Barriers to universal membership of the World Trade Organization.

• Author: Toohey, Lisa

Abstract

This article examines the feasibility of achieving the World Trade Organization's stated aspiration of achieving universal membership. The article first examines the requirements for accession, and argues that the commonly-used definition of universal membership--accession to the WTO by all members of the United Nations--is too narrow having regard to the accession provisions of the relevant WTO Agreements. A broader interpretation of the concept of universal accession reveals the true extent of the 'accession issue' by showing the number of accessions that may be negotiated in future. The article then considers the potential for truly universal membership of the WTO, and the obstacles to that being achieved. This broader potential membership includes a very high proportion of less- and least-developed countries, micro-states, and transitional economies, all of which face particular accession challenges that are examined in the final parr of the article.

Introduction

2012 was an exceptional year for the expansion of the membership of the World Trade Organization ('WTO'). Since 2008, no new member had been admitted to the organisation, which further compounded the sense of malaise about the efficacy of the organisation in the face of the stalled Doha Round negotiations. However, in 2012 the WTO admitted four new members through the accession process: Montenegro, Samoa, the Russian Federation and Vanuatu. Negotiations were also concluded for the membership of the People's Democratic Republic of Laos and Tajikistan, paving the way for their accession in early 2013.

These accessions will bring WTO membership to 159, and the individual accessions had symbolic significance for a number of reasons. The successful conclusion of negotiations for Vanuatu, Samoa and Laos, all less- (or least-) developed countries ('LDCs'), (1) was portrayed as a celebration of the WTO's development agenda. The Russian Federation, Montenegro and Tajikistan are all former socialist, centrally planned economies, now 'brought into the fold' within a quintessentially neoliberal institution. Finally, the accessions of the Russian Federation and Vanuatu were two of the longest and most politically challenging accession processes ever faced by the WTO. Commencing in June 1993 and July 1996 respectively, each was fraught with numerous political controversies that delayed and threatened to derail accession at various stages. (2)

The accession of the Russian Federation completes the WTO membership of the BRICs group of countries (Brazil, Russian Federation, India, China and South Africa), powerful, populous and rapidly developing states predicted to be the future key economic powers. (3) The accessions in the past decade of Vietnam, Taiwan and Saudi Arabia, plus China in 2001, have rounded out WTO participation by the most economically significant economies in the world. According to recent statistics, WTO members now account for more than 97 per cent of world trade. (4)

However, the WTO aspires to universal membership, which is generally defined as membership of the WTO by all 192 member states of the United Nations ('UN'). (5) Universal membership by this definition requires 25 further states to complete accession negotiations that are already underway, and a further 14 states to commence the process.

How feasible is the concept of universal membership? As indicated above, the recent flurry of accessions was unusual. This article examines the obstacles to universal membership of the WTO, focusing on the substantive, procedural and practical difficulties that the remaining acceding members face. (6) First, it explains the concept of universal membership, and the shortcomings of UN membership as a yardstick, pointing out that the potential membership of the WTO is much broader than the UN-based definition suggests. Second, the rules for WTO membership are explained, with particular emphasis on accession. The article then considers current non-members, highlighting how the economically and politically vulnerable nature of most of these potential members will inevitably make accession a challenging--and possibly unachievable--process.

II 'Universal Membership'

'Universal membership' is a concept regularly invoked in the context of accession, (7) and is usually taken to mean accession to the WTO of all members of the UN. While this definition is useful as a simple yardstick, it belies the more complex reality that there are asymmetrical criteria for membership of the two organisations.

Article 4 of the Charter of the United Nations permits membership by 'states' that fulfil the other requirements of art 4, whereas both art XXIII of the GATT 1947 (8) and art XII of the Marrakesh Agreement (9) permit membership by either a 'state' or 'separate customs territory', provided that the government concerned has 'full autonomy in the conduct of its external and commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements'. The potential membership of the WTO is therefore considerably broader than that of the UN.

For this reason, there are quite a number of current and potential WTO members that are unable to attain UN membership, but that are nonetheless very significant members of the WTO. Hong Kong and Macau are perfect examples--as Special Administrative Regions of the People's Republic of China, they are not members of the UN, but are both original members of the WTO. The provisions of the WTO Agreements do not require the determination of the vexed question of the legal status of Taiwan under international law. (10) Thus, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, known for convenience as 'Chinese Taipei', has been a member of the WTO since its accession on 1 January 2002. (11) The European Union, itself a supranational organisation, is also an 'economic and monetary union', (12) and therefore a WTO member, despite having only observer status at the UN.

There are around 50 constituent countries, territories or dependencies of various types that are not independent members of the UN. These constituent countries have governments with varying degrees of autonomy and independence from the states to which they officially belong, some of them designated 'non-self-governing' territories by the UN in accordance with the work of the Special Committee on Decolonization. (13) These include Greenland, Bermuda, French Polynesia, the Cayman Islands, the Cook Islands, Western Sahara, Sint Maarten, New Caledonia, Niue, Puerto Rico, and Reunion. Whether any of these territories is eligible for WTO membership depends on interpretation of the Marrakesh Agrement art XII requirement of 'full autonomy in the conduct of its external and commercial relations'. Many of these territories have, for example, independent heads of state, legislatures, judiciaries and customs services and may be able to assert that they are eligible for WTO membership. States that have declared independence and obtained partial recognition, but not UN membership, may also be eligible for WTO accession, and include Palestine, Kosovo, Northern Cyprus, Transnistria, Abkhazia and South Ossetia.

The potential WTO membership of these territories and contested states is generally overlooked, and there is no doubt that the membership of some of them would be deeply contested by some existing WTO members. However, many have sufficient autonomy to accede to the WTO, or may continue to expand their autonomy and be eligible for membership in the future. Recognising their existence as potential members strengthens the claim that more attention should be paid to the WTO accession process, as there are a great many more potential members of the WTO than may first be apparent.

III Formal Requirements of Accession

The WTO's accession procedures were very closely modelled on the accession procedures of the GATT 1947, (14) and were not the subject of specific negotiations during the Uruguay Round. However, there is a dramatic difference in the attitude towards accession between the GATT 1947 and the WTO. Curzon's observation of the GATT 1947 in the 1960s was that it was biased towards new members, with incumbent members 'not normally try[ing] to drive too hard a bargain in payment of concessions which they made to third countries many years before'. (15) However, by the 1990s, and in a dramatically different political context, the vast number of accessions strengthened the resolve of the existing GATT members that there should be no lowering of the terms of accession simply to expand the organisation. (16)

Accession is one of the two ways two pathways for WTO membership. More than three-quarters of the WTO membership (123 members) joined the WTO as 'original members'. This was granted to the original signatories of the GATT 1947 and to what was then the European Communities, provided that they fulfilled three criteria. These criteria, stipulated in art XI of the Marrakesh Agreement, require acceptance of the Marrakesh Agreement and the Multilateral Trade Agreements found in Annex I of the Marrakesh Agreement, and annexure of their commitment schedules in relation to goods and services to the GATT 1994 (17) and the GATS (18) respectively. The possibility of original membership of the WTO remained open from the establishment of the WTO until March 1997. (19) Since that time, the only process available for membership is the accession process stipulated by art XII of the Marrakesh Agreement.

The requirements of art XII are at best vague, but they appear to impose at least two criteria for accession. The first, discussed above, is the requirement that a prospective member has conduct of its own commercial and external relations; in other words, it is sufficiently autonomous to make good on the obligations of the WTO Agreements. The second, and more onerous, requirement concerns the terms of accession, with art XII(1)...