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MINISTERIAL CONFERENCES

Briefing note: Montenegro’s accession to the WTO

On 5 December 2011, the Working Party on Montenegro’s accession paved the way for the country’s membership in the WTO by adopting, ad referendum, the country’s accession terms. Ministers are expected to accept Montenegro as a new WTO Member at the 15-17 December Ministerial Conference. Montenegro will have until 31 March 2012 to ratify the accession package.

As part of its accession commitments, Montenegro has agreed to further liberalize its trade regime and accelerate its integration in the world economy. The country has also pledged to provide a transparent and predictable environment for trade and foreign investment.

From the date of accession, Montenegro has committed to fully apply all WTO provisions. WTO rules, including Montenegro’s Protocol of Accession, would be applied uniformly throughout its customs territory and other territories under its control. Montenegro would, two years after accession, establish an official journal dedicated to the publication of all legislation related to international trade.

“This is the fourth WTO accession this year. This is an important step in making the WTO a more global organization and shows that the WTO and multilateralism remain a priority for trade policy. WTO membership will enhance Montenegro’s capacity to be more competitive in trade through policy and legislative reforms. It will also provide Montenegro with the ’WTO label’, which is so important to attract investors” said WTO Director General Pascal Lamy. 

“This is a big step forward in integrating the multilateral trading system. WTO membership is one of the main priorities of the government. This accession also shows Montenegro’s ability to integrate into the International community” said Dr. Vladimir Kavarić, Montenegro’s Minister of Economy.

Ambassador Andrej Logar from Slovenia, the Working Party Chair, said that Montenegro’s WTO accession was a strong, positive and clear signal about its commitment to engaging with the global economy, in the framework of the rules-based trading system.

 

Montenegro’s most important commitments in detail  

Privatizations and state owned enterprises: Montenegro would report annually to WTO Members on its privatization programme, providing information about enterprises recently privatized or expected to be privatized, as well as relevant legal measures relating to its privatization programme. State-owned or controlled enterprises, and those with exclusive privileges, would make purchases of goods and services in accordance with commercial considerations.

Price control: Montenegro would apply price control measures in a WTO-consistent manner.

 

Market access commitments

Individuals and firms, regardless of national origin, would be able to import and export products, with no requirement of physical presence or investment in Montenegro.

Montenegro would bind “other duties and charges” at zero, from the date of accession.

Montenegro would administer and apply its tariff rate quotas and tariff exemptions in conformity with WTO provisions.

Montenegro would apply internal taxes, including excise taxes and value added taxes, in a non-discriminatory manner to imports from all WTO Members.

Montenegro would eliminate and would not apply quantitative restrictions on imports or other non-tariff measures such as licensing, quotas, bans, permits, prior authorization requirements that could not be justified under the WTO provisions.

If Montenegro would introduce preshipment inspection requirements in the future, they would be temporary and comply with WTO rules.

Montenegro would not apply any anti-dumping, countervailing or safeguard measures to imports from WTO Members until it had notified and implemented appropriate laws in conformity with the WTO provisions.

Upon accession, Montenegro would not apply or reintroduce any export duty.

Any export licensing requirements, export restrictions and control requirements would either be eliminated or applied in conformity with WTO provisions. The non-automatic licence currently needed for the exportation of ferrous and nonferrous scrap metal would be abolished from the date of accession. Some goods, including uranium, nuclear reactors, wastes, substances damaging the ozone layer, arsenic, pharmaceuticals, narcotics, works of art, collector pieces and antiques, would be subjected to export licenses.

Montenegro would not grant or maintain export subsidies or subsidies designed to help domestic production and avoid importing (import-substitution subsidies).

Montenegro’s rules accrediting certification bodies would be based on relevant international standards and be developed using an open, transparent and impartial approach.

Free economic zones established in Montenegro would be administered in compliance with WTO provisions.

Information Technology: Montenegro will join the Information Technology Agreement (ITA) upon accession and will provide duty free treatment to all products covered by the ITA.

Government Procurement: Upon accession, Montenegro would initiate negotiations to become a member of the Government Procurement Agreement with the objective to complete those negotiations by 31 December 2013.

Civil Aircraft: Montenegro would become a signatory to the Trade in Civil Aircraft Agreement, from the day of its accession.

Agriculture: Upon accession, Montenegro would bind all agricultural export subsidies at zero.

Transit of goods: Montenegro would apply all its laws governing transit of goods (including energy) in conformity with WTO rules.

Transparency: Within two years of accession, Montenegro would establish an official journal, dedicated to the publication of all legislation related to international trade. Upon accession, all legislation related to international trade would be published promptly and no laws would become effective prior to such publication in the Official Journal. Interested stakeholders would have no less than 30 days to provide Montenegro with their comments on the published legislations before implementation, except for measures involving national emergency or security, or which publication would impede law enforcement. Upon entry into force of the Protocol of Accession, Montenegro would submit all notifications required by the WTO Agreements.

Trade agreements: Montenegro would comply with all WTO provisions when participating in preferential trade agreements. Montenegro would, upon accession, submit notifications and copies of its Free Trade Areas and Custom Union Agreements to the Committee on Regional Trade Agreements.

 

Market access for goods

All Montenegro’s tariffs are bound.  

Montenegro will apply an average final bound rate of 5.1% (10.8% for agricultural products and 4.3% for industrial products).

Tariff reductions will be phased out during a period going up to 2022 for some products.

 

Market access for services

Montenegro has made specific commitments in all 11 core services sectors such as  business services including accounting/auditing/bookkeeping, architectural, medical/dental, veterinary, computer and related services, R&D services — communication services, including telecommunication services — construction and related engineering services —  distribution services — educational and environmental services — financial services (insurance and banking) — health services — tourism and travel — recreational, cultural and sporting services — and transport services.

Montenegro would ensure that its licensing procedures would not act as a barrier to market access. Montenegro would issue a list of all organizations responsible for authorizing, approving or regulating service activities. Licensing procedures and conditions would be published in the official journal.

Since January 2007, representation by foreign lawyers before administrative and judicial tribunals has been subjected to reciprocity. Conditions for market access with respect to legal services would not be more restrictive, subsequent to accession.

 

General information about Montenegro
(Source: WTO and World Bank — 2010)

  • Income level: Upper middle income
  • Population: 631,000
  • GDP (million current US$)   4 004
  • Rank in world trade — goods exports: 159
  • Rank in world trade — goods imports: 145
  • Rank in world trade — services exports: 115
  • Rank in world trade — services imports: 157
  • Merchandise exports, f.o.b. (million US$): 471
  • Merchandise imports, c.i.f. (million US$): 2 211
  • Commercial services exports (million US$): 989   
  • Commercial services imports (million US$): 386   
  • Main destination of goods exports: European Union (55.9%), Serbia (28.2%), Bosnia and Herzegovina (7.3%), Albania (2.5%) and Turkey (1.5%).
  • Main destination of goods imports: European Union (37.7%), Serbia (26.2%), Bosnia and Herzegovina (7.5%), China (5.4%) and Croatia (4.8%).
  • Services mostly exported and imported: transportation and travel.
  • “Ease of Doing Business” rank (out of 183 economies): 56 (2011)
  • Life expectancy at birth: 74 years (2009)

 

Background information about Montenegro’s accession process

Montenegro applied for WTO membership on 10 December 2004.

The Working Party was established on 15 February 2005.

The chair of Working Party is Ambassador Andrej Logar (Slovenia).