Economic Paper

2310-1385 (online)
Hide / Show Abstract

This series examines current economic issues from a Commonwealth perspective. The titles in the series are technical papers of topical interest to specialists concerned with trade, micro and macroeconomics, development economics and related subjects.

An Evaluation of the Terms of Accession to the World Trade Organization

An Evaluation of the Terms of Accession to the World Trade Organization

A Comparative Assessment of Services and Goods Sector Commitments by WTO Members and Acceding Countries You do not have access to this content

Click to Access:
  • PDF
  • READ
Roman Grynberg, Manleen Dugal, Mohammad A. Razzaque
01 May 2006
9781848598744 (PDF)

Hide / Show Abstract

The relevant provisions for accession to the WTO do not provide an adequate legal basis for the process. Its inherent flaws have resulted in demands on acceding countries which are invariably onerous and bear little or no relation to their size, significance or development status. This book uses econometric tools to conduct a comparative assessment of commitments in the goods and services sectors. For the services sector, the authors find that at all three levels of services classification the commitments of postUruguay Round acceding countries far exceed those of their WTO member counterparts. In the goods sector, apart from the much greater binding coverage rate, the bound tariff rate for acceding countries is much lower than their WTO member counterparts. The book also provides country specific commitment comparisons after controlling for the level of economic development of the countries. In conclusion, the authors make brief recommendations for reform of the process of accession, in light of the costs incurred by applicant countries in the process.

loader image

Expand / Collapse Hide / Show all Abstracts Table of Contents

  • Mark Click to Access
  • Executive Summary

    The relevant provisions (Article XII of the Marrakech Agreement) and practices that govern accession to the WTO provide limited legal basis for the process. In the first stage of the process of accession, known as the multilateral stage, WTO members review the trading practices of an applicant in order to determine their compatibility with WTO rules, in spite of the fact that they frequently have a direct commercial interest. This allows existing WTO members to act as judge and jury on the trade regime of the applicant country.

  • Introduction

    When the General Agreement on Tariffs and Trade (GATT) was replaced by the World Trade Organization (WTO) on 1 January 1995 as the institution overseeing the multilateral trading system, it was a landmark event that would influence world trade in goods and services in an unprecedented way. Unlike under the GATT, the WTO dispute settlement mechanism's reverse consensus rule means that the legal system of rules and procedures can be enforced through a system of punitive sanctions. With this newly incorporated mandate, there has been a profound change in the nature of the institution and, among other aspects, in the practice of accession to the new rules-based system.

  • The Process of Accession to the WTO

    Although there were only 23 founder members of the GATT, and it was then considered to be a forum promoting the interests only of developed countries (UNCTAD, 1967), its role underwent a big change in the Uruguay Round of Multilateral Trade Negotiations (MTNs). The Round was marked by the participation, albeit nominal, of many developing and least developed countries for the first time in the history of trade talks, resulting in an increase in the number of WTO Members to 128 by the end of l994.

  • Services Sector

    GATS requires members to undertake two major obligations: general and sector service obligations.

  • Goods Sector

    Acceding countries have been made to pay a high price for accession in terms of their commitments in the goods sector as well. A comparative assessment of tariff commitments made by acceding countries as a group on the one hand and founding WTO Members on the other hand brings to light some very interesting results. Acceding countries, for example and as will be demonstrated through econometric analysis, have been asked to bind almost all tariff lines in the agriculture and industrial sectors as opposed to existing WTO Members.

  • Simultaneous Accession to the European Union

    For the countries of Bulgaria, Croatia, Estonia, Latvia and Lithuania, the process of accession to the WTO has been accompanied by simultaneous efforts to complete the process of accession to the European Union. These countries have had to respond to the challenge of accession to the EU, the process of compliance towards which could have resulted in an upward bias in the commitments made at the WTO. Hence the analysis in this section is based on the premise that statistical comparison of commitments between the WTO members and WTO acceding members might bring about biased results in showing excessive commitments on the part of acceding countries resulting from negotiations during EU accession for the above five countries.

  • Conclusion

    The relevant provisions and practices related to the process of accession to the WTO result in inequitable membership negotiations causing acceding countries to make commitments that are far greater than those made by WTO members. These differences cannot be accounted for simply by development status.

  • References and Appendices
  • Add to Marked List