Seeking Withdrawal of Congressional Approval of the WTO Agreement: Background, Legislative Procedure, and Practical Consequences
Released: 2005-06-09T00:00:00

Background

The Uruguay Round Agreements Act (URAA; P.L. 103-465 ) in Section 101 (19 U.S.C.3511) authorized the acceptance, by the President, of United States membership in the World TradeOrganization (WTO) and, thereby, of the rights and obligations of the Agreement Establishing theWorld Trade Organization (WTO Agreement) with its annexed specialized multilateral andplurilateral trade agreements. (1) The URAA, on the other hand, also contains provisions spellingout the legislative procedure whereby the statutory approval of the WTO Agreement -- and, thereby-- of the United States' membership in the WTO can be withdrawn.

This legislation functionally ties the withdrawal of the U.S. legislative approval of the WTOagreement to the requirement of periodic reports by the Executive to the Congress on the operationof the WTO and its effects on the United States.

Section 124 of the URAA (19 U.S.C. 3534) requires the U.S. Trade Representative to submitto the Congress, by March 1 of each year, beginning in 1996, a report on a wide range of WTOactivities and administrative aspects of WTO operations during the preceding WTO fiscal year(which is the calendar year).

Moreover, as required by Section 125 of the Uruguay Round Agreements Act (19 U.S.C.2535), beginning with March 1, 2000, and every fifth year thereafter, such report, transmitted by thePresident, must "include an analysis of the effects of the WTO Agreement on the interests of theUnited States, the costs and benefits to the United States of its participation in the WTO, and thevalue of the continued participation of the United States in the WTO."

As pointed out in the section on Disapproval Resolutions contained in the Statement ofAdministrative Action, a part of the documentation which is required to be transmitted by thePresident to the Congress together with the draft of the implementing bill for the Uruguay RoundAgreements Act,

[t]he provision creates a mechanism that will permitperiodic Congressional review of U.S. participation in the WTO. (2)

Following the submission of such quinquennial report and its review by Congress, Congresscan withdraw its approval of the WTO Agreement, leading to the termination of the United States'participation in the WTO, through the enactment of a joint resolution disapproving the originalapproval of the WTO Agreement.

The reasons for the disapproval provision are explained by the House Ways and MeansCommittee as follows:

The purpose of this provision is to provide anopportunity for the Congress to evaluate the transition of the GATT to the WTO and to assessperiodically whether continued membership in this organization is in the best interest of the UnitedStates. It is the desire of the Committee not to leave this decision totally in the hands of theExecutive Branch but to be active in determining whether the WTO is an effective organization forachieving common trade goals and principles and for settling trade disputes among sovereignnations.

In the course of the five-year review, individualmembers of Congress can evaluate whether the WTO remains on course as a trade-orientedorganization and has not expanded its activities to non-trade related areas. Congress wants to ensurethat the United States can continue to exercise substantial influence within the WTO andsuccessfully promote goals that benefit American producers, workers and consumers...

Congress may vote on a joint resolution disapprovingthe continued participation of the U.S. in the WTO. (3)

The Senate report on the provision similarly states regarding United States continuedmembership in the WTO that

Section 125 establishes a mechanism through which theCongress may withdraw the approval of U.S. participation in the WTO granted under section 102(a)of the bill. ... Congress may consider and adopt a joint resolution providing for withdrawal of U.S.approval of the WTO Agreement, the effect of which would be to end U.S. participation in theWTO. (4)

The withdrawal issue came into legislative focus for the first time after the President'squinquennial report of March 2, 2000, but congressional disapproval action initiated in response tothat report was unsuccessful (see p. 9-10).

Legislative Procedure

The legislation lays out a specific, expedited (fast-track) procedure to be followed by theCongress in the consideration of the withdrawal measure. To the extent that it differs from theregular procedure (5) , thisprocedure follows, in the main, the special abbreviated fast-track procedure for the consideration of"resolutions disapproving certain actions" (Section 152 of the Trade Act of 1974, as amended; 19U.S.C. 2192) (6) , which hasbeen modified with respect to the timetable for certain legislative steps by the provisions of Section125 itself. The provisions of both Section 152 of the Trade Act of 1974 and Section 125 of theURAA are specifically defined as exercises of the rulemaking power of either House and deemeda part of the rules of either House. They can be changed by either House, with respect to its ownprocedure, at any time in the same manner and to the same extent as any other rule of that House(Section 151(a) of the Trade Act of 1974, as amended, applied to the procedure by Section 152 ofthe same Act; and Section 125(d) of the Uruguay Round Agreements Act; 19 U.S.C. 2191(a), 2192,and 3535(d)).

In the presentation that follows, consequently, statutory references to Section 125 refer tothat section of the Uruguay Round Agreements Act (19 U.S.C. 3535), while those to Section 152refer to that section of the Trade Act of 1974 (19 U.S.C. 2192).

Functionally, the timetable for legislative consideration of the joint resolution of disapprovalencompasses the following steps:

(1) Introduction of a joint resolution of withdrawal .

A joint resolution of withdrawal may be introduced in either House by any member of thatHouse (Sec. 125(c)(2)(A); 19 U.S.C. 3535(c)(2)(A)) within 90 days (7) of the date on which theCongress receives the quinquennial report transmitted by the President on the operation of the WTO(Sec. 125(b)(2)(B); 19 U.S.C. 3535(b)(2)(B)).

(The resolution is privileged -- hence, it must be considered -- and is nonamendable. (8) )

(2) Language of the withdrawal resolution .

The language of the joint resolution is prescribed by law (Sec. 125(c)(1); 19 U.S.C.3535(c)(1)) to read, after the resolving clause, only as follows:

That the Congress withdraws its approval, providedunder section 101(a) of the Uruguay Round Agreements Act, of the WTO Agreement as defined insection 2(9) of that Act.

(This provision by its very nature makes the withdrawal resolution nonamendable.)

(3) Committee referral .

The resolution is referred, in the House, to the Committee on Ways and Means and, in theSenate, to the Committee on Finance (Sec. 152(b); 19 U.S.C. 2192(b)).

(4) Committee consideration.

If the committee of either House to which the resolution has been referred has not reportedit within 45 days (9) afterits introduction, the committee is automatically discharged from further consideration of theresolution, and the resolution is placed on the appropriate calendar for floor consideration (Sec.125(c)(2)(C); 19 U.S.C. 3535(c)(2)(C)).

(Also placed on the appropriate calendar under regular legislative procedure are measuresthat have been reported, whether favorably or adversely.)

(5) Restriction on consideration in either House .

It is not in order in either House to consider a joint resolution of withdrawal (other than aresolution received from the other House) if that House has previously adopted a joint resolution ofwithdrawal (Sec. 125(c)(3); 19 U.S.C. 3535(c)(3)). (10)

(6) Floor consideration in the House.

(a) It is not in order to consider the joint resolution unless it has been reported by theWays and Means Committee or that committee has been discharged (Sec. 125(c)(2)(D)(ii); 19 U.S.C.3535(c)(2)(D)(ii)).

(b) A motion to proceed to the consideration of the resolution may only be made onthe second legislative day after the calendar day on which the sponsor of the motion announces tothe House his intention to do so (Sec. 125(c)(2)(E); 19 U.S.C. 3535(c)(2)(E)). The motion is highlyprivileged and nondebatable; no amendment to the motion, nor a motion to reconsider the vote bywhich it has been agreed or disagreed to, is in order (Sec. 152(d)(1); 19 U.S.C. 2192(d)(1)).

(c) Debate is limited to 20 hours, divided equally between those favoring and thoseopposing the resolution; a motion further to limit debate is nondebatable; no amendment to theresolution, nor a motion to recommit it or to reconsider the vote by which it has been agreed ordisagreed to, is in order (Sec. 152(d)(2); 19 U.S.C. 2192(d)(2)).

(d) Motions to postpone the consideration of the resolution and motions to proceed to the consideration of other business are decided without debate (Sec. 152(d)(3); 19 U.S.C.2192(d)(3)).

(e) All appeals from the decisions of the Chair regarding the application of the Rulesof the House of Representatives relating to the resolution are decided without debate (Sec. 152(d)(4);19 U.S.C. 2192(d)(4)).

(f) Except as provided in the preceding provisions (a) - (e), consideration of theresolution is governed by the Rules of the House of Representatives applicable to other measures insimilar circumstances (Sec. 152(d)(5); 19 U.S.C. 2192(d)(5)).

(Hence, like all expedited procedures, this procedure can be superseded by the House'sadoption of a resolution reported by the Rules Committee providing for a different procedure.)

(7) Procedure in the Senate .

(a) A joint resolution of withdrawal that has passed the House is, upon receipt by theSenate, referred to the Committee on Finance (Sec. 152(f)(1)(A)(i); 19 U.S.C. 2192(f)(1)(A)(i)).

(b) If a joint resolution was introduced in the Senate before receipt of the resolutionpassed by the House, the House resolution is placed on the Senate calendar, but the Senate considersits own resolution, except that the Senate vote on the passage of the resolution is on the Houseresolution (Sec. 152(f)(1)(A)(ii); 19 U.S.C. 2192(f)(1)(A)(ii)).

(c) If the Senate passes a joint resolution of withdrawal before receiving the passedHouse resolution, its resolution is held at the desk pending the receipt of the House resolution. Uponreceipt of the House resolution, the latter is deemed to have been read twice, considered, read thethird time, and passed (Sec.152(f)(1)(B); 19 U.S.C. 2192(f)(1)(B)).

(In the procedure for the enactment of a withdrawal resolution, items (b) and (c) arematerially irrelevant, since they imply the possibility of a difference between the House and Senatelanguages of the measure, possible in the consideration of some other resolutions under Section 152(see footnote 4), but not of a WTO withdrawal resolution in view of its mandatory language.)

(This procedure also makes it functionally clear that a resolution of withdrawal cannot beadopted unless it is a House joint resolution.)

(8) Floor consideration in the Senate .

(a) A motion to proceed to the consideration of the resolution is privileged; anamendment to the motion is not in order, nor is a motion to reconsider the vote on the motion toproceed, whether agreed or disagreed to (Sec. 152(e)(1); 19 U.S.C. 2192(e)(1)).

(b) Debate on the joint resolution and all debatable motions and appeals connectedtherewith is limited to 20 hours, equally divided between, and controlled by, the majority leader andthe minority leader, or their designees (Sec. 152(e)(2); 19 U.S.C. 2192(e)(2)).

(c) Debate on any debatable motion or appeal is limited to one hour, equally dividedbetween, and controlled by, its mover and the manager of the resolution, except that when themanager is in favor of such motion or appeal, the time in opposition is controlled by the minorityleader or his designee. Such leaders, or either of them, may, from time under their control on thepassage of the resolution, allot additional time to any Senator during the consideration of anydebatable motion or appeal (Sec. 152(e)(3); 19 U.S.C. 2192(e)(3)).

(d) A motion to further limit debate on the resolution, on a debatable motion, or onan appeal is nondebatable; and no amendment to, or motion to recommit, the resolution is in order(Sec. 152(e)(4); 19 U.S.C. 2192(e)(4)).

(9) Deadline for transmission to the President.

If the Congress adopts a joint resolution of withdrawal, it must transmit it to the Presidentwithin 90 days (11) fromthe receipt of the President's quinquennial report (Sec. 125(b)(2)(i); 19 U.S.C. 3535(b)(2)(i)).

(10) Override of the veto .

If the President vetoes the joint resolution, each House may vote to override the veto -- bya two-thirds majority -- either by the last day of the 90-day period beginning on the date the Congressreceives the President's report, or the last day of the 15-day period (12) beginning on the date theCongress receives the veto message, whichever is later (Sec. 125(b)(2)(A)(ii); 19 U.S.C.3535(b)(2)(A)(ii)). In the Senate, consideration of a veto message, including consideration of anydebatable motions and appeals related thereto, is limited to ten hours, equally divided between, andcontrolled by, the majority leader and the minority leader, or their designees (Sec. 152(f)(3); 19U.S.C. (f)(3)).

(Under the Rules of the House of Representatives, the debate on overriding a Presidentialveto is normally limited to one hour.)

Implementation Procedure

(1) Implementation of the withdrawal by the United States . (13)

Section 125 is not self-implementing, nor does it contain any specific provision regardingthe withdrawal resolution's entry into effect (presumably on the date of its enactment), nor a directive(presumably to the President) to transmit the notice of withdrawal to the Director-General (14) , nor the deadline for suchtransmittal. This discrepancy was noted -- with some other relevant comments -- on page 4 of theHouse report on the measure, as follows:

While enactment of a resolution withdrawingCongressional approval under section 125 would call into question the future of U.S. participationin the WTO, it does not expressly provide for the President to withdraw from the WTO. Nor wouldthe resolution put the United States in violation of its WTO obligations. (15)

(2) WTO withdrawal procedure.

The withdrawal of a member from the WTO is regulated by Article XV of the WTOAgreement. The provision requires the transmission of a written notice of withdrawal by thewithdrawing member to the Director-General of the WTO, which takes effect six months after thedate of its receipt and applies to the WTO Agreement and all related multilateral trade agreements;withdrawal from plurilateral agreements acceded to by the withdrawing member is controlled bythe specific provisions of such agreements. Thus, the withdrawal from the plurilateral Agreementon Government Procurement under its Article 10 takes effect 60 days after the receipt of writtennotice of withdrawal by the Director-General of the WTO; and the withdrawal from the Agreementon Civilian Aircraft under its Article 9.6, 12 months from the receipt of the written notice.

Practical Consequences

Whether or not the withdrawal resolution is adopted, its mandatory consideration after itsintroduction can be expected to deal with various causes of dissatisfaction and, in some instances,frustration that some Members, not all on the proponent side of the withdrawal issue, feel toward theWTO regime. As in the debate on the withdrawal resolution introduced in 2000 (see section of PastActivity on next page), the salient arguments in favor of the resolution as put forward by itssupporters in the debate are likely to be: the encroachment on U.S. sovereignty by virtue of U.S.membership in the WTO and submission to the obligations under the WTO Agreement; usurpationof Congress' constitutional power "to regulate Commerce with foreign Nations"; violation of the U.S.Constitution by implementing the WTO Agreement as a Congressional-Executive agreement ratherthan a treaty; and, more tangibly, the perceived, for the United States adverse, results of the WTOdispute settlement mechanism (16) in cases where the United States is either the complainant or thedefendant.

Again, as in 2000, the opposition to the resolution is likely to argue that the WTO hascontributed greatly to the expansion, regulation and transparency of international trade -- includingthat of the United States -- and that some deficiencies of the WTO regime as seen by the supportersof the resolution are nonexistent and their adverse effects exaggerated and merely in need of reformrather than being a sufficient reason for United States' withdrawal from the WTO.

In the event that the withdrawal resolution is adopted and actually implemented by the UnitedStates' withdrawal from the WTO, such withdrawal would, on the most general level, exclude theUnited States from participation in an international multilateral system of trade rules and practices,which initially (in the General Agreement on Tariffs and Trade of 1947) was formulated andpromoted principally by the United States itself. Since then, it has been greatly expanded in the formof the WTO Agreement, likewise with the United States' participation and under its leadership, intoa world-wide, comprehensive code of rules covering most aspects of international trade. This codehas radically reduced tariff and nontariff obstacles to free flows of world commerce in goods andservices and provided a forum for settling international trade disputes. U.S. withdrawal from theWTO also would likely erode the U.S. leadership position in international trade relations andthereby possibly put a strain on the cohesiveness of the organization.

On a more specific, functional level, the withdrawal would relieve the United States from theobligations stemming specifically from the WTO agreement, but also preclude it from benefittingfrom its rights under the agreement, particularly, from access to WTO dispute settlement mechanism.Except for that access, however, this exclusion from the WTO regime would in practice be likelyto result in very limited selective changes in the United States' position in international trade, at leastin the short run.

On the U.S. side, most obligations under the WTO Agreement have been enacted by theURAA as general U.S. domestic law and would not be automatically repealed by the withdrawalresolution. To that extent, they would continue to apply not only to WTO members but to U.S.trading partners in general. Some provisions of the WTO Agreement have been substantively ineffect on the basis of earlier, also generally applicable legislation; others have been amended ornewly enacted by the URAA, again as generally applicable domestic legislation. Such applicabilitywould not cease due to the U.S. withdrawal from the WTO.

Similarly, those U.S. present rights under the WTO (i.e., obligations of other WTO memberstoward the United States) which are reflected in those countries' generally applicable statutes orregulations would not cease to apply to the United States. In either case, appropriate action (in theUnited States, by new legislation) would need to be taken to nullify their reciprocal applicability.

If the United States withdraws from the WTO, its trade relationships with a number ofcountries could continue to be regulated by earlier bilateral compacts with them, substantially lesscomprehensive than the WTO, which are still in force but currently suspended while both parties aremembers of the WTO, and by later agreements not related to the WTO (e.g., free-trade agreements).

Within these parameters, the United States, but also all other WTO members, would be freeof any restraint that is now mandated by WTO rules, if they wished to take any adverse action againsteach other. By acting in such manner, however, they would be open to unrestrained retaliation andcounter-retaliation without recourse to the established WTO mediatory or conciliatory procedure.In this context, U.S. withdrawal from the WTO would result in a major disadvantage for the UnitedStates: the loss of access to the WTO dispute settlement mechanism, with the concomitant loss of potential WTO approval of a WTO-legal retaliatory action on the part of the United States in theevent that the challenged U.S. measure could have been found not to be in violation of WTO rules.

Congressional Activity

The first Section 125 report was included as Chapter II - World Trade Organization in 2000Trade Policy Agenda and 1999 Annual Report of the President of the United States on the TradeAgreements Program , transmitted to Congress on March 2, 2000. The report presented favorably theWTO accomplishments that took place during the preceding five-year review period, but alsodiscussed in detail issues still to be resolved with regard to the future operation of the Organization.

In response, Representative Ron Paul (TX) and several cosponsors introduced on March 6,2000, H.J.Res. 90 to withdraw the Congress' approval of the WTO Agreement, whichwas referred to the Ways and Means Committee. On March 30, 2000, the Committee held a hearingon the subject, (17) andon June 12, 2000 -- being in general agreement with the President's evaluation -- unanimously (35-0)adversely reported (18) the withdrawal resolution. On June 19, 2000, House Committee on Rules held a hearing on the rulefor the consideration of H.J.Res. 90 ( H.Res. 528 ; 106th Congress), whichwas adopted on the same day on a nonrecord vote and favorably reported by that committee as anoriginal measure ( H.Rept. 106-682 ) and adopted by the House on June 21, 2000. Also on June 21,the withdrawal resolution was considered on the House floor and failed of passage on a roll-call vote(56-363). No parallel action took place in the Senate.

As in the year 2000, the Section 125 report due in 2005, in overall content similar to the 2000report, was included as Chapter II -- World Trade Organization, in the U.S. Trade Representative'spublication 2005 Trade Policy Agenda and 2004 Annual Report of the President of the United Stateson the Trade Agreements Program, (19) transmitted to Congress on March 1, 2005. On March 2, 2005,Representatives Bernard Sanders (VT) and Ron Paul (TX) introduced H.J.Res. 27 towithdraw the Congress' approval of the WTO Agreement, which was referred to the Committee onWays and Means. On May 17, 2005, the Subcommittee on Trade held a hearing on the Future of theWorld Trade Organization. On May 24, 2005, the full Committee ordered adversely reported byvoice vote H.J.Res. 27 , and on May 26, 2005, submitted an adverse report. (20) On June 9, 2005, theHouse disapproved withdrawal resolution H.J.Res. 27 by a vote of 338-86.