WTO accessions
Driving Economic Growth through Trade Policy Reforms and Investment Attraction in the Open World Economy: The Experience of China
China achieved a great leap forward in its economic development in the last thirty years supported by profound trade policy reforms significant infrastructure investment and utilization of foreign capital under the overarching state policy of reform and opening-up. Shares of manufactures and services in production have kept increasing and remarkable export performance has been scored during this period. Additions of labour and capital as well as competitive costs have largely shaped the economy’s comparative advantages up to now and they are likely to be replaced by increasing domestic consumption productivity growth and a greater reliance on services as the main factors sustaining future economic growth albeit at a slower pace. Nonetheless opening-up and domestic policy reforms going hand-in-hand will continue to play a critical role. The question that this paper addresses from China’s perspective may serve as a reference for the African economies seeking to establish a strong manufacturing base and to realise economic take-off with the help of a clear opening-up strategy and a proper trade policy toolkit.
Trade Rules, Industrial Policy and Competitiveness: Implications for Africa’s Development
Industrialization is one of the cardinal priorities for economies in dynamic transformation from a commodity base to a diversified value-added development stage. In major African economies as in other economies worldwide industrial policy is resurgent and back at the centre of economic policy. The sectors in focus revolve around manufacturing textiles and clothing footwear automobiles infrastructure information technology products petrochemicals aluminium smelting agro- and cut flower industries. African economies actively applying industrial policy include Algeria Egypt Ethiopia Kenya Madagascar Mozambique Nigeria Rwanda and South Africa.
From Marrakesh to Nairobi: Africa – A Force for the World Trading System: From the Past Twenty Years to the Next Twenty Years
Morocco’s membership of the GATT and WTO has been part of an overall strategy of the Government of the Kingdom of Morocco at the instigation of the late King Hassan II to introduce a package of institutional and socio-economic reforms which sought mainly to modify and diversify the structure of the national economy optimize the allocation of its resources and ensure its integration into the world economy. Being a Member of the Multilateral Trading System is also an expression of the government’s wish to integrate more fully into the world economy by anchoring its reforms in the legal primacy of an international agreement rather than just in domestic legislation as reaffirmed by the Constitution adopted in 2011. In doing so Morocco made opening up its economy a firm and irreversible commitment.
Trade Policy Trends in Africa: Empirical Evidence from Twenty Years of WTO Trade Policy Reviews
Trade liberalization has been a key component of economic development and transformation in the global economy since the middle of the last century and is a leading force in fostering globalization and connectivity in the twenty-first century. Trade reform has been on the agenda of African economies first under the IMF-supported structural adjustment programmes of the 1980s and the early 1990s and subsequently pursued within the multilateral legal and policy framework of the WTO. Following two decades of rapid trade growth in Africa the evidence suggests that significant barriers to trade remain within Africa impeding its integration to regional and global value chains. Considerable scope exists for the use of trade policy to accelerate and deepen sustained economic development and transformation. African economies should embark on the next generation of trade and associated structural reforms more aggressively and ambitiously.
Integration into Global and Regional Value Chains – How Is It Done? The Experience of Lesotho in the Textiles and Apparel Sector
Lesotho is a landlocked least-developed economy and a member of the Southern African Customs Union (SACU) the oldest customs union (CU) in the global economy. Forty per cent of the population lives under the poverty line. The economic base is narrow reliant on the textiles and apparel industry (for 59 per cent of total exports) subsistence agriculture remittances regional customs revenue and a degree of manufacturing. The apparel industry and agriculture constitute the backbone of the economy and the main employer. Faced with Lesotho’s geo-economic circumstances and development challenges the trade and economic response of government has been strategic. Domestic economic policy and structural reforms accompanied by a policy of economic diversification trade openness and integration have been pursued. A trade development plan was carefully designed for active integration into regional and global value chains. These measures have yielded significant welfare gains and economic livelihood dividends. Trade and economic policies are reviewing the next generation of reforms inter alia in the sectors of mining electricity and tourism which face challenges but have potential for growth. This chapter identifies and discusses the specific steps in the trade policy plan for Lesotho’s successful integration into the textile and apparel value chain specifically and more broadly into a global value chain.
Building Capacity in Africa to Facilitate Integration into Global Value Chains: Contributions from the ITC
While Africa’s share of global value-added trade has increased significantly during the past 20 years connecting African small and medium-sized enterprises (SMEs) to value chains and turning the support for greater intra-African trade into a reality remains challenging. Ensuring that the trade discourse is fully integrated into this development story is critical and countries especially those that have recently acceded have to be supported to recognise and take advantage of the global trading system and their WTO membership. To place a spotlight on trade-led growth for SMEs the International Trade Centre (ITC) launched its SME Competitiveness Outlook in 2015. This flagship publication identified three key determinants of SMEs’ ability to integrate into value chains: their ability to compete connect and change. The ITC’s capacity-building interventions which have a strong focus on African countries are centred on helping SMEs become more competitive and connect to value chains to drive the continent’s sustainable economic development.
Investment and Trade Rules: Increasing the Stock of African Foreign Direct Investment Flows
Trade can be a powerful engine for development. But harnessing trade for development in Africa requires investment to foster lasting economic transformation. Investment therefore is key to unlocking the potential of trade-led growth. While flows of foreign direct investment (FDI) into Africa paint a familiar picture of the dominance of extractive industries the reality is more nuanced and promising. The fact that FDI stocks in Africa are geared towards the burgeoning services sector offers immense potential for countries in Africa to access and climb regional and global value chains; however unless interrelated policy challenges are addressed Africa will not be able to optimize the benefits of FDI. Combined with efforts at national and regional levels the WTO should be better used by African countries to properly exploit the trade-investment nexus for the achievement of the United Nations’ Sustainable Development Goals.
African Union Priorities at the WTO
The African Union’s (AU) priorities at the WTO reflect the priorities of the WTO’s African member states that the multilateral trading system should contribute to the economic development of their economies through the elaboration of equitable fair and development-friendly rules. The position of the AU is consistent with the recently adopted United Nations Sustainable Development Goals (SDGs) which also see trade as being critical to achieving the goal of eradicating extreme poverty everywhere. The AU’s priority is therefore to see WTO outcomes that serve to facilitate the structural economic transformation and development of developing and least-developed African countries in line with the vision of the African Union’s Agenda 2063.
African Perspectives on Trade and the WTO
Twenty-first century Africa is in a process of economic transformation but challenges remain in areas such as structural reform governance commodity pricing and geopolitics. This book looks into key questions facing the continent such as how Africa can achieve deeper integration into the rules-based multilateral trading system and the global economy. It provides a range of perspectives on the future of the multilateral trading system and Africa's participation in global trade and underlines the supportive roles that can be played by multilateral and regional institutions during such a rapid and uncertain transition. This volume is based on contributions to the Fourth China Round Table on WTO Accessions and the Multilateral Trading System which took place just before the WTO's Tenth Ministerial Conference in Nairobi in December 2015.
WTO Accessions and Trade Multilateralism
What have WTO accessions contributed to the rules-based multilateral trading system? What demands have been made by original WTO members on acceding governments? How have the acceding governments fared? This volume of essays offers critical readings on how WTO accession negotiations have expanded the reach of the multilateral trading system not only geographically but also conceptually clarifying disciplines and pointing the way to their further strengthening in future negotiations. Members who have acceded since the WTO was established now account for twenty per wto_cent of total WTO membership. In the age of globalization there is an increased need for a universal system of trade rules. Accession negotiations have been used by governments as an instrument for domestic reforms and one lesson from the accession process is that there are contexts which lead multilateral trade negotiations to successful outcomes even in the complex and multi-polar twenty-first-century economic environment. The contributions in this volume illuminate the pressing question regarding why some trade negotiations fail some stall and others succeed.
Energy-related rules in Accession Protocols: Where are they?
Energy issues have not been systematically discussed by WTO members in the multilateral trading system. This is owing to the fact that there is no rule on energy per se in WTO agreements. Yet all tradable energy goods and services are covered by the General Agreement on Tariffs and Trade 1994 and the General Agreement on Trade in Services respectively. With energy security and climate change high on the global agenda there is increasing interest in how to deal with energy-related issues during WTO accession negotiations particularly given that several energy-producing countries energy-transit countries and energy-consuming countries are currently in accession negotiations. Following the examples of earlier accessions the ongoing negotiation dossiers would need to negotiate energy-related specific obligations in their terms of accession. This chapter identifies five key themes relating to energy in the WTO Accession Protocols of the Article XII members and explains the rationale of how these topics relate to trade in energy based on the existing WTO rules. Further it categorizes similar energy patterns and trends for Article XII members. Finally the chapter draws lessons for future WTO rule-making by arguing that these ‘updated’ rules on energy found in Article XII members’ Accession Protocols will have the potential to guide the envisaged regular work of the WTO on future rule-making on trade in energy thereby contributing to international energy cooperation in the context of the rules-based multilateral trading system.
The WTO and the global economy: Contemporary challenges and possible responses
The high economic growth rates that have been achieved by many countries in Asia have led to a contemporary world economy that is multipolar. This has had repercussions for the WTO as well as for other multilateral organisations. The deadlock in the WTO’s Doha Round has led the United States and the European Union increasingly to turn their attention towards the negotiation of preferential trade agreements including so-called ‘mega-regional’ partnerships. This chapter discusses some of the implications for – and possible responses by – the economies that have the greatest stake in a well-functioning multilateral trading system. These economies may find themselves caught in the midst of disagreements between the major trading nations with few prospects of participating in the mega-regionals. The chapter argues that these economies – including those that have acceded to the WTO since its creation – need to take a more proactive leadership role in the WTO to enhance the transparency of what is done in the ‘megaregionals’ and to facilitate the pursuit of rule-making initiatives in the WTO on a plurilateral basis.
A podium perspective: Experiences and challenges of chairing a working party
What is the perspective from the podium? what are the challenges that face the chairperson of an accession working party? The role of a chairperson of an accession working party is tough and challenging and the functions of a chairperson can only be successfully exercised if he or she has the trust and confidence of parties involved. This role is best understood as that of a referee assisted by the Secretariat. The accession of the Russian Federation demonstrated that ‘the real work in WTO accession negotiations is done “beyond the gavel”. If the chair could only work with the gavel the accession process would get nowhere.’ Critical to any progress in the complexity of accession negotiations is political will and the ability to compromise as geopolitics may add a thick layer of complexity to the process. The reality of accession negotiations is that all participants have to be accommodated.
Services market opening: Salience, results and meaning
This chapter is structured around three questions. What advances have been made on services market opening? what have been the specific market access commitments of least-developed countries (LDCs)? And what is the progress made with domestic regulation disciplines? This chapter examines the extent to which the services-specific commitments and domestic regulatory disciplines of Article XII members differ from those undertaken by original WTO members at similar levels of development. Although no single indicator exists that can be used to make this comparison given the textual nature of specific commitments as opposed to the numerical properties of tariffs several other possible parameters exist which could be used alone or in combination to assess such departures. The evidence and patterns in Article XII members’ services market access commitments and regulatory state-of-play and advances are examined. The trends and patterns in the depth and sectoral coverage of commitments are identified. The results from accession negotiations on the rules are reviewed with particular focus on how they compare to the envisaged disciplines on domestic regulation under the General Agreement on Trade in Services Article VI:4. Finally the performance of Article XII LDC members in their WTO accession services negotiations is reviewed. Overall the evidence indicates that Article XII members’ services bindings go further than those of original WTO members.
The 2013 WTO accession of Tajikistan: Experience of a landlocked economy in a changing regional economic configuration
Tajikistan was part of the Great Silk Road a system of caravan routes connecting Eurasian countries between the second century BC and the fifteenth century AD. The development of trade throughout Central Asia encouraged the people of this region to adapt to the demands and requirements of consumers thousands of kilometres away both in western Europe and in China. Tajikistan’s principal rationale for seeking WTO membership was to gain access to new markets and secure the General Agreement on Tariffs and Trade/WTO right of freedom of transit reinserting Tajikistan into trading routes comparable to its location in the historic Great Silk Road system. By becoming a member of the WTO in 2013 Tajikistan is opening up new markets for its goods just as it did several centuries ago. Tajikistan sought WTO membership to sustain domestic reforms. Domestic reforms entailed enactment repeal and/or amendment of approximately one hundred laws and regulations. In the experience of Tajikistan successful negotiating factors included inter alia a technically competent negotiation team support from WTO members strategically defined negotiating objectives accompanied by a strategy for cooperation. Post-accession considerations should be part of an accession strategy. This chapter outlines Tajikistan’s road to the WTO.
Original Members - WTO accessions from a member’s perspective: Safeguarding the rules-based system
Forms of collective action and balanced commitment through negotiations were the foundation of the General Agreement on Tariffs and Trade (GATT) and the structure for its daily work. These remain at the centrepiece of work in the WTO in a system structured on the balance of rights and obligations. GATT contracting parties established the principles of balance and reciprocity trade liberalisation and a system of mediation and dispute settlement for mutual resolution of GATT provisions. From this base expansion of membership pursuant to accession negotiations has required a commitment to accepting GATT/WTO rules resulting from previous negotiations. WTO accession supports applicants’ efforts for economic reform and integration into world markets. This is one of the most important benefits of membership. Although challenging accession negotiations and the implementation of WTO provisions support important economic goals such as sustainable growth the promotion of high-tech industries attraction of foreign direct investment raised living standards and global assertion of national trade interest.
The evolution of the GATT/WTO Accession Protocol: Legal tightening and domestic ratification
Where are the legal roots of WTO Accession Protocols? How much was carried over from the General Agreement on Tariffs and Trade standard and practice? What customary practice governs the preparation and approval of accession decisions and protocols? What is the current substantive standard and basic architecture of Accession Protocols? Are there unique provisions in Accession Protocols that have emerged in twenty years of WTO accession history? To what extent do Accession Protocols come into play in the context of WTO dispute settlement? By comparing the empirical data contained in the WTO Accession Protocols with preceding GATT Accession Protocols this chapter offers waterfront coverage of WTO Accession Protocols from the GATT baseline. The chapter shows that although rooted in its GATT predecessor base and remarkably consistent over time some unique provisions have been incorporated into the architecture of the WTO Accession Protocols since 1995. Because Accession Protocols become integral parts of WTO Agreement after they come into force the chapter argues that the specific ‘terms and conditions of accession’ in WTO Accession Protocols have had a direct and salutary impact on the entirety of the WTO Agreement through its tightened safeguard and upgrade. The chapter concludes by arguing that the evidence suggests that the WTO Agreement has been expanded by the absorption of the Accession Protocols over the course of the last twenty years and that the effect on the WTO Agreement has been significant rather than marginal.