CIAO DATE: 09/03

The Institutional Dimension of WTO Accession Observations and Practical Guidelines for Improving National Trade-related Governance Capacities

Uwe Schmidt

November 2002

Institute for Development and Peace

 

Introduction

For developing countries and economies in transition, accession to and member-ship in the global trade body is a delicate and cumbersome experience. The need to bring national legislation into confor-mity with WTO rules, negotiating and implementing concessions on market access for trade in goods and services, transparency requirements, emerging new trade issues (e. g. environmental standards), and the necessity to establish and maintain professional trade-related research competence places heavy bur-dens on applicants and developing mem-bers that not infrequently exceed their institutional capacity for formulating policy options or negotiation strategies.

National preparation for and participa-tion in the WTO system is subject to two sets of constraints, which must be taken into account at the outset when man-agement and coordination mechanisms are designed or upgraded. Externally, the WTO application (and later membership) generates a common set of re-quirements which all countries must respond to in a more or less standardized way. Internally, each country must develop an intra-governmental system of trade policy preparation and coordina-tion adapted to its own circumstances and needs, including the allocation of governmental power and authority.

Often underestimated, the intensity and focus of trade-related coordination proc-esses during the phase of accession and the later stage of full membership differ somewhat:

1. Negotiating WTO membership appears to create what may be termed a "peak load" problem. The political priority of securing mem-bership, and the difficulties of coming to terms with a huge mass of new policies and legislation re-quire the creation of a team dedi-cated to this task. One aspect that is essential during this phase is perceptible and continuous support from the center of the govern-ment2. Short-term pressures foster the illusion that after accession is achieved, things will become eas-ier and the peak of demands on government administration will be over. But things will never go back to "normal," Experience suggests the opposite is true. Membership creates a different situation, but not an easier one.

2. After accession, the obligations of membership have to be met during the negotiated transition period. This requires considerable invest-ment in capacities for policy im-plementation in line with the ac-cession protocol and WTO provi-sions. The built-in review of some WTO agreements obliges mem-bers, in addition, to keep track of the progress of intra-organizational discussions. The country’s Perma-nent Mission to Geneva is the na-tional “watchdog” and should at-tentively monitor the dynamics of daily WTO work. In addition, new issues are continually being placed on the WTO agenda. The Doha Ministerial Meeting provided a mandate, for example, to clarify the relationship between the multi-lateral trade and environment re-gimes as well as to negotiate on the liberalization of trade in envi-ronmental goods and services. The implications of conceivable liber-alization have to be considered and assessed by all domestic stake-holders in order to establish na-tional bargaining positions that re-flect what is desirable and feasible. A well-managed mechanism of trade-related information and co-ordination in the capital helps to absorb and digest information from the mission and ensures that national stakeholders' interests and participation in the global trade negotiations are given appropriate consideration.

It is worth noting that the result of acces-sion (as well as of later liberalization talks) depends on the general system of domestic policy coordination. Since WTO membership is a severe test of governmental capacities (and thus can be considered a touchstone for the country’s capacity to meet and manage global challenges), it calls for a re-thinking and re-designing of the internal preparation and coordination process within national governments. If there are weaknesses or shortcomings in the domestic system, it is very likely that they will be come to the fore in negotiations with WTO members - perhaps at considerable economic and political cost. Conversely, deliberate efforts to improve and up-grade national policy coordination ca-pacities with a view to more effective management of external relations is likely to have the added benefit of sup-porting the strengthening of domestic policy coordination capacities.

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