Membership, alliances and bureaucracy
All members have joined the system as a result of negotiation and therefore membership means a balance of rights and obligations. They enjoy the privileges that other member-countries give to them and the security that the trading rules provide. In return, they had to make commitments to open their markets and to abide by the rules — those commitments were the result of the membership (or “accession”) negotiations. Countries negotiating membership are WTO “observers”.
More introductory information
> The WTO in Brief
How to join the WTO: the accession process
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. 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 the WTO in a memorandum which is examined by the working party dealing with the country’s application. These working parties are open to all WTO members.
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”. 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 appear in a 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.
Representing us ...
The work of the WTO is undertaken by representatives of member governments but its roots lie in the everyday activity of industry and commerce. Trade policies and negotiating positions are prepared in capitals, usually taking into account advice from private firms, business organizations, farmers, consumers and other interest groups.
Most countries have a diplomatic mission in Geneva, sometimes headed by a special ambassador to the WTO. Officials from the missions attend meetings of the many councils, committees, working parties and negotiating groups at WTO headquarters. Sometimes expert representatives are sent directly from capitals to put forward their governments’ views on specific questions.
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Representing groups of countries ...
Increasingly, countries are getting together to form groups and alliances in the WTO. In many cases they even speak with one voice using a single spokesman or negotiating team. In the agriculture negotiations, well over 20 coalitions have submitted proposals or negotiated with a common position, most of them still active. The increasing number of coalitions involving developing countries reflects the broader spread of bargaining power in the WTO. One group is seen as politically symbolic of this change, the G-20, which includes Argentina, Brazil, China, Egypt, India, South Africa, Thailand and many others, but there are other, overlapping “Gs” too, and one “C” — the Cotton Four (C-4), an alliance of sub-Saharan countries lobbying for trade reform in the sector.
Coalition-building is partly the natural result of economic integration — more customs unions, free trade areas and common markets are being set up around the world. It is also seen as a means for smaller countries to increase their bargaining power in negotiations with their larger trading partners and to ensure they are represented when consultations are held among smaller groups of members. Sometimes when groups of countries adopt common positions consensus can be reached more easily. Sometimes the groups are specifically created to compromise and break a deadlock rather than to stick to a common position. But there are no hard and fast rules about the impact of groupings in the WTO.
The largest and most comprehensive group is the European Union and its 28 member states. The EU is a customs union with a single external trade policy and tariff. While the member states coordinate their position in Brussels and Geneva, the European Commission alone speaks for the EU at almost all WTO meetings. The EU is a WTO member in its own right as are each of its member states.
A lesser degree of economic integration has so far been achieved by WTO members in the Association of South East Asian Nations (ASEAN) — Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand, Singapore and Viet Nam. (The remaining member Laos is applying to join the WTO.) Nevertheless, they have many common trade interests and are frequently able to coordinate positions and to speak with a single voice. The role of spokesman rotates among ASEAN members and can be shared out according to topic. MERCOSUR, the Southern Common Market (Argentina, Brazil, Paraguay, Uruguay and Venezuela, with Bolivia, Chile, Colombia, Ecuador and Peru as associate members), has a similar set-up.
More recent efforts at regional economic integration have not yet reached the point where their constituents frequently have a single spokesman on WTO issues. An examples is the North American Free Trade Agreement: NAFTA (Canada, US and Mexico). Among other groupings which occasionally present unified statements are the African Group, the least-developed countries, the African, Caribbean and Pacific Group (ACP) and the Latin American Economic System (SELA).
A well-known alliance of a different kind is the Cairns Group. It was set up just before the Uruguay Round began in 1986 to argue for agricultural trade liberalization. The group became an important third force in the farm talks and remains in operation. Its members are diverse, but sharing a common objective — that agriculture has to be liberalized — and the common view that they lack the resources to compete with larger countries in domestic and export subsidies.
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The WTO Secretariat and budget
The WTO Secretariat is located in Geneva. It has around 630 staff and is headed by a director-general. Its responsibilities include:
Administrative and technical support for WTO delegate bodies (councils, committees, working parties, negotiating groups) for negotiations and the implementation of agreements.
Technical support for developing countries, and especially the least-developed.
Trade performance and trade policy analysis by WTO economists and statisticians.
Assistance from legal staff in the resolution of trade disputes involving the interpretation of WTO rules and precedents.
Dealing with accession negotiations for new members and providing advice to governments considering membership.
Some of the WTO’s divisions are responsible for supporting particular committees: the Agriculture Division assists the committees on agriculture and on sanitary and phytosanitary measures, for example. Other divisions provide broader support for WTO activities: technical cooperation, economic analysis, and information, for example.
The WTO budget is over 160 million Swiss francs with individual contributions calculated on the basis of shares in the total trade conducted by WTO members. Part of the WTO budget also goes to the International Trade Centre.
The Quad, the Quint, the Six and ‘not’
Some of the most difficult negotiations have needed an initial breakthrough in talks among four to six “major” members.
Once upon a time, there was the “Quadrilaterals” or the “Quad”:
- European Union
- United States
Since the turn of the century and the launch of the Doha Round, developing countries’ voices have increased considerably, bringing in Brazil and India — and Australia as a representative of the Cairns Group. Japan remains in the picture not only in its own right, but also as a member of the G-10 group in agriculture. Since 2005, four, five or six of the following have got together to try to break deadlocks, particularly in agriculture.
- European Union
- United States
They have been called “the new Quad”, the “Four/Five Interested Parties” (FIPS), the “Quint” and the “G-6.” The Doha Round was suspended in July 2006 because the six could not agree. Afterwards an alternative group of six, sometimes called the “non-G-6” or the “Oslo Group” tried their hand at compromise, sometimes listed in reverse order to emphasise their “alternative” nature — Norway, New Zealand, Kenya, Indonesia, Chile, Canada
The EU is a WTO member in its own right as are each of its 28 member states — making 29 WTO members.
While the member states coordinate their position in Brussels and Geneva, the European Commission alone speaks for the EU at almost all WTO meetings. For this reason, in most issues WTO materials refer to the EU or the more legally-correct EC.
However, sometimes references are made to the specific member states, particularly where their laws differ. This is the case in some disputes when an EU member’s law or measure is cited, or in notifications of EU member countries’ laws, such as in intellectual property (TRIPS). Sometimes individuals’ nationalities are identified, such as for WTO committee chairpersons.