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U.S. Department of State
95/06/07 Fact Sheet: World Trade Organization
Bureau of Public Affairs


Fact Sheet: The World Trade Organization

As a result of the Uruguay Round of multilateral trade negotiations, 
global rules for international trade have been improved and extended to 
most trading nations on an equivalent basis.  Responsibility for 
enforcement of these rules has been entrusted to a new World Trade 
Organization (WTO).  The WTO also will provide procedures for 
negotiating additional reductions of trade barriers and for the prompt 
and effective settlement of disputes in all the policy areas covered by 
the new world trade agreement.

U.S. Objectives

The principal trade negotiating objectives of the United States 
regarding the improvement of the General Agreement on Tariffs and Trade 
(GATT) and multilateral trade negotiation agreements were:

--  To enhance the status of the GATT;

--  To improve the operation and extend the coverage of the GATT and 
such agreements and arrangements to products, sectors, and conditions of 
trade not adequately covered; and

--  To expand country participation in particular agreements or 
arrangements, where appropriate.

The agreement establishing the WTO facilitates the implementation of 
trade agreements in the diverse areas of trade in goods, trade in 
services, and the protection of trade-related intellectual property 
rights.  The WTO encom-passes the former GATT structure and extends it 
to new disciplines that have not been adequately covered in the past.  
By bringing together disciplines on government practices affecting trade 
in goods and services and the protection of intellectual property rights 
under one institutional umbrella, the WTO agreement also facilitates the 
"cross-retaliation" mechanism of the integrated dispute settlement 
understanding.

In addition, the WTO resolves the "free rider" problem in the world 
trading system. WTO benefits only extend to its members who have agreed 
to adhere to all of the Uruguay Round agreements; and that submit 
schedules of market access commitments for industrial goods, 
agricultural goods, and services.  This eliminates the shortcomings of 
the former GATT system in which, for example, only a handful of 
countries voluntarily adhered to disciplines on subsidies under the 1979 
Tokyo Round agreement.

The WTO agreement establishes a number of institutional rules (described 
below) that are applied to all Uruguay Round agreements.  It establishes 
an international organization with a stature commensurate with that of 
the World Bank and International Monetary Fund.  The organization is 
similar to that of the existing GATT Secretariat.

Key Provisions

Trade and Environment.  The WTO agreement recognizes the importance of 
environmental concerns.  This addresses a key interest among U.S. 
environmental and conservation groups, which have often expressed 
concern that international trade agreements have failed to take 
environmental issues into account.  A WTO committee on trade and 
environment aims to ensure the responsiveness of the multilateral 
trading system to environmental objectives.

Decision-making.  The U.S. has successfully retained the practice of 
general decision-making by consensus followed under the GATT since 1947.  
Consensus is achieved "if no member, present at the meeting where the 
decision is taken, formally objects to the proposed decision."  This 
continues to enable the U.S. to prevent a decision that it perceives to 
be contrary to its interest.

Amendments.  The agreement permits amendments but ensures that an 
amendment of the substantive rights and obligations not be binding on 
the U.S. without acceptance of the amendment.  In contrast, amendments 
to pure procedural provisions of the Uruguay Round agreements will be 
binding on all members in order to avoid the destabilizing effect that 
would result if different members were subject to different procedural 
rules.

Waivers.  The agreement allows members to grant waivers of substantive 
provisions in the various Uruguay Round agreements, but only in 
exceptional circumstances.  In the case of an obligation subject to 
phased-in implementation, such as those in the agreement on trade-
related intellectual property issues (TRIPs), that has not yet been 
fulfilled by the requesting member, members may grant a waiver only by 
consensus.  Also, the waiver provision substantially increases the 
threshold for obtaining waivers from two-thirds of members present to 
three-quarters of all members.  Any waivers granted are subject to 
specific conditions, including a date on which the waiver will 
terminate.

Interpretations.  Under the WTO, reports of dispute settlement panels do 
not constitute "authoritative" interpretations of the relevant 
agreements.  Only the members themselves--acting through the Ministerial 
Conference or General Council--can adopt such an interpretation.  The 
agreement also states that interpretations not be used in a manner that 
undermine amendment provisions.

Non-application.  The agreement does not permit sector non-application. 
Thus, for example, India is precluded from not applying the TRIPs 
agreement to the U.S.  With respect to WTO members that accede to the 
WTO but are not "original members" (generally, are not GATT contracting 
parties), a member can invoke "global" non-application.  Thus, with 
respect to the People's Republic  of China and possibly other acceding 
members, the U.S. can choose not to apply the GATT and the Uruguay Round 
agreements to that country as   a whole.

Definitive Application.  In joining the WTO agreement, members agree to 
the definitive application of the obligations of the Uruguay Round 
multilateral trade agreements.  (Accession to the multilateral trade 
agreements, such as the agreement on government procurement, is limited 
to those members that affirmatively accept these agreements.)  Annex 1 
to the WTO agreement eliminates the protocol of provisional application 
and corresponding provisions in protocols of accession to the GATT that 
had the effect of allowing certain existing legislation of contracting 
parties that are inconsistent with the GATT.  However, Annex 1 includes 
a clause that protects from GATT challenge U.S. maritime laws relating 
to cabotage ("Jones Act").  

June 7, 1995
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