Free Trade Agreements and the WTO Exceptions (CRS Report for Congress)
| Release Date |
Revised July 2, 2008 |
| Report Number |
RS21554 |
| Report Type |
Report |
| Authors |
Jeanne J. Grimmett, Todd B. Tatelman, and James E. Nichols, American Law Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
World Trade Organization (WTO) members must grant immediate and unconditional most-favored-nation (MFN) treatment to the products of other members with respect to tariffs and other trade matters. Free trade agreements (FTAs) are facially inconsistent with this obligation because they grant countries who are party to the agreement more favorable trade benefits than those extended to other trading partners. Due to the prevailing view that such arrangements are trade-enhancing, Article XXIV of the General Agreement on Tariffs and Trade (GATT) contains a specific exception for FTAs. The growing number of regional trade agreements, however, has made it difficult for the WTO to efficiently monitor the consistency of FTAs with the provided exemption. Negotiations on rules for regional trade agreements are part of the WTO Doha Round; separately, the WTO General Council in December 2006 established a new transparency mechanism for FTAs which provides for early notification by WTO Members of FTA negotiations. The United States is presently a party to nine bilateral or regional trade agreements. While Congress has approved FTAs with Oman and Peru FTAs, these have not yet entered into force. In addition, the Administration has entered into FTAs with Colombia, Panama, and South Korea FTAs, all of which are pending approval by Congress. Implementing legislation for the FTA with Colombia was introduced April 8, 2008 (H.R. 5724, S. 2830), but expedited legislative procedures that would have applied to the House bill were suspended by the House on April 10, 2008 (H.Res. 1092). The Administration has also been involved in FTA negotiations with several other countries, including Thailand, Malaysia, the United Arab Emirates, and the South African Customs Union. This report will be updated as events warrant.
