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Paying the Price for Joining the WTO

A Comparative Assessment of Services Sector Commitments by WTO Members and Acceding Countries

image of Paying the Price for Joining the WTO

This paper focuses on the accession process for new WTO membership. The basic premise is that the commitments demanded are too onerous for new members. It argues that the whole process is fundamentally flawed and, in fact, forces applicant countries to accept demands that are not required under WTO agreements. Section 2 is a brief discussion of the process of accession and highlights the inherent flaws. Section 3 focuses on one of the crucial international trade agreements, the General Agreement in Trade and Services (GATS) and provides sectorspecific commitments by countries. Section 4 uses a series of statistical tests to verify whether acceding countries have made a significantly higher number of specific commitments than existing WTO members. Section 5 makes some concluding observations. The paper uses a strong body of econometric evidence to support its claim that acceding countries undertake greater commitments than those made by WTO members of a similar development status.

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Concluding Observations

The relevant provisions (Article XII of the Marrakesh Agreement) and practices that govern the process of accession to the WTO are fundamentally flawed. There are two stages of the WTO accession process: the multilateral track where WTO members examine the trade regime of the applicant; and the bilateral track where acceding countries ‘negotiate’ with WTO members over their bound tariffs, agricultural schedules and service sector commitments. The current practice in both stages of the accession process is flawed in different ways.

English

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