WTO accessions and how Australia stands to benefit
Introduction
Currently there are a number of countries negotiating terms for their membership and more are interested in joining. Admission of new Members is accompanied by significant expansion in trading opportunities, and Australian exporters stand to benefit considerably. Australia supports the admission of new Members to the WTO on appropriate terms. Australia engages actively in accession negotiations to ensure that the commercial interests of Australian businesses are accommodated adequately.
The Accession Negotiation Process
Several of Australia’s important trading partners are seeking to join the WTO. Economies become WTO Members by undertaking individual accession negotiations in which they agree to reform legislation and administrative processes to bring their trade and industry policies into line with WTO rules and provide their trading partners with improved access to their markets. Commitments to limit subsidies on both agricultural and industrial products are part of the package.
Bilateral market access negotiations are a key part of the accession negotiations. These negotiations cover measures such as tariffs, import bans and quotas, and restrictions on trade in services. As well, arrangements are negotiated on measures such as subsidies, customs procedures and charges, publication of trade rules, standards and testing, customs valuation, licensing and intellectual property protection.All of these have direct implications for access to the markets of these countries. Improved access arrangements are available to all WTO Members through the operation of the most favoured nation rule.
The final result of an accession negotiation is a Report of a WTO Working Party established for each individual accession, a Protocol of Accession and Schedules of Concessions and Commitments on Goods and Services. That package contains the precise terms and conditions of entry into the WTO. Once accepted by the WTO General Council, the applicant is free to sign the Protocol. Thirty days after the acceding government sends the WTO its formal notification that it has completed its ratification process it becomes a Member.
Commitments Expected of New Members
Accession negotiations are non-reciprocal and offer a unique opportunity for Australia to address existing trading problems, secure new market access, and achieve commitments which provide a substantial degree of transparency and security in future trading conditions.
New Members are expected to apply the WTO Agreements fully and not seek exemptions from key provisions. The rules basically require the reduction or removal of measures that discriminate against imports or discriminate between different supplying countries. Before joining the WTO, potential new Members must explain and adjust a wide range of trade policies and practices so that these conform to WTO rules. The necessary reforms cover a wide range of issues and require the modification of laws, regulations and practices governing trading conditions and the development of new capacities in areas such as customs administration, standards and certification, intellectual policy protection, taxation, domestic regulation and judicial review.
Examples of policy adjustments that Australia and the WTO membership have required new Members to undertake include:
- elimination of WTO-inconsistent measures including border restrictions (e.g., import bans and quotas), prohibited subsidies, discrimination against imports in domestic taxation and market regulation, investment performance requirements that adversely affect imports or enhance exports, and unjustifiable formalities or requirements applied to imports;
- reforms that ensure that valuation for customs purposes will be based on actual transaction value, procedural aspects of import licensing will not impede trade, that any entity will have the right to engage in importation and exportation, all laws, regulations, decisions and rulings affecting trade will be published, avenues exist for judicial review of administrative decisions affecting importation, and that appropriate protection will be provided to intellectual property;
- reform of unjustifiable trade-restrictive measures maintained in the area of standards and technical regulations (e.g., packaging, labelling), conformity assessment procedures, and quarantine, sampling, testing and certification.
Market Access
Market access is a very important aspect of WTO accession. The WTO membership expects new Members to make binding commitments on tariffs and services that provide security of existing access and appropriate liberalisation. These commitments are determined by separate bilateral negotiations. The results of the market access negotiations are extended to all WTO Members through the application of the MFN principle (most favoured nation).
Applicants are expected to give commitments that broadly match the liberalisation to which existing Members have committed over the life of the GATT and WTO and, for this reason, the negotiations are non-reciprocal. However, the overall level of commitment expected also depends on the applicant’s level of economic development.
Through these market access negotiations, Australia has negotiated secure access and liberalisation for a very wide range of products of interest to Australian industry. Market gains have been made for live animals, meat, offals, seafood, dairy products, fruit, vegetables, legumes, grains, flour, oilseeds, animal feed, animal fats, vegetable oils, sugar, processed foods, alcoholic and non-alcoholic beverages, minerals, chemicals, medicaments, chemical preparations, hides and skins, leather, textile fibres (including wool and cotton), textile yarns and fabrics, metals (ferrous and non-ferrous), precious metals and stones, machinery (including electrical), motor vehicles (including components, parts and accessories) and scientific, technical and medical equipment, as well as in other areas.
Australia has also negotiated improved access for exporters of services such as legal, banking, insurance, accountancy, architectural, engineering, computing, telecommunications, construction, distribution, education, environmental and transport, including through deregulation of restrictions on the scope of business operations and conditions of entry.
Australia has also pursued and secured the reform of many different kinds of non-tariff measures that give rise to trade problems and has succeeded in achieving their modification or removal. Market access gains made in this area include, for example, removal of import bans, simplification of import formalities, reductions in import fees, elimination of point of sale restrictions that discriminate against Australian products, replacement of unreasonable packaging and labelling requirements with more reasonable requirements, and elimination of unnecessary requirements relating to conformity with standards.
Agricultural Subsidies
Australia participates actively in joint efforts within the Cairns Group and with other like-minded WTO Members to ensure that new WTO Members will participate meaningfully in the multilateral reform process for trade in agriculture, including by giving commitments to limit the subsidisation of the agricultural sector. This involves new WTO Members capping domestic support at recent levels and applying phased reductions from those levels. Australia expects new Members to eliminate agricultural export subsidies. Australia takes a lead role in these negotiations.
Negotiations Concluded in Recent Years
A number of economies have completed accession negotiations and joined the WTO in recent years. They include Cambodia, China, Jordan, Oman, Saudi Arabia, Chinese Taipei, Tonga, Ukraine and Vietnam. Details of accession commitments are available on the WTO website.
Negotiations Currently Underway
At present a number of countries are negotiating their accession to the WTO, including Russia, Algeria, Kazakhstan, Laos, Lebanon and Samoa. Current status of accessions.
Accession of Least Developed Countries (LDCs)
The WTO General Council at the end of 2002 adopted new guidelines to accelerate the accession of LDCs to the WTO, as mandated by Ministers at the Doha Ministerial Conference in 2001. The guidelines cover 4 areas. WTO Members have undertaken to be reasonable in their demands for commitments on market access. Members have underlined the availability of the Special and Differential Treatment provisions in the WTO Agreements to LDCs and have agreed to grant transitional arrangements, where appropriate, to enable acceding LDCs to effectively implement commitments. Members also agreed to expedite accession procedures for LDCs. Finally, Members agreed to accord priority to LDCs in the provision of targeted and coordinated technical assistance and capacity building throughout the accession process.
Cambodia and Nepal are the first LDCs to join the WTO through a full working party negotiation.
More Information
The Department wants to ensure that issues of concern to Australian industry are reflected in Australia's negotiating position on WTO accessions and would welcome your views on Fax 61 2 6273 1527. The Department is particularly interested in hearing about specific examples of difficulties experienced by exporters in gaining access to the markets of countries seeking to join the WTO so that these issues can be taken up in negotiations.