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Sun, Apr 15, 2007
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WTO Membership
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WTO deals with trade rules among nations to help producers of goods and services, exporters and importers conduct their business.
An application for Iran’s membership to the World Trade Organization (WTO) was received by its director-general on 19 July 1996.
A Working Group (WG) was established at the General Council (GC) meeting on 26 May 2005 to scrutinize Iran’s membership to WTO. Tehran has not yet submitted a Memorandum on its Foreign Trade Regime and the WG has still not met.
Iranian officials said establishment of working groups was long overdue but now that it is created, future of nation’s ties with WTO and member states would be magnified regarding potential outcome of membership process, something that Tehran would examine, reported Persian daily Iran.
WTO has 148 Members and Iran’s application brings to 28 the number of governments negotiating entry.
The Organization permitted Iran to begin membership talks after US government lifted unjustified opposition to its entry.
The move followed after Iran agreed to a deal with European countries to maintain voluntary suspension of nuclear activities and continue talks.
In March 2005, US said it would drop its decade-long block on Iran to advance negotiations.
Iran applied in September 1996, but WTO officials maintain they cannot guarantee how long it would take for Iran, a major oil exporter, to become a member.

Policy Change
WTO deals with trade rules among nations to help producers of goods and services, exporters and importers conduct their business.
“The Iranian foreign ministry welcomes this step. But we knew right from onset that our right for entry into the WTO was ignored unreasonably,“ Iran’s former foreign ministry spokesman Hamid Reza Asefi told AFP at the time.
“In past months the Islamic Republic in negotiations with Europe and influential WTO member states, stressed the need to recognize Iran’s right to membership,“ Asefi added.

Starting Point
Establishing a trade regime will be the kick-start of talks on Iran’s membership to WTO. A copy of trade laws will be presented to state organizations besides Chamber of Commerce, Industries and Mines for their views.
Devised policies are transparent and problem free. To check likely consequences of membership bid, the scheme has tentatively been introduced in some government bodies like banks, financial, agricultural and transportation sectors.
Iran can select some countries from among WTO’s member countries in the negotiation committee.
Since acceptance of its application, after being opposed 21 times, Iran is permitted to attend the organization’s sessions as observer.
However, the entire process is complicated, time-intensive and phased, prompting reforms in national plans.
Experts say a line should be drawn between Iran’s WTO membership and politics. Incorporating politics in talks for its membership is diversionary and will hinder it from achieving its goal, which is economic in nature.
Highlights of WTO membership strategy have been drawn by a steering council, comprising various ministers, besides head of Chamber of Commerce, Industries and Mines.
Membership process involves reforms in trade laws within framework of commercial regime and in accordance with WTO agreement.

WTO
WTO is designed to supervise and liberalize international trade. It was founded on January 1, 1995, succeeding the General Agreement on Tariffs and Trade (GATT), which was established in 1947 and continued operation for almost five decades as a de facto international organization.
Iran was also an observer of GATT’s general meetings.
The body deals with trade laws among nations at a global or near-global level; it negotiates and implements new trade agreements and oversees that policing member states abide by agreements, signed by bulk of world’s trading nations and ratified by their parliaments.
The Organization’s current bulk work comes from 1986-94 negotiations called the Uruguay Round and previous GATT negotiations. It currently hosts new discussions under Doha Development Agenda (DDA) launched in 2001.
The Trade body is governed by a Ministerial Conference (MC), which meets every two years; GC, which implements conference’s policy decisions and controls routine administration; and a director-general, appointed by MC.

Mission, Functions, Principles
WTO aims to improve welfare of peoples’ of member countries, specifically by lowering trade barriers and providing platform for trade talks.
Its chief mission which is to ensure smooth business flow is specified in certain core functions of safeguarding five fundamental principles which form the multilateral trading system. It also settles disputes.
The body reviews national trade policies, ensures coherence and transparency of business policies through surveillance in global economic policy-making.
It also assists developing, least-developed and low-income countries in transition to adjust to its laws through technical cooperation and training besides acting as a center for economic research and analysis. WTO cooperates closely with IMF and World Bank.
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Formal Structure
WTO rules provide ground for members to participate in all council, committee meetings. The top decision-making body of MC assembles members which comprise countries or separate customs territories. MC decides issues under multilateral trade agreements. Its routine work is managed by GC, Dispute Settlement- and Trade Policy Review Organizations. These departments have the same membership-representatives of WTO members but each meet under different circumstances.
A nation desiring membership withdrawal must submit in writing to the director-general of WTO six months in advance.

Trade Negotiations
While most international organizations operate on one country, one vote or even a weighted voting basis, many WTO decisions, like adopting agreements are officially determined by consensus of members.
This practice provides collective efforts of members to use the best acceptable decision. Disadvantages include several rounds of talks before accepting decisions. Besides being time-consuming there is tendency that final agreements become ambiguous on contentious that complicate future interpretation of treaties.

Membership
A WTO member joins the body resulting from negotiations. Thus membership means balance of rights and obligations. The process is unique to every applicant country and terms of membership depend on the country’s stage of economic development and current trade regime.
It takes around five years on average but can prolong indefinitely if a country does not fully commit to the process or if political issues interfere, which has been the case for Iran or even Russia.
The shortest membership negotiation was with the Kyrgyz Republic, which took 2 years and 10 months, while the longest was the People’s Republic of China that lasted 15 years and 5 months. Russia, having first applied to join GATT in 1993, is still negotiating.
Moldova and Georgia are two nations that Russia must make agreements with, to enter WTO. Typical WTO procedures offer membership only when consensus is reached among interested parties.

Process
Iran’s membership to the body can be broken down into four major stages:
A country wishing to enter WTO submits an application describing all aspects of trade and economic policies that have bearing on the body’s agreements to the GC.
The application in memorandum form is examined by WP open to all interested WTO members.
For large countries like Iran or Russia, several states participate in the process.
The applicant then presents a detailed memorandum to WP on its foreign trade regime, economy and related policies, domestic and international trade laws and intellectual property policies.
WP members submit written questions to the applicant to clarify aspect of foreign trade regime specifically to the degree of privatization in economy and extent to which government regulation is transparent.
Only after provision of such information, WP begins meetings focusing on issues of discrepancy between WTO rules and applicant’s international, domestic trade policies and laws.
WP determines terms and conditions of entry into WTO for the applicant nation and may consider transitional periods to allow states leeway in complying with WTO rules.
Final phase of entry involves negotiations among applicant nation and other WP members regarding concession and commitment on tariff level and market access for goods and services.
These talks cover tariff rates and specific market access commitments, besides policies of goods and services.
As a new member, Iran’s commitments include applying equally to all WTO members under normal non-discriminatory rules, even though negotiated bilaterally. In other words, talks determine benefits (in the form of export opportunities and guarantees) other WTO members can expect on Iran’s entry as a member.
Discussions can get complicated and has been said that in some cases it broadens to an entire round of multilateral trade talks.
When discussions conclude, WP finalizes terms of the country’s accession, sends a membership package, which includes a summary of WP meetings, Protocol of Accession (a draft membership treaty) and list of commitments of members-to-be to GC or MC.
Once GC/MC approves accession terms, the Majlis will be is required to ratify the Protocol accession before the country can become a member. Documents used during membership process which are confidential during the stage are released once the nation becomes member.

Conclusion
Iran has been lobbying to enter WTO and its foreign trade management body is working round-the-clock to evaluate pros, cons of accession.
It has also completed and ratified its working party, which is ready for negotiations at WTO.
It is currently devising a comprehensive trade management system. Once operational, it can help introduce an accurate supervision system over all sectors.
Under international law, conflicts should not arise between its own rules and commitments with those of WTO. Such disagreements must be resolved before becoming a permanent member.