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CHAPTER 11 Benefiting from WTO Accession and Membership Bernard Hoekman and Jayanta Roy Almost all countries in the MENA region have been reforming their foreign trade and domestic investment regimes to make the policy environment more conducive to fuller integration intothe world economy. Despite these efforts, the extent of integration remains relatively low. One dimension of this lag is reflected in the limited extent to which MENA countries participate pro-actively in the multilateral trading system, particularly the WTO, the successor of the General Agreement on Tariffs and Trade (GATT). Although many countries in the MENA region are WTO members (Bahrain, Egypt, Israel, Kuwait, Morocco, Qatar, Tunisia, and UAE), many are not. Algeria, Jordan, Oman, and Saudi Arabia are in the process of acceding, while Iraq, Lebanon, Libya, Syria, and Yemen have yet to launch a bid for membership. The creation of the WTO in 1994 with its three constituent elements-a new and expanded set of GATT disciplines, a General Agreement on Trade in Services, and an agreement on TRIPs-has major implicationsfor both members and nonmembers. All countries in the MENA region will be affected by the liberalization of markets agreedto in the Uruguay Round and by the negotiations that are scheduled to be launched in 2000. In addition, members and countries that have yet to accede are confronted with numerous implementation requirements , many of which involve institutionalreform and strengthening and many of which require significantfinancialresources if they are to be implemented in a manner that maximizes the positive development impact on the economy. This chapter focuses primarily on the policy and institutional implications of WTO membership and accession for MENA economies. We discuss the mechanisms through which the benefits of membership can be maximized and the process of accession simplified.1 Very much depends in this connection on the objectives of the governments concerned. The WTO is an 308 Catching Up with the Competition instrument of international cooperation between (mostly) sovereign states. The objective is to limit the potential for governments to impose negative externalities upon other countries when implementing trade policies. The focus of attention of the WTO is therefore on the effect of national policies on other countries, not on the effect of a government's policies on its own economy. We argue that any assessment of WTO rules and disciplines from the perspective of a national government should focus on its internal implications. In order to fully benefit from membership (and accession), governments should use the WTO as a mechanism to support the implementation of a domestic policy mix that supports export-oriented production and attracts investment into activities in which the country has a comparative advantage. At the same time, domestic institutions must be created and supported that allow a government to be a player in the WTO club and defend its interests and market access rights. After a brief summary of the main elements of the WTO, we relate the status quo in MENA countries to the WTO's requirements, providing an indication of how "far away" these countries are on average from multilateral standards of good practice. We then discuss the potential benefits of WTO membership and accession and what can be done to realize these benefits. Basic WTO Rules and Disciplines The implications of the WTO can be divided into four parts: the three multilateral agreements (GATT, GATS, and TRIPs), and their enforcement through consultation, transparency, and dispute settlement mechanisms. The three substantive agreements (treaties) have both institutionaland policy implications.2 The GATT requires that trade policies and their implementation be nondiscriminatory . The use of QRs is in principle prohibited. WTO members may only use tariffs to restrict imports of agricultural products, and all such tariffs are bound.3 Governments are subject to requirements relating to reduction of support granted to agricultural production and export subsidies, if any. Developing countries that have a per capita GNP above $1,000 become subject to GATT's prohibition on export subsidies. All trade-related investment measures (TRIMs) such as local content requirements that violate GATT's national treatment principle or its prohibition on QRs must be removed. The WTO's rules relating to product standards and SPS measures require that new regulations and conformity assessment procedures be based on international standards. The basis for customs valuation is to be the importer's invoice (transaction value). Under the GATS, nondiscrimination principles also extend to measures affecting trade in services. While MFN is a general obligation, the sectoral coverage of national treatment and market access...

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