WTO accessions
The year 2012: WTO accession of Montenegro – why did we apply to join? Priorities and results
Montenegro’s path to becoming a member of the WTO began in 1966, when the Socialist Federal Republic of Yugoslavia became party to the General Agreement on Tariffs and Trade (GATT). However, pursuant to the constitution of the Federal Republic of Yugoslavia (FRY) in 1992, its application to continue as part of the GATT was not accepted. In 2000, the FRY re-started the process of accession to the WTO, aware that WTO membership would increase its competitiveness in the international market, with the acquisition of the so-called ‘WTO label’. In 2004, Montenegro decided to continue the accession process as an independent customs territory. This chapter describes the process of Montenegro’s accession up to and beyond its becoming a member of the WTO in 2012. With the country’s membership in the WTO, an entirely new chapter begins in comparison to the period prior to accession negotiations. Post-accession, the interest of each member is to be involved as much as possible in the activities of the WTO, and to seek the scope to influence the decisions and rules that will be applied in the future.
Market access goods negotiations: Salience, results and meaning
Trade negotiations and the exchange of concessions on trade in goods have been the cornerstone of the multilateral trading system. This chapter examines the salient features, results and meaning of the schedules of tariff concessions and commitments on goods of Article XII members: what they mean and what they have contributed. We find that the bilateral market access of Article XII members has shaped the landscape of tariff commitments that provide transparency and predictability to today’s merchandise trade relationships. We also found that the large number of post-2001 accessions coincided with an extended period of global growth, particularly among the major emerging economies, fostered by the stability of trade regimes. When we compared Article XII members with General Agreement on Tariffs and Trade (GATT) members on bound tariffs, we found that the comparable bound tariff rates were higher for GATT members, and that a number of original members retained unbound tariff lines for non-agricultural products. Overall, results from the concluded accessions have produced more liberal tariff concessions than those of original WTO members, expanding the market access for WTO members’ exports. The lower barriers to trade in these Article XII members’ markets have improved economic efficiency, increased competition and led to better resource reallocation.
The 2004 WTO accession of Cambodia: Negotiating priorities and experience – growth and integration eleven years later
Cambodia was the first least-developed country to complete negotiations to become a member of the WTO. Its negotiations took place in the context of the Decision on LDC accessions taken by the WTO General Council in December 2002, in which WTO members agreed that they would be bound by certain restraints in dealing with LDCs seeking to join the WTO. Given the constraints that, as an LDC, it faced when entering the negotiations, Cambodia recognised that joining the WTO could play an important part in accelerating its growth and development. This chapter describes Cambodia’s approach to the accession negotiations: its negotiating strategy, the negotiations themselves and their outcome and Cambodia’s post-accession activities. The foundation of all international trading arrangements is the WTO, its concepts and its rules, most of which are carried over into preferential trading arrangements. Being a member of the WTO provides a member’s traders with the transparent and predictable trading environment that they need to prosper. It can truly be said that being a WTO member is one of the main pillars of Cambodia’s successful economic performance.
The macroeconomic implications of WTO accession
This chapter proposes a holistic framework by which acceding governments may evaluate the macroeconomic impact of joining the WTO. Because both acceding governments and WTO members are interested in preserving their own systemic stability and the stability of the multilateral trading system, evaluation of the Accession Package can be achieved by examining its impact on the domestic and external stability of the acceding country. The chapter concludes that, in the long run, the impact should be positive, and should be driven by better resource allocation as the acceding economy opens to international trade, makes deep structural reforms and aligns its institutions and policies with internationally recognised standards. However, in the short term, implementation of WTO commitments may lead to substantial adjustment costs in the public and private sectors. Overall, the design and implementation of WTO accession commitments is a matter of public policy that should aim to promote systemic stability and accelerate domestic reform, while addressing transitional costs.
WTO accessions: A market access perspective on growth – the approach of the European Union
A strong multilateral trading system is vital to developing countries’ longterm interests both for its rulebook and for the market access that it guarantees in all key markets. Markets are increasingly located in developing countries. Indeed, for the first time in recent history, South–South trade outweighs North–South trade, even though barriers to South–South trade are much more significant than those to developed countries’ markets. Through their WTO accession, acceding economies can reap the benefits of more and better access to most world markets – that of the European Union being among the biggest.
Sanitary and phytosanitary measures: Trends in accession plurilateral negotiations
Since 1947, effective levels of average tariff protection have declined, as regulatory protectionism – behind the border – has risen. To a large extent, the greater gains from continued trade opening lie in the area of procompetitive domestic regulatory reform, codified in duly enacted legislation with associated implementing regulations. In the practice of WTO accession negotiations, specific obligations have focused more on regulatory areas of the foreign trade regime. The evidence from thirty-three deposited Accession Protocols shows that there have been ninety-three specific obligations undertaken on sanitary and phytosanitary (SPS) measures. Pursuant to WTO Accession Protocols, these are now integral to the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement). The quantum of citation in WTO jurisprudence in the area of SPS is considerable: since 1995, 42 out of 494 WTO dispute settlement cases have cited the WTO Agreement on Sanitary and Phytosanitary Measures in the request for consultations. This chapter examines the evolution of accession results on SPS from 1995 to 2015, and their contributions to the enhancement of the existing WTO legal and policy framework on SPS. Specifically, this chapter focuses on the increasing importance of SPS regulatory issues in the foreign trade regimes of WTO members, the substance of specific SPS obligations undertaken by Article XII members and their relationship to the WTO Agreement, and the core questions that have emerged on the SPS accession treaty dialogue in the context of customs union agreements. As demonstrated in this chapter, SPS accession commitments undertaken by thirty-three Article XII WTO members have exercised a significant influence on WTO jurisprudence. To a large extent, this has further clarified and strengthened WTO law.
Accession Protocols as building blocks
This book provides multiple perspectives on the process and results from WTO accession negotiations. The perspectives reflected are those of economists, lawyers, academics, chief negotiators of selected original WTO members and Article XII members, chairpersons of WTO accession working parties, professionals from the multilateral institutions of the WTO, World Bank, International Monetary Fund and International Trade Centre. Analysis is combined with ‘stories’, enriched by anecdotes. The detailing of the facts of trade policy drudgery is accompanied by explanatory narratives that bring the situations to life. In many ways, what will strike the reader is that this is a unique book of high value that has emerged from a system that has yielded higher levels of transparency, albeit grudgingly and only when pressed.
A reflection on accessions as the WTO turns twenty
As the WTO celebrates its twentieth year, it is appropriate to ask what WTO accessions have contributed to the rules-based multilateral trading system. What demands have been made by the original and incumbent WTO members on acceding governments? How have the acceding governments fared? This chapter finds that WTO accessions have expanded the reach of the trading system, not only geographically but conceptually, by clarifying disciplines and pointing the way to their further strengthening in future negotiations. Members who have acceded under Article XII of the General Agreement on Tariffs and Trade now account for 20 per wto_cent of total membership of the WTO. Meanwhile, with globalisation, the increased prevalence, complexity and capillarity of international exchange has greatly increased the need for a universal system of trade rules. Crucially, accession negotiations have been used by governments as an instrument for wide-ranging domestic reforms, including by means of far-reaching new legislation that has effectively changed the business landscape. In several instances, the WTO accession negotiating platform has been used for the much broader purpose of facilitating new, closer, geopolitical relationships. As the negotiating arm of the WTO continuously adapts, the success of accession negotiations also points to the opportunities inherent in variable negotiating configurations, such as plurilaterals around specific issues. There is also considerable scope for improving the process of accession negotiations to ensure greater transparency, streamlining and fairness.
WTO Accessions and Trade Multilateralism
Trois questions importantes seront déterminantes pour l'avenir de l'OMC: le règlement des différends, les négociations et l'intégration régionale. Le règlement des différends est généralement considéré comme l'un des succès majeurs de l'OMC durant ses dix premières années d'existence. La conclusion des négociations du Cycle de Doha est l'un de ses principaux défis. L'intégration régionale est désormais au premier plan du débat alors que les accords régionaux prolifèrent et que les décideurs et les universitaires prennent la mesure de leur incidence sur le système commercial multilatéral. Ces questions, et leur interaction, sont traitées par d'éminents spécialistes et professionnels du droit commercial international originaires d'Amérique du Nord, d'Europe et de la région Asie Pacifique. En outre, des sections spécifiques sont consacrées à la région Asie Pacifique, à sa participation au règlement des différends et aux négociations dans le cadre de l'OMC, et aux tendances récentes à une plus grande intégration régionale.AE1:AE10
WTO rule-making: WTO Accession Protocols and jurisprudence
This chapter examines rule-making in the WTO. It explains the legal provisions governing how rules are made in the WTO, and describes WTO rule-making in practice, including through the adoption of decisions by the Ministerial Conference and the General Council and by way of dispute settlement. The role of consensus and voting in WTO rulemaking are discussed. The chapter also refers to different types of rules and decisions – such as ministerial declarations, authoritative interpretations, amendments and waivers – and considers their legal value and effect, as well as how different types of rules or decisions have been interpreted or applied. Finally, it also includes a look at rule-making in the context of accessions, and considers Accession Protocols and working party reports through the lens of WTO dispute settlement.
Article XII Members - The 2001 WTO accession of China: Negotiating experience – challenges, opportunities and post-accession approaches
China is among the Article XII members which joined the WTO after its establishment in 1995. Membership of the WTO has served as a major stabiliser and strong accelerator for China’s economic take-off, although China’s accession commitments were highly demanding. One of the most profound impacts brought about by China’s accession has been that the country fully embraced the rules-based spirit upheld by the WTO. Concepts such as non-discrimination, transparency and the rule of law are no longer trade jargon but common words for the general public. To this end, China conducted the largest legislative reform in its history to establish a WTO-consistent legal system. China’s accession brought tangible benefits to the Chinese people, quadrupling the gross domestic product per capita increasing people’s income and improving people’s livelihood. Household income increased from about US$800 to US$3,300, marking an annual growth of 10 per cent. More than 200 million people were successfully lifted out of poverty. As China benefited from integration into the WTO and the rules-based multilateral trading system, it has shared these benefits with other WTO members, including and in particular least-developed countries.
Facilitating accessions: The role of the working party chairperson
What is the role of the chairperson of a working party? What instruments can he or she use to manage the complexities of the WTO accession process? Typically, WTO accession negotiations are time consuming because of extensive domestic legislative and institutional reforms, which need to be aligned with economic development strategies. These reforms focus on the tough questions of eliminating trade barriers, improving governance, tackling corruption and enforcing the rule of law through WTO-consistent legislation. Formally, the function of the chairperson is to preside over working party meetings. In practice, the chairperson works as part of a team with the WTO Secretariat, led by the Accessions Division, in seeking to identify the balance of interests and what the market can bear, and hence leading the working party to develop a common view of its purpose and shared responsibility.
Developments in the global economy and trading system effects: The transformation of world trade
The Great Recession of 2008–2009 tested the resilience of economies across the world and placed enormous strain on the frameworks underpinning global cooperation. In no arena was the test more severe than in world trade, which, against a background of collapsing output and surging unemployment in the industrialised countries, fell about one-quarter in the first half of 2009, a rate of decline that exceeded the worst years of the Great Depression of the 1930s. Although the rate of recovery remains sluggish and the pace of trade liberalisation has slowed, a relapse into protectionism has been avoided and world trade volumes have surpassed the pre-crisis peak by some 25 per cent. The world trading system seems to have passed this most strenuous of tests. This chapter examines how two great changes in the global economic landscape, deepening trade integration (trade as a means of production as well as consumption), and the rising weight of developing countries, are changing trade and investment flows and creating new challenges for policy-makers.
WTO accessions: A rules perspective on growth – the approach of the European Union
In today’s difficult economic conditions and in the aftermath of the global financial crisis, growth is more than ever the priority of governments. Economic growth, employment, wealth, health and political stability are intrinsically linked notions, and each is essential for the others. Trade and economic integration have been credited as core means to deliver growth. The heads of the EU member states have recently reiterated the importance of free, fair and open trade for growth, and have highlighted the European Union’s objective to promote, among other things, international regulatory convergence. Trade liberalisation is a major structural reform in itself, creating incentives for investments, modernisation and increased competitiveness. Moreover, in a world of increasing production interdependence as a consequence of global supply chains, achieving regulatory convergence is not a question for consideration but an imminent necessity if trade and growth are to be preserved and stimulated. The WTO offers both a beacon for economic reforms and an unprecedented forum for economic partnership.
Disciplining state trading practices: Lessons from WTO accession negotiations
This chapter addresses a number of concerns associated with state trading. What are the applicable WTO rules in this area and have they kept up with the evolving nature of production methods and the changing landscape of state trading enterprises (STEs)? How have state trading practices been approached in WTO accession negotiations? How many WTO members acceding under the provisions of Article XII of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) have accepted specific obligations aimed at disciplining the operations of STEs? What specific patterns have emerged across these commitments and how have they evolved over time? Have the commitments resulting from WTO accession negotiations offered a more effective and forward-looking approach to disciplining STE activities? What is the systemic relevance of STE-related accession commitments and what lessons can be drawn about possible future multilateral disciplines in this area? What has been the contribution of accession commitments relating to transparency in privatisation programmes? STE disciplines have been in the rulebook of the multilateral trading system since 1947, but have not kept track with the evolving nature of state trading operations. State trading plays a significant role in the economies of the majority of Article XII members. The applicability of existing WTO rules in this area has therefore been put to practice in their accession negotiations. The commitments resulting from accession negotiations have produced more comprehensive and forward-looking disciplines, which arguably capture modern-day state trading operations more adequately. Specifically, STE-related accession commitments have evolved over time to extend the scope of obligations to the purchases and sales of both goods and services, contribute further definitional clarity to the term ‘state trading enterprise’ and address the transparency deficit in this area. In addition to steering the operations of acceding governments’ STEs towards conformity with WTO principles, the evolution of these commitments is of systemic relevance to the multilateral trading system, as it points to the possible direction of future disciplines in this area. While not pre-judging the future development of multilateral provisions on state trading, it is argued that Article XII members, which today account for one-fifth of the WTO membership, are well placed to influence the direction of future discussions in the area of STEs.
China - Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum
On 13 March 2012, the United States requested consultations with China with respect to China’s restrictions on the export of various forms of rare earths, tungsten and molybdenum. The request refers to materials falling under but not limited to 212 eight-digit Chinese Customs Commodity Codes and over 30 measures. The request also refers to a number of Chinese published as well as unpublished measures that, operating separately or collectively, allegedly impose and administer export restrictions. These restrictions include export duties, export quotas, minimum export price requirements, export licensing requirements and additional requirements and procedures in connection with the administration of the quantitative restrictions.
China - Measures Related to the Exportation of rare Earths, Tungsten, and Molybdenum
On 13 March 2012, the United States requested consultations with China with respect to China’s restrictions on the export of various forms of rare earths, tungsten and molybdenum. The request refers to materials falling under but not limited to 212 eight-digit Chinese Customs Commodity Codes and over 30 measures. The request also refers to a number of Chinese published as well as unpublished measures that, operating separately or collectively, allegedly impose and administer export restrictions. These restrictions include export duties, export quotas, minimum export price requirements, export licensing requirements and additional requirements and procedures in connection with the administration of the quantitative restrictions.
China - Measures Related to the Exportation of Various Raw Materials
On 23 June 2009, the United States requested consultations with China with respect to China's restraints on the export from China of various forms of raw materials. The United States cites 32 measures through which China allegedly imposes restraints on the exports in question and note that there appear to be additional unpublished restrictive measures.
United States - Measures Affecting Imports of Certain Passenger Vehicle and Light Truck Tyres from China
On 14 September 2009, China requested consultations with the United States concerning increased tariffs on certain passenger vehicle and light truck tyres (subject tyres) from China. The decision was announced on 11 September 2009 following an investigation pursuant to section 421 of the Trade Act of 1974 (19 U.S.C. 2451 et seq.). The USITC determined that there was market disruption as a result of rapidly increasing imports of subject tyres from China that were a significant cause of material injury to the domestic industry. Following a Presidential decision additional duties were imposed on subject tyres imports for a three year period in the amount of 35 per cent ad valorem in the first year, 30 per cent ad valorem in the second year and 25 per cent ad valorem in the third year (the tyres measure). This measure took effect on 26 September 2009.