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Reports on Meetings

May 2000

LDCs in the Process of Accession to the WTO

(held in Geneva on 10 May 2000)




I. Background

Of the 48 least-developed countries (LDCs), 29 are already Members of the WTO. Eight have started their accession process and are at various stages within it: while some have just established a Working Party, others (e.g. Vanuatu) have almost completed their accession negotiations. It seems important to clarify that to get the accession process started, an official application must be sent by the prospective Member to the Director General of the WTO. Prior to that, a country can request the status of "observer". One LDC, Ethiopia, has done so. However, it must be noted that the observer status does not give a formal right to attend the negotiation meetings and can last for five years only. After such time has elapsed, Members of the WTO can request an Observer "makes up his mind". However, no time limit is set for the completion of the negotiations once the Secretariat has received a formal application for accession.

II. Report

1. The meeting began with a short presentation by a WTO Accessions official which centred on three main points:

(i) The General Council meeting of 3 May 2000 had given particular attention to the activities of the WTO in favour of the least-developed countries in general and the accession process in particular. Members are not convinced that there should be a different process of accession than the current one. The parameters proposed by the European Communities regarding the acceleration of the LDC accession process (the "fast-track" approach proposed prior to the Seattle Ministerial last year) had not received universal endorsement and acceding countries had not come forward to support it.

(ii) WTO Members had expressed a strong political support to the early accession of the LDCs. At the last meeting of the General Council on 3 May 2000, the Director General had enunciated that a possible target would be the completion of their accession negotiations by the time of the next WTO Ministerial Conference. However, there is competition amongst acceding countries on getting WTO Members’ attention in view of the increasing number of countries in the course of accession. China was a case in point, as its accession process was accelerating and could well conclude before the summer break or shortly thereafter.

(iii) For LDCs, there are two main conditions for accelerating accession: to have a trade regime in conformity with WTO agreements and to conduct market access negotiations on goods and services with Members. Having initial offers on the table would speed-up the accession process.

2. Following this presentation, participants raised the following points: What is really meant by "accelerating the accession process" for LDCs; would it involve not only the time element, but also the list of commitments; or the development of their institutional capacity to accelerate the process? On the institutional side, it was noted that, from WTO standpoint, one way would be to minimise the number of working party meetings. But the acceleration of the procedure is mainly in the hands of countries in accession. It would be helpful if they were to give clear indications on the legislative changes at home, what is the time-frame of their national / parliamentary procedures. The WTO Secretariat could be of assistance, if so requested, by making available to acceding countries model laws. Also, countries in accession should actively negotiate, i.e. put proposals forward. One case in point was Vanuatu, whose accession process had been very rapid indeed. Vanuatu undertook important commitments which would be worthwhile analysing by other acceding countries, for example Vanuatu practically had no transitional arrangements.

3. One participant pointed out that accession was not an end in itself. The speed of the procedure was of lesser importance than actual terms of the accession, which should be in accordance with the acceding country’s development needs.

4. Another remark related to technical assistance provided to accessing countries, participants felt it should be more focused and targeted to capacity building in capitals.

5. A participant inquired whether there are specific sectors in which developed countries traditionally ask for concessions. The reply to this question had to take into consideration the fact that major Members such as the United States the European Communities, Canada, Japan, Australia, Switzerland, New Zealand etc. have been traditionally active in negotiations on all accessions; moreover, although the negotiating process covers every aspect of the WTO agreements, there are still sectors of priority to certain Members, such as the Agreement on Information Technology for the US; or concessions in services for the EC (in at least 3 sectors) and Switzerland. But everything is negotiable! For example, to have bindings is of highest importance, but they could very well be higher in the case of LDCs; the periods of transition could also be longer. The inclusion of Information Technology products in their offer would be helpful, as well as commitments in several industrial products such chemicals, pharmaceuticals, toys. Again, everything is negotiable, but it is up to LDCs themselves to make proposals on specific schedules of concessions, having regard to their development, financial and trade needs and institutional capabilities. It was noted that there is an important difference between the WTO and the GATT where requests by Members were made, which rendered the process slower. In general, Members are expected to take into consideration the development needs of LDCs. Again, the Vanuatu case was recalled, in particular its negotiation with the US on telecommunications.

6. A point of utmost importance was raised by a participant: what are the concrete benefits in the short term for an LDC to accede the WTO? Long-term benefits were obvious: be a Member of the "club", participate in the elaboration of global rules, provide a predictable trade environment, etc. In the short term, the consolidation of development policies and liberalization, and the incorporation into the multilateral trade rules. The negotiation of additional concessions by WTO Members was not part of the process. A country which is not Member of the WTO "took a risk", in certain instances, e.g. if a country were to increase its tariff duty on a particular product, being member of the WTO gave the right to compensation. This is particularly important and interesting for LDCs which are often dependent on a few export products, for example, for Ethiopia coffee represents 65% of exports.

7. Being Member of the WTO gives an incentive to attract foreign direct investment (FDI) by offering investors institutional predictability and stability regarding the economic framework. However, some participants noted that countries which were not Members of the WTO were being heavy recipients of FDI (China was probably the prime example). In other cases, being a Member of the WTO gave transit rights, which were particularly important for land-locked countries such as Bhutan. One thing was certain, the longer it took to join the WTO, the harder the process would be. Conditions for accession were becoming more difficult as more agreements and rules were negotiated and agreed and had to be made compatible with national conditions and legislation.

8. Further discussion included two main topics:

(i) Technical assistance provided to LDCs in accession, by the WTO Secretariat itself but also by the UNCTAD. There was significant disappointment on the results of the Integrated Framework approach which, until now, had not yielded practical benefits to the LDCs.

(ii) On the "documentation dissemination policy" of the WTO, there was general agreement that the documents produced by the WTO were not always of value to small missions, which were often overwhelmed by their number and length.

9. The meeting concluded that there was need for more coordination between LDCs in the process of accession and for making their needs, problems and projects known. Perhaps drafting a joint document stating specific problems and constraints should be sent to the Secretariat to be circulated amongst all WTO Members.


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