1. Is it breaching copyright to copy and paste material from another website (e.g. one run by an organisation such as the WTO) and not rewrite it? My understanding would be that this is not good practice (a euphemism for "total theft of someone else's work"), even if the source is acknowledged in a reference or elsewhere in the entry.
Usually it is, but there are some exceptions. If it's only a short sentence and there is no natural way to rewrite it, then it's okay. If it's more than that, then it's plagiarism (which in academic circles is considered a more serious offence than mere total theft) unless the source is acknowledged and quotation marks are used. It's often also a breach of copyright, unless the author has allowed copying (as we do, under certain conditions; this might also be the case for WTO, check the source) or the text is quoted in order to comment on it, or various other things.
Laws, treaties and specifications are another matter, commented on above.
2. If I find an instance of this, should I:
a.) edit the item to change the wording and avoid hassles?
b.) report the incident to someone (and if so, whom)?
c.) tuck my head under my armpit, whistle a merry tune and forget the whole thing ever happened?
You should definitely do something. If you're not sure, I would first contact the author. If the author doesn't reply, if you don't agree with the reply, or if you're sure it's a breach of copyright or plagiarism, contact the constabulary (see
[[CZ:Constabulary]] and use the email address listed at the top) and let them handle it. Not everybody knows about this and some simply need to be educated.
If it's found that the text is okay, then that resolves the matter. If not, it will be deleted. Usually, it's best to start from scratch instead of just changing the wording.
I'm afraid your question is too general to give an easy reply, so let me end with a one-sentence piece of advice: the easiest (for you) plan of action that I'd consider acceptable in all situations I can think of is to contact the Constabulary and forget about it.