The full text is here. I'll quote some key portions and offer comments.
Lighthizer starts with this:
First, the WTO is obviously an important institution. It does an enormous amount of good, and provides a helpful negotiating forum for Contracting Parties.
That sounds like a pretty basic point, but it's very good to hear him say this. (Although why does he say "Contracting Parties"? Why not "WTO Members"? I can see how someone might speculate that this is part of his longing for the GATT.)
But, in our opinion, serious challenges exist.
I agree with this as well, although I may have different challenges in mind than he does. The biggest one I see is the proliferation of bilateral and regional trade agreements, which constitute preferential trading arrangements and undermine multilateral trade liberalization that is truly free.
He then turns to negotiation vs. litigation:
Second, many are concerned that the WTO is losing its essential focus on negotiation and becoming a litigation-centered organization. Too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table. We have to ask ourselves whether this is good for the institution and whether the current litigation structure makes sense.
The biggest problem with WTO negotiations, in my view, is that most governments are reluctant to liberalize in areas that are sensitive for them. I'll come back to this later.
In terms of litigation, there are lots of rules, and sometimes governments don't follow them. Thus, I wouldn't call the WTO "litigation-centered." It's just that governments violate the rules sometimes, and that leads to complaints.
As for gaining concessions through lawsuits, I'd want to see exactly what cases he has in mind, but certainly you could argue that the U.S. has done this sort of thing as well.
Does the "current litigation structure" make sense? In my view, it's the best international litigation system there is, but some tweaks may be in order.
Next up is development:
Third, we need to clarify our understanding of development within the WTO. We cannot sustain a situation in which new rules can only apply to the few, and that others will be given a pass in the name of self-proclaimed development status. There is something wrong, in our view, when five of the six richest countries in the world presently claim developing country status. Indeed, we should all be troubled that so many Members appear to believe that they would be better off with exemptions to the rules. If in the opinion of a vast majority of Members playing by current WTO rules makes it harder to achieve economic growth, then clearly serious reflection is needed.
5 of the 6 richest countries in the world claim developing country status? That can't be right! Oh, wait, maybe it is. But it's not quite what you think, because those 5 are small, oil rich states plus Singapore. (One point I'd like clarified, though, is in what context exactly these particular countries have claimed developing country status. It's hard to find that kind of information.)
But I do think there needs to be a reconsideration of the classification of certain countries as developing, and also of the extent of the obligations that some of these countries have taken on. In my view, taking on more obligations in core areas such as tariff reductions would be beneficial for economic growth and development.
Finally, the last two points relate to negotiations on the substance of WTO rules:
Fourth, it is impossible to negotiate new rules when many of the current ones are not being followed. This is why the United States is leading a discussion on the need to correct the sad performance of many Members in notifications and transparency. Some Members are intentionally circumventing these obligations, and addressing these lapses will remain a top U.S. priority.
Fifth, the United States believes that much can and should be done at the WTO to help make markets more efficient. We are interested in revitalizing the standing bodies to ensure they are focused on new challenges, such as chronic overcapacity and the influence of state-owned enterprises. Further, we are working closely with many Members in committee and elsewhere to address real-world problems such as SPS barriers.
This takes me back to my earlier point. Governments want to negotiate about things that others are doing wrong, but not about what they are doing wrong. With that attitude, nothing much is ever going to get done at the WTO. It's great that the U.S. is pushing on notifications and transparency, SOEs, and SPS barriers. But if it is not willing to negotiate on farm subsidies and trade remedies, and if it insists on pushing anti-free market policies on intellectual property, I don't see WTO negotiations going very far.