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WTO Accession: Lessons from Experience

WTO Accession: Lessons from Experience. Carlos A. Primo Braga Senior Adviser, International Trade Department The World Bank. The WTO and the DDA Washington, D.C. April 25, 2005. Benefits of WTO membership.

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WTO Accession: Lessons from Experience

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  1. WTO Accession: Lessons from Experience Carlos A. Primo Braga Senior Adviser, International Trade Department The World Bank The WTO and the DDA Washington, D.C. April 25, 2005

  2. Benefits of WTO membership • Support for strengthening policies and institutions associated with international trade; • Greater stability in commercial policy; • Better and more secure market access to major export markets; • Access to WTO’s dispute settlement mechanism.

  3. Additional claims made about impact of WTO accession • “Seal of approval.” • More inward FDI • Development of a rules-based market economy. • Better governance and government credibility. • Implementation costs of accession—talent and government budgets.

  4. The WTO accession process • As of April 2005, 29 accession applications were under consideration; • Since the WTO Agreement entered into force (1/1/1995), 20 new members acceded to the WTO; • The shortest total time of the accession process was 2 years and 10 months (Kyrgyz Republic) and the longest 15 years and 5 months (China); • Steps include: formal request/establishment of working party/submission of a memorandum on the foreign trade regime/ Q&A/ negotiations/approval (WP/GC)/ signature of protocol of accession/ratification at national level/full membership.

  5. Claims about the WTO accession process • Concerns raised about negotiating accession: • “Price is too high” including being asked to sign WTO+ commitments and WTO- rights. • “Price is growing” • “Negotiations are taking longer to complete” • In sum: “Cost and complexity of negotiations is high and growing” • Some recent economic research points to increased manufactured trade post-WTO accession.

  6. Time required for WTO accession

  7. “Price” of accession • Market access related commitments: • Agricultural products. • Non-agricultural products. • Services. • “Special commitments” • Transition periods • Exemptions

  8. Trend of lower ceiling for bindings (agriculture)

  9. Trend of lower ceiling for bindings(manufactured products)

  10. Other characteristics of binding commitments

  11. Services Commitments

  12. Types of “specific” commitments • Obligations to abide by existing WTO rules. • Obligations not to have recourse to specific WTO provisions (“WTO minus” rights) • Specific transition periods. • Authorizations to temporarily depart from WTO rules. • Obligations to abide by commitments not contained in WTO Multilateral Agreements (“WTO plus”)

  13. Commentary on specific commitments • Significance of these commitments for a rules-based trading system • Potential for creating “second class citizens.” • Difficult to classify • Room for interpretation—especially concerning controversial WTO+ commitments. • Kennettt et al (2005) identified specific examples of potential WTO+ commitments in Bulgaria, Ecuador, and Jordan’s accession.

  14. Treatment of Least Developed Countries • Two LDCs have acceded; 9 are in the process of accession; • General Council decision on 10 December 2002, and its antecedents: • Guidelines on “restraint,” S&D, and transitional periods. • Statements by Cambodia and Nepal.

  15. What to expect • Issues that tend to receive special attention: degree of privatization in the economy; transparency of regulatory environment; and governance (capacity of institutions to implement commitments). • Expectations/trends: • Tariffs: comprehensive binding at levels that do not deviate dramatically from applied rates. • Agriculture: substantive commitments in terms of AMS and export subsidies. • Services: comprehensive coverage. • Rules and disciplines: limited flexibility for phasing in commitments with respect to TRIPS, customs valuation, standards, and SPS regulations.

  16. Potential reforms: areas for discussion • Sharpen legal definition of WTO accession process to: • Focus on trade-related matters. • Reduce likelihood of differentiation between peers—establish presumptions on treatment. • Reduce uncertainty. • Clarify the categorisation of existing and future specific commitments—and, if not, adopt a presumption of parity across peers.

  17. “All periods … are transition periods. We only know one thing with regard to the future: it will not look like the present” Jorge Luis Borges

  18. More information www.worldbank.org/trade cbraga@worldbank.org References: Kennett, M., S.J. Evenett and J. Gage, 2005, Evaluating WTO Accessions: Legal and Economic Perspectives, manuscript Evenett, S.J. and C.A. Primo Braga, 2005, “WTO Accession: Lessons from Experience,” Trade Note (Washington, D.C.: The World Bank), forthcoming.

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