WTO ACCESSIONS

 

2016 ANNUAL REPORT BY THE DIRECTOR‑GENERAL^[*]

 

 

 

This document has been prepared under the Secretariat's own responsibility and is without prejudice to the positions of Members or to their rights and obligations under the WTO.

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

I. INTRODUCTION AND OVERVIEW... 3

II. 2016 DEVELOPMENTS. 5

1. ACCESSION WORKING PARTIES:  AN OVERVIEW OF ACTIVITIES. 5

2. WORKING PARTY CHAIRPERSONS. 5

3. TRANSPARENCY IN THE ACCESSION PROCESS. 6

4. TECHNICAL ASSISTANCE AND OUTREACH.. 7

5. ACCESSIONS TRANSPARENCY TOOLS BOX (ATTB). 9

III. STATE-OF-PLAY IN ACCESSION WORKING PARTIES. 10

IV. LEAST-DEVELOPED COUNTRIES' ACCESSIONS. 13

V. wto accession template for structural reforms and economic diversification.. 14

1. INTRODUCTION.. 14

2. WTO ACCESSION ACQUIS: TEMPLATE FOR WTO-CONSISTENT structural REFORMS. 15

3. WTO Accessions: CONTRIBUTIONs TO Structural REforms and ECONOMIC DIVERSIFICATION.. 18

4. Structural reform agenda for the remaining accessions. 20

VI. WTO POST-ACCESSION SUPPORT. 22

VIi. TRADE AND ECONOMIC PERFORMANCE OF ARTICLE XII MEMBERS. 24

viii. CONCLUSIONS - OUTLOOK 2017. 28

ANNEX 1 - ACCESSIONS DIVISION WORK INDICATORS. 30

ANNEX 2 - ACCESSIONS NEGOTIATED PURSUANT TO ARTICLE XII. 31

ANNEX 3 - WTO ACCESSIONS WORKING PARTY (WP) CHAIRPERSONS. 32

ANNEX 4 – LENGTH OF TIME OF COMPLETED ACCESSIONS. 33

ANNEX 5 - SECTION VIi-DATA ON ECONOMIC PERFORMANCE. 34

ANNEX 6 - ACCESSIONS MANAGEMENT. 35

I. Introduction and Overview

1.       I am pleased to present the Eighth Annual Report on WTO Accessions.  In 2016, Members continued supporting WTO accessions to achieve universality as a strategic priority for the Organization.  With the accessions of Liberia and Afghanistan in July, the WTO membership increased from 162 to 164.  As for the on-going accessions, in addition to the activation of several new accessions, this year also saw the re-activation of a number of accession processes after periods of inactivity, which has prepared the ground for substantive and intensive engagement on Article XII negotiations in 2017.  Moreover, in keeping pace with the evolving standards for openness and transparency in trade negotiations, the Secretariat launched the Accessions Intelligence Portal (AIP), which provides improved access to documentation and data on WTO accession.

2.       The accessions of Liberia and Afghanistan were gavelled at the Tenth WTO Ministerial Conference (MC10) in December 2015, in Nairobi, Kenya.  Along with the adoption of the "Nairobi package" of decisions, the accession of these two countries has sent a powerful signal to the international community about the ability of the WTO to deliver results which can unlock the growth and development potential of vulnerable economies.  Not only did these two accessions provide positive impetus to MC10 and its deliverables, they also underscored the role that the Organization can play in responding to the needs of post-conflict LDCs and enabling their integration into the global economy.  In particular, in the year under review, the two completed LDC accession processes provided a unique opportunity for the Secretariat to refine its approach to post-accession support and ensure that the benefits of accession reforms are delivered from day one of membership.  The main focus of the WTO Post-Accession Implementation Support and its associated training was to assist the new Members in preparing for participation in the day-to-day work of the WTO.  The results of this new approach have been tangible and positive for Liberia and Afghanistan, as reflected in the timely completion of the domestic ratification procedures of their respective Accession Protocols (and the Trade Facilitation Agreement in the case of Afghanistan), the submission of a comprehensive set of initial notifications during the first month of membership, and the receipt of substantial specific post-accession support from development partners.  As Director-General, I reiterate the critical importance of post-accession support, especially for LDCs, as the Organization continues to accord priority to their accessions.

3.       At the time of issuing this Annual Report, there are 19 ongoing WTO accessions.^[2]  In 2016, substantive technical progress was registered on several accessions, setting the stage for further advancement in 2017.  The accession of Bosnia and Herzegovina moved to the final stages of the process following the completion of legislative work, but a number of outstanding bilateral market access negotiations need to be concluded before this accession can be finalized.  Good progress has also been registered in two LDC accessions. The Working Party on the Accession of the Union of the Comoros completed a substantive initial review of Comoros' trade regime at its first meeting, which paves the way for entering the negotiation phase of the process in 2017.  The accession of Sudan has been restarted after 12 years of inactivity and a Working Party meeting will be shortly reconvened on the basis of an updated set of technical inputs.  As 2016 comes to a close, these two LDC accessions have entered into decisive stages, supported by high‑level political commitment in their respective governments.  In this regard, I am pleased to observe the constructive engagement by all parties in exploring ways to accelerate LDC accessions.  This effort is based on the accession experience of Liberia, which has provided an example for a fast-track accession when key elements are met both politically and technically.

4.       The year 2016 also marked the re-activation of several accession dossiers.  Building on the accessions of the Russian Federation (2012) and of Kazakhstan (2015), the accession of Belarus is being re-started as the "last chapter" of the accessions of the Eurasian Economic Union.  A technical base is also being prepared for the resumption of the accession of Lebanon.  Technical work on the accession of Iran, the biggest economy outside of the multilateral trading system, could be undertaken on the basis of updated negotiating inputs to be submitted by Teheran.  In addition, regular technical exchanges were held on the accession of Azerbaijan.  While there is clear potential for substantive progress in all these processes, sustained engagement by the acceding governments, on both the legislative and negotiating fronts, will be essential for moving these accessions to an advanced phase in 2017.

5.       This year is closing with two applications for WTO accession from Somalia and Timor-Leste.  These new expressions of interest in joining the Organization manifest the confidence of post-conflict states in using the accession process to develop, and build or re-build their economies.  These applications will be considered by WTO Members at the last meeting of the General Council in 2016 for a formal decision on the establishment of Working Parties.

6.       Every Annual Report has a thematic focus.  This year, as the global economy continues to experience weak growth and uncertainty, I chose the topic of structural reform and WTO accessions.  Reform is one of the main reasons to undertake an accession process for the 55 applicants which have expressed interest to join the Organization through the Article XII process since its establishment in 1995.  Empirical evidence suggests that WTO accession, whose process normally entails domestic reforms, has had an overall positive impact on the economic performance of the 36 Article XII Members.  The section also concludes that the accession process has had a positive impact on the structure of most of their economies which became more diversified after accession, with more than a half of Article XII Members experiencing an increase in the number of commodities exported after WTO membership.  Looking at the remaining accessions, which involve a large number of economies dominated by a narrow-range of export products, the agenda of structural reforms will remain a critical, if not overriding impetus, for economic diversification, increased competitiveness, private sector development and improvements in the business environment and governance - within the overall goals of faster growth and job creation.

7.       Specific actions were taken this year to enhance transparency.  To better serve the WTO Membership, the Secretariat continued to upgrade its electronic platforms, through the launch of the Accessions Intelligence Portal (AIP) in July.  Monthly meetings of the Informal Group on Accessions (IGA) and the annual outreach cycle with WTO regional groups continue to serve as an important platform for information exchange between Members and the Secretariat on fast-evolving accession processes.  The Accession Newsletter was re-designed in 2016 and became more widely disseminated, including through the use of WTO social media.  This year, we have maintained Central Asia as a region of strategic focus. The first WTO Trade Policy Forum was organised in Ashgabat, Turkmenistan where Members – old and new – and those yet to join the Organization from the region, debated the role of the multilateral trading system and, in particular, that of WTO accession and the Trade Facilitation Agreement in promoting regional integration.

8.       I am grateful for the valuable support which has been provided in the area of accession-related technical assistance and post-accession support by a range of WTO Members, including China, the European Union (and its member States such as Sweden), India, Japan and the United States.  The partnership has been strengthened between the WTO and the Enhanced Integrated Framework and its core partners, including the International Monetary Fund, the International Trade Centre, the UN Conference on Trade and Development and the World Bank, based on complementary contributions to respond to the specific needs of LDCs during accession and the post-accession phase.  The Secretariat has also benefited from collaboration and expertise from its regional partners, including the Asian Development Bank, the UN Economic and Social Commission for Asia and the Pacific, and the UN Economic Commissions for Africa and Europe.  Furthermore, the China Least Developed Countries' and Accessions Programme ("China Programme") continues to make a distinct and valuable contribution to LDC accessions; this year, specific support has been extended to the accessions of Comoros and Sudan, and the post-accession of Afghanistan and Liberia.  The next China Round Table, which will be the fifth, is envisaged to be held in March 2017, in Cambodia, one of the first LDCs which joined in the Organisation in 2004.

9.       2016 has been a good year for WTO accessions.  The WTO family has grown and its accession community is being expanded with new applications.  Technical progress has been made on several accessions for further substantive advancement in 2017, which I expect will be another busy yet fruitful year for WTO accessions.  The accession dossiers will remain an area of prime attention for me as Director-General, as the Organization strives to achieve the strategic goal of universality, based on its core principles of inclusiveness, openness and non-discrimination.  I look forward to working closely with the acceding governments and Members so that we are in a position to deliver substantive outcomes for the Organization, including on the LDC accession front, in the WTO ministerial year of 2017.

II. 2016 DEVELOPMENTS

1. Accession working parties:  An overview of activities

10.    Nineteen (19) acceding governments were in the process of WTO accession, at the start of the year. These negotiations were managed through a combination of formal and/or informal multilateral, plurilateral and bilateral meetings (See Annex 1).  In the year under review:

-                 Two (2) formal Working Party meetings were held.  These were on the accessions of:  Azerbaijan (one^[3] meeting); and, Comoros (one^[4] meeting).

 

-                One (1) plurilateral meeting addressed specific technical issues in the area of agriculture^[5], on the accession of Azerbaijan.  This plurilateral meeting was chaired by the Officer-in-Charge of the Accessions Division.

11.      In 2016, progress at the accession Working Parties, was documented as follows:

-                Draft Reports were revised by the Secretariat for two Working Parties: Bosnia and Herzegovina (one revision) and, Azerbaijan (one revision).     

 

2. WORKING PARTY CHAIRPERSONs

12.    There were several changes in the status of Accession Working Party Chairpersons in 2016, in a chronological order: 

 

-                H.E. Mr. Rajmund Kiss (Hungary) took over the Chairmanship of the Working Party on the accession of Bosnia and Herzegovina, in January 2016, following the retirement of H.E. Mr. István Major (Hungary);

 

-                H.E. Mr. Walter Werner (Germany) took over the Chairmanship of the Working Party on the accession of Azerbaijan, in March 2016, following the retirement of H.E. Mr. Walter Lewalter (Germany);

 

-                Mr. Ryosuke Kuwana (Japan) was designated as the Chairperson of the Working Party on the accession of Sudan, in July 2016;

 

-                H.E. Mr. Gustavo Miguel Vanerio Balbela (Uruguay) took over the Chairmanship of the Working Party on the accession of Algeria, in October 2016, following the departure of H.E. Mr. Alberto D'Alotto (Argentina);

 

-                The position of Chairperson of the Working Party on the accession of Belarus became vacant due to the departure of H.E. Mr. Haluk Ilicak (Turkey). Consultations with Members are ongoing on the designation of the new Chairperson of the Working Party;

 

13.    At present, eight of the Chairpersons are Geneva-based.  There are six vacancies for the positions of Chairpersons of Accession Working Parties (see Annex 3).  These include vacancies on accessions at their initial stages, where no documentary basis for work exists, at this time.

 

14.    In 2016, Working Party Chairpersons remained actively engaged.  They consulted with Members and acceding governments in various formats and configurations and, engaged in outreach to improve technical and policy understanding on WTO accessions.  The active engagement of Chairpersons advanced the accession processes, including through country visits.

15.    The Chairperson of the Working Party on the accession of Lebanon, Mr. Jean-Paul Thuillier (France), led a mission, accompanied by the Director of the Accessions Division and the Working Party Secretary, to Beirut, on 9-10 March, at the invitation of the Government. The objectives of the mission were threefold: (i) to review the state-of-play on the accession of Lebanon to ascertain the level of commitment and the technical ability of the government of Lebanon and assess support in the wider economy, to re-start and advance the accession process; (ii) to establish clarity with the government of Lebanon on the technical substance required; and, (iii) to agree on practical next steps based on an accession roadmap.  The mission programme included meetings with: (i) H.E. Mr. Tammam Salam, Prime Minister, and the Cabinet of Ministers; and, (ii) the Parliament.  The meetings and consultations underscored the pressing necessity to re-start and conclude the accession of Lebanon. 

16.    The Chairman of the Working Party on the accession of Bosnia and Herzegovina, H.E. Mr. Rajmund Kiss (Hungary), led a mission, accompanied by the Director of the Accessions Division and the Working Party Secretary, to Sarajevo, from 20 to 22 June, at the invitation of the Government. The objectives of the mission were: (i) to take stock of the progress that had been registered; (ii) to review what remained outstanding; and, (iii) to underscore for the authorities in Sarajevo the importance for prompt decision-making to conclude the accession of Bosnia and Herzegovina. The WTO delegation met with H.E. President Bakir Izetbegović; H.E. Mr. Denis Zvizdić, Chairperson of the Council of Ministers of Bosnia and Herzegovina; the Chairpersons of the Houses of Parliamentary Assembly, other senior officials and stakeholders. 

17.    In keeping with systemic transparency obligations, the Chairpersons of the Working Party reported to Members and the progress of the work in their respective Working Parties, including the results of their visits, at the Informal Group on Accessions (IGA).^[6]

3. Transparency in the accession process

18.    Ensuring transparency and predictability in the accession process remain key priorities for the WTO Director-General and the WTO Membership.  In 2016, the transparency measures that were introduced since 2010 continued to be implemented and reinforced.    

i.             Informal Group on Accessions (IGA)

19.      The Informal Group on Accessions (IGA) held 10 meetings in 2016.  Consultations in the Informal Group focused on:  (i) information exchange on accessions; (ii) Secretariat reports on technical developments in accession processes; (iii) reports by Working Party Chairpersons; (iv) planning of accession meetings and related activities on the basis of the Secretariat Evolving Calendar of Accession Meetings (ECAM); and, (v) addressing specific concerns raised by Members and acceding governments.

ii.            WTO Accessions Newsletter

20.    In 2016, the Secretariat prepared ten WTO Accessions Newsletters.  The Newsletter has served its purpose to ensure transparency on accession matters, report on monthly meetings of the Informal Group on Accessions (IGA) and, enhance communication with acceding governments, Chairpersons, Members and the broader global trade policy community. The newsletter was re‑designed with a view to enhancing friendliness for readers.  The number of subscribers to the Newsletter in 2016 was 721, excluding the Secretariat.

iii.           2016 Annual Outreach Dialogue with WTO Regional Groups

21.    As part of its 2016 annual outreach dialogue with WTO regional groups, a briefing for LDCs was provided at the Seventy-Ninth session of the Sub-Committee on LDCs held on 19 October.  Annual outreach dialogue on accessions was conducted with the GRULAC on 21 November; the African Group on 22 November; the WTO Arab Group on 25 November; and, the Informal Group of Developing Countries on 28 November.  The objective of the outreach dialogue is to strengthen communication channels with Members and acceding governments alike, through the WTO regional groups.  The briefings provide a platform to exchange region-specific information on WTO accessions; and respond to accession-specific concerns by Members and Acceding Governments.  They strengthen the collaboration between Members, acceding governments and the Secretariat. 

4. technical assistance and outreach

22.     The WTO Biennial Technical Assistance and Training Plan for 2016-2017 establishes support for acceding governments as one of its four overarching objectives.^[7]  The Plan grants priority attention to acceding LDCs. 

23.    Traditionally, accession-related technical assistance and capacity-building focus on training for government officials.  These activities, however, also cover outreach and awareness-raising activities for Parliamentarians, the private sector, academia, civil society and the media.

24.    In the period under review, technical assistance and capacity-building activities included:  (i) national seminars; (ii) sessions on accessions in advanced trade policy courses, regional courses and introductory courses for LDCs; (iii) workshops; (iv) technical missions; (v) establishment/upgrade of WTO Reference Centres; (vi) e-Learning; (vii) outreach dialogue with WTO groupings; and, (viii) participation in conferences.    

25.    This year, the Secretariat pioneered the first-ever dedicated training on post-accession for Liberia and Afghanistan, the two most recently acceded LDCs, before their official WTO membership.  The National Workshop on Post-Accession for Liberia, 27-29 June, and the Policy Dialogue on Post-Accession for Afghanistan, 11-15 July, were held in preparation for their official WTO membership dates of 14 and 29 July, respectively.  The two activities focused on the implementation of accession-specific commitments by the two soon-to-be Members, including the preparation of their initial notifications.  In addition to the country-specific post-accession activities, a high-level WTO Post-Accession Forum was held on 19 July in Nairobi, Kenya, on the margins of the Fourteenth session of the United Nations Conference on Trade and Development (UNCTAD14) where Trade Ministers from Liberia and Afghanistan shared their visions and strategies for membership and indicated post-accession needs to the development partners (see Section IV "WTO Post-Accession Support").

26.    The Secretariat organised its first Trade Policy Forum with the focus on the region of Central Asia, in Ashgabat, Turkmenistan, on 11-13 May, in partnership with the UN Economic Commission for Europe (UNECE).  The First Trade Policy Forum on Central Asia and the Multilateral Trading System focused on the dual themes of the trade policy agenda of the region: i) WTO accession and associated domestic reforms; and ii) regional integration, including the implementation of the WTO Trade Facilitation Agreement.  At the conclusion of the Ashgabat Trade Policy Forum, participants from the region and its neighbouring countries adopted the Ashgabat Statement.^[8]  The outcome document also set-out a framework for the WTO to sustain its engagement with the region, including the establishment of a "Network of Central Asian Chief Negotiators". 

27.    From 28 November to 2 December, the Secretariat organised the Course on Trade in Services for WTO Acceding Governments.  Participants included 27 officials from 14 governments (acceding governments and governments applying for WTO accession).  The course objectives were to: (i) review key milestones in the accession process related to Trade in Services; (ii) provide in-depth training on all accession relevant aspects of Trade in Services, with a focus on scheduling, classification, and implementation issues in the main services sectors; and (iii) enhance the understanding of the negotiating objectives of other WTO Members involved in the accession negotiations; and (iv) provide a platform for exchanging views with services negotiators from recently completed accessions.

28.    In 2016, the Accessions Division was involved in the delivery of 24 technical assistance activities which were held by the Accessions Division, including the activities specified above.  The beneficiary countries included all acceding governments and, several Members.  Specifically, tailor-made technical assistance was delivered to Bhutan, Bosnia and Herzegovina, Lebanon and Sudan.  In addition, at the specific requests from Turkmenistan and Timor-Leste, which had no status in the Organization but expressed interest in applying for WTO observer status and WTO accession, respectively, the Accessions Division undertook technical missions to assist them in their application process.  

29.    In general technical assistance and capacity-building, in 2016, Acceding Governments were invited to participate in over 100 WTO TA activities.^[9]  Chart 1, below, shows the number of participants from Acceding Governments that completed TA activities during 2016.^[10]

Chart 1 - Participants from Acceding Governments in WTO TA Activities – 2016

30.    Accession-related TA and capacity-building were also provided by other institutions, and often in partnership with WTO Members.  The Secretariat continues to work in a strong and effective partnership with the Enhanced Integrated Framework (EIF), the International Trade Centre (ITC), Swedish National Board of Trade (SNBT), the United Nations Economic Commission for Europe (UNECE), the UN Economic and Social Commission for Asia and the Pacific (UNESCAP), and the World Bank.  Activities have been coordinated with positive results. 

31.    In 2016, the Enhanced Integrated Framework (EIF) provided technical and capacity‑building support in the accessions of Liberia and Afghanistan. The EIF supported Liberia through financing technical expertise in the Ministry of Commerce and Industry and played an advocacy role in encouraging partners to contribute to the post‑accession programme of support.  For Afghanistan, while the 2012 DTIS addressed some accessions‑related issues, the main EIF support would  focus on Afghanistan's post‑accession needs, with the implementation of an institutional capacity‑building project to strengthen the national implementation arrangements.  In this context, it should be noted that for the first time, the Executive Secretariat for the EIF participated in a WTO post‑accession activity for Afghanistan held in July, in partnership with the UNESCAP.  The EIF also continued supporting the WTO accession processes in Bhutan, Comoros, Ethiopia, São Tomé and Príncipe, Sudan and Equatorial Guinea, in accordance with the countries' specific demands.   

           i.          China LDCs' and Accessions Programme

32.    The China "Least Developed Countries (LDCs) and Accessions Programme" (hereafter:  the China Programme) was established by the Government of China and the WTO on 14 July 2011.  China undertook the fifth renewal and extension on 14 December 2015, with a contribution of US$500,000.

33.    The China Programme is aimed at strengthening LDCs' participation in the WTO and assisting LDCs acceding to the WTO.  It is an accession-specific focused programme that takes account of the concerns and priorities of LDCs.  The China Programme comprises five pillars:

i. The WTO Accessions Internship Programme;

ii. Annual WTO Accessions Round Table;

iii. LDCs' participation in WTO meetings;

iv. South-South dialogue on LDCs and development; and,

v. LDCs' Trade Policy Review follow-up workshops.

34.    With respect to the WTO Accessions Internship Programme, in the year under review, four interns benefited from this Programme.^[11]   So far, 20 trainees have benefitted from the China Accession Internship Programme.   

35.    Regarding the annual WTO Accessions Round Table, the fifth China Round Table will be hosted by the Government of Cambodia in March 2017.  Consultations have been underway on the theme and programme for the Fifth China Round Table. 

36.    The Fourth China Round Table on WTO Accessions and the Multilateral Trading System was held in Nairobi, Kenya from 13 to 14 December 2015, back-to-back with the Tenth WTO Ministerial Conference.  The theme of the Fourth China Round Table was "Domestic Reforms for Competitiveness and Deeper Trade Integration in the Global Economy", with the focus on Africa. The result of the Fourth China Round Table is reflected in a book: "African Perspectives on Trade and the WTO: Domestic Reforms, Structural Transformation and Global Economic Integration" published by the WTO and the Cambridge University Press in September 2016. This book proposes a range of African perspectives on the role of trade, the WTO and its future agenda. 

37.    Under the sponsorship by the China's LDCs and Accessions Programme (the "China Programme"), two tailor-made activities geared towards post-accession capacity-building were delivered for Liberia on 27-29 June in Monrovia, Liberia, and for Afghanistan on 11-15 July in Bangkok, Thailand, as reflected in Section on Post-Accession Support.  Allocation has been made to meet specific needs of the accession of Comoros and Sudan as the two acceding governments embarked on accelerated accession processes.

          ii.          Other Outreach Activities

38.    In 2016, the Accessions Division updated and modernized the E-learning module on WTO Accessions in collaboration with the Institute for Training and Technical Cooperation (ITTC).  The E-learning module on WTO accessions is generally prerequisite to any WTO accession-specific training activities for acceding governments.    

5. Accessions Transparency Tools Box (ATTB)

i. WTO Accessions Intelligence Portal (AIP)

39.    The Accessions Intelligence Portal (AIP) is the latest accession transparency initiative launched in 2016.  The launch of the AIP, by WTO Deputy Director-General David P. Shark at a meeting of the Informal Group on Accessions on 26 July 2016, was a significant step in achieving a greater standard for openness and transparency for WTO accessions. The AIP is available at: https://www.wto.org/accessions. 

40.    The Accessions Intelligence Portal upgrades the existing accessions gateway on the WTO website, providing improved access to documentation and data on the WTO accessions process.  The new features offered by the AIP include:

a)    direct access to all notified legislation in completed WTO accession processes since 1995;

b)    a Legislative Action Plan Register for all WTO members that have joined since 1995;

c)    an interactive tracker, which provides comprehensive information on the status of ongoing accessions; and

d)    an interactive WTO accessions map with a time bar allowing users to see the evolution of WTO membership since 1995. 

ii. Accession Commitments Database (ACDB)

41.    The Accession Commitments Database (ACDB) provides access to all accession-specific commitments and related information contained in Accession Working Party Reports of 36 Article XII Members.  The ACDB is available in the three official languages of the WTO at: http://acdb.wto.org.

42.    In 2016, the ACDB was updated to include the accession-specific commitments as contained in the Reports of the Working Party on the Accession of Afghanistan and Liberia, which became WTO members in July 2016.      

iii. Secretariat Register of Bilateral Market Access Agreements

43.    The Register of Bilateral Market Access Agreements contains basic information regarding signed Bilateral Market Access Agreements on Goods and Services that have been deposited with the Secretariat.  The information includes: the sector of the agreement (goods; services; or both, as applicable); and, the dates of signature and deposit.  Reports generated by this Register are available to WTO members only via a secure/password-protected access: https://www.wto.org/english/thewto_e/acc_e/xacc_e/register_e.htm. 

44.    In accordance with long-standing practice, the substantive content of Bilateral Market Access Agreements remains absolutely confidential to the parties that signed the Agreement, as well as the Secretariat with whom the Agreements are deposited.  

III. State-of-play in accession working parties

45.    In the period under review, two accessions were concluded.  Following formal action by Members to adopt the accession packages of Liberia and Afghanistan at the Tenth Ministerial Conference in Nairobi, Kenya, in December 2015, the two acceding governments completed their domestic ratification procedures and deposited their respective instruments of acceptance on 14 June and 29 June, respectively.  Liberia became the 163^rd Member of the WTO on 14 July, and Afghanistan became the 164^th Member of the Organization on 29 July 2016.

46.    WTO accession negotiations advance on the basis of three interdependent tracks – with multilateral, bilateral, and in many cases, plurilateral processes running in parallel.  Separately, there are domestic processes in the acceding governments to establish national negotiating positions and to decide on inputs.  In 2016, there was mixed progress in the 19 on-going accessions.  Some advanced whereas others did not advance, as planned.  A range of factors, as in the past, remain in play.  They include, but are not limited to, continued negotiations with Members; technical complexities; domestic challenges; political choices to delay for more impact analysis; re‑ordered priorities; and/or immediate post-conflict situations.

47.    Algeria:  Algeria applied for WTO accession in June 1987. The Working Party on the Accession of Algeria was established in June 1987.  The 12^th meeting of the Working Party was held in March 2014.  The most recent version of the draft Working Party Report was circulated in February 2014.  Bilateral market access negotiations are on-going with interested Members on the basis of revised market access offers circulated to the Woking Party in November 2013 (goods) and October 2013 (services).  The next meeting of the Working Party will be convened after replies to Members' questions and a complete set of updated technical inputs have been submitted by the Acceding Government.

48.    Andorra: Andorra applied for WTO accession in July 1997. The Working Party on the Accession of Andorra was established in October 1997. The Working Party held its first and only meeting in October 1999.  This accession process is inactive, and there are no indications of any intentions to re-start the process. 

49.    Azerbaijan: Azerbaijan applied for WTO accession in June 1997.  The Working Party on the Accession of Azerbaijan was established in July 1997.  The 13^th meeting of the Working Party was held in July 2016.  Multilateral negotiations are underway on the basis of a draft Working Party Report. The second revision of the draft Report was circulated in June 2016.  Bilateral market access negotiations with interested Members are ongoing on the basis of revised market access offers circulated to the Working Party in November 2014 (goods) and, in February 2015 (services).

50.    The Bahamas: The Bahamas applied for WTO accession in May 2001.  The Working Party on the Accession of The Bahamas was established in July 2001.  The second Working Party meeting was held in June 2012.  A Factual Summary of Points Raised was sent to Nassau for factual updates in August 2013.  In July 2015, Nassau submitted negotiating inputs, comprising its feedback on the Factual Summary, an updated Legislative Action Plan (LAP) and three projects of legislation.  The timing of the next meeting of the Working Party will be subject to the finalization of the draft Factual Summary, and the submission by Nassau of required updated negotiating inputs, including an updated LAP and revised market access offers on goods and services.

51.    Belarus:  Belarus applied for WTO accession in September 1993.  The Working Party on the Accession of Belarus was established in October 1993.  The seventh meeting of the Working Party was held in May 2005.  Informal Consultations by the Chairperson took place in 2010, 2012 and 2013.   Belarus submitted updated negotiating inputs in August 2016. These inputs were used by the Secretariat to revise and update the Factual Summary of Points Raised (last circulated in November 2012). This document, along with other updated documentation submitted by Belarus, will provide the basis for holding the next meeting of the Working Party.

52.    Bhutan: Bhutan applied for WTO accession in September 1999.  The Working Party on the Accession of Bhutan was established in October 1999.  The fourth meeting of the Working Party was held in January 2008.  The most recent market access offers on goods and services were circulated in November 2007.  The latest version of the draft Working Party Report was circulated in December 2007.  The Secretariat prepared a revision of the draft Report in 2008, but Bhutan is yet to submit its comments on the revised draft.  Bhutan is periodically in touch with the Secretariat on domestic consultations under way.  This year, at the occasion of the establishment of a WTO Reference Centre at the Ministry of Economic Affairs in September, the acceding Government held consultations with the Secretariat on its accession process.

53.    Bosnia and Herzegovina: Bosnia and Herzegovina applied for WTO accession in May 1999.  The Working Party on the Accession of Bosnia and Herzegovina was established in July 1999.  The 12^th meeting of the Working Party was held in June 2013.  The latest version of the draft Working Party Report was circulated in April 2016.  There remain outstanding bilateral market access negotiations with a limited number of Members.  The next meeting of the Working Party will be convened, as appropriate: (i) to review recent domestic legislative action; (ii) to finalize the draft Working Party Report; and (iii) to review the status of bilateral market access negotiations.

54.    The Union of the Comoros: The Union of the Comoros applied for WTO accession in March 2007. The Working Party on the Accession of the Union of the Comoros was established in October 2007. The Memorandum on the Foreign Trade Regime (MFTR) was circulated in October 2013.  Following technical exchange with the Secretariat, negotiating inputs were submitted in September 2016 and were circulated to the Working Party in October 2016. At the same time, Comoros also circulated initial market access offers on goods and services.  The first meeting of the Working Party was convened on 2 December 2016.

55.    Equatorial Guinea: Equatorial Guinea applied for WTO accession in March 2007. The Working Party on the Accession of the Republic of Equatorial Guinea was established in February 2008. No Working Party meeting has been held to date. Equatorial Guinea has not submitted any negotiating inputs to initiate the accession process.  In October 2016, Equatorial Guinea requested technical assistance from the Secretariat for 2017 to help the Government improve its knowledge on the preparation of a Memorandum on the Foreign Trade Regime. 

56.    Ethiopia: Ethiopia applied for WTO accession in January 2003.  The Working Party on the Accession of Ethiopia was established in February 2003. The third meeting of the Working Party was held in March 2012.  An initial market access offer on goods was circulated in February 2012.  The next meeting of the Working Party will be convened once Ethiopia submits negotiating inputs required for the transformation of the Factual Summary into an Elements of a draft Working Party Report, as well as an initial market access offer on services.    

57.    Islamic Republic of Iran: The Islamic Republic of Iran applied for WTO accession in July 1996.  The Working Party on the Accession of the Islamic Republic of Iran was established in May 2005. The Memorandum on the Foreign Trade Regime (MFTR) was circulated in November 2009.  Technical inputs submitted by Iran, including replies to Members' questions on the MFTR, were circulated in 2011.  To convene the first meeting of the Working Party, the Chairperson of the General Council would need to undertake consultations with Members on the designation of a Chairperson of the Working Party.  There is on-doing domestic preparatory activity to provide a technical platform for the re-engagement of the Islamic Republic of Iran in the accession process. 

58.    Iraq: Iraq applied for WTO accession in September 2004. The Working Party on the Accession of Iraq was established in December 2004. The second meeting of the Working Party was held in April 2008.  Iraq provided a number of negotiating inputs requested by the Working Party.  The next meeting of the Working Party will be scheduled when Iraq submits updated negotiating inputs, including its initial market access offers on goods and services.    

59.    Lebanese Republic: The Lebanese Republic applied for WTO accession in January 1999.  The Working Party on the Accession of the Lebanese Republic was established in April 1999.  The seventh meeting of the Working Party was held in October 2009.  The first revision of the draft Working Party Report was circulated in October 2009.  The latest revisions of the market access offers on goods and services were circulated in June 2004.  Following a visit by the Chairperson of the Working Party to Beirut in March, the Secretariat undertook a technical assistance mission on the preparation of revised market access offers. The next meeting of the Working Party will be convened after Beirut submits negotiating inputs, including factual updates to the draft Working Party Report to reflect developments since 2009, an updated Legislative Action Plan and, revised market access offers on goods and services.

60.    Libya: Libya applied for WTO accession in June 2004.  The Working Party on the Accession of Libya was established in September 2004.  The Working Party has never met.  Libya has not submitted any negotiating inputs to initiate the process of accession negotiations.

61.    São Tomé and Principe: São Tomé and Principe applied for WTO accession in February 2005. The Working Party on the Accession of São Tomé and Principe was established in June 2005.  São Tomé and Principe has not submitted any inputs to initiate the process of accession negotiations.  São Tomé and Principe is subject to Category III^[12] administrative measures. No Working Party meetings can be convened for acceding governments falling under these measures

62.    Serbia: Serbia applied for WTO accession in December 2004. The Working Party on the Accession of Serbia was established in February 2005.  The 13^th meeting of the Working Party was held in June 2013.  The latest version of the draft Working Party Report was circulated in October 2012.  Bilateral market access negotiations with interested Members are outstanding.  The next meeting of the Working Party will be convened when: (i) outstanding domestic legislative action is completed by Belgrade; (ii) work on the latest draft of the Working Party Report is finalized; and, (iii) substantial progress on the remaining bilateral market access negotiations is registered.   

63.    Sudan: Sudan applied for WTO accession in October 1994.  The Working Party on the Accession of Sudan was also established in October 1994.  The second meeting of the Working Party was held in March 2004.  After 12 years of dormancy and following a Secretariat's 2-week technical assistance mission to Khartoum in late September, the updated Memorandum on the Foreign Trade Regime, a Legislative Action Plan were circulated to the Working Party in October 2016.  Other negotiating inputs were submitted thereafter, including revised market access offers on goods and services.  The next meeting of the Working Party could be convened early next year. 

64.    The Syrian Arab Republic: The Syrian Arab Republic applied for WTO accession in October 2001.  Its application was reviewed in 2004, 2005 and 2010.  The Working Party on the Accession of the Syrian Arab Republic was established in May 2010.  No Working Party meeting has been held to date.  The Syrian Arab Republic has not submitted any negotiating inputs to initiate the process of its accession negotiations. 

65.    Uzbekistan: Uzbekistan applied for WTO accession in December 1994.  The Working Party on the Accession of Uzbekistan was also established in December 1994.  The Third Meeting of the Working Party took place in October 2005.  This accession is dormant.

IV. least-developed countries' ACCESSIONS

66.    In the year under review, positive developments were registered with regard to LDCs accessions.  Two LDCs joined the WTO in 2016: Liberia became the 163^rd Member on 14 July; and, Afghanistan became the 164^th Member on 29 July.  With these two additions, 9 Members, or in other words  25 per-cent of the 36 completed accessions since the establishment of the WTO in 1995, acceded to the Organization as LDCs.^[13] 

67.    With respect to six on-going accessions of LDCs, positive developments have been registered in the accessions of Comoros and Sudan.  The Secretariat has been in technical contacts with Comoros and Sudan to identify areas where technical negotiating inputs were missing.  The aim of the exchanges was to prepare updated and comprehensive sets of negotiating documentation which would be reviewed by their respective Working Parties, scheduled at the time of writing this report, in the last quarter of 2016.

68.    Bhutan and Ethiopia sustained contacts with the Secretariat, but there has been no substantive technical engagement at the level of the Working Party on these dossiers. 

69.    Equatorial Guinea recently indicated its readiness to prepare the base documentation for its accession process and was in touch with the Secretariat regarding the organization of a workshop focused on the preparation of the Memorandum of the Foreign Trade Regime, in 2017.  São Tomé and Principe is still subject to Category III of Administrative Measures.

70.    In 2016, there were two requests to join the WTO pursuant to Article XII of the Marrakesh Agreement establishing the WTO.  In November, the applications for WTO accession from Somalia and Timor-Leste were circulated to WTO Members.  These applications were expected to be considered by WTO Members at the meeting of the General Council in December 2016, with a view to the establishment of respective Working Parties to examine the applications.  

71.    In response to the human capital and resource constraints of LDCs, the Secretariat continues to provide a combination of generalized start-up technical assistance activities with tailored accession-specific activities to acceding LDCs at all stages of their WTO accession process.  This year, as in previous years, technical assistance to acceding LDCs delegations in Geneva was combined with assistance to capital-based officials.   This customized assistance is being improved and refined in several ways.  For instance, this year, a structured framework for post-accession support was developed by the Secretariat and specialised post-accession training was delivered to Liberia and Afghanistan in preparation for their membership (see Section "WTO Post-Accession Support").

72.    In addition to in-house Secretariat support, Members have continued to provide technical support for LDC Accessions.  This includes, amongst others, capacity-building on the platform of the China "Least-Developed Countries (LDCs) and Accessions Programme".  So far, nine of the 20 interns have been trained under the WTO Accessions Internship Programme were from LDCs.

73.    Several WTO Members continue to sustain and upgrade their capacity-building and technical support for Acceding LDCs.  Some do, nationally, others on the platform of the Enhanced Integrated Framework (EIF).  Steady support has been extended from Australia, Brazil, the European Union (including dedicated programmes from its individual member States, such as Sweden), India, Japan, and the United States.

74.      In 2012, the General Council adopted the Addendum to WT/L/508 to strengthen, streamline and operationalize the Guidelines on LDCs' Accessions.^[14]  Members are mindful of these Guidelines in on-going active LDCs' accessions.  The Director-General has underscored the vital importance of Members to be cognizant of these Guidelines in facilitating negotiations with LDCs.  Members were sensitive to these Guidelines in the conclusion of the accession negotiations of Liberia and Afghanistan.

V. wto accession template for structural reforms and economic diversification

1. Introduction

75.    WTO accession has been used as a platform to launch, deepen and consolidate a structural transformation of the economies of acceding governments.  An accession process typically involves a series of economy-wide reforms undertaken by the acceding government, which are made in the framework of multilateral trading rules.  Based on the empirical evidence from 36 completed accessions to date, WTO accessions have had a far-reaching impact on policy-making, legal and economic and structural reforms.^[15]

76.    Structural reform has been at the centre of the global economic agenda for strong, sustainable and balanced growth, as reflected in the Hangzhou Consensus adopted by G20 Leaders in September 2016.  In the communiqué, the importance of structural reforms is stressed in boosting productivity and potential output, as well as promoting innovative growth.  While noting that the choice and design of structural reforms may differ from one country to another, promoting trade and investment openness has been identified as one of the nine priority areas of structural reforms.^[16]  The guiding principles for this priority area include: (i) reduction of tariff and non-tariff barriers to trade; (ii) reduction of barriers and restrictions to foreign direct investment; (iii) implementation of trade facilitation measures to reduce border costs; (iv) reduction of behind-the-border restrictions on trade and investment and greater cross-border harmonization; and, (v) reduction of barriers to trade and investment through multilateral as well as plurilateral and bilateral agreements while minimising the discriminatory measures against third parties.  These guiding principles coincide with reform actions which are often pursued as part of the accession negotiations.

77.    This year's thematic focus explores the relationship between WTO accessions and structural reforms.  In doing so, this section will provide: (i) reasons for WTO accession; (ii) an accession template for WTO-consistent structural reforms which has emerged from more than two decades of WTO accession experience; (iii) some empirical evidence on the links between WTO accession and economic performance, including trade diversification; and, (iv) structural reform agenda for the governments in the process of accession.

2. WTO ACCESSION ACQUIS: TEMPLATE FOR WTO-CONSISTENT structural REFORMS

78.    As of December 2016, 55 states or customs territories have applied for WTO membership since the establishment of the Organization in 1995.  Application for WTO accession sends a powerful signal about the acceding government's readiness and commitment to WTO-consistent structural reforms, which are based on the values of open markets, non-discrimination, the rule of law and good governance.  Table 1 lists reasons for WTO accession, drawn from the Introductory Statements in the Working Party Reports of the 36 concluded accessions.  The table indicates that out of the 36 completed accessions to date, 28 Article XII Members cited economic reforms, including structural reforms, as one of the main reasons to seek WTO membership.  Moreover, reflecting a large number of so-called transition economies in the 36 accessions, the table indicates that a half of the Article XII Members cited the transition from central planning to market economy as one of additional reasons to join the WTO.

79.    Apart from these two reasons, individual Article XII Members had other reasons for seeking WTO membership to address their specific constraints or circumstances.  These included the need to diversify the economy away from its dependence on a narrow set of commodities (Oman and Saudi Arabia) or from its vulnerability associated with smallness (Cabo Verde, Samoa, Seychelles, Tonga and Vanuatu).  Several have also cited WTO membership as part of their nation-building processes after independence (these states emerged from the dissolution of the Soviet Union and the break-up of Yugoslavia) or post-conflict economic recovery (Afghanistan, Cambodia and Liberia).  In some other cases, WTO accession was a stepping stone to a regional integration initiative, such as membership of the EU or ASEAN, which often entailed broader and/or deeper structural reforms.^[17]  Almost all LDCs also referred to poverty reduction by way of WTO accession, reflecting their desire to use trade in general, and the WTO in particular, specifically as an instrument for economic development.

80.    WTO accession involves a process of negotiating enforceable WTO commitments for structural reforms.  This means that the acceding government would formulate and implement its legal, economic and policy framework in compliance with WTO rules.  However, as in any reform process, an accession process takes time; on average, it has taken 10 years and 4 months, to conclude an accession process for the 36 Article XII Members, as shown in Table 1.

Table 1: Reasons for WTO accession: 36 completed accessions

	Article XII Member	Date of WP establishment	Date of Membership	Total Time of Accession Process	Reasons for WTO accession: Introductory Statements in the Working Party Report
					Economic Reform	Transition From Central Planning to Market Economy
1	Ecuador	09/1992	01/1996	3 years 4 months	Y	N
2	Bulgaria	11/1986	12/1996	10 years 1 month	Y	Y
3	Mongolia	10/1991	01/1997	5 years 3 months	Y	Y
4	Panama	10/1991	09/1997	5 years 11 months	Y	N
5	Kyrgyz Republic	04/1996	12/1998	2 years 8 months	No Introductory Statements
6	Latvia	12/1993	02/1999	5 years 2 months	Y	Y
7	Estonia	03/1994	11/1999	5 years 8 months	N	Y
8	Jordan	01/1994	04/2000	6 years 3 months	Y	N
9	Georgia	07/1996	06/2000	3 years 11 months	Y	Y
10	Albania	12/1992	09/2000	7 years 9 months	Y	Y
11	Oman	06/1996	11/2000	4 years 5 months	Y	N
12	Croatia	10/1993	11/2000	7 years 1 month	Y	Y
13	Lithuania	02/1994	05/2001	7 years 3 months	Y	Y
14	Moldova	12/1993	07/2001	7 years 7 months	Y	Y
15	China	03/1987	12/2001	14 years 9 months	Y	Y
16	Chinese Taipei	09/1992	01/2002	9 years 4 months	N	N
17	Armenia	12/1993	02/2003	9 years 2 months	Y	Y
18	FYROM	12/1994	04/2003	8 years 4 months	Y	N
19	Nepal*	06/1989	04/2004	14 years 10 months	Y	N
20	Cambodia*	12/1994	10/2004	9 years 10 months	Y	N
21	Saudi Arabia	07/1993	12/2005	12 years 5 months	N	N
22	Tonga	11/1995	07/2007	11 years 8 months	N	N
23	Viet Nam	01/1995	01/2007	12 years	Y	Y
24	Ukraine	12/1993	05/2008	14 years 5 months	Y	Y
25	Cape Verde*	07/2000	07/2008	8 years	N	N
26	Montenegro	02/2005	04/2012	7 years 2 months	N	N
27	Samoa*	07/1998	05/2012	13 years 10 months	Y	N
28	Russian Federation	07/1993	08/2012	19 years 1 month	Y	Y
29	Vanuatu*	07/1995	08/2012	17 years 1 month	Y	N
30	Lao PDR*	02/1998	02/2013	15 years	Y	Y
31	Tajikistan	07/2001	03/2013	11 years 8 months	Y	Y
32	Yemen*	07/2000	06/2014	13 years 11 months	Y	N
33	Seychelles	07/1995	04/2015	19 years 9 months	Y	Y
34	Kazakhstan	02/1996	11/2015	19 years 9 months	Y	Y
35	Liberia*	12/2007	07/2016	8 years 7 months	Y	N
36	Afghanistan*	12/2004	07/2016	11 years 7 months	Y	N
				Average: 10 years 2 months	Total: 28	Total: 18

Source: Accession Working Party Reports.

* LDCs. Since WTO accession, two LDCs graduated from their LDC status - Cape Verde in 2007 and Samoa in 2014.

81.    The extensive reform measures undertaken by these governments during their accessions are reflected in the number of accession commitments which they undertook on rules and market access.^[18]  On multilateral rules, the 36 Article XII Members undertook a total of 1'547 accession specific commitments: on average, an Article XII Member made 42 commitments covering 54 areas related to WTO rules.  On market access, their reforms are reflected not only in the comprehensiveness of tariff binding coverage and of the coverage of services sub-sectors, but also in the depth and scope of commitments. For instance, on average, the tariff binding coverage of Article XII Members is near 100%, while that of original Members is 74%, while the number of specific commitments undertaken in services sub-sectors by Article XII Members is 102, which is more than double that of original Members.  In terms of the level of final bound rates, the average rate of Article XII Members is 13.5%, which is far below the average of 45.5% of original Members.

82.    More than 20 years of successfully concluded accessions have established and consolidated a template which provides the multilateral framework for recording the results of accession negotiations.  This template could also be used to facilitate and induce reforms for the structural transformation of an economy.  The main elements of the accession template are listed in Box 1.

Box 1: Accession template for WTO-consistent domestic structural reforms

ECONOMIC POLICIES -                 Monetary and fiscal policy -                 Foreign exchange and payments -                 Investment regime -                 State ownership and privatization, state-trading entities -                 Pricing policies -                 Competition policy FRAMEWORK FOR MAKING AND ENFORCING POLICIES -                 Powers of Executive, Legislative and Judicial branches of Government -                 Government entities responsible for making and implementing policies affecting foreign trade; Right of appeal -                 Division of authority between central and sub-central governments POLICIES AFFECTING TRADE IN GOODS -                 Trading rights -        Trade Facilitation[19] A.              IMPORT REGULATIONS -                 Ordinary customs duties -                 Other duties and charges -                 Tariff rate quotas, tariff exemptions -                 Fees and charges for services rendered -                 Application of internal taxes to imports -                 Quantitative import restrictions, including prohibitions, quotas and licensing systems -                 Customs valuation -                 Rules of origin -                 Other customs formalities -                 Pre-shipment inspection -                 Anti-dumping, countervailing duties, safeguard regimes B.              EXPORT REGULATIONS -                 Customs tariffs, fees and charges for services rendered, application of internal taxes to exports -                 Export restrictions -                 Export subsidies C.              INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS -                 Industrial policy, including subsidies -                 Technical barriers to trade, standards and certification -                 Sanitary and phytosanitary measures -                 Trade-related investment measures -                 Free zones, special economic areas -                 Government procurement -                 Transit -                 Agricultural policies TRADE-RELATED INTELLECTUAL PROPERTY REGIME -                 GENERAL -                 Industrial property protection -                 Responsible agencies for policy formulation and implementation -                 Participation in international intellectual property agreements -                 Application of national and MFN treatment to foreign nationals -                 Fees and taxes -                 SUBSTANTIVE STANDARDS OF PROTECTION, INCLUDING PROCEDURES FOR THE ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS -                 Copyright and related rights -                 Trademarks, including service marks -                 Geographical indications, including appellations of origin -                 Industrial designs -                 Patents -        TRIPS and public health -                 Plant variety protection -                 Layout designs of integrated circuits -                 Requirements on undisclosed information, including trade secrets and test data -                 ENFORCEMENT -                 Civil judicial procedures and remedies -                 Provisional measures -                 Administrative procedures and remedies -                 Special border measures -                 Criminal procedures POLICIES AFFECTING TRADE IN SERVICES TRANSPARENCY -                 Publication of information on trade -                 Notifications TRADE AGREEMENTS

 

3. WTO Accessions: CONTRIBUTIONs TO Structural REforms and ECONOMIC DIVERSIFICATION

83.    Table 2 lists Article XII Members by the characteristics of their economies, based on standard definitions used by the international community.  Out of the 36 Article XII Members, 11 are classified as resource-based, 21 as transition economies, five (5) as small islands developing states, ten (10) landlocked economies, and six (6) as post-conflict states, with overlapping categories which define structural constraints and limitations.  For these economies, WTO accession presented an opportunity to institute and lock-in reforms that could foster the structural transformation, modernisation and diversification of the economy within a multilateral policy framework provided by the WTO Agreements.

Table 2: WTO accession – Type of economy and export diversification

No	Article XII Member	Type of economy					Number of HS chapters accounting for more than 60% of exports
		Resource based	Tran-sition	Small Island Develop-ing State (SIDS)	Land-locked Country	Post-conflict	Year of Accession	2015 (+ 2014)
1	Ecuador	X					3	3
2	Bulgaria		X				13	13
3	Mongolia	X	X		X		2	2
4	Panama						3	5
5	Kyrgyz Rep.		X		X		6	3
6	Latvia		X				5	12
7	Estonia		X				11	11
8	Jordan						10	7
9	Georgia		X			X	5	6
10	Albania	X	X				2	4
11	Oman	X					1	1
12	Croatia		X				12	14
13	Lithuania		X				8	15
14	Moldova		X		X		4	6
15	China		X				8	8
16	Chinese Taipei						6	7
17	Armenia		X		X		4	5
18	FYROM		X		X		4	5
19	Nepal*				X	X	3	4
20	Cambodia*		X			X	1	1
21	Saudi Arabia	X					1	1
22	Viet Nam	X	X				6	7+
23	Tonga			X			2	2+
24	Ukraine		X				6	5
25	Cabo Verde*			X			2	2
26	Montenegro		X				4	6
27	Samoa*			X			2	3
28	Russian Fed.	X	X				2	3
29	Vanuatu*			X			4	n.a.
30	Lao PDR*	X	X		X		n.a.	n.a.
31	Tajikistan		X		X	X	n.a.	n.a.
32	Yemen*	X					2	n.a.
33	Seychelles			X			2	2
34	Kazakhstan	X	X		X		1	1
35	Liberia*	X				X	n.a.	n.a.
36	Afghanistan*				X	X	n.a.	n.a.
	TOTAL	11	21	5	10	6	4++	6++

Source: WTO Secretariat based on calculations from UN COMTRADE.

* LDCs. ⁺ 2014.  ⁺⁺ Indicates the average number for 28 Members (i.e. from Ecuador to the Russian Federation).

Resource-rich countries, defined by IMF (2012), with the characteristics of either having natural resource revenue or exports at least 20% of total fiscal revenue and exports, respectively, over 2006-2010.  Transition Economies, according to the IMF/World Bank definition.  SIDS and LLDC, according to the UN.  Post-Conflict states, according to UNDP.

 

84.    Empirical evidence has demonstrated that during the last twenty years, 36 Article XII Members, which went through rigorous accession-related reform processes, have generally performed better than the rest of the world in terms of economic performance, including GDP growth and trade performance.  Figure 1 compares the annual GDP growth rates of Article XII Members with those of the rest of the world from 1995 to 2015.  While China's growth outperformed the rest of the world during the last two decades, since 2000, Article XII Members as a whole have consistently performed better than the rest of the world, except in 2009 during the global financial crisis and 2015.  It is also worth noting that since 2007, Article XII LDC Members have exhibited a faster annual GDP growth rate than the Article XII Members as a whole, except in 2011.  In terms of trade performance, as seen in Figure 3 in Section VI "Economic Performance of Article XII Members" of this Report, overall, Article XII Members have consistently registered rapid trade growth above the world average.

Figure 1 - Annual GDP growth rates for Article XII Members (1995-2015)

Source: WTO Secretariat

85.    While positive trends are generally observed between WTO accession and the economic performance of Article XII Members over the last two decades, it is more challenging to assess how accession-induced reforms have had an impact on the structural transformation of the economies which went through the accession process.  Table 2 examines whether Article XII Members have been able to diversify their exports in the years following WTO accession.  The table lists the number of HS Chapters^[20]  accounting for more than 60% of exports for the year of accession and 2015 for Article XII Members.  On average, Article XII Members had exports in four (4) HS Chapters in the year of accession and six (6) HS Chapters in 2015.  The increase in the number of HS Chapters owing, in part, to the manufacture of different products for export, could signal export diversification.  Specifically, it is observed that there has been an increase in the number of HS Chapters for exported products, from the year of accession to the latest year^[21] for 15 Members^[22] out of 28 Article XII Members which acceded before 2015, for which data is reported

86.    For example, upon accession, 60% of Lithuania's exports were in 8 HS Chapters (mainly petroleum, clothing and accessories, road vehicles, electric machinery, textile yarn, fertilizer, dairy products and furniture).  In 2015, 15 HS Chapters (including vegetables and fruit, medicines, metals manufacturers, telecommunication equipment and plastics) constituted 60% hence showing that reliance on the trade of the products under the 8 HS Chapters (including petroleum) was reduced by diversifying the mix of merchandise exports.

87.    For nine (9) Article XII Members, the number of HS Chapters for exported products has remained the same from their respective years of accession to 2015.^[23]  Only three (3) Article XII Members witnessed a decrease in the number of HS Chapters for exported products over the same period, namely: (i) Kyrgyz Republic - due to an increase in the exports of gold (excluding ores) from 38.1 % to 46.1%; (ii) Jordan - owing to a large increase in the exports of clothing and accessories from 8.9% to 17.7%; and, (iii) Ukraine - due to a significant increase in the exports of cereals from 6.1% to 16.5%.  Possible reasons for these increases may include an expansion of the economy's productive capacity in the aforementioned goods.

88.    These results may be attributed, inter alia, to market liberalization, the variety of tailored WTO accession-specific commitments and, benefits associated with WTO membership such as  domestic regulatory reforms; enhanced rule of law and governance; effective transformation to market economy; and, increased international trade cooperation.

4. Structural reform agenda for the remaining accessions

89.    As of December 2016, there are 19 accessions whose processes are still on-going, as listed in Table 3.  These accessions have been running for 16.5 years, on average, since the applications for WTO membership were received; this is far longer than the average of 10 years and 4 months for the 36 concluded accessions to date.  It is interesting to observe that there are higher proportions of resource-based and post-conflict economies among the 19 on-going accessions, in comparison to the 36 concluded accessions, while there remain seven (7) transition economies.  Out of the nine (9) governments which are classified as resource-based economies, seven (7) are hydrocarbon exporters, including some of the world's leading exporters: Algeria, Azerbaijan, Equatorial Guinea, Iran, Iraq, Libya, Sudan and Syria, while Uzbekistan is one of the world's lead exporters of cotton.  Moreover, the small economies among the remaining accessions are dominated by a few sectors, either commodities (such as Comoros and São Tomé and Príncipe)^[24] or services (such as The Bahamas and Bhutan).^[25]  

Table 3: Governments in the process of WTO accession: total time since application and types of economies

	Acceding Government	Date of Application	Total Time of since Application	Type of economy
				Resource-based	Transition	Small Island State	Land-locked Country	Post-conflict
1	Algeria	06/1987	29 years	X
2	Belarus	09/1993	23 years		X		X
3	Sudan*	10/1994	22 years	X				X
4	Uzbekistan	12/1994	22 years	X	X		X
5	Iran	07/1996	20 years	X	X
6	Azerbaijan	06/1997	19 years	X	X		X	X
7	Andorra	07/1997	19 years				X
8	Lebanese Republic	01/1999	17 years					X
9	Bosnia and Herzegovina	05/1999	17 years		X			X
10	Bhutan*	09/1999	17 years				X
11	Bahamas	05/2001	15 years			X
12	Syrian Arab Republic	10/2001	15 years	X				X
13	Ethiopia*	01/2003	13 years		X		X	X
14	Libya	06/2004	12 years	X				X
15	Iraq	09/2004	12 years	X				X
16	Serbia	12/2004	12 years		X		X
17	São Tomé and Príncipe *	01/2005	11 years			X
18	Equatorial Guinea*	02/2007	9 years	X
19	Comoros*	02/2007	9 years			X
			Average: 16.5 years	9	7	3	7	8

Source: WTO Secretariat.

* LDCs.

Resource-rich countries, defined by IMF (2012), with the characteristics of either having natural resource revenue or exports at least 20% of total fiscal revenue and exports, respectively, over 2006-2010.  Transition Economies, according to the IMF/World Bank definition.  SIDS and LLDC, according to the UN.  Post-Conflict states, according to UNDP.

90.    This large number of narrowly-based economies would make the agenda of structural reforms, in particular, economic diversification, as one of the critical, if not overriding reasons, for the remaining accession negotiations.  Table 4 reviews the conclusions of recent IMF Article IV consultations of the remaining accession candidates, and in all cases, the need for structural reforms was stressed, including for economic diversification, increased competition, private sector development, improvements in business environment and governance and/or market-based development, within the overall goals of faster growth and job creation.  In five (5) cases, including Algeria, Azerbaijan, Belarus, Bosnia and Herzegovina and Iran, WTO accession or membership was mentioned as a driver of such reforms.

91.    The number of post-conflict states pursuing WTO accession indicates that WTO accession will continue to be used as part of the process of building or re-building these economies, as demonstrated by the most recently completed accessions of Afghanistan and Liberia.  Moreover, more than one-third of the remaining accession candidates are landlocked-states, indicating that trade facilitation will be a key aspect of WTO accessions, as the Trade Facilitation Agreement is expected to come into force shortly once one-third of the 164 WTO Members ratify the Agreement and deposit their instruments of acceptance with the Director-General.^[26]

92.    Table 4 provides real GDP growth rates for 2013-2015 and projections for 2016-2017, based on the most recently available IMF data.  Nineteen (19) on-going accessions represent a mix of high economic performers (Ethiopia and Uzbekistan), and poor economic performers, either due to the collapse of oil prices (Azerbaijan and Equatorial Guinea), weak external environments (Belarus and The Bahamas) or conflict situations (Libya and Iraq).  Growth projections for these acceding governments also vary widely.  However, for all the acceding governments, structural reform is an inevitable path for economic growth, as reflected in the conclusions of IMF Article IV consultations; and, as the 36 completed accessions have proved over the past two decades, WTO accession provides a valuable instrument for pursuing their structural reform agenda within the multilateral framework.

Table 4: Real GDP growth, 2013-2015 and projections for 2016-17; reference to structural reform in IMF consultations

		Acceding Government	2013	2014	2015	Projection		Reference to structural reform in IMF 2016 Article IV consultation
						2016	2017
Sub-Saharan Africa			5.2	5.1	3.4	1.4	2.9
1	Comoros*		3.5	2.0	1.0	2.2	3.3	X+
2	Equatorial Guinea*		–4.1	–0.5	–7.4	–9.9	–5.8	X
3	Ethiopia*		9.9	10.3	10.2	6.5	7.5	X
4	São Tomé and Príncipe *		4.0	4.5	4.0	4.0	5.0	X
5	Sudan*		5.2	1.6	4.9	3.1	3.5	X
Europe			1.9	1.5	-0.2	1.3	2.1
6	Belarus		1.0	1.7	-3.9	-3.0	-0.5	X (WTO accession)
7	Bosnia and Herzegovina		2.5	1.1	3.2	3.0	3.2	X (WTO accession)+
8	Serbia		2.6	-1.8	0.7	2.5	2.8	X
9	Andorra		n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Middle East and North Africa			2.4	2.7	2.3	3.4	3.4
10	Algeria		2.8	3.8	3.9	3.6	2.9	X (WTO accession)
11	Iran		–1.9	4.3	0.4	4.5	4.1	X (WTO accession)+
12	Iraq		7.6	–0.4	–2.4	10.3	0.5	X+
13	Lebanese Republic		2.5	2.0	1.0	1.0	2.0	X+
14	Libya		–13.6	–24.0	–6.4	–3.3	13.7	n.a.
15	Syrian Arab Republic		…	…	…	…	…	n.a.
Caucasus and Central Asia			6.6	5.3	3.2	1.3	2.6
16	Azerbaijan		5.8	2.8	1.1	–2.4	1.4	X (WTO accession)
17	Uzbekistan		8.0	8.1	8.0	6.0	6.0	X+
Asia			5.8	5.6	5.4	5.4	5.3
18	Bhutan*		3.6	3.8	5.2	6.0	6.4	X
Latin America and Caribbean			2.9	1.0	0.0	–0.6	1.6
19	Bahamas		0.0	–0.5	–1.7	0.3	1.0	X
	World average		3.3	3.4	3.2	3.1	3.4	Total: 16 (Reference to WTO accession: 5)

Source: IMF. Various Regional Economic Outlooks, October 2016; various Article IV Consultations in 2015 and 2016.

* LDCs. Italics indicates hydro-carbon exporters. ^+.2014

The figures for Europe is Central, Eastern, and Southeastern Europe

VI. wto post-accession support

93.    Building on the framework of post-accession implementation support which was developed in the 2014 and 2015 Annual Reports on WTO Accessions, the Secretariat further refined its approach to post-accession support, developed new tools and delivered the first specialised post-accession training activities of their kind.  In 2016, the Secretariat implemented post-accession support for Liberia and Afghanistan, in a structured and integrated manner, to achieve specific targets within defined timelines, in preparation for their membership in July.  The refined and upgraded post-accession implementation framework consists of five main elements:  

i. Country-Specific Post-Accession Implementation Strategy;

ii. Specialized training on WTO post-accession;

iii. Secretariat Note on "Best Practices on WTO Post-Accession" (document WT/ACC/27);

iv. Dedicated web-page on "Post-accession — what next?" in the WTO Accession Website;

v. Internal Secretariat Note on Post-Accession Implementation and Monitoring.

94.    First, Liberia and Afghanistan developed individual Post-Accession Implementation Strategies, based on their accession-commitments contained in the Accession Packages, during the final phase of their accession negotiations in late 2015.  The main objectives of the Strategy are to: (i) implement accession commitments, including notification obligations, and, (ii) identify and sequence specific post-accession needs for trade-related technical assistance and capacity building and infrastructural support for implementation.  The two acceding LDCs presented their respective Post-Accession Implementation Strategies to the international community at Round Tables held on the margins of the WTO Tenth Ministerial Conference where Ministers took formal action on their Accession Packages.

95.    Second, two tailor-made activities geared towards post-accession capacity-building were delivered for Liberia on 27-29 June in Monrovia and for Afghanistan on 11-15 July in Bangkok.  The activities, sponsored under the China's LDCs and Accessions Programme (or the "China Programme"), were organised shortly after the deposit of the instrument of acceptance of the Accession Protocol by the two acceding governments, with the objective of preparing for their WTO membership.  More specifically, these activities focused on: (i) the preparation of notifications and internal coordination to implement accession commitments from day 1 of WTO membership; (ii) the development of a medium-term action plan to operationalise the Post‑Accession Implementation Strategy; and, (iii) the exchange of post-accession experiences and best practices with other recently acceded LDCs.

96.    Third, the Secretariat issued a Note "Best Practices on WTO Post-Accession", contained in document WT/ACC/27.  Building on the first dialogue on post-accession at the Dushanbe China Round Table held in May 2015, this Note compiled experiences and lessons learned in the transition from accession to membership from over 30 accessions concluded to date.  The best practices are comprised of seven areas: (i) a policy framework for WTO membership; (ii) institutional and coordination structures; (iii) a legislative framework for implementation; (iv) transparency; (v) technical assistance and capacity building; (vi) outreach; and, (vii) participation in the work of the WTO. 

97.    Fourth, a dedicated webpage on post-accession was developed: https://www.wto.org/english/thewto_e/acc_e/post_acc_e.htm.  This webpage, which is part of the WTO Accessions website, contains all background information, training materials and post-accession activities, to guide new members for the immediate post-accession stage.

98.    Fifth, on the date of membership, the Accessions Division circulates an internal hand-over note on the completed accession dossier to Divisions with relevant responsibilities.  Aimed at improving internal coordination, this note lists accession-specific commitments undertaken by the acceding government so that the implementation of commitments is monitored and post-accession support is provided for new Article XII Members.  With the circulation of this internal note, the Accessions Division officially ceases its primary responsibility for accession-related engagement with acceding governments.

99.    The results of the implementation of the above-mentioned integrated approach to post-accession implementation support have been positive and concrete.  First, Liberia and Afghanistan ratified the Accession Protocol and deposited the instrument of acceptance with the Director-General, within the timeframe defined in the respective Protocols.^[27]  Second, the two LDCs submitted their initial notifications during the first month of membership.  Third, the post-accession strategy and training helped the two LDCs identify priority areas and specific trade-related needs for their participation in the WTO.  In the case of Afghanistan, this was reflected in the ratification of the WTO Trade Facilitation Agreement that was completed by the date of its membership.  Fourth, the two LDCs were able to secure substantial amount of post-accession support, including pledges, from bilateral and multilateral partners. 

VIi. Trade and Economic performance of article xii members^[28]

100.  In 2015, world trade registered a positive growth, albeit at a modest rate.  While the volume of global trade grew by 2.8%, in contrast, its nominal value fell sharply when compared to 2014. The dollar value of world merchandise trade in 2015 fell 13% from 2014, and world trade in commercial services declined by 6%.

101.  The trade growth discrepancy was mostly attributed to strong fluctuations in commodity prices and exchange rates.  Also, structural factors have been suggested to explain the global slowdown of trade growth. These include the lack of coordination between monetary policies of leading economies, geopolitical tensions in the Middle East and Eastern Europe, falling demand in emerging economies.  Against this background, individual situations reflect diversity.

102.  Figure 2 provides three snapshots which illustrate the evolution of market shares by membership status.  On the one hand, original Members' share of world trade decreased from 91% in 1995, 86% in 2005, to 81% in 2015.  On the other hand, the share of world trade of Article XII Members' increased from 8% in 1995, 12% in 2005, to 18% in 2015, thus expanding the reach of the multilateral trading system to cover approximately 98.4% of world trade in 2015, an increase of 0.4% from the previous year. 

Figure 2 - Share of world trade by membership status: 1995, 2005 and 2015

Source:  WTO Statistics Database

103.  Figure 3 shows that since the establishment of the WTO in 1995, the nominal value of world trade in goods and commercial services grew by 232%, or at an average annual growth rate of 6.2%. Over the same period, that of Article XII Members increased by 650%, or at an average annual growth rate of 10.6%.  And, even excluding the largest Article XII Member by trade value (China), over the same period, the other Article XII Members' nominal value of trade increased by 318%, or at an average annual growth rate of 7.4% i.e. approximately 20% faster than global trade growth rate. 

Figure 3 – Evolution of world trade in nominal value by membership status: 1995-2015

104.  Overall, Article XII Members have consistently registered rapid trade growth above the world average.  Figures 4 and 5 show that, in the period 1995 to 2015, the nominal value of trade in goods and services of Article XII Members increased by 639% and 709%, respectively.  This was faster than the increase of the nominal value of global trade in goods and services, which increased respectively, by 218% and 295%.  Even if China, a major trader, is excluded from the calculations, the trend remains.  In other words, the trade growth of Article XII Members is faster than that of the rest of the world.

Figure 4 - Value of merchandise trade of Article XII Members:  1995-2015

(Index, 1995=100)

Source:  WTO Statistics Database

 

Figure 5 - Value of trade in commercial services of Article XII Members:  1995‑2015

(Index, 1995=100)

Source:  WTO Statistics Database

105.  Article XII Members have also registered strong trade performance in terms of their expanded share of world merchandise trade.  As shown in Figure 6, from 1995 to 2015, the share of world merchandise trade of Article XII Members increased significantly from 7.9% to 17.8%.

Figure 6 - Share of world merchandise trade of Article XII Members: 1995 and 2015

Source: WTO Statistics Database

 

VIIi. Conclusions - outlook 2017

106.  As WTO Director-General, since September 2013, I have witnessed the enlargement of the membership of the Organization by five Members – Yemen, Seychelles, Kazakhstan, Liberia and Afghanistan – three of them LDCs.  The conclusions of accessions have been one of the best moments to appreciate the ability of the Organization to deliver for big and small, on development and other complex issues, through dynamic multilateral negotiations.  Not only have WTO accessions expanded and strengthened the multilateral trading system, but they have also injected impetus for growth and development through the structural reforms undertaken by Members that have gone through the Article XII process.  Our future work will continue to be guided by the strategic goal of universality for the WTO that promotes inclusiveness, interdependence and shared values in times of increasing uncertainty and vulnerability in the global economy.

107.  Building on the inspiration drawn from Liberia and Afghanistan becoming WTO Members this year, the accession of LDCs will remain a priority for WTO Members and for me as Director-General in 2017.  Looking ahead, the accessions of Comoros and Sudan will be a strategic focus in support of the goals set by their respective acceding governments for a conclusion in 2017.  The negotiating teams have been engaged on technical substance, with support from the Secretariat.  In both cases, high-level political commitment has been manifested in mobilising support from various government branches to advance the accession negotiations.  The acceding governments have received support from a wide range of WTO Members, in addition to the strong support by the respective Chairpersons.  I also look forward to the start of the accession processes of Somalia and Timor-Leste.

108.   Technical assistance and capacity building have been an integral part of every LDC accession.  In the year ahead, the Secretariat will make further efforts to coordinate and collaborate with its partners to leverage various types of assistance provided during accession and for post-accession.  In particular, I appreciate the support provided to LDCs under the China Programme in meeting their accession-specific and post-accession needs.  The year 2017 will mark the 15^th anniversary of the adoption of the Guidelines on the Accession of LDCs by the General Council.^[29]  Cambodia, one of the first LDCs to join the Organization following the implementation of the Guidelines, will host the next China Round Table which will focus on sharing and fostering best practices for LDC accessions, based on the experience of the nine concluded LDC accessions to date.  The China Internship Programme will continue to provide on-the-ground training for young professionals from LDCs and acceding governments to jump start their careers in the field of international trade.

109.    Apart from the accessions of LDCs, I expect a busy year ahead on WTO accessions that will build on the re-activation of technical work done this year.  The accession of Bosnia and Herzegovina will be ready to cross the finish line as soon as the acceding government's negotiators receive a mandate to tackle the handful of remaining negotiation challenges on the market access front.  Substantive technical progress can be achieved on the accessions of Belarus and Lebanon with the active engagement of Members.  Depending on the availability of new negotiating inputs, work is also expected to continue, through formal and informal channels, on the accessions of Algeria, Azerbaijan, The Bahamas, Ethiopia, Iran and Serbia.

110.  I am confident that Members stand ready, with Secretariat support, to engage with acceding governments willing to pursue WTO-consistent domestic reforms and to make the policy choices required for advancing their accession negotiations.  The evidence suggests that, as time passes, accession negotiations tend to get more complex, not easier.  Yet, I believe that the future prospects for concluding accession negotiations are good, including in 2017. After all, in addition to reinforcing the foundation of the rules-based multilateral trading system, every accession can also be a valuable instrument for growth and development via the adoption of accession-related domestic reforms.

111.  I seize this opportunity to express my appreciation to the Working Party Chairpersons who bring direction and dynamism to the accession processes.  I also welcome the good collaboration between Members and the Secretariat; this partnership is essential for creating a solid framework for managing the WTO accession process.  As Director-General, I will also continue to attach high priority to the transparency aspects of accession negotiations which are Member-driven.  Timely transmission of information and signals plays a key role in the alignment of expectations and corresponding actions by Members and the acceding governments.  Finally, together with the Secretariat staff, I remain committed to providing a platform for assisting and facilitating the work of governments that have taken on the accession challenge and are committed to pursuing WTO Membership.

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