Azernews.Az

By Aynur Jafarova

Energy-rich Turkmenistan is expressing its intention to join the World Trade Organization (WTO) and has set up a working group to study the issue and analyze the economic implications of its potential accession to the organization.

The necessity to study the issue on Turkmenistan's accession to the WTO was stressed by President Gurbanguly Berdymukhamedov at a cabinet meeting held on January 18. At the following meeting of the Cabinet of Ministers on January 24, the president ordered to create a governmental commission for studying issues related to the Central Asian state's accession to the WTO.

The working group will analyze multilateral agreements on trade, which include the General Agreement on Tariffs and Trade (GATT), as well as the agreements on textiles and clothing, on trade-related investment measures, and on import licensing procedures.

Furthermore, it is planned to study the Safeguards Agreement, General Agreement on Trade in Services (GATS), Agreement on Trade Related Aspects of Intellectual Property Rights, Trade Policy Review Mechanism and other norms and regulations of the WTO.

The working group will also consider foreign trade terms and foreign trade-related legislation of Turkmenistan for their compliance with the WTO multilateral trade agreements.

Experts at the Turkmen Institute of Strategic Planning and Economic Development, under which the taskforce was established, believe that the advantages of joining the WTO for Turkmenistan include improvement of legislation and formation of stable trade and investment climate, a greater access to world markets, as well as creation of favorable conditions for improved quality of domestic goods and services.

WTO membership will open up broad opportunities for strengthening the competitiveness of Turkmenistan in international markets, the development of foreign economic relations and increase of foreign demand for Turkmen products and services.

The European Union earlier voiced its readiness to support Turkmenistan's accession to the WTO. During his visit to Turkmenistan in 2011, European Commission President Jose Manuel Barroso suggested that the country join the WTO, saying that this would increase its share in regional and global trade.

"It will have a positive impact on economic development, which is necessary for long-term prosperity and well-being," Barroso said. He added that the WTO optimizes attracting foreign capital and facilitates the creation of jobs.

However, some experts believe it would not be easy for Turkmenistan to be a member of the WTO given the barriers for foreign investments in some fields of the economy, in particular, the natural gas sector. They maintain that the main problem which stands in the way of Turkmenistan's membership is the absence of a market economy. Those experts also think that exporters would compel Turkmenistan to accept extra concessions, such as lower customs duties.

Some assure that talks on the membership of Turkmenistan in the WTO may last two to three years or even decades.

Attaining WTO membership

The procedure for the countries' joining the WTO is multidimensional and defined by Article XII of the Marrakesh Agreement On Establishment of the World Trade Organization. The accession process takes 5-7 years on average.

The first step is the filing of an application by the candidate country on its intention to join the Directorate-General of the WTO. Then, this country receives the status of observer. Further, the observer country provides a detailed Memorandum of the Foreign Trade Regime, which covers such issues as customs tariffs, the transition period, openness for foreign service companies, etc. Having considered the memorandum, the WTO member countries send questions concerning this document to the observer country.

The second stage envisions the conduct of a detailed discussion of issues pertaining to the memorandum and consideration at multilateral level of the economic mechanism and trade-political regime of the joining country. After that, consultations and negotiations on the terms of membership begin.

During the final third stage of the accession procedure, the results of all negotiations and a package of rights and obligations the observer country undertakes are expounded in a report of the working group. Following this, the package of documents, agreed within the framework of the working group and approved by the General Council, is ratified by the legislative authority of the observer country. Then, the mentioned obligations become part of a legal package of documents of the WTO and national legislation and the observer country obtains the status of a WTO member.

The main aim of the WTO, which was officially commenced on January 1, 1995 replacing the GATT, is to supervise and liberalize international trade and to regulate trade-political relations of its member states. Currently the WTO has 158 members.