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Facilitating Uzbekistan's Accession to the WTO

  • SUMMARY AND PROJECT'S OBJECTIVES

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    ACCESSION TO THE WTO: BENEFITS AND CHALLENGES

    Acceding to the World Trade Organization (WTO) as a full-fledged member is key in integrating beneficially into the international trading system and the global economy.

    Accession is a policy decision to enter into the discipline of a rules-based, open and integrated trading system; it can impact a large number of areas of the economy.  Being a WTO Member, or aspiring to be one, sends a clear signal to trade partners and investors about a country's commitment to an open economy, which encourages the increase in trade and inflow of foreign investment and technological know-how and lifts productivity.

    BENEFITS

    Accession to the WTO has important benefits for an acceding country.

    • It brings greater security and predictability of access to the markets of other WTO Members. This is ensured, in particular, by two core WTO principles - Most Favored Nation (MFN) and National Treatment (NT) - that aim at providing non-discriminated and equal trading between the WTO member nations. The MFN principle guarantees that the same privileges and immunities granted to any country are extended to all WTO members and NT ensures that Members treat imported and locally produced goods equally. The market access benefits are widespread and cover a variety of different measures in trade in goods, trade in services, and intellectual property.
    • Through their commitments such as maximum level of tariff protection and elimination of quotas on imports, as required by the WTO, countries create a predictable and transparent framework, which improves the business environment and promotes good governance.  Under the WTO, Members agree to open their markets for goods and services. For goods, countries "bind" their tariffs; i.e. they provide tariff ceilings that cannot be surpassed. This creates certainty that tariffs will not be raised beyond these ceilings. Similarly, the establishment of simplified rules on licensing, registration, and customs clearance can have a very positive effect on business.
    • Liberalization, through increased access to lower-cost products is another benefit of becoming a Member of the WTO, that is seen as part of a process of increasing export competitiveness by reducing or eliminating anti-export bias of import protection. It allows consumers and producers to access goods at lower prices. In the context of global value chains, this enhances the competitiveness of products produced within the country. Enhanced competition, in turn, is associated with quality improvements.
    • Acceding to the WTO also brings greater protection for the private sector against harmful trade actions by other countries. This is being ensured, in particular, through the right to resort to the WTO's Dispute Settlement mechanism that allows disagreements between WTO Members to be resolved when they consider that their rights under the rules are not being fully recognized by another Member. These rights, which are not available to non-Members of the WTO, constitute a central element in providing security and predictability to the multilateral trading system. This mechanism plays an important role in resolving strong imbalances in bilateral trade relationships.
    • Undertaking the obligations of WTO Membership can also help strengthen a country's trade-related institutions and streamline regulatory and institutional policies that can lead to significant domestic legal and regulatory reforms related to imports/exports.  All of these commitments contribute to improving the national business environment, ultimately, making the country more attractive to foreign investors. This consequently helps to attract foreign investment and lift productivity.
    • Last but not least, accession also allows new Members the opportunity to safeguard their interests by participating actively in international trade negotiations and international rule-making.

    CHALLENGES

    While accession to the WTO has many benefits, it creates also a number of obligations, including the adjustments needed following the opening up of   sectors of the economy to competition from other WTO Members and/or the acceptance of procedures for the regulation of the services sector.

    Some challenges can also stem from the accession process itself: it is a long and complex negotiation process, involving wide-ranging legislative and executive actions by acceding countries, that requires extensive human resources and institutional capacities, including sectoral expertise. Many countries that request to accede face particular constraints throughout this process, such as a limited analytical capacity to support trade and impact analysis and/or a lack of resources to respond to information requests among other limitations. For this reason, the private sector needs to take advantage of any opportunities to provide inputs into the preparatory and negotiating processes and to keep abreast of developments over the accession process.

    Nevertheless, most of these challenges can be addressed through a fact-based advisory support and capacity building initiatives available through technical assistance programs.

    Experience also shows that accession can be facilitated by thorough preparation by the acceding country. This includes the preparation of analytical studies and the establishment of a consultative process within government, and between government and the private sector and civil society more generally. In addition to increasing the information available to government negotiators, this process should eventually facilitate the passage of necessary legislation and implementation of policies and measures consistent with the WTO. It also helps the private sector to prepare for any adjustment to a more open economic environment.

    WHAT IS THE WTO ACCESSION PROCESS?

    Any state or customs territory having full autonomy in the conduct of its trade policies may become a member ("accede to") of the WTO, but all WTO members must agree on the terms. This is done through the establishment of a working party of WTO members and through a process of negotiations.

    Following the establishment of a working party for the accession process, bilateral, plurilateral and multilateral negotiations take place in parallel. The successful conclusion of these negotiations leads to the drafting of an accession package ("terms of accession/entry"), which needs to be adopted by the accession working party and approved by the WTO's General Council or Ministerial Conference. Subsequently, the acceding government has to accept the "terms of entry" - either through signature or ratification - and becomes a full-fledged WTO member 30 days after it notifies the acceptance of its Protocol of Accession to the WTO Director-General. UZB1 

    Source: WTO

    All information on the WTO accession process can be found here

    Current status of ongoing accession negotiations can be found here


    HOW ITC SUPPORTS THE INTEGRATION OF DEVELOPING COUNTRIES INTO THE MULTILATERAL TRADING SYSTEM

    Within ITC's exclusive mandate to foster the private sectors' participation, in particular SMEs, for trade-led economic growth, ITC aims at supporting developing countries' private sector participation in the WTO accession process. The assistance provided is customized according to each country's stage of accession and specific economic situation as well as development strategies.

    ITC's provides support to WTO acceding developing countries with a twofold objective:

     

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    Build a national consensus and international momentum around their accession process

     

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    Accede to the WTO with balanced accession strategies and accompanying policy and regulatory reforms that are paramount to enhance the business integration into the global economy.

     

     

    With this objective as its backdrop, ITC has been successfully assisting least developed and developing countries in their WTO accession process since 2009 by providing them with a wide range of technical assistance services and capacity building activities. These include supporting the drafting of their WTO accession documents (Memorandum of Foreign Trade Regime and Legal Action Plan), achieving balanced accession strategies (drafting of the goods and services initial offers, supporting the conclusion of national trade policy strategies), and implementing a nation-wide public-private dialogue methodology to build consensus around the accession and negotiations positions. Samoa, Yemen, Lao PDR, Comoros, Liberia, Sudan, Tajikistan and Ethiopia are all among the beneficiaries of ITC's assistance on the path to their WTO membership.

    To reach this ambitious goal, ITC has developed a five-fold strategy that is tailored to the needs and situation of each country. This strategy encompasses the following:

    • Awareness raising on the WTO system and covered agreements to inform public sector officers and bridge the knowledge asymmetry between the government and the private sector;
    • Support in drafting the Memorandum of Foreign Trade Regime and Legislative Action Plan and/or assistance to reply to WTO Members' questions following the submission of these documents;
    • Support in drafting comprehensive services and goods initial offers, which will be aligned with the country's development strategy and the private sector's needs;
    • Creation of a pool of knowledge for sustainable capacity building on WTO related issues;
    • Providing advisory services to ensure a fruitful participation in WTO negotiations

    Beyond the accession process, ITC also supports countries that have recently acceded to the organization in the implementation of their WTO commitments.


    UZBEKISTAN’S ACCESSION TO THE WTO

    The process of Uzbekistan's WTO accession was initiated in 1994, but was frozen in 2005, due to the self-sufficiency policy that was instituted during that time.

    Fast forward to 2016, where shortly after his election, President Mirziyoyev initiated a broad package of socio-economic reforms and transformation aimed at trade liberalization and modernization of domestic trade regime. Following these reforms, the process of accession to the WTO was renewed through a formal application to the WTO Secretariat signed by the Minister of Foreign Trade in March 2018. In July 2019, Uzbekistan circulated its updated Memorandum of Foreign Trade Regime (MFTR) to the WTO members, as well as later on a number of other required WTO accession documents, including initial market access offers on goods and services. The progress made by Uzbekistan resulted in the support by WTO members in carrying out the 4th Working Party on the accession of Uzbekistan to the WTO, which took place on July 7th, 2020 after almost fifteen years of standstill in the negotiations. This milestone event has marked Uzbekistan's return to the negotiating table and its government's dedication and efforts made towards joining the WTO membership. Next developments in the accession process will depend on the progress achieved in upcoming bilateral and multilateral negotiations as well as the alignment of Uzbekistan's trade regulatory regime with the WTO rules and regulations.

    The current status (as of October 2020) of the WTO accession process of Uzbekistan is represented in this diagramme:

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    Source: WTO

    NB: the blue highlights are the phases that have been completed already,

     while the grey highlights indicate the phases that still need to be completed

     

    All information regarding the status of the process of accession of Uzbekistan to the WTO- including all official documents- can be found here.


    OUR PROJECT: FACILITATING THE PROCESS OF  UZBEKISTAN’S ACESSION TO THE WTO

    Why the project?

    The European Union (EU) ‘Facilitating the process of Uzbekistan’s accession to the WTO’ project is a five-year initiative implemented by the International Trade Centre (ITC). The project, which started in February 2020, aims to support Uzbekistan's development plans to modernize its economy by leveraging its WTO accession process.

    Overall objective

    Overall objective

     

    Contribute to the economic development of Uzbekistan by assisting the country to create a trade environment that is in conformity with international standards, including predictable and enforceable laws and regulations.

     

    specific objective

    Specific objective

     

    Contribute to Uzbekistan's economic development through the creation of a trade environment that is in conformity with the WTO rules.

     

     

    If the Uzbekistan's WTO accession process concludes within the implementation phase of the project, the focus of ITC's assistance will shift to support Uzbekistan's compliance with WTO requirements and implementation of the commitments made during the accession process.

    STAY CONNECTED: #WTOAccessionUZB

     

    Who is funding the project?

     

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    More information on EU's work in Uzbekistan can be found here

    Who are the beneficiaries?

    • The primary beneficiary of the programme will be the ministry responsible for the WTO accession negotiations: the Ministry of Investment and Foreign Trade (MIFT). Other direct beneficiaries will include the various government departments/agencies involved in both the pre- and post- WTO accession process.
    • The project will also work closely with the Uzbekistan Chamber of Commerce and Industry, as well as sectoral business organizations and associations, export-import enterprises, universities, economic research centers and civil society organizations, including women, youth and consumer associations.
    • The ultimate stakeholders will be the Uzbek businesses, especially SMEs as well as the consumers, in particular women, youth and people living in vulnerable and marginalized situation.

    What are the foreseen results?

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    The Uzbek government will be better equipped to draft the documents and develop its negotiating positions as required by the WTO accession process

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    The executive and legislative branches will be better informed to develop specific sectoral laws and regulations as needed to comply with Uzbekistan's new international commitments

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    The policymakers' understanding of the WTO accession process and its legal framework will be reinforced

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    Uzbekistan will have an increased capacity to comply with WTO Rules, in particular with regards to the SPS/TBT & Trade Facilitation Agreements of the WTO

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    ITC's work will increase the business sector's - including women's associations- awareness of the WTO accession process and benefits

     


     IMPACT ON UN SUSTAINABLE DEVELOPMENT GOALS

     

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    SDG 8 (Economic Growth - target 8.a) is the main goal of the project. The programme will directly contribute to facilitate Uzbekistan's accession to the WTO and its participation in global trade. The Government is aiming to further use the rights and benefits of full membership in the WTO to foster export-led growth, diversify the country's economy and markets, attract investment, create jobs and improve the economic welfare of all Uzbeks.

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    SDG 10 (Reduce inequality and empower all women and girls - target 10.a). The programme will contribute to ensure women participation in economic life and support the adoption of policies aimed at promoting gender equality and empowerment through inclusive dialogue aimed at informing the policy formulation and economic reform agenda.

     

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    SDG 16 (inclusive institutions - target 16.a). The programme will help to build effective, accountable and inclusive institutions, through inter alia, technical training, awareness raising and highlighting particular issues relevant to women.

     

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    SDG 17 (Global Partnership for Sustainable Development - target 17.10, 17.13 and 17.17). The programme will focus on improving regulations and procedures that promote an open, rules-based and transparent multilateral trading system.

     

     

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  • Project Factsheet 

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  • contact

    GENEVA OFFICE

    Jean-Sébastien Roure, Senior Officer, Business and Trade Policy 

     E-mail: roure@intracen.org

     T: +41 22 730 03 03

    Daria Shabalina, Project Coordinator

     E-mail: dshabalina@intracen.org

     T: +41 22 730 04 15


    TASHKENT OFFICE

    Nodir Abdullaev, National Project Coordinator

     E-mail: nabdullaev@intracen.org

     T: + 998 93 380 85 85


    Stay connected: #WTOAccessionUZB

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