WTO General Council accepts Laos’ membership, only ratification left

World Trade Organisation (WTO) members meeting as the General Council today agreed to Laos joining the global trade regime, paving the way for the southeast Asian country to become a member in early 2013.

The deal — the Protocol of Accession — was signed after the meeting by Laos’ chief negotiator, industry and commerce minister Nam Viyaketh, and WTO director-general Pascal Lamy. Copies will be submitted to the National Assembly in Vientiane. All that remains is for Laos — officially the Lao People’s Democratic Republic (PDR) — to ratify the membership package, and 30 days later it will become a member, over 15 years after it first applied to join the WTO.

“Laos has come a long way since it embarked on the road to membership in 1997,” Lamy said, adding that it is never easy for any least developed country (LDC), and Laos’ first steps were slow. “But it is now seriously reforming its economy and its institutions, and has shown skill in its membership negotiations.”
“Even at the end there were some tricky steps. The ability to strike the deal says much about Laos’ own ability, the flexibility of WTO members who are now implementing a series of decisions to speed up least developed countries’ accession to the WTO, the technical assistance several of them have provided, and the invaluable mediation of the chair of the Working Party, Ambassador YI Xiaozhun of China,” he added.

“This year has been a particularly important one for the WTO community in the area of accessions: we welcomed four new members –Montenegro, Samoa, and more recently, the Russian Federation and Vanuatu,” General Council chairperson Elin Østebø Johansen, who is Norway’s ambassador, told the meeting.

“In July, we also took a very important decision concerning the accession of least developed countries, in line with the mandate by ministers at MC8 – the eighth WTO Ministerial Conference., he said, adding that he strongly believed that the forthcoming entry of Lao PDR, an least developed country LDC, into the WTO represents a fundamental step towards its integration into world trade and into the world economy,” ambassador Johansen said. “From a systemic point of view, Laos’s entry will also take us a further step towards greater universality in our membership and it is yet another sign of WTO’s ability to deliver important results when members work together constructively towards a common objective.”

The membership allows Laos to join the international trading community on a proper legal footing. In WTO terminology, it enjoys a number of rights but also has some obligations like the right to have access to other WTO members’ markets according to their commitments and WTO rules. This access is considerable in the case of more developed export markets, to be part of an international trading system based on agreed rules rather than everyone-for-themselves, which is transparent and predictable. Just one practical example: if countries want to restrict imports from Laos or any other member on the grounds of food safety or animal and plant health, they cannot do this arbitrarily — they have to apply internationally-agreed standards or provide scientific evidence of risk. The global trade regime agreements also include rules for transit for a land-locked country; to use the WTO’s dispute settlement system; a legal process similar to a court in the WTO that countries can use when they believe other members are breaking their promises or the agreed rules; to more lenient terms and commitments than more developed countries as a LDC. It also means Laos having access to various ‘aid for trade’ programmes which are coordinated through the WTO even though the WTO is not an aid agency itself; to comply with its commitments to open up its markets to a degree, as it has agreed in its membership package and to abide by WTO rules. Implementing the various reforms can also help Laos to become a stronger trading nation and to attract the foreign investment that it wants.

The WTO means the 157 existing WTO members. They negotiated the membership package with Laos and they believe it can comply.. In any case Laos has already implemented many of its commitments and is well on the way to doing the rest.

Being a part of ASEAN’s regional trade and economic liberalization set up has helped Laos prepare for WTO membership, as has the technical assistance that Laos has received from developed countries.