WTO accessions

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.

Trade multilateralism in the twenty-first century faces a serious test as weakness in the global economy and fast-paced technological changes create a challenging environment for world trade. This book examines how an updated and robust rules-based multilateral framework anchored in the WTO remains indispensable to maximizing the benefits of global economic integration and to reviving world trade. By examining recent accessions to the WTO it reveals how the growing membership of the WTO has helped to support domestic reforms and to strengthen the rules-based framework of the WTO. It argues that the new realities of the twenty-first century require an upgrade to the architecture of the multilateral trading system. By erecting its ‘upper floors’ on the foundation of existing trade rules the WTO can continue to adapt to a fast-changing environment and to maximize the benefits brought about by its ever-expanding membership.

Trade facilitation is central to Africa’s competitiveness in the global economy. Costs related to trade facilitation make up a significant proportion of overall trade-related costs which in Africa are higher than in any other developing region. This acts as a barrier for the integration of African countries into global markets as well as greater intra-African integration. Improving trade facilitation is essential for lowering costs for African agricultural producers as well as supporting the development of higher value-added activities in agribusiness manufacturing and services including participation in regional and global value chains. Diagnostic tools used by the World Bank Group such as the Logistics Performance Index as well as country-specific diagnostics highlight the key challenges faced. The evidence also shows that performance varies with some countries making significant progress on reform programs to improve trade facilitation. With other developing regions having generally more advanced trade facilitation regimes the lessons from these regions can be instructive in designing and implementing reforms in Africa which the World Bank Group is actively supporting at the national and regional levels. A priority for the Bank Group is implementing trade facilitation programs that do more to reduce trade-related costs facing the extreme poor given the concentration of extreme poverty in Africa.

Since the establishment of the WTO on 1 January 1995 no less than 23 States and separate customs territories have joined the multilateral trading system through the procedures of Article XII of the Marrakesh Agreement. These represent a range of economies from global players to important emerging and transition economies and least-developed countries. A relatively large number are at various stages of the accession process. A certain limited number have still to take the decision to seek WTO membership.

This guide has been prepared to assist public understanding of the process of accession to the WTO. The WTO Ministerial Conference and the General Council have the exclusive right to adopt interpretations of the Marrakesh Agreement Establishing the WTO and its Multilateral Trade Agreements. This guide is not intended to and does not provide a legal interpretation of WTO provisions.

Accessions to the World Trade Organization (WTO) generate large amounts of data accumulated during accession negotiations and subsequent domestic reforms. Owing to differences in the structure of acceding economies accession commitments vary across recently acceded or Article XII members in the number of tariff lines bound the level of bindings and the various accession-specific commitments and obligations. The depth of commitments and extent of post-accession implementation influence the effectiveness of benefits derived by new members from WTO accession. In spite of the generally positive economic performance exhibited by all Article XII members disparities exist in their country-specific economic performance in terms of trade foreign direct investment (FDI) and gross domestic product (GDP) growth. This chapter analyses the impact and depth of accession commitments to assess the economic effects of WTO accession. It explores how the data from accessions acquis can assist policy-makers in implementing structural reforms and integrating their countries into regional and global value chains. An Accession Commitment Index is proposed as a basis for a statistical exploration of the impact of WTO accession on a series of variables related to economic growth. Using an extension of the difference-in-difference methodological approach the chapter finds that WTO accession generally has a positive and significant impact on the acceding economy’s trade and economic performance. The results also show that the impact of WTO membership on the trade/GDP ratio in developing countries is significantly higher than in previous studies.

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 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.