Overview of Accessions

Dimitar Bratanov, Accessions Division, WTO

Session 2: Overview of Accessions 1. The basic procedures

2. The track record to date

3. The state of play in ongoing accessions

4. What is expected of acceding governments?

Session 2: Overview of Accessions 1. The basic procedures

Session 2: Overview of Accessions A closer relationship with the WTO?

• Request for observer status in the General Council and its subsidiary bodies

• Request for accession under Article XII of the Marrakesh Agreement

Session 2: Overview of Accessions Observer status

• Requests to be made in accordance with the Guidelines for Observer Status for Governments in the WTO (Annex 2 of the Rules of Procedure for Sessions of the Ministerial Conference and Meetings of the General Council, WT/L/161).

• Governments have to: – express an intent to initiate negotiations for WTO accession within 5 years; – provide a description of economic and trade policies, including future reforms.

• 10 governments have been granted observer status under these procedures.

• Not to be confused with ad hoc observer status for WTO Ministerial Conferences.

Session 2: Overview of Accessions WTO Accession: legal basis

Article XII of the Agreement Establishing the WTO (the Marrakesh Agreement)

1. Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such accession shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto. 2. Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two- thirds majority of the Members of the WTO. 3. Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.

Session 2: Overview of Accessions WTO Accession: legal basis

“…by a two-thirds majority…”

• In practice, since 1995 decisions on accession have been taken by consensus in accordance with WTO practice (Article IX:1 of the Marrakesh Agreement).

• Paragraph 2 of Article XII refers to the final stage of the accession process, when the accession documents are adopted by the Ministerial Conference (or by the General Council as per Article IV:2 of the Marrakesh Agreement).

Session 2: Overview of Accessions WTO Accession: legal basis

“…on terms to be agreed…”

The specific terms of accession are unique to each acceding government.

WHY

• Legal/institutional/economic frameworks of acceding governments are different. • Accession negotiations are WTO Member-driven and Members’ interests vary. • The WTO rulebook and “acquis” evolve over time. • …

Note: while the specific terms agreed in each accession may vary, the accession process per se has remained largely unchanged since 1995.

Session 2: Overview of Accessions The WTO Accession Process

Stage 1 Stage 2 Stage 3

Session 2: Overview of Accessions Stage 1: Working Party Establishment

• The General Council considers accession requests and establishes Working Parties to examine applications and elaborate terms of membership.

• Working Party membership open to all WTO Members.

• Consultations on the selection of a Working Party Chairperson begin after circulation of all documents necessary for holding the 1st Working Party meeting.

• Observer status automatically granted to the Acceding Government upon Working Party establishment.

• Annual financial contribution of approx. CHF 30’000. Establishment of the Working Party on the Accessions of Somalia and Timor-Leste

Session 2: Overview of Accessions Stage 2: Fact-finding & negotiation

Stage 2 – the substantive phase of the process – consists of 2 basic negotiating tracks:

– Multilateral negotiations;

– Bilateral negotiations;

NOTE: plurilateral discussions are also a feature in many accessions

These negotiating tracks proceed more or less in parallel.

The accession procedures are outlined in WT/ACC/22/Rev.1, a document developed by the Secretariat in consultation with Members as a practical, non-binding guide.

Session 2: Overview of Accessions Stage 3: Final steps THE ACCESSION PACKAGE • Adoption of the Accession • Decision 1 Package by Working Party • Protocol

• General Council/Ministerial 2 • Report of the Working Party Conference approval • Schedule of Concessions & 3 Commitments on Goods • Domestic ratification /acceptance 4 • Schedule of Specific Commitments on Services • Membership

Session 2: Overview of Accessions 2. The track record to date

Session 2: Overview of Accessions Map of WTO Members and Observers

Most recent acceding government: Curaçao (March 2020)

Session 2: Overview of Accessions Completed (36) and ongoing (23) accessions (LDCs in red) Africa Europe/CIS Asia Pacific Middle East America

3 (2) 16 11 (6) 4 (1) 2

Cape Verde*, 2008 Bulgaria, 1996 Mongolia, 1997 Jordan, 2000 Ecuador, 1996 Seychelles, 2015 Kyrgyz Rep., 1998 China, 2001 Oman, 2000 Panama, 1997 Liberia*, 2016 Latvia, 1999 Chinese Taipei, 2002 Saudi Arabia 2005 Estonia, 1999 Nepal*, 2004 Yemen*, 2014 Georgia, 2000 Cambodia*, 2004 Albania, 2000 Tonga, 2007 Croatia, 2000 Viet Nam, 2007 Lithuania, 2001 Samoa*, 2012 Moldova, 2001 Vanuatu*, 2012 Armenia, 2003 Lao PDR*, 2013 FYR of Macedonia, 2003 Afghanistan*, 2016 Ukraine, 2008 Montenegro, 2012 Russian Fed. 2012 Tajikistan, 2013 Kazakhstan, 2015 9 (6) 6 2 (2) 4 1 Algeria, 1987 Belarus, 1993 Bhutan*, 1999 Lebanese Rep. , 1999 Bahamas, 2001 Sudan*, 1994 Uzbekistan, 1994 Timor-Leste*, 2016 Iraq, 2004 Curaçao, 2020 Ethiopia*, 2003 Azerbaijan, 1997 I.R. of Iran, 2005 Libya, 2004 Andorra, 1997 Syrian Arab Rep., 2010 Sao Tomé & Principe*, 2005 Bosnia & Herzegovina, 1999 Comoros*, 2007 Serbia, 2005 Equatorial Guinea, 2008 Somalia*, 2016 South Sudan, 2017 Session 2: Overview of Accessions What has been done so far? 36 accessions completed to date (By accession date)

-Kyrgyz --Yemen Republic

-Nepal -Ukraine -Cambodia -Cabo -Chinese Verde Taipei -Viet -Mongolia -Lithuania -Armenia Nam -Seychelles -Montenegro -Panama -Moldova -FYR -To n g a -Kazakhstan -Samoa -China Macedonia -Ecuador -Russian -Latvia -Saudi -Bulgaria Federation -Estonia Arabia -Vanuatu -Jordan -Georgia -Lao PDR -Tajikistan -Albania -Liberia -Oman -Afghanist -Croatia 2016 2015 2001 2005 2012 2014 2013 2007 2008 1997 2003 1996 2002 2004 2000 1998 1999 Shares of world trade

Session 2: Overview of Accessions WTO accession results (1/3)

Growth rate of merchandise exports Growth rate of merchandise imports of Article XII Members of Article XII Members

Article XII Members Rest of the World 900 Article XII Members Rest of the World

800

600 600

400

300 200

0 -5 years WTO +5 years +10 years +15 years +20 years accession

Session 2: Overview of Accessions WTO accession results (2/3) Growth rate of commercial services Growth rate of commercial services exports of Article XII Members exports of Article XII Members (1996-2011) (2012-2018)

Article XII Members Rest of the World Article XII Members Rest of the World 250 250

200 200

150 150

100 100

50 50

0 0 -5 years WTO accession +5 years -5 years WTO accession +5 years

Session 2: Overview of Accessions WTO accession results (3/3)

Growth rate of FDI inward stocks Improvements in Business of Article XII Members Environment

Article XII Members Rest of the World Average DTF Changes for a Member 8000

6000

4000

2000

0 -5 years WTO +5 years +10 years +15 years +20 years accession

Session 2: Overview of Accessions 3. The state of play

Session 2: Overview of Accessions What remains to be done? 23 ongoing accessions, plus …. (By application date)

-Sao -Iran Tomé & Principe -Belarus -Curaçao -Algeria -Bahamas -Syrian -Iraq -Timor- Arab Rep. -Serbia Leste -Sudan -Azerbaijan -Libya -Somalia -Uzbekistan -Comoros -Andorra -Ethiopia -Equatorial -Lebanese Guinea Republic -Bosnia & -South Herzegovina Sudan -Bhutan 1987 1993 2003 2001 1994 2004 1999 2020 2005 2007 2105 2017 1996 1997 Accession negotiations – state of play Multilateral negotiations (Rules)

Memorandum on Factual Summary Draft Working Working Foreign Trade of Points Raised Party Report Application Party Regime Established • Algeria • Andorra • Bahamas • Azerbaijan (No documents • Iran • Ethiopia* • Belarus submitted) • Iraq • Sudan* • Bhutan* • Timor-Leste* • Bosnia & • Somalia* Herzegovina • South Sudan* • Comoros* • Curaçao • Uzbekistan • Lebanese Rep. • Equatorial • Serbia Guinea • Turkmenistan • Libya (application for • Sao Tomé and Bilateral negotiations (Market Access) observership) Principe* • Syrian Arab Revised Goods & Services Offer Initial Goods & Draft Goods and Rep. Services Offer • Algeria Services • Azerbaijan Schedules • Bahamas • Andorra • Belarus • Ethiopia* • Bhutan* (revised goods • Bosnia and Herzegovina offer) • Comoros* • Lebanese Rep. • Serbia • Sudan* • Uzbekistan

Session 2: Overview of Accessions Accessions by status General Status Accession WP (establishment) Last WP meeting Next WP meeting (based on Secretariat’s assessment) Strategic focus 1. Belarus (1993) 12WPM, July 2019 2nd half of 2020 2. Bosnia & Herzegovina (1999) 13WPM, February 2018 2nd half of 2020 3. Comoros* (2007) 4WPM, March 2018 Q3 2020 4. Serbia (2005) 13WPM, June 2013 TBD Work in progress 1. Azerbaijan (1997) 14WPM, July 2017 2nd half of 2020 On-going efforts to 2. Bahamas (2001) 4WPM, April 2019 TBD move the WP process 3. Ethiopia* (2003) 4WPM, January 2020 2nd half of 2020 4. South Sudan* (2017) 1WPM, March 2019 TBD 5. Sudan* (1994) 4WPM, July 2017 TBD Reactivation 1. Iraq (2004) 2WPM, April 2008 TBD Efforts to resume the 2. Lebanese Republic (1999) 7WPM, October 2009 TBD WP process after at 3. Uzbekistan (1994) 3WPM, October 2005 7 July 2020 least 5 years Activation 1. Curaçao (2020) No WP held to date TBD 1st WP yet to be held 2. Equatorial Guinea (2008) No WP held to date TBD 3. Somalia* (2016) No WP held to date TBD 4. Timor-Leste* (2016) No WP held to date 31 July 2020 (TBC) Inactive Algeria (1987), Andorra (1997), Bhutan* No WP held at least (1999), Iran (2005), Libya (2004), Sao during last 5 years Tomé and Principe* (2005), Syrian Arab Republic (2010) Notes: * LDCs Session 2: Overview of Accessions WTO accessions: new “themes”

 A larger number of active accessions • New applications – Somalia, Timor-Leste, South Sudan, Curaçao (+ Turkmenistan) • Resumption of accession Working Parties after years of inactivity • Comoros (2016), Belarus (2017), Sudan (2017), Bosnia and Herzegovina (2018), Bahamas (2018), Ethiopia (2020), Uzbekistan (2020)  Increased role for technical assistance? • Members’ broad support for WTO accessions, at WP level or through technical assistance • Strong interest & support from international partners, e.g. IMF, World Bank, ITC, African Union/UN Economic Commission for Africa (UNECA), Arab Monetary Fund  Fragility and conflict (trade as an engine of peace?)

Session 2: Overview of Accessions 4. What is expected of acceding governments?

Session 2: Overview of Accessions WTO Accessions – what are the yardsticks?

 Average length of accession: 10 years and 2 months (and 12 years and 2 months for LDCs) • Shortest: 2 years and 8 months (Kyrgyz Republic, 1998) • Longest: 19 years and 9 months (Kazakhstan and Seychelles, 2015)

 Accession commitments • Number of accession commitment paragraphs in Working Party Report: 17 (Mongolia) – 163 (Russian Federation) • Tariff concessions: 5.1% (Montenegro) - 39.7% (Vanuatu) for all products; 7.6% - 43.7% (AG), 4.3% - 39.1% (Non-AG) • AG Domestic Support & Export Subsidies: 5, 8.5, 10% de minimis levels; AMS (various); export subsidies bound at zero • Number of services sub-sectors with commitments: 37 (Mongolia) – 147 (Moldova)

Session 2: Overview of Accessions Policy Framework for LDC Accessions

 2002 General Council Guidelines for LDCs’ Accessions (WT/L/508) – Market Access, WTO Rules, Process, technical assistance

 2012 General Council Decision to “strengthen, streamline and operationalize” the 2002 Guidelines” (WT/L/508/Add.1) – Benchmarks on market access on Goods and Services – Transparency in accession negotiations – “Facilitation” by Chairs of SCLDC & Accession Working Parties – Special and differential treatment & transition periods – Technical assistance and capacity building

Session 2: Overview of Accessions Length of WTO Accession Process: From 1st Working Party to Membership

Average: 6 years and 7 months

* Acceded as an LDC. On average, 9 LDC accessions took 5 years and 4 months Session 2: Overview of Accessions Length of WTO accession process: From application to membership, in years

Average: Average: 10y.04m 10 years and 2 months

* Acceded as an LDC. On average, 9 LDC accessions took 12 years and 6 months Session 2: Overview of Accessions 31 Tariff commitments: agricultural products

45 43.6 41.4

40 35.5 34.6 35 33.7

30 28.1 27.7 28 25.5 25.8 24.9 25 23.7 23.8

18.9 20 18.5 19.2 19.3 19.3 17.5 17 15.8 15.2 15.3 10.8 14.7 15 12.4 12.3 11.7 12.2 10.8 11.3 10.7 9.4 9.4 10.1 10 7.6

(NOTE: average final bound rates, %) Session 2: Overview of Accessions 32 Tariff commitments: non- agricultural products

40 39.1

30 27.2

25 23.6 22.9 23.7 21.1 20.4 20.5 20 18.7 17.3 17.7 17.3 15.2 15.3 15 11.6 10.510.3 10.3 9.4 9.1 10 8.4 8.3 7.3 7.5 7.3 7.6 6.7 6.6 6.5 6 6.2 5.9 5.5 5 4.8 4.3 5

(NOTE: average final bound rates, %) Session 2: Overview of Accessions Services: specific commitments sectors - No. of services sub

Session 2: Overview of Accessions Accession in numbers: completed accessions No Article XII Length of # of WP # of # of # of No Article XII Length of # of WP # of # of # of legislation . Members accession Meetings documents questions legislation . Members accession Meetings documents questions submitted to process held issued replied submitted to process held issued replied WP WP 1 Ecuador (1996) 3yr.4mo 10 11 111 69 19 Nepal* (2004) 14yr.10mo 3 34 466 24

2 Bulgaria (1996) 10yr.1mo 9 7 276 26 20 Cambodia* (2004) 9yr.10mo 5 48 460 85 3 Mongolia (1997) 5yr.3mo 5 12 146 33 21 Saudi Arabia (2005) 12yr.5mo 14 98 1218 95 22 Viet Nam (2007) 12yrs 14 105 3511 184 4 Panama (1997) 5yr.11mo 5 23 502 45 23 Tonga (2007) 11yr.8mo 3 36 416 74 5 Kyrgyz Rep. (1998) 2yr.8mo 6 63 952 155

6 Latvia (1999) 5yr.2mo 6 49 396 77 24 Ukraine (2008) 14yr5mo 17 225 3810 385

7 Estonia (1999) 5yr.8mo 9 44 490 77 25 Cabo Verde*(2008) 8yrs 6 69 888 73

8 Jordan (2000) 6yr.3mo 5 53 929 52 26 Montenegro (2012) 7yr2mo 8 67 1015 114

9 Georgia (2000) 3yr.11mo 3 56 512 53 27 Samoa* (2012) 13yr10mo 2 52 914 123

10 Albania (2002) 7yr.9mo 8 95 607 66 28 Russian Fed. (2012) 19yr1mo 31 187 2566 529

11 Oman (2000) 4yr.5mo 6 52 808 55 29 Vanuatu* (2012) 17yr1mo 2 36 343 123

12 Croatia (2000) 7yr.1mo 6 94 919 111 30 Lao PDR* (2013) 15yrs 10 105 1224 159

13 Lithuania (2001) 7yr.3 mo 5 90 640 167 31 Tajikistan (2013) 11yr8mo 9 71 1296 137

14 Moldova (2001) 7yr.7mo 6 84 861 124 32 Yemen* (2014) 13yr11mo 11 98 1164 58

15 China (2001) 14yr.9 mo 18 71 441 2,300 33 Seychelles (2015) 19yr.9mo 7 110 1043 287

16 Chinese Taipei (2002) 9yr.4mo 11 50 960 96 34 Kazakhstan (2015) 19yr.9mo 20 229 1900 412

17 Armenia (2003) 9yr.2mo 5 42 434 87 35 Liberia* (2016) 8yr.7mo 4 39 264 102

36 Afghanistan* (2016) 11yr.7mo 5 62 773 75 18 N. Macedonia (2003) 8yr.4mo 5 52 829 132

Session 2: Overview of Accessions Legislation enacted by Article XII Members

Bulgaria (1996) 26 Mongolia (1997) 33 Latvia (1999) 77 Georgia (2000) 106 Albania (2000) 107 Armenia (2003) 112 Estonia (1999) 126 Montenegro (2012) 133 The FRY of Macedonia (2003) 133 Croatia (2000) 135 Lithuania (2001) 137 Tajikistan (2013) 141 Kyrgyz Republic (1998) 155 Moldova (2001) 174 Kazakhstan (2015) 412 Ukraine (2008) 449 Russian Federation (2012) 1,166 China (2001) 2,300

0 500 1,000 1,500 2,000 2,500

M. Lekic and C. Osakwe, "WTO Rules, Accession Protocols and Mega-Regionals: Complementarity and Governance in the Rules-Based Global Economy" in A. Kireyev and C. Osakwe (eds.) Trade Multilateralism in the Twenty-First Century – Building the Upper Floors of the Trading System Through WTO Accessions, 2017, p. 137.

Session 2: Overview of Accessions Number of commitments undertaken by Article XII Members

180 168 163 160

140 118 120

100

80 70 65 59 63 60 40 40 40 39 35 37 40 29 29 29 29 29 29 30 27 24 24 26 27 28 28 24 25 26 26 28 22 18 22 20

0 China '01 China Nepal '04 Latvia '99 Oman '00 Oman Tonga '07 Jordan '00 Jordan Liberia '16 Samoa '12 Yemen '14 Croatia '00 Croatia Estonia '99 Albania '00 Ukraine '08 Georgia '00 Panama '97 Panama Bulgaria '96 Ecuador '96 Vanuatu '12 Lithuania '01 Viet Nam '07 Mongolia '97 Tajikistan '13 Cambodia '04 Seychelles '15 Kazakhstan '15 Kazakhstan Cabo Verde '08 Saudi Arabia '05 Montenegro '12 Chinese Taipei '02 FYR Macedonia '03 Kyrgyz Republic '98 Russian Federation '12 Moldova, Repblic of '01 Armenia, Republic of'03 Lao People's Democratic '13 Democratic People's Lao

120

100

0 Transit Trading rights Rules of origin Pricing policies Textile regimes Export subsidies Export Trade agreements Trade Export restrictions Customs valuation Customs Competition Policy Investment regime Agricultural policies Tradecivil in aircraft Pre-shipment inspection Ordinary customs duties customs Ordinary Other duties and charges and duties Other Other customs formalities Technical barriers to trade Government procurement Monetary and Fiscal Policy Fiscal and Monetary Transparency - notification - Transparency Export duties, fees and and charges fees duties, Export Reservations by WTO members WTO by Reservations Balance-of-payments measures Balance-of-payments Transitional Review Mechanism Foreign exchange and payments and exchange Foreign Policies affecting trade in services Free zones, special economic areas special economic zones, Free Tariff rate quotas, tariff exemptions tariff rate quotas, Tariff Trade-related investment measures investment Trade-related Industrial policy, includingsubsidies Trade-related aspects ofintellectual… Anti-dumping, countervailing duties,… countervailing Anti-dumping, Quantitativeimport restrictions, incl.… Sanitary and phytosanitary measures phytosanitary and Sanitary Transitional product-specific safeguard… Fees services chargesrendered for and Special trade arrangements, incl. barter… Application of internal taxes on imports on taxes internal of Application State ownership and privatization; state… and privatization; ownership State Special Exchange Agreement between the… Non-discrimination/ China's workingparty… Staging of dismantling of Tariff Adjustment… Transparency - publication of information on… information of publication - Transparency Framework for making and enforcing policies and enforcing making for Framework

Session 2: Overview of Accessions In the vanguard of WTO reform?

1500+ accession specific commitments undertaken by 36 Article XII Members: tailored to individual circumstances, but patterns have emerged.

“WTO+” commitments: obligations to abide by the rules created by the commitment paragraph and not contained in the multilateral trade agreements.

Accessions rule-making = a counterpart to multilateral rule-making? E.g. transparency, export subsidies

Example 1: Before the Trade Facilitation Agreement’s entry into force, WTO accessions contributed 37 commitments on transparency in dedicated “Transparency” section of WP Reports and 200+ commitments on transparency under other WP Report headings (RoO, SPS,TBT, TRIPS…).

Example 2: While a multilateral decision to end agriculture export subsidies was taken in 2015, all Article XII Members have committed to bind such subsidies at zero since 1996 .

Setting the stage for future negotiations = pressure to level the playing-field?

Session 2: Overview of Accessions The aim and rationale of WTO accession

• The accession process aims to ensure that an Acceding Government’s legislation and practices will be compliant with WTO rules and that it becomes a full and effective player from its first day of membership.

• The WTO accession process involves learning and preparation for WTO membership. It benefits both the Acceding Government and the WTO.

• Why join the WTO?

Acceding Government WTO • Foster and consolidate domestic reform • Economic diversification and modernization • Deepen international cooperation for trade • Better integration into global supply chains • Expand market access for the WTO membership • Predictable and transparent rules • Extend the reach of WTO rules and strengthen their application • Participate in the shaping of global trade rules • Facilitate smoother trade flows • Positive signalling to foreign and domestic investors • Achieve universality of the multilateral trading system • Improve economic resilience post- COVID-19

Session 2: Overview of Accessions Best practices • Early identification of benefits and interests, which should be reflected in a negotiating strategy

• Impact assessment of WTO Membership • Assessment of trade-related legislation and practices to determine conformity with WTO rules

• Establishment of a national steering committee (e.g. ministries, private sector, and civil society representatives)

• Involvement of lawmakers for sustainability of reforms, transparency and domestic mobilization.

• Identification of a 'model accession’ • Use of technical assistance & capacity building

Session 2: Overview of Accessions Accession-Related Technical Assistance

Technical Assistance and Capacity building activities include inter alia:

• National seminars; • Sessions on accessions in advanced trade policy courses, regional courses and introductory courses for LDCs; • Workshops; • Technical missions; • Establishment/upgrade of WTO reference centres; • E-learning courses and e-lecture series; • Outreach dialogue with WTO groupings; • Participation in conferences; and • Customized briefings on accessions for delegations (including non- residents in Geneva) are also provided by the Secretariat.

Session 2: Overview of Accessions Questions?

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Session 2: Overview of Accessions