WTO market principles doesn’t have a bigger impact on national goals
To be a member of World Trade Organization (WTO) would mean embracing consumerism which often is a question in Bhutan’s accession if WTO market principles are in line with sustainable development.
Bhutan’s application to WTO started since 1999; however Bhutan is still building its capacity for the accession.
A workshop on capac- ity building for WTO accession and trade held last Wednesday saw experts discuss about benefits and loss resulting from the accession.
The chief of trade policy and analysis of the UN Economic and Social commission for Asia and the Pacific UNESCAP, Dr Mia Mikie said it is not in the spirit of WTO to make trade absolutely free, that there is an acceptable level of restrictions in the form of public policy, for instance protecting the environment and national security.
She said the ideal meaning of free trade lies in the sense of making trade free from unnecessary distortion like non- tariff barriers and discrimination of products.
Citing an example of alcohol, she said imported alcohol is taxed more than the local. Once the country becomes a member of WTO the products will be taxed the same despite the differences in the place of production.
The WTO offers special and differential treatment to least developed countries ( LDC) and this example was used while talking of the advantage Bhutan could have if it joins the organization since Bhutan falls into the category of least developed countries. ‘’You can protect the activities where you don’t want foreigners to be,’’ she said.
She added that WTO members must agree to some degree of reciprocity but this is not strictly imposed on LDCs.
Bhutan banned imports temporarily due to severe rupee shortage. The ban would not have lasted more than six months had it been a WTO member then for one cannot discriminate foreign goods.
Dr Mia Mikie said that there is nothing to fear and it is rather beneficial to be a member of WTO. She added that accession would mean upping the level of regulations and trade laws to international standards and more technical aid in the area of trade promotion.
Trade department officials said that even if Bhutan doesn’t have basic factors of productivity land, labour and capital, accession would mean attracting more foreign direct investments (FDI) and building innovative capacity resulting in the growth of private sector.
The key to attract more FDIs, officials mentioned are political stability, peace and access to Indian market among many others.
An official said that the country’s trade legislations are already consistent with WTO principles. But he said the preferential trade agreement with Bang- ladesh and free trade agreement with India are much more favourable than other multilateral and regional agreements.
The official said that the Trade Act governing the trade relations and competition policy is in the final stages of approval. He added that the country has enough support to join WTO within the ministry but the most important factor lies with the will of politicians.
Dr Mia Mikie said an efficient small and medium enterprises by using the FDI as means to aid would enhance productive capacity for LDC.
Although FDI is sensitive to cost of trading, she said it is up to the government as to how the country wants the FDIs to behave in the domestic regime.
‘’It is not export- led development but trade led development that is sustainable develop- ment, ‘’ she said.
When discussing of benefits from WTO, experts said it is dependent on how well the country can negotiate while accessing. Trade officials said the last negotiation was a good deal but suspended due to change in government.
The officials reached for a unanimous conclusion that joining the WTO would not have much an impact on the GNH goals.