HANDBOOK ON ACCESSION TO THE WTO: CHAPTER 4
The accession process — the procedures and how they have been applied
WTO document WT/ACC/1 describes the procedures governing the negotiating phase in less detail than the procedures for the initial fact-finding or the concluding stages in which the results of the discussions are formalized and adopted. The main aim of these procedures is to define a framework for negotiations between WTO Members and the acceding government.85
Negotiations on terms of accession take place in four main parts: multilateral negotiations in the Working Party on the rules to be accepted; plurilateral negotiations among interested parties on agricultural domestic support and export subsidies (which sometimes also deal with SPS and TBT); bilateral negotiations between interested parties on concessions on goods; and bilateral negotiations between interested parties on specific commitments on services.
Members of the Working Party may hold bilateral meetings with the applicant at any stage of the work. These bilateral meetings may cover any matter connected with the accession of the applicant. In the initial fact-finding phase, some members may want to hold bilateral meetings on complex issues which are more efficiently discussed bilaterally than in the Working Party. Members may also want to make their expectations known on matters being discussed in the Working Party, to explore the reactions of the applicant and to reach common understandings on commitments that it is prepared to undertake. Bilateral meetings are not attended by the Secretariat and much of this process is confidential and not publicly documented.
Bilateral meetings, plurilateral meetings and the multilateral meetings of the Working Party therefore proceed in parallel. However, all agreements reached at the bilateral and plurilateral levels must be multilateralized before the negotiations are concluded and the Working Party must concur with their inclusion in the accession package consisting of the draft Report, including a draft Protocol and Decision, and draft Goods and Services Schedules. These documents are prepared by the Secretariat and presented to the Working Party for adoption.
The following four sections describe the procedures followed in the negotiations on rules, agricultural support and export subsidies, tariffs and services.
Negotiation on Rules back to top
The suggested procedures simply state that the move from the fact-finding phase to the negotiation phase of the work takes place when the examination of the foreign trade regime is sufficiently advanced and it is understood that fact-finding work on the foreign trade regime and the negotiating phase can overlap and proceed in parallel.86
The decision to move to examine commitments in the rules area is taken once Working Party members are satisfied they have established an adequate factual basis. Progress in the other areas of the negotiations may also be a factor. The negotiations on rules are generally conducted multilaterally in the Working Party although concerns on particular issues may be settled bilaterally and brought to the Working Party for consideration in the shape of proposed texts.
It has become standard practice for applicants to submit legislative action plans outlining the work programme underway to amend their legislation, as well as target dates for implementation. As the accession process advances, governments are requested to revise and update these plans. Legislative action plans dealing with specific subjects may also be required, in particular when Working Parties wish to reach a clear understanding of what remains to be done to bring the applicant’s legislation and practices into full conformity with each of the main provisions of WTO agreements. These plans now tend to be submitted earlier in the accession process than in the past.
When it is established that applicants need to introduce new legislation, some interested Members invite legislation to be presented to them in draft form. There is of course no obligation to comply with this request and governments sometimes prefer to present legislation once it has been enacted. However, it has been argued that presentation of the draft legislation would be helpful to acceding governments, as it would ensure that they did not ask their parliaments to pass texts which, when brought to the Working Party, were found unacceptable on the grounds that they did not conform to WTO requirements. While this procedure has not always been followed, it has now become common for draft legislation to be presented, sometimes informally, for comments by interested members.
It is often a member of the Working Party that initiates the negotiations on commitments by putting forward proposed texts for inclusion in the draft Report. Applicants may also propose texts if they wish to expedite the work, for instance by offering to amend specific measures which they recognize as being not in accordance with WTO requirements.
Negotiations are considered advanced when the Secretariat is asked to prepare the text of a draft Report. When taking this decision, progress in other areas of the negotiations, including the bilateral goods and services negotiations, will be taken into account, so that the work proceeds in parallel. The end result of the negotiation on rules on each topic is a text for inclusion in the Working Party Report which often includes commitments accepted by the acceding government.
Negotiation of tariff concessions back to top
Negotiations on tariff concessions are conducted bilaterally on the basis of offers and requests. The procedures suggest that the negotiations may be initiated either by the applicant or by the Members. However, in practice, Members tend to wait for the acceding government to submit an initial offer of proposed bound rates before requesting bilateral negotiations and submitting requests. These offers are more usefully submitted in electronic form, rather than on paper. They are sent to the Secretariat which then circulates a notice to members of the Working Party, indicating that it is available. In a few cases applicants have made their offer available to interested Members on request. The usual format for the initial tariff offer, including notes on the way in which the format for scheduling has been used, will be found in Annex 8.1.
The record shows that, typically, initial tariff offers are tabled between the first and the second Working Party meetings at about the same time as initial offers on services. To the extent possible, offers on goods and services should be tabled at the same time so that the negotiations on these two subjects can move forward together. Offers are made available to all interested Working Party members through WT/ACC/SPEC/* series of WTO documents.
The tabling of market access offers triggers the bilateral negotiations. Members wishing to engage in the tariff negotiations contact the applicant to arrange bilateral meetings, which are normally held in the margins of Working Party meetings. Delegations may either arrange these meetings themselves or request the Secretariat to do so. The number of Members taking part in these negotiations varies considerably from one accession to another. The largest WTO Members always take part in these negotiations and a few other Members take part in nearly all. Geographical factors will lead some Members to negotiate with some applicants. Many Members will take part in the negotiations with the largest acceders.
The number of rounds of bilateral negotiations depends on the quality of the offers and the complexity of the issues involved.
Members who negotiate on both goods and services usually conclude both at the same time. However, some Members may negotiate only on goods or only on services. Bilateral agreements recording the agreed tariff concessions are signed and transmitted to the Secretariat. The format for these is at Annex 8.2. Three signed originals are necessary, as one has to be sent to the Secretariat and the others kept by the applicant and the Member concerned. The bilateral agreements submitted to the Secretariat remain confidential.
After bilateral agreements have been completed with all interested WTO Members, the Secretariat uses these agreements, and the commitments resulting from the consultations on agricultural domestic support and export subsidies (see below), to prepare a single, consolidated draft Goods Schedule. This multilateralizes the results of the bilateral tariff negotiations. In accordance with the most-favoured-nation (MFN) principle,87 if an applicant has agreed to bind its tariff on an item at 20 percent in its negotiations with one Member and at 10 percent in its negotiations with another, the rate in the Schedule will be 10 percent.
The format for the Tariff Schedule is contained in Annex 8.3. The cover page of each Schedule indicates the Schedule number and the authentic language of the Schedule. Each new Member is allocated the next available Schedule number, which is expressed in Latin numerals on the cover page of its Schedule.88 The Schedules are usually authentic in only one of the three official languages of WTO (English, French or Spanish). This language is chosen by the acceder.
When completed, the draft Schedules are formally circulated to all members of the Working Party for multilateral review and verification, enabling Members to confirm that the concessions contained in the draft Schedules reflect the results of their bilateral negotiations with the acceding government. It also presents an opportunity to ensure that the contents are in accordance with the relevant WTO provisions.
Particular attention needs to be paid in this connection to the observance of obligations relating to like products in the basic MFN provision in Article I:1 of the GATT 1994. Changes have been made to draft Tariff Schedules to remove discrimination on like products when Members claimed their GATT rights in the Working Party.89 It may be noted that a similar point has also been raised in the General Council after a Working Party had adopted its Report. At this later stage, the Member which considered certain tariff bindings on like products to be discriminatory said that if the discriminatory rates were actually applied they would be considered a violation of Article I:1 of GATT 1994.90
Discussions on agricultural support and export subsidies. back to top
The discussions on agricultural commitments are based on the factual data supplied by the applicant in the format of WTO document WT/ACC/4 (Annex 7.2). Since the preparation of the supporting tables involves a thorough grasp of complex WTO requirements and detailed technical work, they are invariably revised during the accession negotiations, taking into account comments formulated by Members. The supporting tables are made available to all interested Working Party members as a WT/ACC/SPEC/ WTO document.
WTO document WT/ACC/1 states that this information may be examined and further clarified on a bilateral basis. It now appears to be accepted that the tables containing information on domestic support and export subsidies are dealt with in plurilateral meetings with interested WTO Members as this information is of more general systemic interest than concessions on specific tariff lines of interest to individual Members. These meetings are called when the applicant has submitted the necessary tables and members of the Working Party have demonstrated an interest in pursuing the matter. These meetings are usually held on the fringes of Working Party meetings, when delegations come together to focus on the accession in question.
This process leads the Secretariat to circulate a set of final tables which forms the basis for the future commitment levels in relation to the Total Aggregate Measurement of Support (Total AMS) and Export Subsides in Agriculture that are recorded in Part IV of the Schedule of Concessions and Commitments on Goods. The relevant supporting tables are also incorporated by reference in Part IV of the Schedule.
Negotiation of specific commitments on services back to top
WTO document WT/ACC/1 notes that the procedures for the negotiations on services are similar to those for the negotiations on tariffs, being based on offers and requests.91 Negotiations on services are usually engaged after members of the Working Party have undertaken multilateral examination of the services regime, generally based on information submitted in the outline format described in the Secretariat’s Technical Note WTO document WT/ACC/5 and in written replies to specific questions. As noted above, many applicants have found it difficult to supply all the factual information requested and members of accession Working Parties have often explicitly requested them to provide the Working Party with an initial offer on services as soon as possible.92
The negotiations start in earnest with the multilateral circulation of the applicant’s initial offer. Some applicants have taken much longer to table services offers than others. On average, initial services offers have been tabled three years after submitting their Memoranda. Typically, initial services offers are tabled at about the same time as the initial tariff offers.
Initial offers on services follow the same format as all Schedules to the GATS.93 The format is reproduced in Annex 9, which also includes notes on the drafting of a Services Schedule. If initially inconsistent, initial offers have had to be revised to conform to the standard format.
The offer is made available to all interested Working Party members as a WT/ACC/SPEC/ WTO document for the applicant concerned.94 Although the multilateral process of questions and answers in the Working Party provides an insight into the expectations of Members and the positions of applicants, the negotiations are pursued bilaterally.
The negotiations on services and tariffs normally proceed in parallel. The tabling of the offer triggers the negotiating process. Bilateral meetings are often scheduled around meetings of the accession Working Parties. In the early stages of the negotiations some Members may simply ask applicants to improve the scope and quality of their offer and not focus on particular sectors. The initial offers are inevitably revised in the course of the negotiations. The main factor affecting the number of rounds of negotiations is the willingness of the applicant to meet Members’ requests. As already noted, the procedures for the signature of bilateral agreements on tariffs and services are linked. When it has received bilateral agreements from all the Members that have negotiated, the Secretariat consolidates the bilateral agreements into a draft Services Schedule and circulates the document to Members of the Working Party and the acceding government. If commitments have been made in a given sector to two or more Members, the Secretariat will take the least restrictive of these into the draft Schedule, as a commitment to one Member must be accorded to all Members under the most-favoured-nation clause. This draft is then reviewed by the accession Working Party as part of its review of the whole accession package — an opportunity of ensuring that the draft Schedule is a correct reflection of the bilateral agreements and that it conforms to the provisions of the GATS.95
85. WTO document WT/
ACC/1, para 12.
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86. WTO document WT/ACC/1, para 12. back to text
87. MFN Principle (GATT 1994, Article I.1) provides that any tariff binding granted by any Member to any product originating in any other country shall be accorded immediately and unconditionally to the like product originating in the territories of all other Members. back to text
88. Viet Nam, the latest applicant to have completed its accession process, has Schedule CLX, the Latin equivalent of 160. There are more Schedule numbers than there are WTO Members because some Members of GATT 1947 withdrew from that Agreement. back to text
89. Mongolian bindings on alcoholic beverages. back to text
90. Argentina, concerning the former Yugoslav Republic of Macedonia’s tariff bindings on certain cheeses and alcoholic beverages. WTO document WT/GC/M/76, para 8. back to text
91. WTO document WT/ACC/1, para 13 (iii). back to text
92. E.g. Belarus, WTO document WT/ACC/BLR/7 (19 December 1997); Kyrgyz Republic, WTO document WT/ACC/KGZ/7 (11 April 1997). back to text
93. General Agreement on Trade in Services, Article XX, Schedules of Specific Commitments. back to text
94. By way of example, Nepal’s initial services offer was distributed as WTO document WT/ACC/SPEC/NPL/4 (7 July 2000). back to text
95. Such as GATS Article II, its most-favoured-nation clause, under which a commitment must not be so narrowly defined as to deprive like services and service suppliers of other Members of its benefits. back to text