification was essential so that developing countries cannot claim 

later that technical assistance was inadequate to obtain their 

willingness to participate further in the negotiations. This will be 

one of the critical issues to be addressed at the fifth ministerial 

conference in Mexico in September 2003.



Principles Guiding the Negotiations Could Slow Progress:



In January 2002 the General Council established “principles and 

practices,” or guidelines, for conducting the negotiations.[Footnote 

29] Certain aspects of these guidelines were written specifically to 

accommodate many of the concerns of developing countries. However, some 

of these guidelines could create delays in the negotiations. For 

example, a WTO official highlighted a requirement that chairs of 

negotiating bodies include the different views of members in draft 

texts if no consensus exists. This is partly because several developing 

countries claimed that the General Council chair’s draft Doha 

Declaration did not reflect their consistent opposition to negotiations 

on the Singapore issues. Consequently, these countries insisted on this 

requirement in the principles and practices to prevent drafts from 

being produced that do not reflect their positions. However, this 

limitation could make it harder for chairpersons to broker a final 

negotiating agreement, if it produces the type of unwieldy text that 

prevented consensus at the Seattle ministerial.



Another element of the principles and practices that could delay the 

progress of the negotiations is guidance that only one negotiating body 

should meet at a given time, according to a WTO official.[Footnote 30] 

The objective of this guideline is to structure the talks so that small 

delegations would be better able to participate. Developing countries 

have stressed the importance of enabling greater inclusion of all 

members in the negotiating process. Although this is an important goal, 

it limits the total number of meetings that could possibly take place 

over the course of the negotiations. A chair of one of the negotiating 

groups believes chairs still have the flexibility to schedule 

overlapping meetings if absolutely necessary to move the talks along. 

However, he suggested that some WTO members, who do not support further 

trade liberalization, could use the principles and procedures as a 

means of restricting the flexibility of the negotiating bodies.



Transition to New WTO Director General Presents Some Uncertainties:



A new WTO Director General from Thailand, Dr. Supachai Panitchpakdi, 

began a 3 year term in September 2002, replacing the former Director 

General, Mike Moore, from New Zealand.[Footnote 31] Before the Seattle 

ministerial in 1999, after failing to reach consensus on one candidate, 

WTO members selected both men to serve consecutive 3 year terms. While 

this latest transition in leadership could very well be a smooth one, 

any change in leadership could potentially affect the negotiations. The 

new Director General has come on board in the middle of difficult 

negotiations. In addition, the terms of the four current Deputy 

Directors General expire at the end of September, and four new deputies 

have been named to replace them as of October 1st. While the WTO is 

largely a member-driven organization, the Director General and his or 

her deputies can play an important role in facilitating consensus and 

organizing work so as to ensure maximum progress in the negotiations. 

Significantly, as the first Director General from a developing country, 

the new leader may face additional pressure to address the concerns of 

developing country members. For example, the new Director General will 

have to try to deliver on promises made regarding technical assistance.



Outside Events Could Affect the Negotiations:



Events not directly part of the negotiations could also affect their 

progress. First, any ongoing contentious WTO dispute settlement cases 

concerning issues being negotiated could negatively affect negotiators’ 

willingness to reach agreement. For example, several WTO members have 

filed dispute settlement cases against the United States in reaction to 

its decision to impose higher tariffs on imported steel. Another event 

that may undermine the negotiations is concern on the part of many WTO 

members about the increase in the U.S. agricultural domestic support 

payments called for in the U.S. Farm Security and Rural Investment Act 

of 2002, mentioned earlier. This concern could affect U.S. credibility 

in persuading other countries to reduce such payments in the 

negotiations. Finally, more optimistically, the enactment of the Trade 

Act of 2002 (P.L. 107-210) this August, granting the U.S. President 

trade promotion authority, is likely to provide positive momentum in 

the negotiations.



Dispute over U.S. Imposition of Tariffs on Steel Imports:



Some experts believe that tensions caused by a recent WTO dispute 

settlement case regarding increased U.S. tariffs on steel imports could 

diminish the level of trust and cooperation among negotiators that had 

existed at the time of the Doha ministerial conference. On March 5, 

2002, President Bush agreed to impose tariffs of up to 30 percent on 

certain steel imports. This was in response to a U.S. International 

Trade Commission finding that the U.S. steel industry had been harmed 

by substantially increased imports of steel products. As a result of 

the tariff increases, the European Union, China, Japan, Korea, Brazil, 

and other WTO members have entered into consultations with U.S. 

officials under WTO dispute settlement procedures.[Footnote 32] On June 

3, 2002, the WTO established a dispute settlement panel to hear 

concerns that these countries have about U.S. tariffs on steel imports.



Some countries have indicated that they may also introduce tariffs to 

guard against what they perceive as a surplus of steel imports flooding 

their markets, as a result of the U.S. action. China has already 

enacted a tariff-rate quota on 9 categories of steel products to 

prevent a possible surge of steel imports resulting from U.S. actions. 

Similarly, the European Union has imposed a provisional tariff-rate 

quota on 15 categories of steel to prevent what the European Union 

describes as a potential flood of diverted steel coming into the EU 

market. Moreover, the European Union is considering imposing tariffs on 

imports from the United States amounting to about $335 million to 

offset potential losses as a result of increased U.S. steel tariffs.



The U.S. Trade Representative has responded to WTO members’ criticism 

of U.S. tariffs on steel imports by emphasizing that “the WTO expressly 

permits safeguard measures to allow an industry injured by imports 

temporary relief and time to restructure.” He also pointed out that 

Japan, Korea, Brazil, and others have used similar safeguards in the 

past or are using them today. Further, he noted that in the 1980s the 

European Union and its member states provided more than $50 billion in 

government subsidies to restructure the European steel industry.



WTO Member Concerns about U.S. Farm Legislation:



Several WTO members have expressed concern that the U.S. farm 

legislation passed earlier this year calls for raising domestic support 

payments to U.S. farmers over the next 10 years. They maintain that it 

undermines one of the main objectives set out in the Doha Declaration, 

that of reducing trade-distorting domestic support. The EU Commissioner 

for Agriculture has severely criticized the farm legislation, claiming 

that it will undermine ongoing multilateral efforts to reform global 

farm trade. Specifically, the Commissioner criticized not only the 

increase in domestic payments but also their potential to distort 

trade. For example, he maintained that one type of support payment in 

the legislation, termed “counter-cyclical payments,” would shield U.S. 

farmers from low agricultural prices and would result in 

overproduction.[Footnote 33] Similarly, Australian government 

officials have declared that because the act raises domestic support 

payments and would increase payments to U.S. farmers should commodity 

prices fall, the United States has effectively relinquished its 

leadership in the WTO agricultural talks, even though this leadership 

has historically been crucial to obtaining agricultural concessions 

from the European Union. Further, the Canadian Minister of Agriculture 

and Agri-Food called the farm legislation, particularly its price-based 

support payments, a serious blow to U.S. credibility in the WTO 

negotiations.



The United States has countered that it is fully committed to the 

negotiations and will be a strong advocate for liberalizing trade in 

food and agricultural products. USTR officials stated that the new farm 

legislation supports U.S. farmers while maintaining U.S. obligations 

under WTO. The U.S. Secretary of Agriculture said that the legislation 

does nothing to change the resolve of the United States to negotiate a 

very aggressive result in the Doha Development Agenda negotiations. 

Moreover, the U.S. Undersecretary of Agriculture emphasized that the 

U.S. domestic support ceiling allowable under the WTO is low relative 

to those of other WTO members, and pledged that the United States would 

not exceed its allowable ceiling. For example (as shown earlier in fig. 

4), in 1998, the EU ceiling was $80.4 billion, versus the U.S. ceiling 

of $20.7 billion. Stressing this point, the Undersecretary cited a 

fail-safe mechanism in the legislation directing the Secretary of 

Agriculture to use, to the maximum extent practicable, a so-called 

circuit breaker to ensure that the United States does not exceed its 

WTO limit on domestic support payments to agricultural producers.	:



Outcome of U.S. Trade Promotion Authority Legislation:



On a positive note, for the first time since 1994, in August of this 

year, Congress granted the President trade promotion authority. Under 

this authority, Congress agrees to consider legislation to implement 

trade agreements negotiated by the President under a streamlined 

procedure with mandatory deadlines, no amendments, and limited debate. 

Prior to the act’s passage, WTO officials and member country 

representatives cited the lack of trade promotion authority for the 

U.S. President as a significant obstacle to progress in the WTO 

negotiations. Following congressional approval of this authority, the 

WTO Director General and trade ministers from the European Union, 

Japan, Australia, and other countries cited it as providing a boost to 

the WTO negotiations. Specifically, the WTO Director General noted that 

it has “renewed confidence to wrap up these talks” by the 2005 

deadline.



Concluding Observations:



On the whole, two main factors made it possible for WTO members to 

reach consensus on the Doha Development Agenda: (1) the strong U.S. and 

EU support for the negotiations, bolstered by the positive relationship 

between the U.S. Trade Representative and the EU Commissioner for 

Trade; and (2) the strategy of deferring some important decisions to 

the actual negotiations. Nevertheless, the first factor may not 

continue to be present throughout the negotiations, and the second may 

actually impair WTO members’ ability to reach a viable agreement.



First, if the negotiations go beyond the WTO’s target date of January 

2005, there will be a new set of players who may not have the same kind 

of positive relationship that existed when the negotiations were 

launched. Specifically, in January 2005, a new EU Commission is likely 

to take office and thus a new EU Commissioner for Trade may be 

appointed. In addition, a new U.S. Trade Representative could be named 

depending upon the outcome of the 2004 U.S. presidential election. 

Further, the current WTO Director General’s term of office expires on 

August 31, 2005, and the terms of his deputies are up a month later.



Second, the Doha strategy of deferring several contentious decisions to 

the negotiations means that these decisions now need to be made, and 

the timetable is ambitious. For example, the outcome of the ministerial 

conference in September 2003 in Cancun, Mexico, will be a critical 

indication of whether key decisions on agricultural trade and the 

Singapore issues can be made. This is especially true because trade 

ministers have only 15 months thereafter to conclude the negotiations 

by January 1, 2005. During the Uruguay Round, the negotiations took 7 

years to conclude, which was significantly longer than the original 4 

year deadline.



Further, these negotiations will take place in the context of 

significant organizational challenges. In particular, the larger and 

more diverse set of WTO developing country members are taking a more 

active role in the negotiations and placing greater demands on the 

organization than during the Uruguay Round. The WTO’s ability to 

successfully address these development dynamics could have a direct 

bearing on the progress of the negotiations. Therefore, the Doha 

Development Agenda is a serious test of WTO members’ ability to 

preserve positive relations while balancing their considerable 

organizational challenges and their strongly held disparate views on 

several politically sensitive trade issues.



Agency Comments and Our Evaluation:



We requested comments on a draft of this report from the U.S. Trade 

Representative and from the Secretary of Agriculture, or their 

designees. The Assistant U. S. Trade Representative for WTO 

Multilateral Affairs and the Director of Multilateral Trade 

Negotiations, Foreign Agricultural Service, provided us on July 24TH 

and August 8TH, respectively, with technical oral comments on the 

draft, which we incorporated into the report. In addition, on July 26TH 

we obtained and incorporated into the report oral comments from the 

Director of the Office of Policy, Import Administration, the Department 

of Commerce, on sections in the draft covering trade rules regarding 

countries’ unfair trade practices.



As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 12 days 

after its date. At that time, we will send copies of this report to the 

U.S. Trade Representative, the Secretary of Agriculture, the Secretary 

of Commerce, and interested congressional committees. We will also make 

copies available to others on request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov.



If you or your staff have any questions about this report, please 

contact me at (202) 512-4128. Other GAO contacts and staff 

acknowledgments are listed in appendix IV.



Loren Yager, Director

International Affairs and Trade:

Signed by Loren Yager:



[End of section]



Appendixes:



Appendix I: Additional Issues on the Doha Negotiating Agenda:



This appendix provides a brief synopsis of the issues to be negotiated 

in the Doha Development Agenda (other than agriculture, the Singapore 

issues, and special and differential treatment). As seen in figure 5, 

these issues include World Trade Organization (WTO) rules, 

nonagricultural market access, services, environment, dispute 

settlement, and a registry for geographical indications for wines and 

spirits. Also included in this appendix is a discussion of intellectual 

property and public health as well as the implementation of existing 

Uruguay Round agreements, for which the WTO did not create new 

negotiating groups or special sessions of existing WTO bodies. For a 

more detailed account of all the issues in the Doha Declaration and 

updates on their progress, refer to the WTO Web site at http://

www.wto.org.



Figure 5: Organization of the WTO Negotiations:



[See PDF for image]



Note 1: Highlighted issues are discussed in this appendix.



Note 2: Shaded issues (agriculture, and special and differential 

treatment) were discussed earlier in the report.



Note 3: Some WTO members, including the United States, contend that the 

special session of the Trade and Development Committee is not a 

negotiating body but rather is part of the general Doha work program.



Source: GAO analysis, based on WTO documents.



[End of figure]



WTO Rules:



The Doha Declaration launched negotiations in several areas pertaining 

to WTO rules.[Footnote 34] Specifically, WTO members agreed to 

negotiate on WTO rules dealing with antidumping, subsidies and 

countervailing measures, fisheries subsidies, and regional trade 

agreements.



Antidumping and Countervailing Duties:



The negotiations on the trade remedies of antidumping and 

countervailing duties are among the most important and contentious on 

the Doha agenda. An increasing number of WTO members are applying 

antidumping and countervailing duty measures.[Footnote 35] At the same 

time, several members are voicing serious concerns about how their 

fellow members, particularly the United States, are implementing those 

measures, and questioning whether in some cases the measures are being 

applied fairly. While the United States accounted for about 20 percent 

of antidumping measures reported to the WTO in 2001, Canada and the 

European Union (EU) also made extensive use of these measures. In 

addition, some developing countries have become major users of 

antidumping measures. In 2001, for example, India actually reported 

more antidumping measures to the WTO than did the United States. 

Accordingly, before the 2001 Doha ministerial conference, countries 

including Brazil, Korea, and Japan called for clarifying rules on 

antidumping measures to prevent unjustified investigations and to 

remove ambiguity and excessive discretion in their implementation. 

Urging caution, the United States has strongly supported preserving 

current trade remedy laws while allowing for clarification of existing 

provisions. In addition, U.S. officials emphasize the need for enhanced 

disciplines on the way that WTO members apply trade remedy measures.



According to U.S. officials, the major difficulty in these negotiations 

will be to find common ground, on the one hand, between WTO members who 

believe that clarifying and improving trade remedies require a major 

overhaul of the Uruguay Round agreements on antidumping and 

countervailing duties, and on the other hand, U.S. insistence that 

these agreements remain intact and that no changes in U.S. trade remedy 

laws are necessary.[Footnote 36] In the first phase of negotiations, 

member countries will identify and agree on the specific issues to be 

clarified and improved. A group of 14 countries has submitted a list of 

several topics that they want to raise in these discussions on trade 

remedies to clarify and improve, including a number on antidumping 

measures. Examples include the practice of excluding certain 

transactions from the calculation of a “dumping margin,”[Footnote 37] 

or establishing a clearer link between dumped imports and the resultant 

injury. The WTO Appellate Body has issued rulings regarding the use of 

these practices over the past few years, in some cases citing problems 

with EU and U.S. methodologies.



While the United States is advocating caution and discretion in this 

initial phase of identifying WTO trade remedy disciplines to be 

clarified and improved, it is not discounting the need for improvement 

in some areas. In particular, the U.S. Trade Representative (USTR) has 

noted that any consideration of WTO rules must focus on improving the 

transparency of the processes of the rapidly increasing number of 

countries using trade remedies. Moreover, the United States is 

concerned about the way that other countries determine damages and 

trade-distorting practices. For example, one USTR official explained 

that he would like to see improved disciplines on what constitutes 

valid trade remedy investigations.



The Doha Declaration does not specify any interim deadlines regarding 

the trade remedy negotiations. A U.S. negotiator told us that the 

really difficult decisions on trade remedies will likely be left to the 

end of the 3 year negotiating period, because so many trade-offs will 

be necessary to achieve any progress in this controversial area.



Some labor and industry groups and some members of the Congress have 

expressed strong opposition to weakening U.S. trade remedy 

laws.[Footnote 38] For example, the American Federation of Labor/

Congress of Industrial Organizations (AFL-CIO) has warned that 

including antidumping and countervailing duties in the WTO negotiations 

will weaken U.S. trade remedy laws and leave American workers 

vulnerable to other countries’ unfair trade practices. Some U.S. 

businesses, such as those in the steel industry, argue that effective 

rules against dumping and trade-distorting subsidies are an essential 

element of the multilateral trading system.



The importance of antidumping and countervailing duty measures was 

emphasized in the trade promotion authority sections of the recently 

passed Trade Act of 2002. Thus, the law states that one of the 

principal U.S. trade negotiating objectives is to preserve the ability 

of the United States to rigorously enforce its trade laws, including 

antidumping and countervailing duty law, and avoid agreements that 

lessen the effectiveness of domestic and international rules on unfair 

trade, especially dumping or subsidies.[Footnote 39] Another provision 

in this legislation requires that the President report to Congress, at 

least 180 days before entering into a trade agreement, on the range of 

proposals advanced in the negotiations and how those proposals relate 

to the negotiating objectives on trade remedy laws.



Fisheries Subsidies:



As part of the mandate to negotiate WTO rules, including subsidies in 

general, the Doha Declaration specifically calls for negotiations to 

“clarify and improve” WTO disciplines on fisheries subsidies. The 

United States was one of the major proponents for these negotiations, 

which it views as a win-win opportunity to reduce trade-distorting 

subsidies while supporting environmental and developmental goals. 

Fisheries subsidies will be covered under the general heading of 

“subsidies,” which are part of the agenda of the Negotiating Group on 

Rules.



The United States is one of a group of countries known as Friends of 

Fish.[Footnote 40] The group believes that current trade disciplines 

under the WTO Agreement on Subsidies and Countervailing Measures are 

inadequate to address the negative effects of fisheries subsidies. They 

cite a range of studies that conclude that annual subsidies in the 

fisheries sector are between $14 and $20.5 billion. In an April 2002 

paper submitted to the Negotiating Group on Rules,[Footnote 41] these 

countries argued that fisheries subsidies distort trade and contribute 

to “excessive fishing capacity,” leading to the depletion of fish 

stocks. They also argued that trade distortions and overcapacity in the 

fisheries sector “impede the sustainable development of many countries 

with significant fisheries resources.” The Friends of Fish paper also 

claims that developing countries cannot compete with subsidized, 

distant-water fishing fleets from wealthier countries. Additionally, 

nonsubsidizing countries seeking to safeguard a shared fish stock lose 

the extra catch gained by fishers from subsidizing countries, according 

to this paper.



Japan and Korea, both major providers of subsidies in the fisheries 

sector, opposed specific reference to fisheries subsidies in the Doha 

Declaration. They argued that subsidies are not to blame for the 

depletion of fish stocks. Instead, they claimed that inadequate 

management regimes and uncontrolled illegal fishing were the main 

causes of the depletion of fish stock, and that subsidies designed to 

reduce capacity would actually be beneficial. The European Union, which 

includes a group of countries with subsidized fishing sectors, mostly 

in Southern Europe, is also unlikely to support efforts during the 

negotiations to reduce or eliminate fisheries subsidies, according to a 

USTR official. Efforts within the European Union to reform its 

fisheries policies have faced resistance from France, Spain, Italy, 

Portugal, Greece, and Ireland.



Regional Trade Agreements:



Regional trade agreements are arrangements through which countries may 

grant more favorable terms of trade to countries within a regional 

group than to countries outside that arrangement. These arrangements 

may vary in form but generally include customs unions and free trade 

areas.[Footnote 42]They also differ in the extent to which their 

preferential treatment provisions cover trade in various economic 

sectors and products. Regional trade agreements have proliferated 

during the past decade. In addition, there has been interest in 

clarifying WTO rules on such arrangements. Nearly all WTO members have 

notified the WTO of their participation in one or more such 

agreements.[Footnote 43]



WTO members are permitted to enter into preferential trade 

arrangements. Nevertheless, a fundamental debate has taken place 

concerning the compatibility of regional trade agreements with the 

multilateral trading system. At Doha, WTO members agreed to 

negotiations to clarify and improve the current WTO provisions that 

apply to regional trade agreements. However, countries are divided over 

whether such a mandate would require revising existing WTO rules or 

developing additional rules. Countries are also split over whether to 

apply new disciplines to existing regional trade agreements.



Toward the end of the Uruguay Round, regional trade agreements emerged 

as an issue for certain countries as they became aware of how these 

agreements might work to their disadvantage. Several countries began 

calling for a review of the impact of these arrangements on 

multilateral commitments under WTO agreements. The concerns these 

countries express vary. For example, Australia and New Zealand are 

concerned that regional trade agreements may lead to an uneven process 

of trade liberalization, because existing rules allow countries 

negotiating these agreements to select those sectors that they wish to 

liberalize. In contrast, a U.S. official stated that Japan and Korea 

have opposed regional trade agreements in the past because such 

arrangements permit different terms of trade for certain products that 

originate in specified countries. India has sought reforms to WTO rules 

on regional trade agreements because it has felt excluded from those 

arrangements. And Japan, Korea, and Hong Kong have also argued that 

newly clarified and improved WTO rules should apply to existing 

agreements; otherwise, new disciplines may be irrelevant, because so 

many countries have already entered into regional agreements.



Those WTO members that have entered into regional trade agreements 

generally have less of an interest in seeking further disciplines 

covering such agreements, which could then be applied retroactively. 

The United States, already a member of the North American Free Trade 

Agreement and currently considering other bilateral and regional free 

trade arrangements, including a free trade agreement encompassing the 

entire Western Hemisphere, has not taken a strong position in favor of 

reforming existing WTO provisions governing regional trade agreements. 

The United States has advocated more transparency in the implementation 

of existing obligations. Similarly, the European Union (which has 

notified the WTO of more than 30 regional trade agreements) has been 

hesitant to clarify disciplines, because it seeks flexible procedures 

for interpreting its existing regional agreements and future agreements 

with countries seeking to join the European Union.[Footnote 44] Other 

WTO members, such as Argentina, Brazil, Hungary, and Mexico, oppose the 

application of new disciplines to existing agreements. These countries 

argue that the application of new rules to already negotiated 

agreements may allow members to undertake dispute settlement cases on 

trade agreements that have been in existence for years.



Nonagricultural Market Access:



The reduction of nonagricultural tariffs is one of the key goals of the 

new multilateral negotiations and has been the traditional focus of 

past multilateral negotiations. For example, previous multinational 

negotiations have reduced trade-weighted most favored nation (MFN) 

tariff rates on industrial goods from an average high of 40 percent at 

the end of World War II to about 4 percent at the conclusion of the 
Uruguay 

Round in 1994.[Footnote 45] Still, there is considerable potential for 

further cuts, as tariff reductions have not been evenly distributed 

across countries or applied equally among all products and sectors. 

According to the World Bank, even though developing countries agreed to 

cut their tariffs in the Uruguay Round, these tariffs are still on 

average considerably higher than those of the developed countries. For 

example, the post-Uruguay Round average ad valorem “bound” rate for 

developed economies was 3.5 percent, as compared with 25.2 percent for 

developing economies, according to the World Bank.[Footnote 46]



The Doha Declaration mandates negotiations aimed at reducing or, as 

appropriate, eliminating tariffs for nonagricultural products, 

including reducing or eliminating tariff peaks[Footnote 47]and tariff 

escalation,[Footnote 48] as well as nontariff barriers. Negotiations 

are to be comprehensive in that no products are to be excluded, and 

they must take fully into account the principle of special and 

differential treatment for developing countries embodied in the General 

Agreement on Tariffs and Trade. This includes allowing for “less than 

full reciprocity” in meeting tariff reduction commitments.



The negotiations on market access for nonagricultural goods face 

several difficulties. U.S. tariffs, as well as those of its 

industrialized trading partners, are already very low. For example, the 

average U.S. trade-weighted industrial tariff rate is about 3 percent, 

and more than 5,000 of the 10,000 U.S. tariff lines are now duty free. 

This leaves the United States with limited leverage to convince other 

countries to reduce their higher tariffs, according to USTR officials. 

In addition, the countries with the highest tariffs, primarily 

developing countries, are resistant to reducing their tariffs for 

several reasons. First, many already enjoy dutyfree access through U.S. 

and EU trade preference programs, so further reductions in MFN rates 

will only dilute the competitive advantage they receive from these 

programs. Second, many developing countries are resistant to making 

significant reductions in their nonagricultural tariffs, or are opposed 

to their elimination, because they rely on tariffs as a significant 

source of revenue.



The key points of controversy will likely surround the issues of tariff 

reciprocity among countries, tariff peaks, and tariff escalation. The 

United States views “less than full reciprocity” as, among other 

things, allowing longer transition periods for implementing tariff 

concessions, and it will consider it on a case-by-case basis depending 

upon the situation and the country involved. Some developing countries 

may argue that less than full reciprocity entitles them, under some 

circumstances, to avoid eliminating or reducing their tariffs. A 

priority of many developing countries is to reduce the tariff peaks and 

tariff escalation practices that industrialized countries often employ, 

especially in sectors in which they have the greatest competitive 

advantage, such as textiles and apparel. For example, the relatively 

high U.S. textile and apparel tariffs (out-of-quota rates for various 

apparel items range from 20 to 33 percent) will be a certain target for 

developing countries because of the size of the U.S. market, according 

to a USTR official. However, it will be difficult for the United States 

to offer concessions in this area. Indeed, the U.S. textiles industry 

has proposed that the level of U.S. textile and apparel tariffs be 

frozen, while Asian and other countries’ tariffs are brought down to 

U.S. levels.[Footnote 49]



On July 19, 2002, the Negotiating Group on Market Access established a 

program of meetings for the negotiations on market access for 

nonagricultural products. As a part of this program, the participants 

in the negotiations will aim at achieving “a common understanding on a 

possible outline of modalities by the end of March 2003 with a view to 

reaching an agreement on those modalities by May 31, 2003.”:



Trade in Services:



The large and growing volume of international trade in services makes 

services liberalization an important part of the Doha negotiating 

agenda. Over the past 10 years, international trade in services has 

grown dramatically, increasing from $783 billion in 1990 to $1.4 

trillion (or about 19 percent of total world trade) in 2000. At the 

national level, trade in services accounts for nearly 80 percent of 

U.S. employment and private-sector gross domestic product. U.S. exports 

of commercial services were $279 billion in 2000, supporting more than 

4 million services and manufacturing jobs. Other major services 

exporters in 2000 included the United Kingdom ($100 billion), France 

($81 billion), Germany ($80 billion), and Japan ($68 billion). A U.S. 

Trade Representative official indicated that the U.S. objectives in the 

services negotiations include broad participation by many countries, 

reduction of restrictions, building upon previous services agreements, 

and expansion of regulatory transparency. A U.S. services industry 

representative noted that issues of importance for the negotiations 

also include providing regulatory transparency and personnel mobility 

and preventing a safeguard provision for trade in services.



The Doha Declaration intends that WTO members complete the work they 

initiated in January 2000 under the General Agreement on Trade in 

Services (GATS).[Footnote 50] The declaration calls for pursuing the 

GATS’ intention of increasing developing country participation in world 

trade and achieving a progressively higher level of liberalization in 

the services trade. Guidelines and procedures for the negotiations 

include two key principles: no sectors should be excluded from the 

negotiations; and negotiations can occur in bilateral, plurilateral, or 

multilateral (including all members) groups, mainly using a request-

offer method.[Footnote 51] However, according to a WTO official, the 

negotiations will be conducted predominantly on a bilateral basis using 

the request-offer approach, with results applied to all WTO members on 

an MFN basis.



Although it is probably one of the least controversial issues on the 

Doha agenda, the services negotiations face several 

difficulties.[Footnote 52] One challenge is to convince developing 

countries to open up their services sectors. According to a U.S. 

services industry representative, this difficulty is attributable, in 

part, to the fact that developed countries can offer few concessions in 

the services area because their barriers are already so low in many 

sectors. Another difficulty is that some areas of trade in services 

that developing countries are interested in pursuing may be difficult 

to negotiate.[Footnote 53] For example, the tourism sector is one of 

the developing countries’ best economic growth opportunities. But 

liberalization in this sector will be difficult to negotiate because of 

its linkage to other sectors such as air and road transport and 

financial services. Finally, services negotiations are by nature 

especially complex, time consuming, and resource intensive. For 

example, they can involve a separate set of bilateral negotiations 

among all 144 WTO member countries, for each and every sector; and they 

would involve agreeing to change domestic laws and regulations and 

developing and implementing new administrative procedures.



Trade and the Environment:



For the first time, the WTO will begin negotiations on trade and 

environment issues. These negotiations are intended to clarify the 

relationship between WTO rules and explicit trade measures included in 

multilateral environmental agreements (MEA). An MEA is any agreement 

between three or more signatory countries concerning some aspect of 

environmental protection. There are approximately 200 multilateral 

environmental agreements in place today. In addition, the negotiations 

are to address procedures for exchanging information between WTO 

committees and MEA secretariats, and the criteria for granting observer 

status. They are also to liberalize trade in environmental goods and 

services. These negotiations will be conducted in special sessions of 

the existing WTO Committee on Trade and Environment.



During the preparation period before the Doha ministerial, the European 

Union demanded that the negotiations include environmental issues. 

Developing countries have generally resisted any efforts to negotiate 

these issues in the WTO, arguing that industrialized countries might 

use environmental standards as a form of “green” protectionism. The 

United States also opposed the EU’s objectives for addressing 

environment in the WTO. Of the three environment-related issues that 

the European Union specifically sought at the Doha ministerial, only 

the relationship between MEAs and WTO rules became part of the 

negotiating agenda. The European Union also sought negotiations to 

clarify countries’ use of the “precautionary principle”[Footnote 54] in 

taking trade measures to protect environmental and human health, and of 

“eco-labeling.”[Footnote 55] However, the issue of precaution was left 

out of the Doha Declaration entirely, while eco-labeling could be added 

to the negotiations if members decide at the next ministerial that 

there is consensus to do so. According to a USTR official, additional 

environmental issues are unlikely to be included in the negotiations.



Clarifying the relationship between the WTO and the MEAs is the most 

prominent item on the negotiating agenda related to the issue of trade 

and the environment. To be acceptable to WTO members, including the 

United States, the Doha Declaration limited the scope of these 

negotiations. In particular, the results of the negotiations are 

limited to the applicability of WTO rules to parties to an MEA. 

Further, negotiations shall not affect WTO rights of any WTO member 

that is not a party to an MEA in question. However, there has never 

been a challenge under the WTO dispute settlement system[Footnote 56] 

to trade measures taken between parties to an MEA, and, according to 

both a USTR official and a WTO Secretariat official, such a challenge 

is unlikely. Consequently, the negotiations on this issue may have a 

limited impact.



The Doha Declaration also limits the negotiations to clarifying the 

relationship between WTO rules and “specific trade obligations set out 

in MEAs.” Members are debating whether this language excludes trade 

measures that are not specifically mentioned by an MEA but that are 

taken to pursue an MEA objective. The European Union is likely to 

support a broader scope than are most other members, including the 

United States.[Footnote 57] Only about 20 MEAs contain trade 

provisions. For example, the Montreal Protocol on Substances that 

Deplete the Ozone Layer controls the production and consumption of 

ozone-depleting substances such as chlorofluorocarbons. The Basel 

Convention, which controls trade or transportation of hazardous waste 

across international borders, and the Convention on International Trade 

in Endangered Species are other multilateral environmental agreements 

containing trade provisions.



The Committee on Trade and Environment has been charged with reviewing 

the effect of environmental measures on market access and reporting to 

the fifth ministerial conference on the desirability of future action. 

In addition, although the mandate in the Doha Declaration for 

negotiations on environmental goods and services appears in the section 

on trade and the environment, the negotiating body handling trade in 

services will cover environmental services. Further, the negotiating 

group addressing nonagricultural market access will cover environmental 

goods. However, the special session of the Committee on Trade and 

Environment will also play a role in these negotiations, including 

monitoring developments in the aforementioned negotiating groups and 

clarifying the concept of environmental goods. The United States 

believes that these negotiations allow “win-win” opportunities to 

provide trade liberalization and promote sustainable development.



Dispute Settlement:



The Uruguay Round agreements, which created the WTO, also established a 

new dispute settlement system, replacing the procedures that had 

gradually emerged under the GATT.[Footnote 58] Unlike the GATT, the WTO 

Dispute Settlement Understanding (DSU) discourages stalemate by not 

allowing parties to block decisions. It also establishes a standing 

Appellate Body, making the dispute settlement process more stable and 

predictable. Nevertheless, many WTO member governments have argued 

there is still room for improvement in the existing WTO dispute 

settlement system.[Footnote 59] Beginning in 1997, the WTO Dispute 

Settlement Body, which administers the dispute settlement process, held 

a series of informal discussions on the basis of proposals and issues 

that members had identified to improve the DSU. However, this effort 

did not result in a consensus for change. Subsequently, at the Doha 

ministerial conference, WTO members agreed to initiate formal 

negotiations to improve and clarify DSU provisions.



Many countries want these negotiations to address the issue of 

conflicting time lines in WTO rules regarding when a member can 

retaliate against another for failing to implement a dispute settlement 

ruling. Other priorities for the United States specifically include (1) 

streamlining the dispute settlement process to achieve faster results 

by preventing countries from delaying compliance with dispute 

settlement rulings and (2) increasing the transparency of the 

proceedings of dispute settlement and appellate panels. A potential 

area of disagreement in the DSU negotiations involves the way in which 

members can impose sanctions on other countries when they fail to 

implement adverse WTO decisions. The European Union wants to limit the 

ability of members to shift sanctions among various imports from the 

offending country. To the contrary, the United States supports shifting 

sanctions among imports.[Footnote 60]



The Doha Declaration calls for concluding DSU negotiations by May 2003, 

and for taking steps to ensure that the results enter into force as 

soon as possible. Unlike other aspects of the negotiating agenda that 

the Doha Declaration mandated, the DSU negotiations will not be part of 

the single undertaking. In other words, the DSU negotiations will not 

be tied to the overall success or failure of the other negotiations, 

which are scheduled to conclude by January 2005.



Registry for Geographical Indications for Wines and Spirits:



The Council for Trade-Related Aspects of Intellectual Property Rights 

(TRIPS) must resolve the issue of developing a registry and 

notification system for geographical indications. While TRIPS mandated 

that the Council negotiate the establishment of a multilateral system 

for notification and registration of geographical indications for 

wines, it did not establish a deadline for the negotiations. At the 

Doha ministerial, WTO members decided that these negotiations, which 

began in 1997, should be concluded by the fifth ministerial conference 

in 2003.[Footnote 61] The negotiations are being undertaken in special 

sessions of the Council for TRIPS.



Proposals previously submitted in meetings of the Council for TRIPS 

adopted two different approaches. One proposal made by the European 

Union and supported by a number of other countries maintains that 

geographical indications on the registry for wines and spirits would be 

considered as protected by all WTO members. The proposal allows WTO 

members to challenge any geographical indication on the registry that 

they consider to be generic. The other proposal, made by United States, 

Canada, Chile, and Japan and supported by a number of other countries, 

treats the registry as a database to assist WTO members, but it 

contains no requirement that all members protect all items on the 

registry.



The debate among WTO members over the meaning and purpose of this 

registry has been contentious. According to the U.S. Department of 

Agriculture, under the EU’s proposal, many WTO members would incur 

significant costs for the examination and enforcement of geographical 

indications, which would not be paid for through fees or trade 

concessions and would be offset by few benefits. In contrast, the 

European Union believes that its proposal would not impose any new 

substantive obligations on WTO members. In addition, the European Union 

contends that the joint U.S., Canadian, Chilean, and Japanese proposal 

to publish a list of geographical indications exclusively for 

informational purposes would not necessarily facilitate the protection 

of those indications, as called for in the TRIPS agreement.



Issues Negotiated Outside New Negotiating Groups or Special Sessions of 

WTO Bodies:



WTO members have also agreed to negotiate two sets of issues outside of 

any new negotiating group or special session of existing WTO bodies. 

They include intellectual property rights and public health, and issues 

surrounding the implementation of existing Uruguay Round agreements.



Intellectual Property Rights and Public Health:



Prior to the Doha ministerial, African nations, nongovernmental 

organizations, and others argued that the patent protection provisions 

of TRIPS were preventing developing countries from gaining access to 

medicines needed to fight HIV/AIDS, tuberculosis, malaria, and other 

epidemic diseases. For example, they argued that such provisions made 

some medicines unaffordable in some developing countries. In response, 

some developed countries, including the United States, maintained that 

TRIPS should not prevent access to such medicines, because the 

agreement is flexible. For example, it contains provisions allowing WTO 

members to grant licenses to domestically produce pharmaceuticals 

without the consent of the patent holder in situations of “national 

emergency or other circumstances of extreme urgency.” In response to 

this ongoing debate, ministers from WTO members adopted the Declaration 

on the TRIPS Agreement and Public Health in Doha that explicitly stated 

members’ opinions that TRIPS does not and should not prevent any WTO 

member from taking measures to protect public health. According to U.S. 

government officials, the declaration demonstrates the flexibility of 

TRIPS while keeping the provisions of the agreement intact. In 

addition, the declaration mandates that the WTO Council for TRIPS 

develop alternatives for members to take advantage of the flexibilities 

in TRIPS to allow them access to medicines even if they lack the 

ability to manufacture pharmaceuticals domestically. The Council for 

TRIPS is mandated to complete this work by the end of 2002.



Implementation Issues:



Issues surrounding the implementation of agreements deal with long-

standing concerns on the part of developing country members about the 

Uruguay Round agreements. These issues played a primary role in 

preparations for the Doha ministerial. Their discussion was facilitated 

when a group of seven countries, chaired by Uruguay, proposed that they 

be dealt with in three stages--before, during, and after the 

ministerial conference. Implementation issues involve two major 

concerns. First, many developing countries maintained that they lacked 

the capacity in terms of expertise, financial resources, and 

institutions to fully meet their Uruguay Round obligations such as 

complying with subsidies obligations and initiating trade-related 

investment measures. Given these difficulties, many developing 

countries demanded that deadlines for these obligations be extended. 

Second, many developing country members claimed that they had not 

reaped the economic benefits promised by the Uruguay Round agreements. 

They argued for changing the agreements to make them more balanced in 

favor of developing country interests. Examples include accelerating 

the schedule for increasing textile and apparel quota growth rates in 

the Uruguay Round Agreement on Textiles and Clothing. While developed 

countries have been agreeable in some cases to extending developing 

countries’ deadlines for implementing their Uruguay Round obligations 

and making other changes, they have maintained that any issues 

involving changes to the Uruguay Round agreements would have to be 

pursued in new trade negotiations.



Ultimately, the Doha Declaration commits WTO members to addressing the 

implementation issues under two categories. First, issues with a 

specific negotiating mandate will be addressed in the relevant 

negotiating group. For example, since trade remedies are mandated for 

the negotiation group on WTO rules, concerns about antidumping 

practices will be folded into the negotiations on trade remedies. 

Second, other outstanding implementation issues not mandated for 

negotiations, such as initiatives surrounding textile and apparel 

trade, are to be addressed as a matter of priority by the existing WTO 

bodies. The WTO bodies are to report on those issues to the Trade 

Negotiations Committee for “appropriate action” by the end of 2002. 

Many implementation issues are contained in the Decision on 

Implementation-Related Issues and Concerns adopted at the Doha 

ministerial.



Several WTO developing country representatives emphasized that it was 

very important that existing WTO bodies address outstanding 

implementation issues by the end of 2002, as mentioned in the Doha 

Declaration. One WTO official said that he expected developing 

countries to push hard for progress on those implementation issues not 

mandated for negotiation at the fifth ministerial conference in 

September 2003. Another WTO official was concerned that some developing 

countries might try to keep some implementation issues that were 

mandated for negotiations, particularly trade remedies, on a separate 

track.



Geographical Indications Other than Wines and Spirits:



Whether or not to extend a higher level of protection for geographical 

indications for products other than wines and spirits is one of the 

more controversial implementation issues listed in the Doha Declaration 

but not mandated for negotiations. The issue has been assigned to the 

WTO’s Council for TRIPS, which is to report on appropriate action by 

the end of 2002. WTO officials have indicated that this is an important 

issue to watch, because it involves many WTO members with diametrically 

opposed positions and thus could affect the progress in the overall 

negotiations.



Using the geographical indication when the product was made elsewhere, 

or when the product does not meet the standards originally associated 

with the geographical indication, can mislead consumers, and TRIPS 

requires countries to prevent the misuse of geographical indications. 

For wines and spirits, TRIPS provides an even higher level of 

protection, protecting geographical indications even when there is 

little risk of misleading the consumer.



The European Union and some other WTO members believe that the Council 

for TRIPS should agree on rules for negotiating the extension of a 

higher-level protection for products beyond wines and spirits. These 

countries believe that extending heightened protection would benefit 

countries’ development, because geographical indications can be a means 

for countries--particularly developing countries--to market their 

products and secure higher prices, since product quality is associated 

with those geographical indications. Further, one WTO member has warned 

that failure to reach consensus on this issue would have implications 

for other subjects under negotiation: in particular, agriculture. The 

United States and some other WTO members believe that the Council for 

TRIPS should simply report to the Trade Negotiations Committee on its 

discussions, without proposing any rules for further negotiations. 

These members believe that existing protection for geographical 

indications for all products is sufficient, and that extending the 

higher level of protection to products other than wines and spirits 

would restrict trade and necessitate serious costs to governments, 

manufacturers, and consumers. According to the U.S. Department of 

Agriculture, examples of such costs include administrative mechanisms 

to implement the broadened standards, relabeling, and repackaging.



[End of section]



Appendix II: Work Mandated by the Doha Declaration, but Not Part of 

Negotiations:



In addition to the issues under negotiation discussed in the report and 

in appendix I, the Doha Declaration mandates other areas of work that 

are not part of the negotiations. Figure 6 shows the organization of 

the WTO negotiations from appendix I and also identifies these 

additional areas in the general Doha work program.



Figure 6: Organization of the WTO Negotiations, and WTO Work Not 

Subject to Negotiations but Called for in the Doha Declaration:



[See PDF for image]



Source: GAO.



[End of figure]



[End of section]



Appendix III: Objectives, Scope, and Methodology:



The Ranking Minority Member of the Senate Committee on Finance, the 

Chairman of the House Committee on Ways and Means, and the Chairman of 

the House Ways and Means Subcommittee on Trade asked us to (1) analyze 

the factors that contributed to the Doha ministerial conference’s 

successful launch of new WTO negotiations, (2) analyze the key interim 

deadlines for the most sensitive issues, from the present time through 

the next ministerial conference in 2003, and (3) evaluate the most 

significant challenges facing the WTO in the overall negotiations.



We followed the same overall methodology to complete all three of our 

objectives. We obtained, reviewed, and analyzed documents from a 

variety of sources. From the WTO, we analyzed the Doha Ministerial 

Declaration, the Decision on Implementation-Related Issues and 

Concerns, and the Declaration on the TRIPS Agreement and Public Health, 

as well as numerous negotiating proposals from WTO member countries and 

other documents. From U.S. government agencies, we obtained background 

information and documentation regarding negotiating proposals and 

positions.



We met with and obtained documents from a wide variety of U.S. 

government and private-sector officials, foreign government and 

private-sector officials, WTO officials, and officials from 

international nongovernmental and intergovernmental organizations. 

Prior to the Doha ministerial conference, we met with officials from 

the Department of Agriculture, the Department of Labor, the 

Environmental Protection Agency, the Department of Commerce, the Office 

of the U.S. Trade Representative, the Department of Justice, and the 

State Department. We also met with representatives from developed and 

developing countries in Washington, D.C., including Australia, Brazil, 

Canada, the European Union, France, Jamaica, Malaysia, Mexico, South 

Korea, Thailand, and Zambia. Further, we met with private-sector 

representatives from the AgTrade Coalition, the American Forest and 

Paper Association, the National Association of Manufacturers, the 

National Farmers Union, and the National Foreign Trade Council.



After the Doha ministerial conference, we met with additional U.S., 

WTO, and foreign government officials, private-sector representatives, 

and nongovernmental and intergovernmental organizations to obtain their 

views about the negotiations launched in Doha. We also traveled to the 

WTO’s headquarters in Geneva, where we met with WTO member country 

representatives from developed and developing countries, including 

Brazil, Canada, Chile, China, Hong Kong, India, Jamaica, Japan, 

Malaysia, Mexico, and Uganda. We also met with WTO officials, including 

all the Deputy Directors-General and eight division directors. In 

addition, while in Geneva, we met with representatives from the South 

Centre and the International Centre for Trade and Sustainable 

Development. In Brussels, we met with officials from the European 

Commission, including the Directorates-General for trade and 

agriculture. Also in Brussels, we met with representatives of business 

and environmental groups from the European Union. In Washington, D.C., 

we met with private-sector representatives including those from the 

American Forest and Paper Association, the Coalition for Service 

Industries, the Center for International Environmental Law, and Kodak.



We performed our work from August 2001 through July 2002 in accordance 

with generally accepted government auditing standards.



[End of section]



Appendix IV: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Elizabeth Sirois (202) 512-8989

Nina Pfeiffer (202) 512-9639:



Acknowledgments:



In addition to those listed above, Juan Gobel, Howard Cott, Jason Bair, 

Bradley Hunt, Lori Kmetz, Rona Mendelsohn, and Richard Seldin made key 

contributions to this report.



FOOTNOTES



[1] The negotiations are formally called the Doha Development Agenda 

but are commonly referred to as a round. The Doha Declaration refers to 

the Ministerial Declaration issued at Doha, which is the formal 

document that the World Trade Organization membership endorsed on the 

negotiations and work program.



[2] See background for a discussion of the Seattle ministerial 

conference.



[3] The term “Singapore issues” originated from the work program of the 

1996 ministerial conference in Singapore, which created three working 

groups on the issues of trade and investment, trade and competition 

policy, and transparency in government procurement. Trade facilitation 

was also highlighted as a priority in the Singapore Declaration.



[4] The United Nations currently categorizes a total of 49 countries as 

“least developed countries,” calling them “particularly ill-equipped to 

develop their domestic economies and to ensure an adequate standard of 

living for their populations.” Under the WTO agreements, developing 

and, to an even greater extent, least developed countries receive 

special treatment, such as being granted additional time to meet their 

various WTO commitments.



[5] For additional analysis of the Seattle ministerial conference, see 

U.S. General Accounting Office, World Trade Organization, Seattle 

Ministerial: Outcomes and Lessons Learned, GAO-T-NSIAD-00-84 

(Washington, D.C.: Feb. 10, 2000).



[6] The Agreement on Trade-Related Aspects of Intellectual Property 

Rights (TRIPS) currently provides protection for geographical 

indications (indications that identify a good as originating in the 

territory of a member country, or a region or locality in that 

territory, where a given quality reputation or other characteristic of 

the good is essentially attributable to its geographical origin). 

Examples of such products include Roquefort cheese, Washington state 

apples, and Idaho potatoes.



[7] During the 2 years following the Seattle ministerial conference, 

concerns were raised about the long-term role of the WTO in increasing 

trade liberalization, as WTO members continued to grapple with serious 

differences over important issues like the scope of any new 

negotiations. Some countries favored a narrow agenda limited to 

negotiations mandated under the Uruguay Round, while others wanted to 

bring new areas of trade under WTO disciplines, including investment 

and competition policy. Further, some developing countries continued to 

express serious misgivings about launching a round at all. Many of 

these countries had experienced difficulty meeting their commitments 

under the Uruguay Round agreements and were disappointed about the lack 

of benefits these agreements had provided them. Therefore, they were 

reluctant to take on any additional obligations.



[8] Most-favored-nation is a fundamental principle in the WTO, which 

requires WTO members to grant each other trade privileges as favorable 

as they give to any other WTO member.



[9] The African, Caribbean, and Pacific-European Union Partnership 

Agreement signed in Cotonou, Benin, on June 23, 2000, referred to as 

the Cotonou Agreement, is an agreement between 77 African, Caribbean, 

and Pacific states and the European Union that provides trade 

preferences to the ACP countries.



[10] The Doha Declaration commits WTO members, without prejudging the 

outcome, to negotiate substantial improvements in market access for 

agricultural products; reduce, with a view to phasing out, all forms of 

export subsidies; and substantially reduce domestic support payments 

that distort trade.



[11] By the fifth ministerial conference in September 2003, members 

must submit their tariff schedules detailing the specific concessions 

they are willing to make by tariff line, based on the modalities they 

agreed to 6 months earlier in March.



[12] Export subsidies are subsidies contingent on export performance. 

For example, they include cost reduction measures, such as subsidies to 

reduce the cost of marketing goods for export, and internal transport 

subsidies applying to exports only.



[13] Domestic supports are payments made to farmers that raise or 

guarantee prices or income. They include such measures as government 

buying at a guaranteed price and commodity loan programs.



[14] The CAP is a set of rules and regulations governing agricultural 

production in the European Union. CAP rules cover most aspects of 

agricultural activity, including financial support to farmers, 

production methods, marketing, and controls over quantities of food 

that different agricultural sectors can produce.



[15] In addition to raising the level of domestic support for some of 

the major U.S. crops, including corn, soybeans, and wheat, the new 

legislation reintroduces payments to producers of other commodities 

that had been phased out after 1996.



[16] The members of the Cairns Group are Argentina, Australia, Bolivia, 

Brazil, Canada, Chile, Colombia, Costa Rica, Fiji, Guatemala, 

Indonesia, Malaysia, New Zealand, Paraguay, the Philippines, South 

Africa, Thailand, and Uruguay. The group takes its name from the city 

in Australia where members first met in 1986.



[17] An important issue for the United States has been the role of 

state trading enterprises (STE), which the United States contends 

provide export subsidies in some cases. An STE is generally considered 

to be a government enterprise authorized to engage in trade and owned, 

sanctioned, or otherwise supported by a government. The United States 

seeks to end the exclusive export rights of STEs in order to ensure 

private-sector competition; establish WTO requirements for notifying 

costs, pricing, and other sales information for STEs; and eliminate 

government funding or other support for these enterprises.



[18] The latest comprehensive official WTO figures on export subsidies 

for all WTO members are from 1998. However, the latest official figures 

for the European Union indicate that its export subsidies totaled 

approximately $2.6 billion for the marketing year 2000-2001. The latest 

official WTO figures for U.S. export subsidies were about $15 million 

for fiscal year 2000.



[19] The U.S. Department of Agriculture operates four types of credit 

guarantee programs. These programs provide government guarantee of 

repayment to U.S. banks willing to finance agricultural exports to 

countries where credit might otherwise be difficult to obtain. Proposed 

disciplines on credit guarantees would apply to these U.S. programs, as 

well as similar programs of other WTO members. Fourteen other such 

programs have been identified, according to the Department of 

Agriculture.



[20] Although EU officials mentioned only 10 countries as candidates, 

13 countries are currently seeking to become EU members. They include 

Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, 

Slovenia, Romania, Bulgaria, Malta, Cyprus, and Turkey. The timing of 

accession of each country depends upon the progress each country makes 

in meeting the criteria for membership laid down by the European 

Council in 1993.



[21] The Doha Declaration mandates that WTO members focus on clarifying 

various aspects of the Singapore issues through existing WTO working 

groups on trade and investment, trade and competition, and transparency 

in government procurement; and, in the case of trade facilitation, 

through the WTO’s Council for Trade in Goods.



[22] National treatment is the act of treating a foreign product or 

supplier no less favorably than domestic products or suppliers.



[23] Members of the Like-Minded Group include Cuba, the Dominican 

Republic, Honduras, India, Indonesia, Kenya, Malaysia, Mauritius, 

Pakistan, Sri Lanka, Tanzania, Uganda, Zambia, and Zimbabwe.



[24] See appendix I for a discussion of WTO member country concerns 

about the commitments they made under the Uruguay Round.



[25] The WTO agreements have a total of 145 special and differential 

treatment provisions, 22 of which apply only to least developed country 

members. These provisions give developing countries special privileges, 

such as longer time periods for implementing agreements. For example, 

when the WTO agreements took effect on January 1, 1995, developed 

countries were given 1 year before they had to apply the provisions of 

the TRIPS agreement. Developing countries were given 5 years, and least 

developed countries were given 11 years. Other special and differential 

treatment provisions include exemptions from, or a reduced level of, 

commitments otherwise applying to members in general; actions to 

increase trading opportunities for developing countries; and actions 

taken or avoided to safeguard their interests.



[26] Although China is considered to be a developing country under 

World Bank development criteria, China does not automatically have 

recourse to the more favorable treatment accorded to developing country 

members of the WTO. For example, the amount that China can exempt from 

the calculation of its total allowable domestic agricultural support is 

less than that permitted developing country members: 8.5 percent 

compared with 10 percent.



[27] Antidumping measures include tariff duties or fees that countries 

apply to imported goods that a foreign industry has exported for sale 

at a lower price than it normally charges for the same product or a 

similar product in the “home” market of the exporter. The WTO allows 

governments to impose antidumping measures when there has been genuine, 

material injury to the competing industry in the importing country.



[28] At their first conference in Singapore in December 1996, WTO 

ministers adopted the comprehensive and integrated WTO Plan of Action 

for the Least Developed Countries, which “envisaged a closer 

cooperation between the WTO and other multilateral agencies assisting 

least developed countries” in the area of trade. The plan of action was 

aimed at improving the overall capacity of least developed countries to 

respond to the challenges and opportunities offered by the trading 

system. The WTO, the United Nations Conference on Trade and 

Development, the International Trade Center, the International Monetary 

Fund, the World Bank, and the United Nations Development Program formed 

the integrated framework for the provision of trade-related technical 

assistance, for that purpose.



[29] See document # TN/C/1 at www.wto.org.



[30] See figure 1 for a description of the negotiating bodies.



[31] The Director General heads the WTO Secretariat, which provides the 

administrative support for all aspects of the organization.



[32] Other WTO members that have requested consultations with U.S. 

officials under WTO dispute settlement procedures include Switzerland, 

Norway, and New Zealand.



[33] The farm legislation allows producers of covered commodities to 

receive direct payments based on farmers’ historical acreage and to 

receive payments that increase as commodity prices decrease. An example 

of the latter type of domestic support payment is a system of “counter-

cyclical” payments meant to guarantee a minimum per-bushel price for 

eligible commodities by paying producers the difference between the 

market price and a “target price” specified in the legislation.



[34] The work on WTO rules will deal with trade remedy measures, which 

are actions that countries take to counter the adverse effects on 

domestic producers of unfair practices by their trade partners. These 

measures include: the imposition of antidumping duties, to neutralize 

the injurious effect of unfair pricing practices; and countervailing 

duties, to counteract the economic effect of a subsidy and thus prevent 

injury to a domestic industry caused by a subsidized import. A subsidy 

is generally considered to be a bounty or a grant provided by a 

government that confers a financial benefit on the production, 

manufacture, or distribution of goods or services.



[35] The WTO allows the use of antidumping and countervailing duties 

provided that the application of these measures conforms to rules 

specified in the Agreement on Implementation of Article VI of the 

General Agreement on Tariffs and Trade (GATT) 1994, also known as the 

Antidumping Agreement, and the Subsidies and Countervailing Measures 

Agreement.



[36] The Doha Declaration mandates negotiations aimed at clarifying and 

improving disciplines under the GATT agreements on antidumping and 

subsidies and countervailing measures, while preserving their basic 

concepts, principles, and effectiveness, as well as their instruments 

and objectives.



[37] The dumping margin is the amount by which the imported merchandise 

is sold in the United States below the home-market or third-country 

price, or the constructed value (that is, at less than its “fair 

value”). For example, if the U.S. “purchase price” is $200 and the fair 

value is $220, the dumping margin is $20. This margin is expressed as a 

percentage of the U.S. price. In this example, the margin is 10 

percent.



[38] The U.S. private sector is divided on this issue. While some 

members of the U.S. business community have supported the agreement to 

begin a new round of negotiations on trade remedies, other industry 

groups have opposed it.



[39] In November 2001, the U.S. House of Representatives passed a 

concurrent resolution--H.R. Con. Res. 262--aimed at ensuring that these 

issues be considered in the Doha negotiations. Both the Trade Act of 

2002 and the House Concurrent Resolution also expressed concern that 

recent WTO dispute settlement decisions are imposing obligations and 

restrictions on the use of antidumping and countervailing measures by 

WTO members, as well as concern that the standard of review contained 

in article 17.6 of the WTO Antidumping Agreement be appropriately 

applied.



[40] This coalition of countries includes the United States, Australia, 

Chile, Iceland, New Zealand, Peru, and the Philippines.



[41] See WTO document # TN/RL/W/3 available at www.wto.org.



[42] According to GATT, Article XXIV, a “customs union” refers to two 

or more customs territories in which (1) duties and other restrictive 

regulations are eliminated with regard to substantially all trade 

within the union and (2) substantially the same duties are applied by 

each member of the union to territories not part of the union. A “free 

trade area” is a group of customs territories in which tariffs and 

other commercial regulations have been eliminated on substantially all 

the trade between the constituent territories for products originating 

in such territories.



[43] Since the establishment of the WTO, there have been more than 100 

additional notifications to the WTO on regional arrangements covering 

trade in goods and services.



[44] Some sources have indicated that the European Union may be neutral 

on the subject of WTO rules on regional trade agreements.



[45] These figures are based on trade-weighted average tariffs in which 

the value of trade by product across all imports provides a basis for 

the tariff rates that are averaged together.



[46] “Ad valorem” signifies any charge, tax, or duty that is applied as 

a percentage of value. Bound tariff rates are most-favored-nation 

tariff rates resulting from GATT or WTO negotiations and thereafter 

incorporated as integral provisions of a country’s schedule of 

concessions. The bound rate may represent either a reduced rate or a 

commitment not to raise the existing rate, or a ceiling binding.



[47] There is no agreed-upon cut-off value at the multilateral level 

that delineates tariff peaks; however, they are commonly defined as 

greater than 10 to 20 percent ad valorem.



[48] Tariff escalation is a practice that industrialized countries 

often use, whereby they increase tariffs in relation to the degree of 

processing found in a product. For example, a leather jacket would have 

a higher tariff than animal hide. The result is that developing 

countries are able to export their raw materials but are discouraged 

from using their raw materials to develop processed goods because of 

higher tariffs in developed country markets.



[49] Footwear and glassware are also products with tariff peaks in the 

United States.



[50] GATS has been termed a “standstill” agreement, in that most 

individual country commitments (with the exception of financial and 

telecommunication services) have remained confined to confirming status 

quo market conditions. The negotiations are aimed at moving beyond the 

standstill agreement to increasing liberalization. GATS required the 

first round of negotiations under the built-in agenda to begin no later 

than 5 years from 1995.



[51] The request-offer approach is a negotiating technique whereby an 

individual country submits a request list of commitments to another 

country. That country then responds with an offer list of commitments 

it is willing to make.



[52] The WTO attributes the lack of controversy to the flexibility of 

the GATS agreement. This flexibility includes the fact that members can 

choose those sectors on which to make commitments guaranteeing the 

right of foreign suppliers to provide the service; that members may 

specify limits to their commitments; and that members may take 

exemptions (in principle, limited to 10 years’ duration) from the MFN 

principle, which is otherwise applicable to all measures covered by the 

GATS agreement.



[53] The WTO reports that developing countries have a keen interest in 

many services areas, including tourism, health, and construction.



[54] According to the European Union, the precautionary principle 

covers circumstances “where scientific evidence is insufficient, 

inconclusive or uncertain and. . .there are reasonable grounds for 

concern” about a product’s “potentially dangerous effects on the 

environment, human, animal or plant health.”



[55] According to the European Union, European eco-labeling schemes are 

an attempt to validate the fact that certain goods and services have 

been produced in an environmentally friendly manner.



[56] There have been challenges to environmental measures under both 

the GATT and the WTO. Dispute panel decisions in these cases have been 

primarily based on GATT, Article XX. This article provides exemptions 

to normal trade disciplines for restrictive trade measures “necessary 

to protect human, animal or plant life or health.” For a detailed 

review of interpretations of Article XX in past dispute settlement 

cases, see WTO document # WT/CTE/W/203, “GATT/WTO Dispute Settlement 

Practice Relating to GATT Article XX, Paragraphs (b), (d) and (g),” 

available at www.wto.org.



[57] For additional information on the initial debate on the scope of 

the negotiations, see WTO document # TN/TE/1, “Statement by the 

Chairperson of the Special Session of the Committee on Trade and 

Environment to the Trade Negotiations Committee,” available at 

www.wto.org.



[58] The agreement that governs this system is formally titled the 

“Understanding on Rules and Procedures Governing the Settlement of 

Disputes” and is generally referred to as the Dispute Settlement 

Understanding.



[59] For additional information on the way in which the WTO dispute 

settlement system has affected U.S. interests, see U.S. General 

Accounting Office, World Trade Organization: Issues in Dispute 

Settlement, GAO/NSIAD-00-210 (Washington, D.C.: Aug. 9, 2000).



[60] Under an amendment to section 306 of the Trade Act of 1974, 

subject to certain exceptions, USTR is required to periodically revise 

a retaliation list against goods of a foreign country because of the 

country’s failure to implement WTO dispute settlement recommendations.



[61] The Doha Declaration mandates that the multilateral system of 

notification and registration include wines and spirits.



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