UNITED STATES TRADE REPRESENTATIVE

EXECUTIVE OFFICE OF THE PRESIDENT

ORGANIZATION
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countries to enforce trade agreements

and continue negotiations toward

expanding world trade opportunities.

Under WTO rules, foreign nations assure us greater access to

their markets, and are constrained from giving their workers

and firms unfair advantages through subsidies and protectionist

domestic policies. At the same time, WTO rules recognize and

respect governments’ right to maintain high standards for the

environment, labor, health, and safety. The trade gains that the

United States has won through the WTO Agreements and

other trade policies have been a major contributing factor to

our thriving economy. Studies estimate that the effect of full

implementation of the WTO Agreements will be to boost U.S.

GDP by $125-250 billion per year (in 1998 dollars). We have a

great stake in further expanding opportunities for U.S. companies and workers in manufacturing, agriculture, and services

industries through the WTO.

Promoting U.S. exports and jobs

➤ WTO rules lower trade barriers abroad and help us

export more of our goods and services to other countries.

➤ On average, every billion dollars of goods and services

exports results in thousands of jobs here at home.

Did You Know:
3.5% increase in Germany and a .5% decline in Japan.

Between 1992 and 1998, manufacturing productivity

was up nearly 4% per year, and manufacturing jobs

increased by over half a million.

➤ Benefitting from new opportunities created by WTO

rules, over one-third of U.S. agricultural production was

exported in 1998, with a value of $52 billion.

➤ The services sector—including retailing, transport, construction, insurance, finance, accounting, advertising,

computer services, tourism, engineering, and environmental services—accounts for over 60 percent of the

U.S. economy, and 80 percent of our jobs.

➤ Helped by WTO services rules, the United States leads

the world in trade in services with over $264 billion in

exports annually. It is the fastest growing sector in our

economy and provides the greatest number of new jobs.

Raising living standards for all Americans

➤ The creation of higher-paying jobs supported by trade

raises living standards for tens of thousands of American

households.

➤ Trade barriers, by making goods and services more

expensive, cost you money at the store. In 1990, prior to

the WTO, private sector studies estimated that trade

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➤ The WTO Agreements result in lower prices for business

and consumer products. By the time that the Agreements

are fully implemented in 2005, the annual effect will be

equivalent to an increase of $1500-$3000 in purchasing

power for the average American family of four.

The prosperity and economic growth of our nation rests in large

part on our ability to sell the goods and services we produce to

consumers everywhere. The World Trade Organization (WTO),

with its system of rules, helps the United States achieve this

purpose. During the Great Depression, nations often kept out

each other’s products with tariff walls, resulting in fewer jobs

and less economic growth for everyone. During the postwar

era, successive “Rounds” of international trade negotiations created a more open and fair world economy, raising growth and

living standards worldwide. The most recent round, the

“Uruguay Round,” created the WTO in 1995. The WTO is an

international institution and a forum for negotiating, administering, and enforcing a set of agreements to reduce barriers to

trade among the United States and 134 other members. Based

in Geneva, Switzerland, it succeeds the General Agreement on

Tariffs and Trade (GATT) founded after World War II, which

began the process of lowering trade barriers around the globe.

What is the World Trade Organization?

BACKGROUND
and intellectual property; reduce tariffs; limit the use of tradedistorting subsidies; promote the sustainable use of natural

resources; and reduce unfair obstacles to trade embodied in

product standards, customs procedures and other measures.

Under these rules, other countries commit not to block U.S.

exports through higher tariffs and other restrictions on trade,

and agree to abide by fair trading practices that safeguard U.S.

workers and firms. WTO rules ensure market access for the

products Americans design, produce, and deliver, while recognizing and respecting governments’ right to maintain high standards for the environment, labor, health, and safety. When governments follow a common rule book it makes trade easier and

more efficient, and ensures that our workers and companies,

the most productive in the world, can compete with others on 

a level playing field. Thus, since the creation of the WTO, our

exports of goods and services have risen by over $300 billion,

meaning new jobs and business opportunities all across our

economy.

To ensure that the United States secures the full benefits of the

WTO Agreements, the United States sought and obtained a

strong, binding and expeditious dispute settlement process for

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RESOLVING TRADE DISPUTES
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ment process has proven

valuable in achieving tangible gains for American companies and workers, across a broad

range of sectors, including agriculture, manufacturing, services

and intellectual property protection. It has also served as a

deterrent—our trading partners know it is ready and available

to us if they do not fulfill their obligations. We have been successful in reaching rapid resolution of our complaints through

early settlement, and have also achieved substantial benefits

from litigation and resulting panel decisions which enforce our

rights. The United States is working within the WTO to ensure

that the dispute settlement mechanism is more effective in

securing prompt compliance.

More broadly, the WTO also assists in advancing democratic

values. Countries that subscribe to WTO rules are obliged to

follow the rule of law in commercial transactions, with the

result that WTO members’ policies are more transparent and

less arbitrary. Disputes are to be settled peaceably and efficiently under WTO provisions. Open markets and regulatory

due process also increase the freedom of individuals to reap

the rewards of their labor, and to maximize the economic benefit of their talents and creativity. Last, the WTO’s broad netPROMOTING DEMOCRATIC VALUES
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other policies and regulations; 

➤ increased foreign market access for U.S. exporters

of services. These sectors include telecommunications, finance, accounting, advertising, computer

services, tourism, engineering, and construction;

➤ intellectual property rights protection for U.S.

entrepreneurs, in industries such as pharmaceuticals, entertainment, and software. WTO rules help

combat piracy in world markets; and 

➤ an effective set of rules for the prompt settlement

of disputes between WTO members. 

The WTO Agreements do not and will not:

➤ preclude the United States from establishing and

maintaining its own laws;

➤ impair the effective enforcement of U.S. laws,

including laws to combat unfair imports; or

➤ limit the ability of the United States to set our environmental, labor, health, and safety standards at the

level we consider appropriate.
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countries erected tariff barriers in response to the financial crisis. The painful economic lessons of this era prompted the

United States and other countries to reverse the protectionist

course and begin dismantling trade barriers in the wake of the

Second World War. The General Agreement on Tariffs and

Trade, which entered into force in 1948, initiated several successive rounds of tariff reductions. These rounds resulted in

industrial tariffs being reduced by 90%, from an average of 40%

to just 4% following the Uruguay Round, and reduced or eliminated numerous other barriers to trade.

Now, building upon the tradition of trade liberalization which

the United States has pursued over the last 50 years, our government has taken the lead at the WTO to craft agreements

which benefit American workers, companies, and consumers, by

removing remaining tariff and non-tariff barriers to trade with

foreign countries and ensuring market access for U.S. products.

We do this because our domestic market alone, although it is

large, has only a limited capacity to absorb the products which

American firms and workers make. Ninety-six percent of the

world’s population and nearly four-fifths of the world economy

are outside of U.S. borders. For manufacturing companies to

produce efficiently and give additional resources to research

and development, or for farmers to market their crops profitably, we must be able to export. When we are able to sell the

goods, services, and agricultural products we produce to foreign
and services exports by $65 billion. This in

turn means that, in part due to the opportunities created by the WTO Agreements,

the number of jobs for U.S. workers supported by exports has increased by 1.3 million since 1994.

Furthermore, export-related jobs are concentrated in the high-wage, high-skill fields

that help raise living standards for American families. These

jobs pay 13-16 percent more than the average wage. Almost 10

percent of all U.S. jobs, nearly 12 million jobs, now depend on

our ability to export to the world. For example, Americans are

extremely competitive in exporting wheat, tractors, aircraft,

chemicals, medicines, computer software, and artistic creations

such as sound recordings, movies and TV programs. 

Moreover, millions of American jobs also

depend on our ability to import goods

from around the world. At home, dockworkers unload containers in U.S. ports

every day. Truck drivers transport imported goods to distribution centers and

points of sale. Retailers stock clothes,

shoes, and accessories from other countries, in addition to domestic goods, to satisfy customer

demand. Likewise, grocery stores display a broad array of

imported and domestic foods on their shelves. American facto9
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Americans have the opportunity to buy

coffee and tea, fresh fruits and vegetables

year round, and consumer products such

as toys, kitchen appliances, and other

household items produced in other countries. In this way, the

lowering of tariffs and trade barriers, as a result of the WTO

Agreements, expands consumers’ freedom of choice. The standard of living improves for all Americans, but particularly for

low-income families, since lower prices mean that your paycheck goes further at the supermarket or the department store.

Since the WTO Agreements reduce or eliminate government

surcharges (tariffs) on the products that we consume, the effect

is equivalent to a global tax cut which

the World Bank estimates at about

$100-$200 billion dollars per year.

About two-thirds of these cost-reduction benefits accrue to advanced

industrial countries, such as the United

States, where consumption is greatest.

At the same time, the WTO Agreements serve to dismantle barriers to American exports. Between 1992 and 1997, nearly one

third of U.S. economic growth derived from increased exports

to the world.

However, in 1998 the global financial crisis and severe recessionary conditions in some of our major trading partners had a

temporary negative impact on U.S. exports. Despite these
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In May 1998, WTO members meeting in Geneva accepted

President Clinton’s invitation for the United States to host the

3rd WTO Ministerial conference. This is

an historic opportunity for the United

States to exercise leadership in setting

the trade agenda for the next century,

much as we did after World War II.

Trade ministers from over 160 countries will convene in the city of Seattle,

Washington to engage on a broad range of

trade topics. President Clinton has called for and we expect to

launch at Seattle a new round of trade negotiations to reduce

trade barriers, and expand exports of agriculture, services, and

manufactured products. The range of WTO work will expand

to address emerging issues in the trade arena.

This Round, to begin at the end of the year, will establish a

new approach to global trade negotiations, including:

➤ An “accelerated” negotiating framework designed to

deliver new commercial opportunities in agriculture,

goods, and services over a three year timetable;

THE TRADE AGENDA AHEAD: THE WTO MINISTERIAL

CONFERENCE IN SEATTLE, WASHINGTON

November 30 - December 3, 1999
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expanding membership of the WTO, and improve

ment of the dispute settlement process.

The timing of the Ministerial meeting is particularly important, as the multilateral trading system today faces formidable

challenges. First, in light of the situation in Asia and the

global economy, we must work to keep foreign markets open

and to restore economic growth. Second, expanding WTO

membership is of strategic significance to the United States.

There are currently 32 applicants for WTO accession,

accounting for 11% of world trade, and these represent

important markets for U.S. goods and services exports.

Accession to the WTO, in turn, will support the new members in their transition to stable and market-based

economies. Third, President Clinton has called for a WTO

trading system that is more open and transparent to citizens,

and that supports environmental protection and core labor

standards. Finally, the WTO must address the technological

revolution in areas such as electronic commerce, and work to

ease the development and commercialization of beneficial

scientific advances. The 1999 WTO Ministerial Conference

provides an unparalleled opportunity for the United States to

lay the foundation for these and other critical tasks in the

coming years, and to build upon an international framework

of trade rules that promotes the prosperity of all Americans.
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y g 

accountable for their trade actions. At the same time, our

government was careful to structure the WTO dispute 

settlement rules to preserve our rights. The findings of a

WTO dispute settlement panel cannot force us to change

our laws. Only the United States determines exactly how it

will respond to the recommendations of a WTO panel, if 

at all. If a U.S. measure is ever found to be in violation of a

WTO provision, the United States may on its own decide to

change the law; compensate a foreign country by lowering

trade barriers of equivalent amount in another sector; or 

do nothing and possibly undergo retaliation by the affected

country in the form of increased barriers to U.S. exports 

of an equivalent amount. But America retains full sovereignty in its decision of whether or not to implement a

panel recommendation.

Q: Do the rules of the WTO affect our environment, health

and safety standards?

A: Each WTO member remains free to set its own appropriate

levels of environment, health and safety protections, and

the United States is committed to maintaining high levels of

such protection. The WTO Agreements simply provide 

that the environment, health, and safety standards chosen

by governments be fair and transparent, and not be used as

disguised barriers to trade.
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vices—such as clean coal technology, waste-water treatment

and pollution monitoring equipment—we ease the task of

providing people with clean air, clean water, and improved

public health. By reducing trade barriers in efficient energy

technologies, nations can produce more power with less

emission of greenhouse gases. Finally, by disciplining tradedistorting subsidies that can also harm the environment, in

areas such as fisheries, we can move toward sustainable

management of natural resources.

Q: Does increased trade lead to job shifting?

A: Increased trade increases the total number of better-paying

jobs for Americans, and stretches the paychecks of

American workers. With any economy that is growing,

potential rewards are great, but growth

also leads to job dislocations, as firms

enter and exit the economy, or expand

or contract. Dislocations occur for a

number of reasons, but by far the most

important cause is technological change.

Economic studies consistently find that

trade is a relatively small factor in overall job losses. Some studies have shown that more than

ninety percent of all job displacements in manufacturing,
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the new opportunities?

A: The most important thing we can do for American workers

and their families is to create a growing, healthy economy

which generates new jobs. Since 1993, trade policy, together with investment in education and fiscal discipline, has

helped us do so. We are now enjoying America’s longest

peacetime expansion ever. Unemployment is at its lowest

rate in 29 years. Long-term inflation is low, wages are rising, and we have created a net gain of more than 18 million new jobs since President Clinton took office.

However, as the dynamic forces of technology and competition spur economic growth, job dislocations can occur. 

The Administration is working to help these families manage change and succeed in the new environment. To promote a secure workforce, the President’s budget aims to

create a 21st century reemployment system. The

Administration’s plan includes $368 million for a Universal

Reemployment Initiative. This proposal is intended to

ensure that within five years workers who lose a job

through no fault of their own can receive reemployment

services through One-Stop Career Centers and other programs. A total of over $1.5 billion, an increase of $190 million, is requested to provide job search assistance, skill

training, and related services to help workers find jobs as

quickly as possible. The Administration also proposes the
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size to a national average of 18, and

includes a 20 percent increase for

education technology to ensure that

every student has access to computers, the Internet, and high-quality

educational software. Throughout the

country, 47,000 schools and libraries are being connected to

the Internet. Furthermore, 5.5 million students are expected to benefit from the $1500 HOPE scholarship, a tuition

tax credit to make the first two years of college or other

post-secondary training universally available. 7.2 million

students and working Americans pursuing lifelong learning

to upgrade their skills will benefit from the Lifetime

Learning Credit, which offers a 20% tax credit for the first

$5,000 of tuition and fees. 

The President has also called for affordable child care for

working families, and an increase in the minimum wage, 

so that hard-working Americans are given the raise they

deserve.

Q: Where do we go from here?

A: For all the benefits that have been gained from the trading

system over the past five decades, more remains to be

done in opening foreign markets to American goods and

services, and expanding the sales and payrolls of U.S. com-
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and that we will continue on the path toward prosperity,

jobs, growth, and higher living standards for our people.

Working through the WTO, we can speed the economic

and social progress the global economy creates, while

improving the lives of working people, protecting the environment and advancing the values—freedom, fairness,

open government, rule of law—we all share as Americans.
Additional information can be found at:

www.ustr.gov and www.wto.org

Charlene Barshefsky

United States

Trade Representative