The 111 th Congress is considering various issues related to the World Trade Organization (WTO). The United States was a major force behind the creation of the WTO in 1993 and the establishment of new rules and trade liberalization that occurred as a result of the Uruguay Round of multilateral trade negotiations (1986-1994). Section 125 of the Uruguay Round Agreements Act ( P.L. 103-465 ), which is the law that approved and implemented the agreements reached during the Uruguay Round, provided that the U.S. Trade Representative (USTR) must submit to the Congress every five years a report that analyzes the costs and benefits of continued U.S. participation in the WTO. Once Congress receives this comprehensive report, any Member of Congress may introduce a privileged joint resolution withdrawing congressional approval of the WTO Agreement within 90 days. The legislative procedure for such withdrawal basically follows Section 152 of the Trade Act of 1974 ( P.L. 93-618 ), which provides for the enactment of joint resolutions disapproving certain trade-related actions. The procedure provides for a (non-mandatory) introduction of the resolution, with mandatory, non-amendable language, and specific expedited (fast-track) legislative procedures. The USTR submitted the report to Congress on March 1, 2010. To date no withdrawal resolution has been introduced in the 111 th Congress in either chamber. The last time such a resolution was considered was in 2005. At that time the Administration submitted its report on U.S. participation in the WTO on March 2 and on the same day, Representative Bernard Sanders introduced withdrawal resolution H.J.Res. 27 . H.J.Res. 27 was privileged and was considered under expedited legislative procedures. On May 26, 2005, the House Ways and Means Committee reported the resolution adversely ( H.Rept. 109-100 ). On June 9, 2005, the House defeated H.J.Res. 27 by a vote of 338-86. A similar withdrawal resolution was introduced in 2000 ( H.J.Res. 90 ; H.Rept. 106-672 ) and was voted down in the House by a 363-56 vote. The withdrawal resolution offered the opportunity for Members to examine the costs and benefits of WTO participation, express the degree of satisfaction with WTO dispute decisions, or debate other aspects of WTO membership. In addition to possibly considering a withdrawal resolution, the 111 th Congress has monitored WTO disputes involving U.S. interests and U.S. laws, China's implementation of its WTO commitments, and U.S. participation in the Doha Development Agenda, the latest round of multilateral trade negotiations. These talks, which began in November 2001 in Doha, Qatar, have been stalemated for a number of years. Most observers maintain that U.S. withdrawal from the WTO is at best highly unlikely for both substantive and procedural reasons. Substantively, the withdrawal of U.S. participation could undermine a multilateral system of trade rules and practices, formulated and implemented under U.S. leadership, that on balance has contributed to increased economic prosperity and security at home and abroad. Procedurally, a withdrawal resolution would have to pass both the House and Senate and then surmount a likely Presidential veto via an override with a two-thirds majority vote. It has also been debated what legal effect the resolution would have if adopted. Yet, this resolution provides an opportunity for members of Congress periodically to debate the U.S. role in an important international institution and the direction of U.S. trade policy, generally. The reasons for the disapproval provision are explained by the House Ways and Means Committee as follows: The purpose of this provision is to provide an opportunity for the Congress to evaluate the transition of the GATT to the WTO and to assess periodically whether continued membership in this organization is in the best interest of the United States. It is the desire of the Committee not to leave this decision totally in the hands of the Executive Branch but to be active in determining whether the WTO is an effective organization for achieving common trade goals and principles and for settling trade disputes among sovereign nations. The purpose of this report is to analyze some of the main issues in the debate on U.S. participation in the WTO and to address some of the criticisms leveled at the organization. To put the issue in perspective, the report begins with a brief history of the world trading system, including its purpose and functions, followed by an examination of the economic benefits and costs of the WTO. The main body of the report addresses selected issues for the United States: the economic costs and benefits to the United States; decisionmaking in the WTO and national sovereignty; the WTO dispute process; and criticisms of the WTO from environmental, health and safety, labor, development, and financial regulation perspectives. Following World War II, nations throughout the world, led by the United States and several other developed countries, sought to establish an open and non-discriminatory trading system with the goal of raising the economic well-being of all countries. Aware of the role of trade barriers in contributing to the economic depression in the 1930s, including severe drops in world trade, global production, and employment, the countries that met to discuss the new trading system considered open trade as essential for economic stability and peace. The intent of these negotiators was to establish an International Trade Organization, which would address not only trade barriers but other issues indirectly related to trade, including employment, investment, restrictive business practices, and commodity agreements. Unable to secure approval for such a comprehensive agreement, however, they reached a provisional agreement on tariffs and trade rules, called the General Agreement on Tariffs and Trade (GATT). The GATT went into effect in 1948. This provisional agreement became the principal set of rules governing international trade for the next 47 years. The GATT was not a formal international organization. The countries signing the GATT were "contracting parties" and not members because the GATT was simply an agreement between governments and not a formal treaty. The GATT did house a small secretariat based in Geneva but it remained very small, especially compared to the staffs of the other international economic institutions such as the International Monetary Fund and World Bank, which were also established following World War II. Based on a mission to promote trade liberalization, the GATT also became the principal set of rules governing international trade. The core principles and articles of the GATT (which are carried over to the WTO) committed the original 23 members to lower tariffs on a range of industrial goods and to apply tariffs in a non-discriminatory manner (the so-called most-favored-nation or MFN principle). This meant that if a country granted a trade benefit or concession to one country (such as a lower tariff on a particular product), it would have to extend the same benefit or concession to all other members of the GATT. By having to do the same for all members, the welfare gains from trade liberalization were magnified. GATT members also agreed to provide "national treatment" for imports from other members, meaning that domestic regulations could not treat foreign products less favorably than like domestic products once they had entered the market. Countries party to the agreement, thus, could not establish one set of health and safety regulations on domestic products while imposing more stringent regulations on imports as way of protecting domestic producers. Although the GATT lacked authority to enforce these rules or principles largely because it was not accompanied by an effective dispute settlement system, it nonetheless brought about a substantial reduction of tariffs and other trade barriers. Table 1 lists the "negotiating rounds" of the GATT and their major accomplishments. The eight rounds listed succeeded in reducing average tariffs on industrial products from roughly 40% to just below 4%, facilitating a fourteen-fold increase in world trade over its 47 year history. When the first round of negotiations was completed in 1947, 23 nations participated and the amount of trade covered by the agreements was around $53 billion. When the Uruguay Round establishing the WTO was concluded in 1994, 123 countries participated and the amount of trade affected was nearly $3.7 trillion. Currently, there are 153 members of the WTO, governing trade flows of $15.7 trillion in 2008. During the first trade round held in Geneva in 1947, a 20% tariff reduction was negotiated. In the 1950s, more countries acceded to the GATT, but the tariff reductions were negligible. The Kennedy Round in the mid-1960s resulted in an average tariff cut of 35%. These cuts were generally across the board, with each country receiving exemptions for sensitive sectors. The Tokyo Round of the 1970s reduced tariffs by another 33%, leading to an average import duty on industrial goods at just under 5% for developed countries. The Tokyo Round also represented the first attempt to reform the international trade rules that had existed since 1947 by including many more issues and policies that could distort international trade. As a result, Tokyo Round negotiators established several new plurilateral codes dealing with non-tariff issues such as antidumping, subsidies, technical barriers, import licensing, customs valuation, and government procurement. Countries could choose which, if any, of these codes they wished to adopt. The majority of GATT signatories, including most developing countries, chose not to sign the codes. The Uruguay Round, which took eight years to negotiate (1986-1994), proved to be the most comprehensive GATT trade round. This round further lowered tariffs in industrial goods and liberalized trade in areas that had eluded previous negotiators, notably agriculture and textiles and apparel. It also extended rules to new areas such as services, investment, and intellectual property. It created a trade policy review mechanism, which periodically examines a member's trade policies and practices.