Abstract

The negotiations on the accession of Kazakhstan to the World Trade Organization (WTO), concluded in 2015, were unique in the history of the General Agreement on Tariffs and Trade (GATT) and the WTO. This uniqueness was reflected in: (i) the complexity of the accession due to its technical substance and geopolitical aspects; (ii) the significant expansion of market access achieved in the process, which is unusual in multilateral negotiations; (iii) the resultant update of the rules in line with GATT Article XXIV related to customs unions and free trade areas; and (iv) the unprecedented involvement and dedication of Kazakhstan's officials, guided by President Nazarbayev, of WTO members and the WTO Secretariat, and personally of WTO Director-General Roberto Azevêdo. The negotiations were essentially a moving target, as they took place at the same time as the Customs Union between Belarus, Kazakhstan and the Russian Federation was evolving into the Eurasian Economic Union (EAEU). The critical elements of the accession were Kazakhstan's commitments on technical barriers to trade (TBT), sanitary and phytosanitary measures (SPS) and on market access for goods – essentially, the behind-the-border issues. Notwithstanding the complexities and the bilateral and regional mechanics of the negotiations, the Kazakh case demonstrates that the WTO accession process has had practical utility even in a geopolitically challenging and technically complex environment. Accessions continue to contribute to the strategic objective of a universal membership by updating trade rules, encouraging market access expansion and strengthening the rule of law. The accession of Kazakhstan thus confirms the WTO's relevance in an ever more complex global economic and trade policy environment.

Abstract

Accessions to the World Trade Organization (WTO) generate large amounts of data accumulated during accession negotiations and subsequent domestic reforms. Owing to differences in the structure of acceding economies, accession commitments vary across recently acceded, or Article XII, members, in the number of tariff lines bound, the level of bindings and the various accession-specific commitments and obligations. The depth of commitments and extent of post-accession implementation influence the effectiveness of benefits derived by new members from WTO accession. In spite of the generally positive economic performance exhibited by all Article XII members, disparities exist in their country-specific economic performance in terms of trade, foreign direct investment (FDI) and gross domestic product (GDP) growth. This chapter analyses the impact and depth of accession commitments to assess the economic effects of WTO accession. It explores how the data from accessions acquis can assist policy-makers in implementing structural reforms and integrating their countries into regional and global value chains. An Accession Commitment Index is proposed as a basis for a statistical exploration of the impact of WTO accession on a series of variables related to economic growth. Using an extension of the difference-in-difference methodological approach, the chapter finds that WTO accession generally has a positive and significant impact on the acceding economy's trade and economic performance. The results also show that the impact of WTO membership on the trade/GDP ratio in developing countries is significantly higher than in previous studies.

Abstract

Over the past twenty years, the rules-based global economy has been subject to a dynamic process of transformation. The trading environment has been characterized by shifts in the balance of economic power, emerging structures and rapid changes in global and regional alliances. Since its establishment in 1995, the WTO has sought to adapt to these global trends. The 2017 Trade Facilitation Agreement (TFA), the 2015 Nairobi Decisions on Agriculture, the 2015 expansion of the Information Technology Agreement (ITA) and twenty years of cumulative WTO accessions acquis are all part of this process of constant adaptation by the WTO to a rapidly changing environment.

However, after the Seattle Ministerial meeting in 1999, free trade agreements (FTAs) and regional trade agreements (RTAs) mushroomed. The ‘spaghetti-bowl’ consequences and the continuing proliferation of preferential trade agreements (PTAs) and counter-PTAs have created challenges and opportunities for the rules-based multilateral trading system. Several questions have been raised, revolving around the compatibility and the discriminatory and trade diversion effects of such agreements. Are these agreements building blocks or stumbling blocks for the multilateral trading system? Moreover, the emergence of mega-regional RTAs (MRTAs), in particular the Trans-Pacific Partnership (TPP), have called into question, in some quarters, the power and relevance of the WTO at large.

This chapter examines the core question of whether mega-regionalism (and FTAs by implication) poses an existential risk to the multilateral trading system and argues that the answer is ‘no’. The negotiating results from FTAs, including in their mega-regional forms, and trade multilateralism can coexist in a constructive, healthy and competitive relationship and both are essential for the governance of the multipolar twenty-first-century global economy.

To substantiate this conclusion, the chapter reviews the WTO accessions acquis and compares it to the provisions of the TPP, without pre-judging its future. The comparative analysis is conducted across several areas: market access; trade rules (bilateral/plurilateral/multilateral); trade negotiations as an instrument for domestic reforms; and discriminatory effects. The results of the analysis point to areas of significant complementarity and mutual supportiveness between WTO accession acquis and the TPP, and different degrees of trade liberalization in certain sectors. The accessions acquis demonstrates a process of mutually supportive coexistence between bilateral and plurilateral negotiations and the multilateral legal and policy framework of the WTO.

Abstract

Trade multilateralism, i.e. global trade based on negotiated and agreed rules by the World Trade Organization (WTO) membership, faces various challenges. Slow economic growth, changes in the balance of global economic power and inequitable distribution of growth benefits have called into question the benefits of globalization and the rules-based global order. Trade has been the target of a barrage of criticism from many quarters and has become a lightning rod for policy failures, weaknesses in international cooperation and the adverse effects of rapid technological advances on jobs and incomes. In this tortuous and uncertain environment, concerted policy actions along several strategic axes are needed to put trade back on track and make trade multilateralism work for all once again. First, trade multilateralism must be used as a tool to restart global economic growth and job creation, while managing uncertainty and risks. Second, a global trading system anchored in the WTO – with strong, well-enforced rules that continue to adjust to promote competition and a level playing field – remains critical. Third, the new realities of the twenty-first century compel an upgrade of the multilateral trading system by the building of its upper floors on the foundation of the existing trade rules and accumulated acquis and expertise. Such a system would preserve the fundamental set of rules at the core of the multilateral system, abolish or revise obsolete rules, which have not stood the test of time, and adopt new rules that would reflect new realities. Fourth, accessions to the WTO are arguably the most vibrant component of the multilateral trading system and have already made important contributions to each of these policy directions. The objective of this book is to draw on recent accession experiences to distil the impact of accessions on the constantly evolving architecture of the multilateral trading system.