2000-2015: GEORGIA AT THE WORLD TRADE ORGANIZATION (WTO)
June 2015 marks the 15th anniversary of Georgia's accession to the WTO as its 137th member. How has this multilateral organization evolved since 2000? Has it become more transparent and directly relevant to companies? What are Georgia's current priorities in the WTO and what role can smaller trading countries such as Georgia play in ongoing negotiations there? Investor.ge examines these issues with Keith Rockwell, Director for Informational and External Relations at the WTO in Geneva, Switzerland, and Genadi Arveladze, Trade Attaché responsible for the WTO at Georgia's Mission to International Organizations, also in Geneva.
New WTO Members, New Dynamics
The WTO is now an organization with 161 members and includes the major players in the global economy as well as countries with a wide range of development levels. China's accession to the WTO in 2001, the Russian Federation's accession in 2012, and the rise of Brazil, India, and several other developing countries as influential traders has added to the complex negotiating dynamics at the WTO. The accession since 2000 of Georgia's regional trading partners such as Armenia, Ukraine, Russia, and Moldova means that WTO rules form a significant part of the common legal basis for Georgia's bilateral trade with these countries. Not surprisingly, Georgia is also an active participant in the ongoing negotiations with trading partners such as Azerbaijan, Kazakhstan, and Belarus regarding their accession to the WTO.
New Role for the WTO: Bulwark Against Protectionism
In 2008, the WTO assumed a new role - global protectionism monitor - in response to fears that the global financial crisis would spin out of control if countries resorted to a 1930s-type of trade protectionism. In cooperation with the G20 and the OECD, the WTO Secretariat initiated tracking reports and required WTO Members to defend policies that could potentially be trade distorting. Rockwell explains that this "collective transparency deterrent" helped to dial back many emerging policies before they could potentially damage global trade.
The WTO also started to put greater stress on the key WTO requirement that members should notify new trade laws and regulations.
Notification is essential so that other WTO members can examine new policies for compliance with WTO rules. Notification also provides members and their companies forewarning that requirements are going to change and an opportunity to weigh in on new policies before they go into effect.
A More Accessible and Business-Relevant WTO
Since 2000, the WTO has made many negotiations and committee meetings more publicly available through internet reports and event podcasts, explains Rockwell. The WTO also took some of the vast trade data that had been primarily used for internal analysis by WTO Members and the WTO Secretariat and created publicly available databases thattraders can use to find tariff rates, technical regulations, government procurement opportunities, and soon, customs procedures, as well.
Rockwell stresses that businesses also should not underestimate the importance of the everyday work at the WTO. WTO committees, for example, oversee members' real-time implementation of the WTO agreements.
"There are ongoing important negotiations all the time in basic committees, such as the Sanitary and Phytosanitary Committee, which are defining outcomes for international trade," he says. Arveladze agrees that WTO committee work is critical for a country such as Georgia because it provides Georgia with a greater understanding of emerging trade developments and a chance to hear other countries' reactions to them.
Georgia's Current WTO Priorities
Georgia is currently preparing for a review of its Deep and Comprehensive Free Trade Agreement with the European Union at the WTO's Committee on Regional Trade Agreements this summer. It is working alongside other WTO Members to try to reach an agreement on a work program for a global deal on agriculture, industrial goods, and services at the end of July.
Georgia is also preparing for a comprehensive review of its trade and investment regime by other WTO Members as part of a Trade Policy Review, which is scheduled for 2016.
The WTO Trade Facilitation Agreement
Georgia's major current activity, however, is work on internal procedures to ratify and implement the landmark WTO Trade Facilitation Agreement (TFA). Concluded in 2013, the TFA will enter into force once two thirds of WTO Members ratify it. Among its provisions, the TFA establishes new rules to expedite the movement, release and clearance of goods, including goods in transit. Governments have to publish procedures on the internet for importation, exportation, and transit (including port, airport, and other entry-point procedures), and required forms and documents. There are new requirements for governments to provide advance rulings, new procedures for appeal and review of customs procedures, new disciplines on fees and charges, and increased use of measures such as single window, authorized economic operators, coordination with neighboring customs authorities, and expedited release of perishable goods.
International business groups such as U.S. Chamber of Commerce, the International Chamber of Commerce, and various European chambers of commerce widely hail the TFA as one of the most important actions governments can take to energize globalized production and trade and to help SME exporters. According to the OECD, the estimated effect of trade facilitation improvements is a 15.5% reduction of total trade costs for lower-middle- income countries. Implementing TFA helps Georgian companies by easing their access to inputs and their ability to export out of Georgia while also streamlining customs and transit procedures in the countries to which they seek to export.
Arveladze asserts that Georgia is already a leader on trade facilitation procedures in the Caucasus region. According to the OECD, Georgia's strongest performance on trade facilitation in general "is in the areas of simplification and harmonization of documents, automation and internal border agency co-operation, while it performs less well in the areas of advance rulings." (http://compareyourcountry.org/trade-facilitation)
Using Georgia's Seat at the Table
GivenTFA implementation, daily WTO committee meetings, an intense effort to reach an outcome on a global goods and services deal, WTO accession negotiations, etc., how does a small diplomatic mission manage to cover all of these issues and best use its seat at the WTO table? "You get out of the WTO system what you put into it," stresses Rockwell. He acknowledges that smaller countries do face resource and human capacity constraints in tackling WTO work, but that many of them pool their resources and project a louder voice by teaming up with likeminded countries on specific issues.
This is a strategy that Georgia has followed at the WTO, says Arveladze, by aligning itself with the Recently Acceded Members group in some negotiations. Further, he explains, despite the fact that Georgia has been a WTO Member for some time,it still takes advantage of technical assistance provided by the WTO Secretariat to train experts on specific WTO trade areas and procedures to build its human capacity to deal with WTO work and negotiations.
Laurie Kelleher is an international trade advisor based in Tbilisi.
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