WTO accessions
The 2014 WTO accession of Yemen: Accession negotiations as an instrument for domestic reform, national security and international cooperation
In 2011 a popular revolution occurred in Yemen leading to the formation of the government which brought the accession process to its conclusion in 2014 following years of long and complex negotiations. From the beginning Yemen’s accession process was envisaged not as an end in itself but as a means to achieve other more imperative objectives including poverty reduction decreasing levels of chronic unemployment and raising levels of sustained development to meet the needs of a rapidly growing population. This chapter gives an account of the accession process focusing on the positive effects of Yemen’s accession to the WTO both as a catalyst for long sought-after domestic reform and as a useful and convenient path to reach higher levels of reform for which the accession process acted as a spur. The aspiration was to create a competitive business environment that would lead to efficient resource allocation and ultimately boost output and productivity as well as increasing the well-being of the populace and reaping the benefits of WTO membership. Joining the WTO does not mark the end of the reform process. There is work post-accession to establish and strengthen different institutions to exercise the benefits of WTO membership for Yemen.
The future of multilateral investment rules in the WTO: Contributions from WTO accession outcomes
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.
Intellectual property rights protection: The plus/minus debate from a least-developed country perspective – sense and nonsense
This chapter asks whether distinctions exist between the original WTO least-developed country (LDC) members and the Article XII LDCs in respect of their obligations under the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPs) Agreement. The chapter examines the evidence from the protocols of accession of the seven Article XII LDCs in the context of the associated treaty dialogue in their working party reports. It finds that distinctions exist and that the commitments accepted by Article XII LDCs in some respects go beyond the original requirements of the TRIPs Agreements and therefore also go beyond the TRIPs obligations of original LDC members. The chapter investigates these WTO TRIPs ‘plus’ commitments and assesses their merits in relation to the sovereign determined domestic reform priorities of the Article XII members and possible implications for the rules-based multilateral trading system. It is argued that the TRIPs Agreement is a minimum standards agreement consisting of both principles and substantive obligations with built-in flexibilities and considerable scope for interpretation and national implementation of its provisions. WTO members may deviate from these minimum standards to the extent that they benefit from longer or shorter periods of transitional relief which may vary according to an LDC member’s status as either an original member or Article XII member. Accession-specific commitments and associated treaty dialogue also show that there is implementation ‘flexibility’ on the basis of pre-determined action plans. The chapter finds that in those instances where Article XII LDCs members have undertaken legally binding commitments to implement WTO-plus obligations the substantive minimum standards of protection of the TRIPs Agreement have been increased. These WTO-plus binding commitments have been used to ‘lock in’ domestic institutional and structural reforms based on domestic development priorities to encourage innovation and attraction of foreign direct investment and they have served a domestic reform purpose to encourage innovation induce foreign direct investment and strengthen the TRIPs Agreement by increasing substantive minimum standards.
WTO accession and accession to the Agreement on Government Procurement: What is the relationship? Why should WTO acceding governments also consider GPA accession?
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.
The 2013 WTO accession of Lao PDR: Specific commitments and the integration of leastdeveloped countries into the global economy
When Lao PDR applied for membership of the WTO in 1997 it used the WTO accession process as a tool to implement its decision to establish a market economy and fully integrate into the world economy. Although at the outset market access was not considered to be the principal benefit to be derived from WTO accession Lao PDR was aware that WTO membership would give its economy additional security and predictability. WTO accession negotiations allowed Lao PDR to apply international best practices and to align its trade policy with the principles of nondiscrimination and transparency. Adaptation to international trade requirements is a longer-term challenge and post-accession challenges remain but the benefits are significant and worthwhile.
Managing the challenge of acceding post-conflict states
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.
WTO accessions: What does the academic literature say?
This chapter takes stock of the recent academic literature on accessions. It focuses only on the analytical work published since 2000 in books academic journals and working papers by key WTO scholars across the world. These contributions are related to the procedural legal economic and institutional aspects of WTO accessions and to the proposals for their reform. Country-specific studies research on the impact of accessions on individual industries and reports on accessions by national and international institutions are not included.
Eurasian Economic Union integration: Timetable, priorities and challenges
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.
The 2012 WTO accession of Russia: Negotiating experience – challenges, opportunities and post-accession approaches
The working party on the accession of Russia was the biggest and longest in WTO accession history. A big power that decides to join an international organisation even if this is the WTO cannot avoid political burdens. No big country can stay apart from world politics. The WTO accession process is tough demanding and complex with no clear rules. This raises questions about length fairness and lack of procedural clarity. Yet it is risky to stay outside the rules-based multilateral trading system. To navigate the WTO accession process upfront it is critical to define a negotiating strategy and plan the end-game well in advance – a process that requires mobilisation of all negotiating resources concentration and focus. Domestically the challenge for the acceding government is to state a clear rationale for accession demonstrate that there will be real benefits from accession or at a minimum that there will be no negative consequences and define red lines to be defended. Negotiating positions should be aligned with requirements for domestic reform. Strong and consistent political will and leadership with support from the parliamentary majority are necessary to conclude any accession negotiations. WTO accession may in itself play neither a negative nor a positive role for domestic economic developments but by becoming a member a country will obtain benefits in the medium and long term through the creation of better terms for its trade within the WTO itself. In this chapter Russia’s practical experience of its accession negotiation the obstacles encountered its assessment of the benefits of accession including lessons learned during the process are described.
The future of Asia: Unleashing the power of trade and governance
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.
WTO accession negotiations: Trends and results in agriculture plurilaterals
Thirty-three members have acceded to the WTO since it was established in 1995. In the majority of these accession negotiations reforms to the agriculture sector have featured as a particularly sensitive issue for acceding governments. Why is this the case? What are the existing members’ expectations of acceding governments in relation to agriculture? And how have acceding governments fared through this process? While agriculture trade accounts for less than 10 per wto_cent of world merchandise trade the agriculture sector particularly for many developing countries can be significant in terms of its contribution to both gross domestic product and employment.
Are there different rules for least-developed countries in a rule-based system?
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.
WTO accession and the private sector: The nexus of rules and market opportunities
A country’s bid for WTO membership can promote a feeling of challenge and uncertainty among members of the private sector as the long-established methods of conducting business are susceptible to undergoing considerable change. In order to overcome the potential resistance to this change acceding governments have responded to the concerns of their businesses by adopting strategies to raise awareness of the long-term benefits of reform during the negotiating period. In this chapter we document some of the benefits related to trade and investment for Article XII members that have undertaken awareness raising strategies and necessary reforms during their accession processes. This chapter underlines that accession commitments which are critical to bringing about domestic policy and regulatory reforms need to be implemented in the right spirit to develop business competitiveness in the long run.
Domestic framework for making and enforcing policies
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.
Export duty commitments: The treaty dialogue and the pattern of commitments
This chapter focuses pursuant to Article XII accession-specific commitments on the evolving disciplines on export duties distinguished from the broader setting of export restrictions. From a rules angle export duties were not subject to disciplines in contrast to import duties that have classically been bound in schedules of concessions and commitments on goods since GATT 1947. Pursuant to Article XI:1 of the General Agreement on Tariffs and Trade (GATT) 1994 (rules for ‘quantitative restrictions’) prohibitions or restrictions on imports and exports such as bans quotas and restrictive licences are generally prohibited except for duties taxes or other charges. In economic operations export duties with price discrimination effects between domestic and foreign producers have resulted in efficiency losses and anti-competitiveness and have undermined economic welfare. In accession negotiations the establishment of disciplines and improvement in economic welfare has framed the treaty dialogue. This dialogue has made evident a range of issues that are systemic and that have involved questions on international economic cooperation revolving around the broader use of export restrictions and their overlap with export duties. This chapter reviews the substance of the treaty dialogue on export duties and identifies the extent and pattern of specific obligations on export duties in the Article XII Accession Protocols deposited thus far. The analysis shows that fifteen Article XII members have accepted accession-specific obligations on the application of export duties. These obligations range across ‘abiding’ by the provisions of the WTO Agreement; ‘binding and/or fixing’ applied export duty rates; and ‘reducing’ ‘eliminating’ or ‘foreclosing’ on the use of such duties. Of precedential value is the modification of the classical 1947 architecture of the GATT Goods Schedule to create a Part V on Export Duties in the context of the WTO accession commitments of Russia in its Goods Schedule. This chapter argues that accession-specific commitments have deepened and extended original WTO rules governing export duties as an instrument of trade policy. The overall systemic effect has been positive namely to constrain reduce eliminate and/or bind hence contributing to clarity and predictability of the rules with pro-competitive effects enhancement of market access opportunities and improvements in economic welfare. The chapter argues that WTO accession-specific obligations for export duties have set the multilateral standard for disciplines in this area. Nevertheless it is worrying that even as the disciplines on export duties are being formulated and strengthened via Article XII members the facts suggest the higher use of such export duties by original members over the period from 2003 to 2009.
The structural reform implications of WTO accession
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.
The 2001 WTO accession of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu: Negotiating experience – challenges, opportunities and approaches post-accession
The economy of Chinese Taipei has always been highly dependent on trade. Nevertheless its WTO accession negotiations were demanding – although the results have been significant and beneficial – involving a total of eleven formal meetings and five informal meetings for the working party and approximately 200 bilateral meetings between Chinese Taipei and thirty different WTO members. The gradual opening of Chinese Taipei’s market exposed domestic industries to global competition necessitating a process of adjustment and adaptation that has ultimately led to economic growth. For the more vulnerable industries the challenges of market liberalisation have acted as an incentive to restructure and reinvent in order to improve competitiveness. Chinese Taipei’s accession to the WTO has also been a catalyst for the globalisation and development of these industries and necessitated a process of adjustment and adaptation that has ultimately led to economic growth. The trade policies and regulations of Chinese Taipei underwent a thorough review and revision as a result of the requirements of WTO membership and this legislative overhaul has been highly beneficial in modernising the trade regime.
Contributions and lessons from WTO accessions: The present and future of the rules-based multilateral trading system
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.
The 2008 WTO accession of Ukraine: Negotiating experience – challenges, opportunities and post-accession approaches
Ukraine embarked on its road to WTO accession in 1992 a year after it had declared its independence. Fourteen years of intense work steep learning persistence political will and flexibility were to follow. Ukraine faced many immediate challenges and tasks in strengthening its independence and creating and establishing the national institutions required by an independent state moving away from a centralised economy and reinforcing foreign policy. Ukraine had to totally eliminate its post-Soviet legacy. A new system of national government and administration had to be established. Democracy the rule of law and a free market became the guiding principles for political social and economic life. WTO accession implied increased competition which turned out to be quite painful for some companies. However the negative scenarios foreseen by some researchers did not occur; in fact the accession offered the national economy new incentives for structural and long-lasting change. However WTO membership is not simply a recipe for future happiness. While it stimulates trade and business environments members must still work within the multilateral system to keep up to date.
Strengthening transparency in the multilateral trading system: The contribution of the WTO accession process
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.