1934. WTO Accession for Countries in Transition

Constantine Michalopoulos
(June 1998)

Accession to the World Trade Organization should be expedited, and the processing time for applications reduced to no more than two years. This would enable the WTO to achieve universal membership in the next five years, a worthwhile objective for the international community.

Countries in transition have considered membership in the World Trade Organization (WTO) an important step toward integration in the international economic system. After several years of negotiations, five members of the former Soviet Union (FSU)—Armenia, the three Baltic countries, and the Kyrgyz Republic—may become members in 1998. It will probably take longer for Russia, Ukraine, and some others.

It takes four to five years to process applications for FSU countries—which is close to average for recent applicants. The five countries expected to accede to the WTO this year are among the more liberal members of the FSU. With those five processed, there will be a backlog of another 26 applications, most them countries in transition, including China and Russia. At the current rate of processing, it will take five to six years to process them—and a decade or more for the 25 or so developing and transition economies that have yet to apply.

Processing is time-consuming because:

• Legislative requirements needed for accession are time-consuming.
  
  
• Candidate countries are weak institutionally and unfamiliar with the economic and legal issues to be addressed.
  
  
• The fact finding process is unneccessarily cumbersome and time-consuming.
  
  
• Technical assistance to applicants in meeting the requirements for WTO accession is not effectively coordinated.
  
  
• Addressing the commercial interests of all members requires protracted negotiations.

Governments seeking accession must coordinate the legislative and regulatory changes needed in their foreign trade regimes, adopt liberal trade policies, and identify areas of institutional weakness that require delays in implementation of WTO provisions and seek agreement on such delays.

WTO members, for their part, should expedite the process, as universal membership is in everyone’s best interest. They should:

• Agree to suitable, time-bound extensions to allow acceding governments to address institutional weaknesses.
  
  
• Provide coordinated assistance to acceding countries to strengthen their institutional capacity.
  
  
• Streamline the fact finding aspects of the accession process and give the WTO secretariat the budgetary resources it needs to work with applicant governments for this purpose.

This paper is part of a larger effort of the World Bank to collaborate with the World Trade Organization in developing approaches for the more effective integration of the developing countries and transition economies in the international trading system. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Lili Tabada, room MC3-333, telephone 202-473-6896, fax 202-522-1159, Internet address ltabada@worldbank.org. (30 pages)

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