Kelley’s Blog: Iraq And WTO ~ April 7th or before ~ WTO and Iraq … Has Iraq Been Accepted into the WTO?
9 March 2011 (11-1204)
NOTE BY THE SECRETARIAT
The WTO Secretariat is pleased to announce the programme for the 26th WTO Introduction Day, intended for delegates newly arrived in Geneva, non-governmental organizations, as well as interns currently working in the Secretariat and new staff members. Other interested WTO staff members are also welcome to attend the presentations.
The activity will take place on Thursday 7 April 2011 in the Centre William Rappard. Interpretation will be available. The programme will be as follows:
09.30 Welcoming remarks
- Mr. Hakim Ben Hammouda, Director, Institute for Training and Technical Cooperation
09.40 Introduction to the WTO
- Mr. Daniel Morales/Mr. Rolando Alcala, Institute for Training and Technical Cooperation
11.00 Basic Legal Principles of GATT/WTO
- Ms Gabrielle Marceau, Le
*** WTO convinced of Iraqi trade legislation package
Observer status for non-Member governments before application to accede
Non-member governments may become WTO observers before they make an application to accede. However, there is no obligation to do so and, increasingly, governments wanting to join the WTO have preferred to directly enter into the accession process instead of first seeking observer status.
The procedures for observer status for governments in the General Council and its subsidiary bodies make it clear that its purpose is “to allow a government to better acquaint itself with the WTO and its activities, and to prepare and initiate negotiations for accession to the WTO Agreement.”50 Under these procedures, communications from interested governments that have not yet applied to accede must “express an intent to initiate negotiations for accession to the WTO Agreement within a maximum period of five years, and to provide a description of their current economic and trade policies, as well as any intended future reforms of these policies”.51
The status is granted initially for five years and observer governments are expected to take a decision on accession within that period of time. It is however possible for an observer government that has not yet initiated a process of negotiation with a view to acceding to the WTO Agreement, to request an extension of its status as observer. Such a request shall be made in writing and shall be accompanied by a comprehensive, up-dated description of the requesting government’s “current economic and trade policies, as well as an indication of its future plans in relation to initiating accession negotiations”.52
Observer status in the General Council carries with it certain rights and obligations. Observer governments have the right to observe formal meetings of the General Council and its subsidiary bodies, including accession Working Parties (with the exception of the Committee on Budget, Finance and Administration). Informal meetings, on the other hand, are held without observers in attendance. Observers have access to the main WTO document series and may also request technical assistance from the Secretariat in relation to the operation of the WTO system in general, as well as to negotiations on accession to the WTO Agreement.53
Representatives of governments accorded observer status “may be invited to speak at meetings of the bodies to which they are observers normally after Members of that body have spoken. The right to speak does not include the right to make proposals, unless a government is specifically invited to do so, nor to participate in decision-making”.54
Observers have an obligation to make a financial contribution for the services provided to them of 0.015 percent of the total WTO budget, which is the same as the minimum annual contribution made by the smallest WTO Members.55 This amounted to about SFr 26,000 for the year 2006 (about US $ 21,000; € 16,000).
Ten governments have been granted observer status under these procedures.56 One applied for an extension to the five-year period in the form prescribed by the Guidelines. The General Council noted that this was the first such request and agreed to its Chairman’s proposal to extend the period for a further five-year period.57
The General Council has on two occasions deferred consideration of such requests. In one case a Member needed additional time to examine the matter.58
In the other, the request was withdrawn shortly after its presentation when an application was made to accede to the WTO.59
In granting observer status in one case, the General Council took into account the applicant’s unique situation and agreed to waive the requirement concerning the intention to initiate accession negotiations, on the understanding that this did not constitute a precedent for future decisions on requests for observer status.60
2. Iraq – Request for Observer status (WT/L/560)
20. The Chairman drew attention to the communication from Iraq requesting observer status in the General Council and its subsidiary bodies (WT/L/560). In its communication, Iraq had indicated its intention to prepare for a subsequent request for accession to the WTO Agreement and had provided a brief description of its economy and foreign trade regime, which was in accordance with the Guidelines for Observer Status for Governments in the WTO contained in Annex 2 of document WT/L/161. It was his understanding – both from informal contacts he had had, as well as discussions a delegation from Iraq had had with a number of Members over the past weeks, and about which that delegation had informed him – that delegations were in general prepared to give positive consideration to this request at the present meeting. He therefore asked if the General Council was in a position to grant the request from Iraq.
21. The General Council agreed to grant Iraq’s request for observer status in the General Council and its subsidiary bodies.
22. The representative of Iraq, speaking as an observer, said it gave his delegation great pleasure to come to Geneva and to thank Members on behalf of the Government and people of Iraq for accepting this request for observer status at the WTO. This was an important step for Iraq towards integration into the global economy. After decades of isolation, Iraq was beginning to rejoin the international community, and this decision would send a positive signal to the people of Iraq that they were welcomed back and that the world really cared about their welfare. Since the downfall of the previous regime, Iraq had been taking rapid steps towards instituting economic transformations, shifting from a centrally-planned economy to a market economy that favoured private enterprise, economic freedom, full employment, free markets and free trade. This included lowering tariffs, a foreign investment law and reform of the banking system.
Iraq’s oil reserves were the second largest in the world and its natural gas fields were the tenth largest. Its people were highly educated and highly motivated. With an economic policy conforming to international norms and practices, those elements would give Iraq an opportunity to become an active player in international trade. However, there was much to be done.
23. Observer status would help Iraq in many ways. It would give Iraq a better understanding of the WTO, and would assist it in adopting WTO-consistent laws and regulations. Iraqis who had been forced into isolation by the previous regime would get the chance to benefit from the vast resources available at the WTO to learn and to build their capacity. Iraq was undergoing a transition, and at the present meeting it had taken the first step on the long hard road to accession. It was helpful that Members had welcomed Iraq, and his delegation looked forward to working with an Iraqi accession working party in the future. He wished to thank all those who had helped and supported Iraq. His delegation had been warmly received in Geneva and looked forward to having close and fruitful cooperation in Iraq’s bid to accede fully to the WTO. It was indeed a good day for Iraq, and Members had helped to make it that way.
24. All other delegations who spoke welcomed Iraq’s observership in the WTO.
25. The representative of Canada said that he had had the opportunity to meet with the visiting Iraqi delegation and had been impressed, not only by the individuals in that delegation but also by the thoughtful and convincing case they had made for observer status. Canada had been pleased to support Iraq’s request. Canada believed that this move into the WTO system was an important step for Iraq to rejoin the international community and, through this, to begin to revive the prospects and great potential of its economy. Canada also believed it was a signal and a symbol to the people of Iraq that the international community stood in solidarity with their plight and their well-being, because ultimately, membership in the WTO was a means to an end, and the end was to improve the living conditions for people, not only in Iraq, but in all corners of the world. Further to its support for Iraq’s observer status, Canada also supported the creation of accession working parties and the approval of observership for all interested states. Canada strongly endorsed the goal of universal membership of the WTO and the importance of participation in the WTO as a cornerstone of economic development.
1. The representative of the United States said that his delegation welcomed Iraq’s request for observer status and the decision of the General Council to grant that request. In pursuing this request, Iraq had made clear its commitment to the rule of law and the principles that underlay the WTO. Of particular note was the importance Iraq attached to the WTO as part of its ongoing efforts to rebuild its economy. These efforts held great promise for the people of Iraq, and the United States was pleased to join its fellow WTO Members in collectively welcoming Iraq as an observer in the WTO.
2. The representative of Australia said his delegation was pleased that the General Council had agreed to Iraq’s request for observer status in the WTO. Observer status would help Iraq to gain a better understanding of the international trade framework and to facilitate its preparation for accession to the WTO. It would also assist Iraq to realize its full economic potential. Australia was committed to supporting the Iraqi people in their task of building a new democratic and prosperous country. It supported Iraq’s efforts to rejoin the international community and the international economy. Involvement in international institutions such as the WTO was an important step in this process. Australia had provided a number of countries with WTO-related training, and would be discussing with Iraq’s officials how Australia might assist in this important endeavour. Australia was pleased to welcome Iraq’s delegation at the present meeting.
3. The representative of Japan said that his Government had been supportive of the efforts on the part of the Iraqi people for the reconstruction of their country and for the establishment of a new democratic state, and of their efforts to be reintegrated into the international community. In this spirit, Japan would be supportive of Iraq’s efforts towards eventual accession to the WTO.
4. The representative of the European Communities said that his delegation hoped and expected that WTO participation would be beneficial to the Iraqi people as an element to encourage the process of economic and political reform in the country.
5. The representative of Korea said that Iraq had undergone dramatic changes in the recent past that required the attention of the WTO. Some of the notable changes had been in trade, economic and political leadership, which Korea hoped would accelerate Iraq’s integration into the multilateral trading system in the future.
As Iraq had indicated in its communication to the General Council, observer status would assist the country to understand WTO rules and procedures, and would thus facilitate its eventual accession to the WTO. The development strategy Iraq had embraced of encouraging economic diversification would act as a catalyst for stable macroeconomic growth and would facilitate the development of a vibrant private sector. Korea hoped that Iraq’s observer status in the WTO would support its development efforts and encourage its people. In supporting Iraq’s observer status request, his delegation hoped and expected that other countries seeking observer status or accession would have their cases dealt with expeditiously.
6. The representative of India said his delegation believed that the decision just taken by the General Council was one more step towards the WTO’s goal of universal membership, and that this move would enrich the organization.
7. The representative of China said China was aware that Iraq was currently undergoing substantial changes in terms of institutions, legislation and policies related to trade. China believed those changes would be conducive to the further development of Iraq’s trade and economic cooperation.
8. The General Council took note of the statements.
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