HONG KONG WTO MINISTERIAL 2005: BRIEFING NOTES
MEMBERS AND ACCESSIONS 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 facilitation
> Rules: ad, scm including fisheries subsidies
> Rules: regional agreements
> Dispute settlement
> Trade and environment
> Small economies
> Trade, debt and finance
> Trade and technology transfer
> Technical cooperation
> Least-developed countries
> Special and differential treatment
> Implementation issues
> Electronic commerce
> Members and accessions
> Statistics, Textiles and Clothing
> Statistics, Facts and Figures
> Jargon buster, Country groupings
> Jargon buster, An informal guide to ‘WTOspeak’
How to join the WTO: the accession process
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
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
goods and services. The new member’s commitments are to apply equally
to all WTO members under normal non-discrimination rules, even though
bilaterally. In other words, the talks determine the benefits (in the
form of export opportunities and guarantees) other WTO members can expect
the new member joins.
- 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
(“protocol of accession”) and lists (“schedules”) of the member-to-be’s
- 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.
The accession process can vary in length and can take several years to complete. The shortest accession process has overall taken 2 years 10 months, in the case of the Kyrgyz Republic, and the longest 15 years and 5 months, in the case of China. 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.
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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. In the General Council decision, WTO members also agreed to provide technical assistance. Since the measures were agreed, two least-developed countries successfully concluded their negotiations to become members : Nepal and Cambodia.
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The new members
Since the WTO was established on 1 January 1995, 21 new members have joined the WTO through working party negotiations. These are : Albania, Armenia, Bulgaria, China, Cambodia, Croatia, Ecuador, Estonia, Former Yugoslav Republic of Macedonia, Georgia, Jordan, Latvia, Lithuania, Kyrgyz Republic, Moldova, Mongolia, Nepal, Oman, Panama, Saint Kitts and Nevis, and Chinese Taipei. Saudi Arabia becomes a member as of 11 December 2005.
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With 30 governments currently negotiating their terms of membership, accession will remain a major challenge for WTO members in the years ahead. 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
Republic of Montenegro
Republic of Serbia
Samoa Sao Tome and Principe
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Some current accessions negotiations
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 offers on market access in goods and services and the discussion on terms of entry is underway. The 9th meeting of the working party took place in October 2005.
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 is continuing on a third 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 plans for economic reform.
The 29th meeting of the working party was held on October 2005, with additional bilateral meetings held throughout the year. Many of these bilateral meetings involve Russia negotiating market access agreements for goods and services with its trading partners. Other “plurilateral” meetings have focused on dealing in more detail with some contentious issues in the negotiation such as agriculture, sanitary/phytosanitary measures and technical barriers to trade, intellectual property, and services. The working party is also drafting the report of the negotiations and the 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 enterprises, transparency and legal reform, and intellectual property. Bilateral market-access negotiations are continuing on the basis of revised offers in goods and services. Work is underway on the draft report of the working party which specifies members' concerns and Ukraine’s commitments. The last meeting was in mid-November 2005.
Viet Nam’s working party was established on 31 January 1995. The draft Working Party Report (a detailed document summarizing discussions in the Working Party) was circulated in November 2004 and a revision was discussed when the working party met on 15 September 2005. This was its tenth meeting and the chairperson said he expected that by the next meeting Vietnam would have concluded all its remaining bilateral market-access negotiations in goods and services. However, “it is clear that some more work is needed on the various sections of the report,” he also said.