The World Trade Organization (WTO) was established as a result of the Uruguay Round on January 1, 1995, as the successor to the General Agreement on Tariffs and Trade (GATT). Based in Geneva, Switzerland, the WTO administers agreed-upon rules for international trade, provides a mechanism for settling disputes, and serves as a forum for conducting trade negotiations. There are currently 148 WTO members, up from 90 GATT members when the Uruguay Round was launched in 1986 and from 128 members in 1995. The highest decision-making authority in the WTO is the ministerial conference, which consists of trade ministers from all WTO members and occurs every 2 years. The outcome of ministerial conferences is a ministerial declaration that guides future work. The WTO General Council, which consists of representatives from all WTO members, is empowered to make decisions between ministerial conferences. Decisions in the WTO are made by consensus—or absence of dissent—among all members rather than a simple majority. At the fourth ministerial conference in Doha, Qatar, in November 2001, WTO members reached consensus to launch a comprehensive negotiating round, the Doha Development Agenda or Doha Round. The Doha Round is the ninth round of trade liberalizing negotiations since the trading system’s founding in 1947. These rounds result in legally binding international obligations on members both in terms of the trade barriers they are allowed to maintain, such as tariffs (import taxes), and the trade rules (disciplines) they are to abide by. Failure to comply is subject to binding dispute settlement and possible trade retaliation. In the Doha ministerial declaration, WTO members set a number of overall objectives for the round, such as the need to ensure that developing countries, particularly the least-developed, secure growth of world trade commensurate with their needs for economic development (see fig. 1 for a list of the overall Doha objectives). The declaration sets forth a work program that covers 19 negotiating areas, including agriculture, services, and market access for nonagricultural goods (also known as industrial market access). Within each of those areas, WTO members set specific goals. WTO members also established a Trade Negotiations Committee, chaired by the WTO Director General, to oversee the round’s progress. Because the Doha Round is a package, or “single undertaking” in WTO parlance, simultaneous agreement on all issues is required to finalize an agreement. In negotiating the Doha Round on behalf of the United States, the Office of the United States Trade Representative (USTR) is also guided by certain goals, notably the goals outlined by the Trade Promotion Authority (TPA) granted by Congress in 2002. TPA’s goals for USTR negotiators include overall and principal objectives and promotion of certain priorities. In addition to TPA, USTR has its own goals for the Doha Round outlined in a required official notification to Congress in November 2002. (See fig. 1 for a description of the TPA and USTR goals.) In general, USTR states that it plans to use the Doha Round negotiations to strengthen the multilateral trading system, improve the operation of the WTO, and liberalize international markets. USTR places special emphasis on creating new export opportunities for the United States in agriculture, manufacturing, and services. USTR must explain how any resulting agreement makes progress towards TPA goals when submitting it for consideration for congressional approval under TPA’s expedited approval procedures. TPA is set to expire in mid-2005, but provides a procedure for the President to request a one-time extension of the authority to July 1, 2007. The President recently requested such an extension, which is automatic unless Congress disapproves it by June 30, 2005. The Doha declaration also set several goals for the following ministerial conference. However, at the ministerial conference held in Cancun, Mexico, from September 10-14, 2003, WTO ministers were unable to achieve these goals or to bridge wide, substantive differences on individual negotiating issues. They concluded the unsuccessful conference with WTO members sharply divided along North-South (developed-developing country) lines and agreed only to continue consultations and convene a meeting of the General Council by mid-December 2003 to take steps to move the negotiations forward. As we noted in our January 2004 report, the Doha Round of WTO negotiations had missed virtually all of the established milestones for progress during its first two years. The breakdown at Cancun threatened to derail the talks completely. The December 2003 General Council meeting did not result in any agreements, except to resume talks in early 2004. As a result, WTO negotiators missed the original deadline of January 1, 2005, for concluding a Doha Round agreement. Thus, at the time our last report was issued, in January 2004, the Doha Round’s prospects were uncertain. Despite the Doha Round starting 2004 on an uncertain note, political leadership, intensified dialogue, and a series of conciliatory gestures resulted in adoption by WTO members of a framework agreement on key negotiating issues called “the July framework” or “package.” The framework is credited with putting global trade talks back on track, and participants report that they have finally begun to make progress. Recent high-level meetings have sought to focus and accelerate work that leads up to a December 2005 ministerial conference in Hong Kong. The Hong Kong meeting is now hoped to result in decisions that will help determine how ambitious the Doha Round will be in terms of cuts in subsidies, tariffs, and other barriers. But even if negotiators reach the goal of setting the stage for finalizing a Doha Round agreement in 2006, WTO negotiations are about 2 years behind their original target date. Contrary to post-Cancun gloom, 2004 witnessed a resumption of Doha negotiations. Active leadership by the United States and the European Union (EU) proved essential to progress, as did a more interactive process and hard bargaining. Former U.S. Trade Representative Robert Zoellick is widely credited with taking the initiative to resume talks with a January 2004 letter to fellow trade ministers urging them to keep 2004 from being a lost year for the WTO and suggesting various ways to make the agenda more manageable. He followed up on the letter with extensive foreign travel to meet with other WTO nations and rally support for resuming talks. WTO Director-General Supachi also traveled extensively as part of an active outreach effort to WTO member country officials. WTO members reactivated Doha negotiating groups in February 2004 with new chairs intent on ensuring more fruitful member-to-member discussions. Summing up the status after his visits with foreign officials, Ambassador Zoellick concluded that a breakthrough on agriculture was “absolutely the key” to progress. WTO members undertook intensive efforts to reach a breakthrough on agriculture both in Geneva and at high- level meetings among key nations. Observers credited the EU Trade Commissioner Lamy’s offer in May to eliminate export subsidies with providing a tangible incentive to reach agreement on agriculture. Several conciliatory initiatives were also taken to allay specific developing country concerns. For example, a workshop held in Benin emphasized the importance of cotton reform to growth and poverty reduction in Africa. To alleviate poorer countries’ concerns over adjustment costs that were holding back overall trade liberalization, the EU suggested the WTO’s poorest members in Africa and elsewhere should be offered the “Round for Free”—that is, they would benefit from others’ concessions without having to offer much if anything in return. The offer sparked a debate over this differentiation by making it clear that the EU felt the Doha Round offered, and expected, more of other developing countries. Developing countries also took on leadership roles and actions that contributed to progress. After Cancun, there was skepticism in some quarters as to whether the newly-created coalitions of developing countries would be able to maintain cohesion and play constructive roles. However, according to other participants, throughout 2004, these groups articulated their positions clearly and negotiated effectively with other groups, including the industrialized countries. For example, the group of populous developing countries with agricultural interests known as the Group of 20 (G-20) issued a late May paper setting forth principles to govern tariff cuts to help bridge wide differences in agricultural market access. Malaysia played a key role in shaping the novel terms for trade facilitation negotiations. The WTO negotiating process also became more effective, contributing to progress. In our last report, we noted that the WTO’s large number of members made formal gatherings increasingly ineffective and more suitable for speech-making or restating well-known-positions than for advancing the negotiations. Moreover, members often focused their efforts toward influencing the negotiating group chairmen, rather than other members. In early 2004, a series of mini-ministerials and other smaller, informal group meetings were used to foster direct interaction between members and became the real venues for moving the negotiations forward. Negotiating groups on specific issues also adopted informal meetings that featured more direct member-to-member dialogue rather than the prior chair-driven process. Yet, leadership and process improvements alone were not sufficient to attain agreement. Hard work and willingness to compromise were also required. The wide remaining gaps on agriculture and unrealized demands on other issues were apparent at a late June 2004 meeting of the WTO Trade Negotiations Committee. WTO Director General Supachai Panitchpadki urged members then, and at a ministerial among African nations shortly thereafter in Mauritius, to seize the opportunity before them and show the flexibility required to seal a deal. With the July 16 release of a draft text, 2 weeks of day-and-night negotiating—often in intensive small group settings—were begun.