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Joining the WTO: Why Does It Take So Long?

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Abstract

The WTO aspires to universal membership, but the process of joining has become very lengthy and many countries have faced particularly difficult and prolonged negotiations. The WTO applies a detailed and legalistic approach to accession, due to its accumulation of policy coverage over the years and the enforcement powers of the Dispute Settlement Understanding. In WTO accession cases, WTO incumbent members appear to have a superior bargaining position. At the same time, applicant countries appear to differ in their capability or willingness to gather information and institute the many reforms required to conclude the accession negotiation. Based on the record of completed and ongoing accession negotiations, the present study uses an endurance model to identify the factors that determine the probability of an applicant’s joining in a given month. In addition to the number of completed accessions, World Bank indexes of “government effectiveness” have a particularly strong influence on the duration of the accession process. In view of the difficult cases remaining in order to complete universal WTO membership, the authors propose a broader approach to WTO membership and more flexibility in accession requirements.

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Notes

  1. The Russian Federation joined in July 2012; Samoa, Vanuatu, and Montenegro also joined in 2012. As of early 2013, the WTO membership included 157 members, with 26 still negotiating accession.

  2. It should be noted that any concessions granted to a WTO member in the accession negotiations must be extended on an MFN basis to all WTO members upon accession.

  3. The likelihood of a dispute case depends largely on the value of market access under dispute; thus countries with smaller and less developed consumer markets may not raise serious concerns in this regard. See Bown (2009), especially chapter 9, for an analysis of the political economy of developing country participation in WTO dispute settlement.

  4. As Alavi (2010) has noted, Table 1 does not indicate the possible delay that may occur when a country’s formal application to join the WTO is not accepted at the General Council, which operates under the WTO consensus rule. A WP cannot be formed until the General Council accepts a country’s application. See note 9 below.

  5. See Constantine Michalopoulos (2002), pp. 61–70. Kavass (2007) also provides a detailed description of the accession process. The WTO secretariat WTO (2008) has compiled a comprehensive training handbook for negotiators.

  6. See Gay (2005), examining the accession case of Vanuatu and the role of its trading partners.

  7. Favorable treatment in accession negotiations for LDCs is included in the Doha Declaration, available at http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm. See also WTO (2002). The United Nations maintains a list of 48 LDCs, with information available at the UNCTAD website: http://www.unctad.org/Templates/Page.asp?intItemID=3641&lang=1.

  8. The World Bank governance indexes did not show any statistically significant impact on elapsed time-to-accession for the first 25 WTO entrants (Jones 2009). However, compared with the sample of acceded WTO members, the group of 30 applicants in this study exhibited lower governance index scores, which the following empirical results will link with lengthening negotiations.

  9. Iran first submitted a request to initiate WTO accession negotiations in 1996. The United States blocked official receipt of this request by the WTO General Council 21 times, but finally refrained from impeding its submission, which occurred in May 2005. See Evenett and Primo Braga (2005), footnote 4. The US also blocked Syria’s application at the General Council beginning in 2001, before relenting in 2009. See Alavi (2010).

  10. See note 7 above. LDC status remained constant for each country for the time period covered.

  11. Complete results of all regression variants are available upon request.

  12. For example, the mean and standard deviation, respectively, of Regulatory Quality (RQ) for China are −0.130 and 0.198, of the Rule of Law (RL) for Albania are −0.790 and 0.500, and of Control of Corruption (CC) for Latvia are −0.246 and 0.392.

  13. Because of high correlation among the governance index variables, regressions containing all six (not reported in Table 4) showed generally insignificant coefficients, except for statistically much weaker results for Regulatory Quality. The aggregate Govsum maintains the positive results of the individually tested governance indexes but dilutes the impact of its stronger components on probability of accession.

  14. See also Drabek and Bacchetta (2004) for a discussion focusing on transition country accessions.

  15. The WTO Enhanced Integrated Framework program helps LDCs to improve their capacity for participation in the global trade system. See http://www.wto.org/english/tratop_e/devel_e/teccop_e/if_e.htm. The WTO took further action to streamline accession procedures for LDCs in July 2012. See http://www.wto.org/english/news_e/news12_e/acc__03jul12_e.htm.

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  1. Babson College, Babson Park, MA, 02457, USA

    Kent Jones & Yunwei Gai

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  1. Kent Jones
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  2. Yunwei Gai
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Correspondence to Kent Jones.

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The authors gratefully acknowledge helpful comments and suggestions by the editor and an anonymous referee. Any remaining errors are the responsibility of the authors.

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Jones, K., Gai, Y. Joining the WTO: Why Does It Take So Long?. Open Econ Rev 24, 695–716 (2013). https://doi.org/10.1007/s11079-012-9262-4

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