6. What are the accession rules in the wto. Analyse main difficulties of the accession process.

Article XII of Marrakesh Agreement establishing the WTO:

1. Any State or separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such accession shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto.

2. Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO.

3. Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.

The application for WTO accession goes through four stages:

1. “tell us about yourself”. The government applying for membership has to describe all aspects of its trade and economic policies that have a bearing on WTO agreements. This is submitted to the WTO in a memorandum which is examined by the working party dealing with the country’s application. These working parties are open to all WTO members.

2. “work out with us individually what you have to offer”. When the working party has made sufficient progress on principles and policies, parallel bilateral talks begin between the prospective new member and individual countries. They are bilateral because different countries have different trading interests. These talks cover tariff rates and specific market access commitments, and other policies in goods and services. The new member’s commitments are to apply equally to all WTO members under normal non-discrimination rules, even though they are negotiated bilaterally. In other words, the talks determine the benefits (in the form of export opportunities and guarantees) other WTO members can expect when the new member joins.

3. “let’s draft membership terms”. Once the working party has completed its examination of the applicant’s trade regime, and the parallel bilateral market access negotiations are complete, the working party finalizes the terms of accession. These appear in a report, a draft membership treaty (“protocol of accession”) and lists (“schedules”) of the member-to-be’s commitments.

4. “the decision”. The final package, consisting of the report, protocol and lists of commitments, is presented to the WTO General Council or the Ministerial Conference. If a two-thirds majority of WTO members vote in favor, the applicant is free to sign the protocol and to accede to the organization. In many cases, the country’s own parliament or legislature has to ratify the agreement before membership is complete.

Main difficulties of accession process:

1. The terms are to a large extent decided in negotiations on a case-by-case basis, in relation to each applicant’s national measures. In each negotiation, the challenge is to arrive at an appropriate balance between preserving and applying the rules and disciplines of the organization and accommodating them, to the extent possible, to the individual circumstances of the acceding government.

2. Reaching a consensus during negotiations (a consensus is reached if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision) can be highly complicated. In some cases the negotiations are almost as large as an entire round of multilateral trade negotiations. Negotiations are partly about whether the acceding member's policies and institutions are consistent with various aspects of the WTO agreements and partly about the specific tariff bindings and commitments in agriculture and services. Delays can occur from both sides: the acceding government may be unwilling to make needed liberalization commitments e.g. by not offering to liberalize non-tariff barriers or proposing to bind tariffs at levels much higher than presently applied ones; or members may be unsatisfied by the level of liberalization proposed or unwilling to accept delays in bringing the laws and institutions of the applicant in conformity with WTO provisions.

3. Reaching a consensus in bilateral talks taking into account that new commitments are made on a non-discrimination basis.

4. The more the members of the WTO are interested in acceding country (the more GDP per capita; the more real exports, especially to key WTO members; the more real imports), the more severe the terms of accession are.

5. Pre- vs Post-Marrakesh application is an important factor: the more states are in the WTO, the more it is difficult to accede, e.g. there are high tariff commitments for recently acceded members for non-agricultural products.

The demands made for newly acceding countries are greater than WTO disciplines on existing members. The following are areas in which members typically request that acceding countries make commitments in excess of what many existing members at similar levels of development have agreed to:

• Tariffs. Acceding countries are requested to bind all tariffs—while many developing countries continue to have a large portion of their tariff schedule outside agriculture unbound. Ceiling bindings have been accepted, but there is pressure to bind close to applied rates.

• Agriculture. In addition to binding the tariff schedule, commitments are expected on aggregate measures of support (AMS), export subsidies etc. As many acceding countries did not provide substantial support to agriculture, but rather penalized it, the requests they face for reductions in AMS may not be warranted, and in any case meaningful calculation of commitments in this area is subject to serious statistical difficulties.

• Rules and Disciplines. Acceding countries are typically requested to meet all commitments at entry, for example with regard to TRIPs, customs valuation, standards or sanitary and phyto-sanitary regulations; without time limits – such as those available to existing members at similar levels of development; and regardless of whether institutional weaknesses make it difficult for them to fulfill such commitments.