Place Iran accession request on General Council agenda, demand IGDC

by Chakravarthi Raghavan

Geneva, 11 Dec 2000 -- Egypt on behalf of the Informal Group of Developing Countries (IGDC), members of the World Trade Organization, asked Monday for an item on Iran’s request for accession to be put on the agenda of the next meeting of the General Council (which would normally be held 8-9 February 2001).

In a statement, under any other business, Egypt’s ambassador, Mme Fayza Aboulnaga, chair of the informal group of developing countries criticised the failure (of the secretariat) to respect the clear and well-established procedures in dealing with accession applications, and said that though Iran had submitted an application in July 1996 and renewed it in 1998, this had never been put before the GC and listed on the draft agenda.

Aboulnaga’s statement was also critical of the demands in accession negotiations on developing countries, who are asked to accept “more stringent conditions and higher levels of commitments” than was required from current WTO developing countries or even exceeding that of many developed country members, and in some cases even beyond the scope of WTO agreements.

“It is difficult,” said Aboulnaga at the end (in relation to both the accession conditions and the Iran request), “to justify to ourselves and to the public audience that watches us closely our advocacy of the basic principles and objectives of the multilateral trading system, especially the establishment of rule-based, transparent and non-discriminatory trade relations as well as its universality, when our practices sometimes run contradictory to these rules and discriminates against developing countries wishing to become part of that system and respect the obligations it brings along. This in no way presents a challenge to the consensus rule.”

The Egyptian ambassador said “clear and objective” rules and disciplines should be set for accession negotiations to ensure that acceding countries were not “over-burdened by excessive demands”.

She also formally asked for the Iran’s request for accession to be put on the agenda of the next session of the General Council.

A number of developing countries then spoke in support of the statement.

However, Israel, which is a member of the informal group, while associating itself with the complaint about excessive demands on developing countries seeking accession, but disassociated itself from the views on Iran. Israel also brought up the issue of secondary and tertiary ‘boycotts’ by the Arab states and the Arab League on business firms dealing with Israel. The United States spoke in the GC, and touched upon the accession problems of the LDCs, and of US technical assistance to some of these countries to help prepare for accession talks. But the US made no reference to the Iran issue.

The WTO itself held no media briefing on Monday’s meeting, but a copy of Aboulnaga’s statement was provided by the Egyptian mission,

The WTO’s rules of procedure require the Director-General of the WTO (Rule 2) to convene meetings (with ten days notice) and along with it (Rule 3) list the items proposed for the agenda of the meeting. Any member is entitled to suggest items for inclusion in the proposed agenda up to, and not including, the day on which the notice of the meeting is to be issued. Trade officials said this is the first time that a request to include such an item had been made (as in the IGDC statement).

Though Iran’s request was sent in as long ago as July 1996, and renewed in 1998, it was never put on any draft agenda. No official explanations were ever provided, but trade diplomats said that the DG, and perhaps the GC chairs (Amb.William Rossier of Switzerland in 1996 and Amb.John Weekes of Canada in 1998), held their own ‘informal consultations’ and came to the conclusion that there would be no consensus for inclusion of such an item in the agenda, and thus never listed it, saving the US the embarrassment of having to formally object to the agenda item. The present DG, Mike Moore is also reported to have met a couple of times with Iranian officials, and told them there was still no consensus on the issue.

In her statement at the GC,  on behalf of the IGDC, Aboulnaga said Iran’s accession request had been submitted on 19 July 1996 and renewed in 1998, but had never been brought on the agenda of the General Council for the last five years. Despite repeated efforts of Iran, the General Council was “deprived of its right to consider the request and act upon it.”

There was an established pattern for pursuit of accession negotiations, set out in the secretariat note of March 1995 (WT/ACC/1), and modeled on the procedures followed by the Contracting Parties of GATT 1947.  This note set out the different stages of the accession process, and noted that the GC considered applications to acceede under Art. XII of the Marrakesh Agreement and the establishment of the Working Party. The note also addressed every stage of the process in the same manner. A further secretariat technical note of 1 November 2000 (WT/ACC/7/Rev 2) said on page 16 that the DG “verifies the requests submitted in writing by governments wishing to acceede to the WTO and transmits them to the General Council which normally considers them at the next meeting.” Said Aboulnaga, "this clear and well-established procedure has not been respected" with regard to the request by Iran.

She contrasted in this regard the request for accession submitted by Liberia on 13 June 2000, and which was brought before the July 2000 meeting of the General Council. At that time a working party was not established following the request of one member (the US) for further consultations.

“In the light of this,” said Aboulnaga, “we find it unacceptable not to follow the normal procedure and to transmit the accession request submitted by Iran to the General Council and include it as an agenda item in its next meeting.”

Earlier in criticising the onerous conditions sought to be imposed on developing countries seeking accession, the Egyptian ambassador said that the accession process to the WTO was of paramount importance to the IGDC for a number of reasons:

The IGDC have long supported the objective of achieving universality of the WTO and enhancing the credibility of the multilateral trading system (MTS) through participation of all countries (the majority of which are developing countries) in the process of accession to the WTO.

Most of the acceding developing countries, and the rest of them, the transition economies, viewed the accession as an ‘important landmark’ in their efforts towards full integration into the MTS and the global economy. With more and more emphasis put on the role that trade could play as an engine of development, contributing to growth and employment, the WTO membership had become “an indispensable part of the overall development context of the acceding developing countries.”

Against this backdrop, it was frustrating to see that out of the 41 requests for accession submitted since the WTO came into existence in 1995, only 11 countries have joined the organization, with two more very soon on the verge of it.

This was a contradiction to the WTO Ministerial Declaration at Singapore in 1996 which had said (in para 8) that members “will work to bring the applicants of countries wishing to accede to the organization expeditiously into the WTO system.” This commitment of the “members’ resolution to proceed in the accession process as rapidly as possible” was renewed in para 7 of the 1998 Geneva Ministerial Declaration.

Acceding countries, Aboulnaga said, faced numerous difficulties in their accession process, and the cost for these countries of joining the WTO “has become extremely high.”

While the IGDC have always said that acceding developing countries should not be requested “to accept more stringent conditions and higher levels of commitments” than was required from current WTO developing members, the various accession negotiation processes “have revealed that demands and pressures are being exerted on acceding countries to accept a very high level of obligations comparable to or even exceeding that of many developed countries.”

“In some cases,” declared the IGDC chair, “demands for commitments have even gone beyond the scope of WTO agreements. Acceding countries are pressured, for example, to bind their trade-related commitments of structural adjustment programmes, when at the same time some of the practices prohibited under such programmes are perfectly legitimate under the WTO agreements.”

Furthermore, although adherence to the Plurilateral Trade Agreements should be governed by their provisions as stipulated in the Marrakesh Agreement establishing the WTO, acceding countries are requested to adhere to these agreements upon their accession. In the case of one Plurilateral Agreement (a reference to the government procurement agreement, though she did not name it) “all the countries but one, that have acceded to the WTO since its establishment have participated in it, while only three developing members of the WTO in 1995 are signatories to that agreement.”

Further still, despite the “non-binding legal nature” of many of the provisions of Special and Differential Treatment to the WTO Agreements and “their inadequacy”, acceding countries were being asked “to forgo their right to benefit from some of these provisions.”

“In this context,” declared Aboulnaga, “it is very significant and indeed alarming that out of the nine least developed countries (LDCs) that have requested to join the WTO, none has acceded so far. This is despite the fact that the (Marrakesh) Decision on Measures in Favour of Least Developed Countries, which is an integral part of the Uruguay Round outcomes, states that LDCs will only be required to undertake commitments and concessions consistent with their development, financial and trade needs, or their administrative and institutional capabilities.”

The problems and difficulties facing acceding countries, Aboulnaga said, have been well summarized by the UN Secretary-General’s report to the 55th session of the General Assembly—“Accession to the WTO has become increasingly difficult for Developing Countries and Economies in transition, especially for the LDCs.”

“Many countries,” she added, “believe that there is a dire need for clear and objective rules and disciplines for accession negotiations, in order to ensure that acceding countries are not overburdened by excessive demands. Article XII of the Marrakesh Agreement establishing the WTO does not provide such detailed rules and disciplines, hence placing the accession process in a strictly negotiating framework in which acceding countries have the lower hand rather than a rule-compliance context.”-SUNS4803

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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