What are the advantages of WTO membership for the agricultural and agrifood sector in Azerbaijan?
One of the main advantages is greater predictability of market access particularly for those sectors where Azerbaijan has export strengths and is seeking to expand and diversify its export markets. In investing to develop export markets, Azerbaijani firms gain important protections under WTO rules. These protections, however, will not be actionable until accession is effective.
Will the WTO impede Azerbaijan to take measures for the protection of the health of its people, environment, morals or national security, among others?
Articles XX and XXI of the General Agreement on Tariffs and Trade 1994 ("GATT"), and similar provisions of the the General Agreement on Trade in Services ("GATS") and of the Agreement on Trade-Related aspects on Intellectual Property Rights ("TRIPS"), state clearly that such type of measures may be taken unilaterally by any member. There are multiple examples of such measures being adopted and applied by members, whenever they consider it appropriate. However, it should also be noted that the use of these exceptions may be subject to review by the WTO if any Member believes that the conditions for the adoption and application of the measure at stake goes against the rules set forth in the GATT, GATS or TRIPS. For instance, applying a measure to imports from certain WTO members but not to others, without a valid justification for it, is likely to breach multilateral rules. Where the requirements of the provisions in the WTO agreements are complied with, by contrast, the WTO will not interfere in any manner with the trade-restrictive measure adopted and applied. For instance, in June 2018 a panel confirmed that the Tobacco Plain Packaging Act 2011, and related normative acts, of Australia is not contrary to the WTO rules even if it has a very negative impact on the interests of large international corporations and countries producing tobacco. The shrimp, retreaded tyres and seal products are other cases where similarly trade-restricting measures were validated by the WTO.
As a result of WTO accession, will government support in the form of subsidies be prohibited?
No. The WTO agreements generally prohibit certain specific types of subsidies to enterprises. This prohibition extends to export subsidies and subsidies contingent upon the use of domestic over imported goods. All other types of subsidies are either outside the purview of the WTO or permitted to the extent that they do not cause an adverse effect on another WTO member. Subsidies to unemployed, elderly, young etc. are not regulated by the WTO, i.e. WTO accession will not affect the ability of the Government of Azerbaijan to continue providing them to Azerbaijani people.
Can a WTO Member take measures against a surge in imports?
The WTO agreements permit taking measures against an unforeseen increase of imports if certain substantive and procedural requirements contained in the Safeguards Agreement and in the General Agreement on Tariffs and Trade 1994 are met. More than 50 members use this instrument frequently. In addition, the WTO agreements permit the imposition of anti-dumping and anti-subsidy measures when imports are made at dumped prices or receive countervailable subsidies. For more information on this, please consult the page http://wto.az/en/areas/trade-remedies/
Which countries are currently engaged in WTO accession negotiations?
Other than Azerbaijan, there are 21 countries negotiating accession to the WTO. The main economies pursuing negotiations are Belarus, Iran, Iraq, Uzbekistan, Serbia, and Bosnia and Herzegovina. Belarus and Bosnia and Herzegovina are reportedly close to completing the negotiations. Others are actively engaged (e.g. Serbia) or are restarting the negotiations (e.g. Iraq and Uzbekistan).
And, what do countries actually get from accession?
Based on empirical data and Members' statements, the following results are achieved by acceding Members: 1) Improvement of economic performance and trade growth 2) Structural transformation of the economy 3) Diversification of the economy 4) Increased competition 5) Enhancement of the business environment 6) Improvement of governance and/or market-based development For more on this, you may read the page "Membership and accessions" (link: http://wto.az/en/wto/membership-and-accessions/) of this website.
What do countries seek to achieve through WTO accession?
Each country has its own objectives. However, the following are often cited as reasons for pursuing WTO accession: 1) Pursuance of economic reforms, including structural reforms 2) Diversification of the economy away from dependence on a narrow set of commodities 3) Nation-building processes after reaching independence 4) Transitioning from a centrally planned to a market economy 5) Stepping stone to a regional integration initiative
Is the WTO dispute settlement mechanism actually used by countries other than the largest Members?
Yes. While it is true that most disputes involve a developed country or a large developing country - which is due to the size of their markets and weight in international trade -, there are lots of disputes in which the complainant or the defendant, or both, parties are medium or small developing countries. For instance, one of the first cases decided was a dispute brought by Costa Rica against the United States, which Costa Rica won. There are various disputes between Latin American countries (e.g. Guatemala vs Peru or Costa Rica vs Trinidad & Tobago) or between Asian countries (e.g. Vietnam & Taiwan vs Indonesia). Among CIS countries, Ukraine (7 cases, as complainant, and 4 cases, as defendant) and Russia (7 cases, as complainant, and 9 cases as defendant) are important users of the dispute settlement mechanism. Moldova, Armenia and Kazakhstan have also been party to WTO disputes.
Do WTO rules mean that Azerbaijan would no longer be able to invest in and support its agricultural development?
No. WTO rules do not prevent countries from investing in their agricultural sectors and supporting farmers. A wide range of government policies are entirely exempted from any disciplines. These include all kinds of government services (research, marketing, infrastructure improvements) as well as several kinds of direct payments to farmers. For other policies, such as input subsidies, that have a more direct effect on production, limits on the amount of support that can be provided may apply. The key issue for Azerbaijani agricultural policy after WTO accession will be to identify the real needs for agricultural development and to make full use of the flexibility allowed under WTO rules to design agricultural policy interventions to meet those needs.
Has any country ever left the WTO?
No. The overall interests of countries - regardless of size of the country, type of economy or political orientation - are better served by maintaining the status of members. In this manner, they have a say in the bodies and decisions of the Organisation. Bearing in mind that decision-making is consensus-based, any Member country can block decisions that are not in its interests and can shape the multilateral rules that will apply in the future.
How is the WTO financed?
Through payments from its Members. The amount to be paid depends on each Member's share of international trade. For instance, in 2018 the total budget of the WTO exceeds CHF 197 million. The largest contributor to the budget is the US, with more than CHF 22 million, followed by China, with CHF 19 million. Member contributions for 2018 can be found in the following link: https://www.wto.org/english/thewto_e/secre_e/budget_e/budget2018_member_contribution_e.pdf
Can a WTO member enter into preferential trade agreements with other countries?
Yes. However, such agreements should comply with the rules set forth in Article XXIV of the General Agreement on Tariffs and Trade 1994 and/or Article V of the General Agreement on Trade in Services, as the case may be. The WTO reports that, as of August 2018, there are 305 such agreements in force, the European Union being party to 42 of them. Several of these agreements are multiparty such as the agreement recently signed by 11 Asian and Pacific countries. With the WTO being unable to deliver any major trade opening, the number of RTAs is likely to continue growing in the near future.
Should WTO accession improve the situation of Azerbaijani exporters?
Unlike now, following WTO accession importing countries will have to apply the provisions of WTO agreements to Azerbaijani exports. The rights conferred by WTO provisions to Azerbaijani exporters will improve their ability to access the markets of other WTO members. The results of additional WTO negotiations will further improve market access conditions for Azerbaijani products.
How many countries are members of the WTO?
As of August 2018,164 countries are members of the WTO. One of the last countries to accede to the WTO was Kazakhstan, in 2015. WTO members represent 98% of the world trade.
How many agreements were adopted in the Uruguay Round?
There were about 60 agreements and decisions adopted at the end of the Uruguay Round. Some have expired since then. Others have been adopted afterwards, such as the Trade Facilitation Agreement.
When did the Republic of Azerbaijan submit its application for WTO membership?
The application for Azerbaijan's accession to the WTO was submitted to the WTO Secretariat on June 23, 1997.
What is the main objective for Azerbaijan to become a member of the WTO?
The main objective is to accelerate the process of integration into the global economy.
Who decides on the accession of Azerbaijan to the WTO?
The Working Party on Accession of Azerbaijan to the WTO, supported by the Secretariat, plays a key role in the accession negotiations as the Draft Working Party report is prepared under its responsibility. However, the accession package is adopted in the Ministerial Conference or by the General Council. Kazakhstan's accession was for instance agreed in the Ministerial Conference in Bali, Indonesia.
How many WTO members form part of the Working Party on Accession of Azerbaijan to the WTO?
42 countries, including China, the European Union, the Russian Federation, Turkey and the United States.
When was the last meeting of the Working Party on Accession of Azerbaijan to the WTO held?
The 14th and most recent meeting of the Working Party on Accession of Azerbaijan to the WTO was held on July 28, 2017, in Geneva, Switzerland.
Who is the chairperson of the Commission of the Republic of Azerbaijan for Preparation for the WTO Accession?
According to the Decision of the Cabinet of Ministers of the Republic of Azerbaijan №187s of March 9, 2017, the Chairperson of the Commission is the Minister of Economy Mr. Shahin Mustafayev, whereas the deputy chairpersons are the Deputy Minister of Foreign Affairs, Ambassador Mahmud Mammad-Guliyev, and the Deputy Minister of Justice, Mr. Toghrul Musayev.
What are the main subjects covered by the negotiations?
WTO covers a very wide range of topics, relating to trade in goods, services and intellectual property rights. Depending on the situation and interests of each acceding country, the main subjects may vary. In the case of Azerbaijan, the request to be recognised as developing country, domestic support in agriculture and tariffs are among the sensitive questions on the table.
Do WTO accession negotiations require updating the domestic normative framework and if so, which areas are likely to be concerned by those changes?
Often, countries that apply for accession need to make changes to the domestic legislation in areas such as competition; technical regulation, accreditation, standardisation, and metrology; food safety, veterinary and phytosanitary; customs; agriculture; trade remedies; services and intellectual property.
