New WTO rules could ease LDC accession
16 September 2012
At the end of June 2012, WTO members reached a preliminary agreement on new WTO rules on the accession of LDCs, and this received broader endorsement in July.
The new rules could facilitate accession to the WTO of ACP countries such as Ethiopia, Sudan, Comoros, Equatorial Guinea, Liberia, and São Tomé and Principe. Under the new rules, ‘the WTO’s 155 existing members promise to show restraint in the demands they make on the poorest candidate countries and to allow them flexibility in applying the WTO’s rules’. In the past, in order to accede to the WTO, governments not only had to bring their trade-related rules into line with WTO rules, but also had to meet the demands of every existing member.
According to a report by Reuters, however, ‘under the new rules, LDCs hoping to join will not be asked to cut the average “bound tariff” [the legal ceiling allowed for tariffs under WTO rules] for agricultural goods … below 50 percent. For non-agricultural goods, they will be allowed to keep 95% of tariffs at an average bound rate of 35 percent.’ Longer transition periods will also be allowed, subject to case by case review.
These new rules are seen as responding to long-standing complaints from LDC governments that ‘trading partners routinely ask them to take on commitments beyond what they are capable of during their bidding process to join the WTO.’ However, this leaves unresolved the issue of the treatment of LDCs that have recently acceded under far stricter conditions, such as Samoa and Vanuatu.
Editorial comment
The significance of the new WTO accession rules may prove to be primarily symbolic, given the broader impasse in the WTO negotiations. As one developing country official noted, ‘in an organisation where no negotiation seems to end, this is something we could do in time’. Another developing country official noted that ‘if we could not do something as simple for LDCs, then there would have been questions regarding the virtues of the system.’
At the same time, the tough negotiations on the agreement – which still leave many critical details to be hammered out in the membership talks of specific LDC applicants – show how high is the mountain that must be climbed to get a Doha deal. The agreement simply sets operational benchmarks to apply a decision on LDC accession that was taken by WTO members as long ago as 2002. Since then, LDC applicants have complained that they have been subject to demands just as rigorous and inflexible as those imposed on more developed states in order to join the ‘WTO club’, with these often perceived as being even more onerous, given their LDC status.
In terms of substance, there will be no change to the accession procedure. A new LDC applicant will still need to satisfy the demands of any existing WTO member that wishes to make a demand, since no country can join the WTO over the significant opposition of existing members. Self-restraint by existing members will still be required. However, there are now benchmarks against which to measure this self-restraint, which will provide a basis for the exertion of moral pressure for the adoption of a more restrained approach.
