CANCÚN WTO MINISTERIAL 2003: BRIEFING NOTES
MEMBERS AND ACCESSION Becoming a member of the WTO
Any state or customs territory having full autonomy in the conduct of its trade policies may join (“accede to”) the WTO, but WTO members must agree on the terms.
> Director-General’s letter to journalists
> The Doha Development Agenda
> Market access, non-agricultural products
> Intellectual property (TRIPS)
> Trade and investment
> Trade and competition policy
> Transparency in government procurement
> Trade facilitation
> Rules: anti-dumping, subsidies
> Rules: regional agreements
> Dispute settlement
> Trade and environment
> Electronic commerce
> Small economies
> Trade, debt and finance
> Trade and technology transfer
> Technical cooperation
> Least-developed countries
> Special and differential treatment
> Members and accession
> Some facts and figures
> Jargon buster
How to join the WTO: the accession process back to top
The process starts with the applying country submitting a formal written request to accede (under Article 12 of the WTO Agreement). The request is considered by the General Council, which sets up a working party to examine the application — each application has a separate working party. The working party eventually makes recommendations to the General Council, including a “protocol of accession” at the end of the negotiations. The working party is open to all WTO members.
Broadly speaking the application goes through four stages:
- First, “tell us about yourself” The government applying for membership has to describe all aspects of its trade and economic policies that have a bearing on WTO agreements. This is submitted to working party members in a memorandum covering all aspects of its trade and legal regime, that forms the basis of the working party’s fact-finding exercise.
- Second, “work out with us individually what you have to offer”. When the working party has made sufficient progress on principles and policies, parallel bilateral talks begin between the prospective new member and individual countries. They are bilateral because different countries have different trading interests. These talks cover tariff rates and specific market access commitments, and other policies in goods and services. The new member’s commitments are to apply equally to all WTO members under normal non-discrimination rules, even though they are negotiated bilaterally. In other words, the talks determine the benefits (in the form of export opportunities and guarantees) other WTO members can expect when the new member joins. (The talks can be highly complicated. It has been said that in some cases the negotiations are almost as large as an entire round of multilateral trade negotiations.)
- Third, “let’s draft membership terms”. This is the substantive part of the multilateral membership negotiations. Once the working party has completed its examination of the applicant’s trade regime, and the parallel bilateral market access negotiations are complete, the working party finalizes the terms of accession. These consist of commitments to observe WTO rules and disciplines as soon as the new member joins, or in some cases with transitional periods. They appear in a draft working party report, a draft membership treaty (“protocol of accession”) and lists (“schedules”) of the member-to-be’s commitments.
- Finally, “the decision”. The final package, consisting of the report, protocol and lists of commitments, is presented to the WTO General Council or the Ministerial Conference. If a two-thirds majority of WTO members vote in favour, the applicant is free to sign the protocol and to accede to the organization. In many cases, the country’s own parliament or legislature has to ratify the agreement before membership is complete. The applicant becomes a member of the WTO 30 days after it has notified the WTO Secretariat that it has completed ratification.
Readiness and development level back to top
Questions are often raised as to when a country can become a member of the WTO and whether it joins the WTO as a developing or a developed country. These questions are an inherent part of each membership negotiation.
Basically, the questions of a country’s readiness, and its level of development, involve it being given certain flexibilities when it implements the WTO’s rules and disciplines — a matter determined in the membership negotiations. The accession process can vary in length and can take several years to complete. Much depends on the speed with which the applicant government is able to adjust its trade and legal regime to the requirements of the WTO’s rules and disciplines.
Because each working party takes decisions by consensus, WTO members must agree that their individual concerns have been met and that all outstanding issues have been resolved in the course of their deliberations.
Least-developed countries back to top
On 10 December 2002, the General Council agreed a new range of measures enabling the world’s poorest countries, the least-developed countries (LDCs), to join more quickly and easily.
Member governments agreed to be restrained in seeking concessions and commitments on goods and services from least-developed countries negotiating membership. They agreed to apply “special and differential treatment” to those countries as soon as they become members, and to grant transitional periods in specific WTO agreements, taking into account individual development, financial and trade needs. The purpose is to enable them to implement and comply with the rules. (Many WTO agreements allowed transition periods for developing and least-developed countries that were already members when the agreements took effect and the WTO came into being in 1995. Since then, new members have often agreed to implement the provisions as soon as they joined, without a transition period.) In the General Council decision, WTO members also agreed to provide technical assistance.
The new members back to top
Since the WTO was established on 1 January 1995, 19 new members have joined the WTO through working party negotiations. These are: Albania, Armenia, Bulgaria, China, Croatia, Ecuador, Estonia, Former Yugoslav Republic of Macedonia, Georgia, Jordan, Latvia, Lithuania, Kyrgyz Republic, Moldova, Mongolia, Oman, Panama, Saint Kitts and Nevis, and Chinese Taipei. (A number of others were originally GATT members who formally joined the WTO after 1 January 1995 because of delayed ratification and other formalities.)
Since the last Ministerial Conference in November 2001, the WTO has received four new members: China and Chinese Taipei, whose membership was approved by the Ministerial Conference itself; and Armenia and the Former Yugoslav Republic of Macedonia, whose membership was approved by the General Council.
The applicants back to top
With 27 governments still in the queue for membership of the WTO, accession will remain a major challenge for WTO members in the years ahead. These are the 27. Their applications are currently being considered by WTO accession working parties. An exception is Vanuatu, whose membership awaits a final decision by its government and then by the General Council. Each of these applicant governments is an observer in the WTO.
Lao People’s Democratic Republic
Serbia and Montenegro
Some current accessions negotiations back to top
Of the countries applying to join the WTO, these have been more active in their negotiations in the last few months, are close to an agreement, or have aroused more public interest:
Algeria’s working party was established on 17 June 1987 and met for the first time in April 1998. Topics under discussion in the working party include: agriculture, the customs system, state trading, transparency and legal reform, and intellectual property. Algeria has made its initial offers on market access in goods and the discussion on terms of entry is underway. The fifth meeting of the working party took place in May 2003. At that meeting, the working party chairperson, Ambassador Carlos Pérez del Castillo of Uruguay, said that efforts will be made to try to finish the negotiation so that Algeria would become a member of the WTO in 2004.
On 22 July 2003, Cambodia’s working party completed its work (although some of the documentation still needed tidying up). Cambodia is now set to meet its ambition of having its membership approved in Cancún, making it the first least-developed country to join the WTO through a working party negotiation since the WTO came into being in 1995. Cambodia has also benefited from the 10 December 2002 General Council decision setting guidelines to help least-developed countries joint the WTO more quickly and easily.
A tight schedule was agreed at the working party’s 16 April 2003 meeting, aiming for Cambodia’s WTO membership negotiation to end in July, and allowing the possibility for all the formalities to be completed by the Ministerial Conference. The April meeting saw substantive discussion on a first version of the working party’s draft report.
Earlier this year, Cambodia had revised its market access offers, further reducing proposed tariff ceilings and adding more service sectors. In return, Cambodia asked for more technical assistance to help it adjust, although it agreed not to make this a condition for opening its markets. In the meantime, several members still had to complete their bilateral negotiations with Cambodia on particular market access issues that concern them, but many said they were close to agreement.
The Cambodian working party was established on 21 December 1994. Cambodia submitted a memorandum on its foreign trade regime in June 1999. Replies to questions concerning the memorandum were circulated in January 2001. Bilateral negotiations on market access in goods and services continued in 2002 and 2003.
Nepal is now set to be the second least-developed country to join the WTO through a working party negotiation, following hard on the heels of Cambodia. The working party completed its work, marking the end of the membership negotiations, including those on market access for goods and services, on 15 August 2003, less than a month before Cancún.
Nepal’s working party was established on 21 June 1999 and held its first meeting in May 2000. Nepal made the latest offer on market access for goods and services in May 2003. The draft working party report was circulated in mid-June 2003.
Russia’s working party was established on 16 June 1993. Bilateral market access negotiations on goods and services have started. In the working party, topics under discussion include: agriculture, the customs system (and customs union and other trade arrangements with CIS states), excise taxation and national treatment, import licensing, industrial subsidies, national treatment, sanitary/phytosanitary measures and technical barriers to trade, trade-related investment measures, intellectual property, and services. Discussion has started on a second draft of the working party’s report.
Russia is the biggest economy outside the WTO and the accession negotiations are intense and detailed. One of the most important aspects of this negotiation is a wide ranging programme of legislative reforms, which the Russian Parliament plans to complete this year. This set of new or amended laws includes a Customs Code, intellectual property protection, regulation of foreign trade activity, foreign currency regulations and many more. The aim is to create a modern, market oriented and predictable legal environment in tune with WTO agreements and principles and Russia’s own plans for economic reform.
A well-defined programme of bilateral, plurilateral and multilateral meetings for 2003 is underway. Many of these bilateral meetings involve Russia negotiating market access agreements for goods and services with its trading partners. Other meetings have focused on dealing in more detail with some contentious issues in the negotiation such as agriculture, import quotas, and energy, in particular natural gas. At this stage it is very difficult to forecast when the negotiations will end and when Russia will join the WTO.
Saudi Arabia’s working party was established on 21 July 1993. Its last meeting was in October 2000. Bilateral market access negotiations on goods and services are continuing on the basis of revised offers. Topics discussed in the working party include: agriculture, preshipment inspection, sanitary/phytosanitary measures and technical barriers to trade, intellectual property, and services. The working party is also focusing on a draft report and protocol of accession.
Ukraine’s working party was established on 17 December 1994. Topics under discussion include: agriculture, the customs system, excise and value added tax, import licensing and other non-tariff measures, industrial subsidies, national treatment, services, state trading, transparency and legal reform, and intellectual property. Bilateral market access negotiations are continuing on the basis of revised offers in goods and services. Work has started on a “check-list of issues”, i.e. specific concerns that members have raised, and Ukraine’s replies to the individual questions or request for clarification. The working party’s last meeting was on 25 February 2003.
Viet Nam reported progress in its membership negotiations, when its working party met last on 12 May 2003, but several delegations said much more needs to be done. The working party chairperson told members that “success will depend on a quantum jump” in efforts if Viet Nam is to meet its goal of joining by 2005.
The working party was established on 31 January 1995. Bilateral market access contacts are generally in early stages. Several members say they need Viet Nam to circulate lists of the import duties it currently charges (the “applied tariff schedule”) before they can negotiate market access properly.
Topics under discussion in the working party include: trading rights for foreigners and foreign companies, technical barriers to trade, sanitary and phytosanitary measures, quantitative restrictions on imports, customs valuation and the customs system, import licensing, agricultural subsidies, intellectual property, investment policies and subsidies, state trading and the broader economic regime.
Current WTO members back to top
146 governments, as on 4 April 2003, with date of membership (“g” = the 51 original GATT members who joined after 1 January 1995; “n” = new members joining the WTO through a working party negotiation):
Albania 8 September 2000 (n)
Kenya 1 January 1995