WTO accessions

On 5 April 2019 the WTO circulated the panel report in the case brought by Ukraine in “Russia - Measures Concerning Traffic in Transit” (DS512).

The process leading to WTO accession is complex, requires solid domestic coordination mechanisms in the acceding country, a rethinking of its economic and trade policies and significant domestic structural reforms. It often implies the creation of new institutions designed to coordinate and implement the policies at the national level, as was the case in Georgia.

Obligations in accession protocols that go beyond the multilateral trade agreements are commonly referred to as ‘WTO-plus’ obligations. This chapter reviews the so-called WTO-plus obligations and argues that even though they are perceived to expand the existing obligations under multilateral trade agreements, they in fact do not create two classes of membership within the World Trade Organization (WTO). First, all accession processes are conducted on a case-by-case basis, and thus result in different obligations for each acceding government. Second, the WTO legal system is evolving continuously; therefore, to adopt new rules and advance the legal system, obligations cannot remain the same as in previous accessions. Third, non-discrimination remains one of the fundamental principles of the multilateral trading system. Accessions to WTO follow this principle and hence WTO-plus obligations have been and will continue to be set on a non-discriminatory basis. At the same time, WTO-plus obligations help upgrade the rules-based multilateral trading system. They fill gaps in the WTO rules on anti-dumping, countervailing and safeguard regimes, and they advance WTO rules by promoting plurilateral agreements.

Over the past twenty years, the rules-based global economy has been subject to a dynamic process of transformation. The trading environment has been characterized by shifts in the balance of economic power, emerging structures and rapid changes in global and regional alliances. Since its establishment in 1995, the WTO has sought to adapt to these global trends. The 2017 Trade Facilitation Agreement (TFA), the 2015 Nairobi Decisions on Agriculture, the 2015 expansion of the Information Technology Agreement (ITA) and twenty years of cumulative WTO accessions acquis are all part of this process of constant adaptation by the WTO to a rapidly changing environment. However, after the Seattle Ministerial meeting in 1999, free trade agreements (FTAs) and regional trade agreements (RTAs) mushroomed. The 'spaghetti-bowl’ consequences and the continuing proliferation of preferential trade agreements (PTAs) and counter-PTAs have created challenges and opportunities for the rules-based multilateral trading system. Several questions have been raised, revolving around the compatibility and the discriminatory and trade diversion effects of such agreements. Are these agreements building blocks or stumbling blocks for the multilateral trading system? Moreover, the emergence of mega-regional RTAs (MRTAs), in particular the Trans-Pacific Partnership (TPP), have called into question, in some quarters, the power and relevance of the WTO at large. This chapter examines the core question of whether mega-regionalism (and FTAs by implication) poses an existential risk to the multilateral trading system and argues that the answer is ‘no’. The negotiating results from FTAs, including in their mega-regional forms, and trade multilateralism can coexist in a constructive, healthy and competitive relationship and both are essential for the governance of the multipolar twenty-first-century global economy. To substantiate this conclusion, the chapter reviews the WTO accessions acquis and compares it to the provisions of the TPP, without pre-judging its future. The comparative analysis is conducted across several areas: market access; trade rules (bilateral/plurilateral/multilateral); trade negotiations as an instrument for domestic reforms; and discriminatory effects. The results of the analysis point to areas of significant complementarity and mutual supportiveness between WTO accession acquis and the TPP, and different degrees of trade liberalization in certain sectors. The accessions acquis demonstrates a process of mutually supportive coexistence between bilateral and plurilateral negotiations and the multilateral legal and policy framework of the WTO. The scope and quality of accession negotiations results are comparable to results from PTAs, including MRTAs, and go further to show greater robustness and durability.

The world economy is showing signs of recovery after several years of lacklustre performance, although major policy uncertainties may easily upset this fragile trend. To jumpstart economies and trade after the financial crisis of 2008–9, governments across the world employed a traditional mix of fiscal, monetary and structural policies. These efforts helped to prevent a deeper crisis but fell short of pulling the world out of a period of stagnation in 2012–16. Trade, in particular, slowed relative to its historical performance and to overall economic growth. Meanwhile, political and social pressures have led to inward-looking policies in large countries. Other challenges – from civil and military conflicts to scattered terrorism – have also contributed to this inward turn. Against this background, this chapter discusses the need for a new and more flexible global economic architecture. It would require reforms at all levels, starting with revamping the structural foundations for growth and trade, applying solid, ground-level macroeconomic policies in individual countries, and rebuilding the upper floors of multilateral cooperation, i.e. upgrading it and making it more adaptable and responsive to the requirements of the twenty-first century. In the trade area, key pillars to support this structure include innovative mechanisms of trade liberalization in both new and traditional areas, increased inclusiveness of trade, recognition and financing of adjustment costs, effective communication on trade, a redefined role and functions for the WTO, upgraded multilateral rules and strong leadership. With radical changes needed, WTO accessions have already contributed, and could contribute even more, to each of these pillars.

WTO membership has long been an integral part of the overall strategic objectives of Afghanistan. For a post-conflict, landlocked and least-developed economy, joining the WTO was perceived as an opportunity to achieve economic stability, improve regional security and cooperation, alleviate poverty and achieve peace. Afghanistan has been on an eleven-year journey to integrate into the multilateral trading system. Its WTO accession process, described in this chapter, was a learning experience in which Afghanistan’s governmental and academic institutions, private sector and civil society all upgraded their capacity, using this accession as a catalyst to accelerate structural reforms and strengthen market instruments. The enormous reforms accomplished in this process have allowed Afghanistan to build a more favourable trade and investment regime, with effective laws and trade policies based on the WTO agreements. This chapter sheds light on the accession process and the accomplished domestic transformation and identifies ways forward to maximize the benefits of Afghanistan’s WTO membership as a tool for cementing its long-standing commitment to an open economy, rule of law, good governance and international cooperation.

This chapter explains how accession negotiations have helped to further the agricultural reform process by upgrading and deepening the existing multilateral rules on trade in agriculture. It provides a broad overview of the existing multilateral disciplines in the area of agriculture, as contained in the Agreement on Agriculture (AoA). Using the experience of the thirty-six concluded accessions, the chapter suggests that a number of commitments, such as extensive market access commitments, ambitious domestic support commitments and comprehensive bindings with regard to export duties, helped establish high benchmarks vis-à-vis the undertakings of the original members of the World Trade Organization (WTO). In market access, the commitments of acceded members are primarily in the form of reductions in tariff bindings, with a very limited use of tariff rate quotas. In domestic support, the commitments of the acceded members have been negotiated based on the respective recourse to such support during a recent three-year period, dependent on the timing of the individual accessions. These commitments are generally more ambitious than the corresponding commitments of the original members under the AoA, which were derived based on the domestic support policy framework existing in 1986–8. Similarly, in the field of export subsidies, the acceded governments’ ambitious efforts to eliminate these highly distorting subsidies helped to create a strong momentum in the broader agriculture negotiations, leading to the eventual agreement on the global elimination of agricultural export subsidies at the Nairobi Ministerial Conference in 2015.

Trade multilateralism, i.e. global trade based on negotiated and agreed rules by the World Trade Organization (WTO) membership, faces various challenges. Slow economic growth, changes in the balance of global economic power and inequitable distribution of growth benefits have called into question the benefits of globalization and the rules-based global order. Trade has been the target of a barrage of criticism from many quarters and has become a lightning rod for policy failures, weaknesses in international cooperation and the adverse effects of rapid technological advances on jobs and incomes. In this tortuous and uncertain environment, concerted policy actions along several strategic axes are needed to put trade back on track and make trade multilateralism work for all once again. First, trade multilateralism must be used as a tool to restart global economic growth and job creation, while managing uncertainty and risks. Second, a global trading system anchored in the WTO – with strong, well-enforced rules that continue to adjust to promote competition and a level playing field – remains critical. Third, the new realities of the twenty-first century compel an upgrade of the multilateral trading system by the building of its upper floors1 on the foundation of the existing trade rules and accumulated acquis and expertise. Such a system would preserve the fundamental set of rules at the core of the multilateral system, abolish or revise obsolete rules, which have not stood the test of time, and adopt new rules that would reflect new realities. Fourth, accessions to the WTO are arguably the most vibrant component of the multilateral trading system and have already made important contributions to each of these policy directions. The objective of this book is to draw on recent accession experiences to distil the impact of accessions on the constantly evolving architecture of the multilateral trading system.

Seychelles became a member of the World Trade Organization (WTO) in 2015 after an accession process that took almost twenty years to complete. Since the relaunch of its accession process in 2009, Seychelles has undertaken significant trade reforms as part of a broader economic modernization agenda. These trade reforms were anchored on the reform commitments taken by the government as part of accession to the WTO. Although it is still too early to evaluate the full impact and benefits of WTO membership, this chapter offers insights into the negotiation process and weighs the costs and benefits of WTO accession from the perspective of a small country. The main lessons for small economies aspiring to become WTO members are that: (i) WTO accession is a long and arduous process that makes heavy demands on a small country’s resources; (ii) small and developing countries should not expect any special treatment from larger and older members of the WTO; (iii) accession provides a good platform for modernization of a country’s trade regime; and (iv) accession can have a positive impact on a country’s ratings among rating agencies, international financial institutions and private investors.

Geographical indications are signs used to identify the origin of goods characterized by a given quality or reputation that is essentially linked to their geographical origin. They preserve traditional knowledge, foster the growth of local production and satisfy the needs of increasingly quality-conscious and demanding global consumers. Governments acceding to the World Trade Organization (WTO) have reformed their rules on geographical indications in order to achieve WTO consistency. In doing so, they have added value to the multilateral trading system by clarifying the scope of WTO obligations in the field of geographical indications in the following ways: minimum standards of protection; requirements for application to geographical indication protection; the relationship between geographical indications and trademarks; and the scope of substantive provisions with regard to geographical indications. This heightened understanding of the regulation of geographical indications has set new standards in the multilateral trading system. Acceding economies have followed international best practices and sometimes gone a step further by undertaking commitments that exceed those in effect among incumbent WTO members. Rule-making on geographical indications has also helped to prevent disputes on related issues. The lessons learned in the WTO accession process can serve other developing countries and emerging economies to unravel the legal and economic potential of geographical indications.

On 14 July 2016, Liberia joined the World Trade Organization (WTO) as its 163rd member. Liberia’s accession negotiations were done in 804 days since the appointment of the Chief Negotiator after stalling for over 6 years and 10 months since Liberia first applied for Accession. This unprecedented efficiency was made possible by a combination of factors. First, Liberia’s determination at the highest political level allowed it to conduct accession negotiations with commitment and focus, while adhering to a time-bound roadmap. Speed and efficiency of accession-related reforms were essential, as the country had endured an almost simultaneous double shock – the Ebola epidemic and a sharp drop in commodity prices. Second, WTO members appreciated this determination and were ready to move faster than usual in the negotiating process to help put the country on track with trade-related reforms, in particular those aimed at overcoming the twin shocks. Third, the WTO wished to include Liberia’s accession among the deliverables for its Tenth Ministerial Conference in Nairobi, the first ministerial conference to be held in Africa. The outcome was an accession that is now commonly referred to as the Liberian Model. An accession is concluded based on rational individual choices constructed around a vision for modernizing a country and its economy. This chapter highlights Liberia’s transformation and its challenges, and discusses why WTO accession continues to be essential in facilitating Liberia’s economic diversification agenda.

Economic transformation is an important pre-requisite for African countries to maximize the benefits of globalization. The development outcomes of the transformation process are conditioned on the one hand by the level of inclusiveness and on the other by the sustainability of the development pathways, among other factors. Building on experiences since the new millennium, in which Africa has witnessed rapid and sustained high levels of economic growth, and informed by the policy discourse that accompanied the formulation of the Common African Position on Sustainable Development Goals, African countries have charted a transformation path in which they aspire to play to their comparative advantages.

This chapter evaluates the impact on competitiveness of reforms undertaken by recently acceded countries and draws lessons for African countries pursuing the goal of becoming emerging economies. By comparing reform outcomes before and after accessions relative to control groups using the difference-in-difference evaluation method, the chapter concludes that the recently acceded members improved their international competitiveness, although the overall impact was relatively small and differed substantially across economies, economic sectors and time. African economies aspiring to become emerging economies could build on the experience of recently acceded countries by designing long-term reform agendas similar to the accession reform packages, locking them into a credible policy framework through a series of domestic and international agreements, frontloading reforms to gain credibility and persisting in their implementation, balancing short-term costs with long-term benefits and learning from Article XII peers who have gained substantial experience in managing complex reforms.

This volume, the work of more than twenty authors, grew out of the Fourth China Round Table and the WTO’s Tenth Ministerial Conference, two seminal events held back-to-back in Nairobi, Kenya, in December 2015. The work presented here provides comprehensive, substantive insights of the African trade policy and development context in which these two meetings took place.

The obstacles to deeper African integration are great, but the potential gains for development and poverty reduction warrant a sustained effort to overcome these challenges. High trade barriers between countries have been reflected in trade that is more oriented toward distant markets than neighbouring African countries – it is often easier for Africans to trade with the rest of the world than with each other. The potential exists for greater intra-African trade in ways that would have significant, positive impacts on the lives of millions living in poverty. Barriers to intra-regional trade need to be tackled, along with complementary efforts to ensure that the poorest people can access the opportunities created. The World Bank Group is working in a number of different areas to support this effort and is ready to do more.

International trade provides ample opportunities for the economic development of countries and regions. The fall in trade costs – communication and transportation costs, greater access to international capital markets, regional cooperation and, last but not least, the decrease in trade barriers – has supported global trade and output expansion over the last decades. Emerging opportunities and challenges resulting from technological, economic and political developments differ, however, from region to region. Historical experience shows that much of the progress in economic growth and development also depends on the readiness of local business and governments to rapidly adapt and seize opportunities.

Structural transformation is imperative for Africa’s economies. An unprecedented policy unanimity has emerged amongst African government and business leaders that to achieve sustained growth and development, Africa must industrialize and secure a greater share of the benefits of its participation in global value chains. This requires further advances in a programme for ‘development integration’ that simultaneously combines market integration with purposeful industrial development intervention and cooperation to strengthen regional value chains, underpinned by efforts to develop and rehabilitate cross-border infrastructure for greater connectivity across Africa.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Foreign direct investment and trade are increasingly interlinked due to the deepening integration of trade and production networks. Today, there is an ever-increasing percentage of imports in a country’s production. Responding to this increase, some countries have sought to limit the percentage of imports in their production by requiring that foreign investors use locally produced inputs, as an aspect of implementing priorities in development plans and/or strategic industrial policy. These policies and priorities have also been complicated and exacerbated by protectionism, whereby countries discriminate blatantly in order to promote local industries with policies that grant more favours to local producers and/or products and materials. All these practices impact negatively on international trade by distorting the conditions for fair competition. Although different rules have been developed at an international level to streamline these practices, currently there is no single comprehensive framework to govern them at the multilateral level. Despite this, WTO members, through accessions, have negotiated with acceding governments to refine and improve extant investment-related rules in the WTO. This chapter argues that WTO-specific outcomes, as in deposited Accession Protocols, have contributed to improving significantly the predictability of the investment regulatory laws and policies of Article XII members, reinforcing existing investment-related rules on trade in goods and services, and enhancing the business-friendliness of WTO rules and the relationship with the private sector (including through expanded opportunities for investment), by binding, for example, their status quo policies and rules, and accession-specific obligations codified in domestic law and regulation.

The WTO Agreement on Government Procurement (GPA) is unique in its duality as an international trade agreement that promotes and preserves market opening and as an instrument for the promotion of good governance. The recent successful renegotiation of the GPA has enhanced its coverage so that it now provides access to markets valued at US$1.7 trillion annually. In addition, the text of the GPA has been effectively modernised, making it more relevant, economically, and simplifying its implementation. Although not a substitute for domestic procurement reforms, it is a catalytic and reinforcing factor for reforms that enhance transparency and competition internally – thereby yielding important gains for governments and citizens in terms of value for money in national procurement activities. Participation in the GPA can also promote inward foreign direct investment by signalling a country’s commitment to good governance and the fair treatment of all players under national legislation. The review in this chapter of the evidence from WTO and GPA accessions indicates that the WTO accession negotiations of Article XII members are often used to leverage increased GPA accessions. Specifically, of the members that have acceded to the WTO pursuant to Article XII of the Marrakesh Agreement Establishing the WTO (WTO Agreement), twenty-two have undertaken GPA-related commitments, and seven subsequently joined the GPA. Out of the ten WTO members that are currently seeking accession to the GPA, nine undertook commitments related to GPA accession at the time of their WTO accessions, pursuant to Article XII of the WTO Agreement. The chapter concludes that, even though WTO accession and GPA accession are formally separate steps, the basic policy decision as to whether to join the GPA is often made long before GPA accession negotiations are started, at the time of WTO accession. This chapter provides countries and other WTO members considering taking on accession commitments with a strengthened understanding of the relevant benefits and costs.

This chapter posits that leaving WTO accession in the hands of trade experts or commercial specialists within the acceding government can be unwise. Accession to the WTO goes far beyond the remit of the trade, commerce and/or foreign ministry, and even beyond the responsibilities of the minister. In order to conclude an accession, what is required of the acceding government will involve many, if not most, ministries, call upon governmental agencies and other authorities and may very well include both regional and municipal levels of government. The acceding government must expect to make hard policy choices. Poorer developing countries are likely to come across particular challenges and solutions. Given the demanding nature of this process, it is important that the acceding government is entirely convinced, before embarking upon the process, that it has the right motivations and expectations in wishing to become a member of the WTO.

This chapter focuses on the objectives of the Eurasian Economic Union (EAEU) of the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, Kyrgyz Republic and the Russian Federation within the multilateral trading system. The EAEU has become one of the largest trading blocs in the world, with a land area of more than 20 million square kilometres and a population of more than 176 million people. This chapter analyses the history of Eurasian integration and presents its current status, as well as the prospects of the Eurasian Economic Union for 2015.

Half a century ago, the future of Asia looked quite bleak. Civil and regional conflict ravaged many parts of the region. China was still closed to the world, and in the throes of its Cultural Revolution. India and Pakistan were recovering from wars, Indonesia and the Philippines were under authoritarian rule, and several Central Asian countries were mere shadow states of the former Soviet Union. Since then, Asia has surprised the world: Japan and the rest of East Asia have rapidly become industrialised, and successive years of high growth have been attained by other Asian countries, notably China, India and several countries in the Association of Southeast Asian Nations. This growth has been driven in great part by rapidly expanding trade, with the liberalisation of China in the late 1970s and of India in the 1990s, greater integration among North-east and Southeast Asian countries, and the collapse of the Soviet Union.

In July 2012, the WTO General Council agreed on a set of new and improved guidelines to facilitate and accelerate negotiations on the accession to the WTO of least-developed countries (LDCs). The process of acceding to the WTO is complex, time-consuming and resource-intensive for candidate countries, and for LDCs, which have limited institutional and administrative capacity, in particular. The WTO accession process is very much a political process, and requires countries to undertake far-reaching domestic reforms in order to be in a position to implement WTO rules from day one of membership, as well as to benefit from MFN market access from WTO members and vice versa. The prolonged accession process is designed to enable acceding LDCs (and others) to acquire the knowledge and expertise to negotiate not only the terms and conditions for their membership, but also to function as viable members of the rules-based system. This chapter examines the enhanced guidelines and asks whether the WTO needs to improve the procedures for the benefit of LDCs and of the WTO. It examines how the WTO accession process and procedures, as well as the scope of the reforms it requires, compare to EU considerations in the process of its enlargement, and argues that, while the enhanced LDC accession guidelines have made an important contribution, some additional steps may need to be contemplated in the future. However, before a further enhancement is contemplated, it must be understood that the accession process, and the substance of WTO accession negotiations, in all serious institutions, are based on a partnership. This is a fundamental lesson from all successfully completed accessions and enlargement processes. The process is neither unilateral nor automatic.

A core objective of accession results is to establish a legal foundation for the conduct and management of trade policy based on the rule of law. Implementation of accession commitments hinges on the existence of an effective domestic framework for making and enforcing policies. Customarily, this is described in the third chapter of working party reports. Twenty-eight of the members that acceded pursuant to procedures in Article XII of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), have undertaken a total of fifty-five accession-specific commitments in this regard. The uniquely definable pattern that has emerged from WTO Accession Protocols confirms the uniform applicability of the WTO Agreement throughout and across the entirety of the customs territory of the new member, the exclusive authority of central governments to implement and enforce WTO rules, the strengthening of due process and the rule of law, and the precedence of ratified international treaties over domestic legislation, in many instances. These commitments are integral to the WTO Agreement and are enforceable under the WTO Dispute Settlement Understanding. Although normative and standard, they confirm the long-standing accession practice that a range of original members have not confirmed and from which several deviate. This chapter studies the specific accession-specific commitments in the domestic framework for making and enforcing policies. It also investigates the relationship between Accession Protocols and domestic legal systems and asks whether original members undertook similar obligations.

This chapter looks at the relationship between the WTO accession process and structural reforms in developing countries. It finds that developing economies that are in the process of acceding to the WTO commit to more policy reforms (proxied by prior actions in the context of the World Bank’s development policy lending) than developing countries that are already members of the WTO or that have not applied to become members. It also finds that, for almost all developing economies acceding to the WTO, the country risk, measured by a composite indicator of political, financial and economic risk called the International Country Risk Guide, and the policy and institutional indicator, measured by the World Bank Country Policy and Institutional Assessment, significantly improve when a country achieves WTO membership compared with at the beginning of the WTO accession process.

WTO accession still holds a magnetic attraction for non-members. Why is this so, in spite of the challenges faced by the organisation, conclusions by analysts of deadlock in the Doha Development Agenda, assessments that trade policy action has shifted elsewhere to preferential trade arrangements (bilateral and regional trade agreements, including more recently, ‘mega-regionals’) and repeated forecasts about the WTO’s ‘irrelevance’ and ‘unravelling’? Systemically, what have WTO accessions contributed to the rules-based trading system through their processes, procedures, best practices and results? What effects have accession negotiations had on domestic reforms in Article XII members? Are there broader lessons for the WTO? This chapter demonstrates that, after the coming into force of the WTO in 1995, results from WTO accession negotiations served to update trade rules continuously (including influencing WTO jurisprudence), enlarged market access opportunities, provided acceding governments with a critical multilateral instrument for legislation-based domestic reforms, and supported geopolitical and geo-economic transformations from centrally planned to market-based economies, the rule of law and good governance. The changes associated with these results were evident from the 1989 fall of the Berlin Wall and the 1991 collapse of the Soviet Union. The evidence strongly suggests that the accession process and its results have established a legal framework for international cooperation, contributed to the global economic transformation of command to market economies and provided a platform for Article XII members to implement their development and modernisation priorities. Overall, the legal, economic and trade policy impact from the deposited Accession Protocols and the process of accession negotiations per se have not only reinforced existing rules and raised the systemic bar, with associated catalytic effect for domestic reforms, but have also staked out the parameters for the future of the rules-based trading system, including a future WTO work programme.

What specific obligations on transparency and notifications have been negotiated as part of the terms of accession to the WTO since 1995? What patterns and trends have emerged with regard to transparency and notification requirements in WTO accessions over time? What is the implementation behaviour on notification requirements of the states or separate customs territories that have negotiated their terms of accession, pursuant to Article XII of the Marrakesh Agreement Establishing the World Trade Organization and joined the WTO in the period 1995 to 2013? How does the compliance of Article XII members on notification requirements under the WTO Agreements compare to the compliance behaviour of original members? By reviewing the empirical data available from more than thirty completed WTO accessions since 1995, representing about one-fifth of the WTO membership, this chapter examines each of these questions, assessing the extent to which the negotiated accession commitments on transparency have affected the existing transparency and notification obligations under the WTO Agreements. The results of this review suggest that the specific transparency and notification obligations resulting from accession negotiations have safeguarded and reinforced existing transparency requirements embedded across all WTO Agreements. They have also resulted in positive implementation behaviour, with regard to notification requirements, by WTO members that joined the WTO between 1995 and 2013, and have thus improved the compliance rate of the overall WTO membership. The number and scope of specific transparency commitments negotiated in WTO accessions underscores the importance that the WTO membership attaches to transparency, one of its founding principles.

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.

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.

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.

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

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.

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.

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.

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.

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.