Issues: How a Country Joins the WTO

BG9807E | Date: 1998-04-02

The World Trade Organization (WTO) builds on its predecessor, the General Agreement on Tariffs and Trade (GATT), by incorporating the results of the Uruguay Round of trade negotiations. The Uruguay Round strengthened existing rules and introduced new disciplines in the areas of trade in services and intellectual property rights. All Uruguay Round agreements plus the amended version of the GATT (known as GATT 1994) form the basis for accession negotiations. As a result, accession to the WTO has become more complex.

Article XII of the Final Act -- the legal do cument containing the texts of all provisions agreed upon during the Uruguay R ound -- states that any country or separate customs territory with full autonomy in formulating trade and economic policy can accede to the WTO, under conditions negotiated by the acceding country and WTO members. The accession process begins when a country requests the formation of a working party to consider its application. The working party, open to all WTO members, reviews the applicant's trade and economic policies to assess their consistency with WTO rules and to develop the terms of accession. This process helps member countries better understand the applicant's policy regime and its ability to abide by WTO trade rules. The working party also provides a forum for members to identify areas where the applicant should make changes to conform with WTO rules.

Simultaneous with the working party process, bilateral negotiations are held between the acceding country and interested individual WTO members. In agriculture and industry, these talks focus on establishing commitments for market access and internal policies affecting trade in these goods. For agriculture, export subsidies, and such issues as sanitary and phytosanitary (SPS) measures are subjects of particular concern. These talks also address commitments on trade in services. Generally speaking, the working party process does not end until all bilateral negotiations are completed.

The U.S. government, in preparation for bilateral negotiations, posts a request in the Federal Register for public comments on a country's accession and consults with the private sector to identify priority areas. Based on responses, an inter-agency committee, chaired by the Office of the U.S. Trade Representative, develops a formal U.S. request on tariffs and other trade measures, which forms the basis for negotiations.

Once bilateral negotiations have ended and the working party has concluded its re view, a protocol package is prepared. The protocol package consists of the working party report and a draft of the Protocol of Accession - i.e., the terms of accession and any accompanying special provisions. The working party approves these documents on the basis of consensus. Once approved by the working party, these documents are submitted to the WTO membership for final approval. A two-thirds vote is needed for this approval. The applicant country becomes a member 30 days after its acceptance of the terms of accession, either by signature or by submitting proof of ratification, if the country requires legislative approval.

The terms of WTO membership are contained in the Protocol of Accession, which sets out a country's commitments to meet the requirements of all WTO agreements and the GATT 1994. Annexes to the Protocol generally contain special provisions, such as schedules to phase out policies that must be terminated by the date of membership.

An acceding country must negotiate market access commitments for trade in industrial and agricultural goods and for services. These commitments are consolidated and listed as an annex to the Protocol.