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Paying the Price for Joining the WTO

A Comparative Assessment of Services Sector Commitments by WTO Members and Acceding Countries

image of Paying the Price for Joining the WTO

This paper focuses on the accession process for new WTO membership. The basic premise is that the commitments demanded are too onerous for new members. It argues that the whole process is fundamentally flawed and, in fact, forces applicant countries to accept demands that are not required under WTO agreements. Section 2 is a brief discussion of the process of accession and highlights the inherent flaws. Section 3 focuses on one of the crucial international trade agreements, the General Agreement in Trade and Services (GATS) and provides sectorspecific commitments by countries. Section 4 uses a series of statistical tests to verify whether acceding countries have made a significantly higher number of specific commitments than existing WTO members. Section 5 makes some concluding observations. The paper uses a strong body of econometric evidence to support its claim that acceding countries undertake greater commitments than those made by WTO members of a similar development status.

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The Process of Accession to the WTO

Although there were only 23 members at the initial stage of the GATT, when it was considered as a forum promoting the interests of the developed countries alone (UNCTAD, 1967), things changed remarkably in the Uruguay Round of Multilateral Trade Negotiations (MTNs), which was marked by the participation of many developing and least developed countries for the first time in the history of trade talks, resulting in 128 GATT signatories at the end of 1994. Governments that had signed GATT were known as ‘GATT contracting parties’ and upon signing the new WTO agreements (known as GATT 1994), they officially became recognised as ‘WTO members’.

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