History and Timetable of Moldova’s accession to WTO

Motivation and Goal for Accession

Effects of WTO Accession

◦ On Policy Making

◦ On Economic Performance

◦ Controversial Impact

RECOMMENDATIONS FOR BELARUS

CONCLUSIONS

Nov.1993 - GoM submitted an application to join the GATT 1947, which after the creation

of the WTO in 1995, the application has been reiterated

WP on the MD Accession to GATT’47 set in Dec’93 - WP on Accession to WTO (Jan’95)

Sep. 1996 – GoM presented to WP – the Memorandum on Foreign Trade Régime

Followed (starting with May, ‘97 ) by rounds of Questions & Replies

By Aug’2000 the WP consisted of 25 WTO members (counting EU as one)

Between June 1997 – Feb 2001- six official WP Meetings took place at WTO

Feb 2001 - WP approved the Report on the accession of Moldova to the WTO, including

Schedules on Goods and Schedules on Services ( Sch.of Concessions and Commitments).

May 8, 2001- General Council approved and signed the Protocol MD accession to WTO

June, 2001, The Parliament of the Republic of Moldova approved all documents by Law, №

218/ 2001, and ratified the Protocol of Accession to the WTO.

June 26, 2001 The MFA deposited instruments of ratification to the WTO Secretariat .

The Republic of Moldova became a 142 WTO member

Advantages offered by the international trade environment

For being part of the international system

Trade and economic policy

existed after the collapse of

Soviet Union:

lack of natural

resources and

energy &

small size of

domestic

market

Creation of a democratic society with an economy

based on market economy principles;

Ensuring stability in development of country trade

relations on the basis of adopted WTO rules and

regulations, as instruments of economic diplomacy;

Developing a sound trade legal framework based on

international standards (WTO; WCO, WIPO, ISO, etc);

Effects on

POLICY

MAKING

Effects on

ECONOMIC

PERFORMANCE

Creation of Legal and Institutional framework that provides an

well being society environment

Reduction of level of lobbying interests of certain groups,

enabling the participation of more aimed at the development

of trade and economic cooperation

Improving the competition that has positive impact on pricing

and quality

Increase in transparency, non-discrimination and other

aspects help to reduce the potential for the adoption of

ambiguous or erroneous decisions.

Trade Liberalization

Privatization

Licensing of Business Activities (items )

Business Regulatory Reforms (2004-present)

Custom & TF Reforms (2002-present)

Competition policy reforms (2009)

TBT reform (permanent on going)

Food Safety Reform

Gov. Procurement reform

Consumer Protection reform (on-going)

77

80

81

152

120

Regional Average Eastern Europe and Central Asia

Croatia

Moldova

Ukraine

Russia Federation

0 20 40 60 80 100 120 140 160

Ministry of Economy of Moldova 9

Transition from an agrarian-based economy to information and innovation with the

subsequent development of industry and services

Maintaining macroeconomic stability and ensure economic growth (GDP growth

5-7%);

Increase in trade volumes

Increase in trade partners

Creating a favorable investment climate

Increase in Doing Business Ranking

GDP – yearly comparisonactual level and 1999’s levels, in % GDP – recovering recession

compared to the same period of 2010, %

Ministry of Economy of Moldova

11

4,3

6,2

10,8

8,6

-6,9

-8,6

-7,5

-0,8

4,7

6,4

8 8,3

Q I 2008 Q II 2008 Q III 2008

Q IV 2008

QI 2009 Q II 2009 Q III 2009

QIV 2009 Q I 2010 Q II 2010 Q III 2010

Q IV 2010

Transition from an Agro-industrial -based economy to Services, information and innovation

Ministry of Economy of Moldova 12

GDP by type of resources, trend, in %

Ministry of Economy of Moldova 13

Foreign trade structure

Export structurein %

Import structurein %

Ministry of Economy of Moldova 14

Foreign trade dynamics

Development export structure, in %

Foreign Direct Investments

15

103,4 84,1 73,1146,2

190,7258,5

541,3

711,5

145,3197,4

274

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Yearly FDI inflow

549 639 713,9843,9

1020,21278,1

1876,5

2596,3 26972879,6

3163,3

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cumulative FDI stock

Source: NBM, 201115Ministry of Economy of Moldova

FDI inflow, in mln USD

FDI stock, in mln USD

Ministry of Economy of Moldova 16

770,4 764,8747,1

583,2

532,9 536,5

422,4 408,6388,6

333,7314,7 323 303,3

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Agriculture

Industry

Construction

Services** (includes

retail trade, public

administration, TC,

etc.)

770,4 764,8747,1

583,2

532,9 536,5

422,4 408,6388,6

333,7314,7 323,0

0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

800,0

900,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Agriculture

Industry

Controversial impact on Moldova's accession to the WTO

The economically active, employed and unemployed population (aged 15 to 60 years)

Controversial impact on Moldova's accession to the WTO.

2311,8 2341,1 2372,82394,3 2421,6 2449,4

2474,6 2465,1 2483,6 2498,4 2507,5 2504,4 2497,8

1654,7 1616,7 16151473,6 1432,5 1422,3 1357,2 1313,9 1302,8 1265,3 1235,4 1257,5 1214,5

1514,6 1499 1505,11356,5 1316 1318,7 1257,3 1247,2 1251 1184,4 1143,4 1173,5 1146,8

140,1 117,7 109,8 117,1 116,5 103,7 99,9 66,7 51,7 81 92 84 67,7

0,0

500,0

1000,0

1500,0

2000,0

2500,0

3000,0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

15-60 aged population Economically active population

Employed population Unemployed population

19

90

*

19

91

*

19

92

*

19

93

**

19

94

**

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Wages HH Income (per individum) Minimum subsistence

After accession - Increase in both nominal and real level of wages

Since joining the WTO, has actively grow Trade deficit

http://marketolog.biz/pics/articles/vto18.jpghttp://marketolog.biz/pics/articles/vto18.jpg

Ministry of Economy of Moldova 22

Foreign trade dynamics

Trade Balance Deficit

Trends in per capita GDP and the flow of remittances (from 1995 to 2010)

0

200

400

600

800

1000

1200

1400

1600

1800

2000

1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP per capita Remittances

Political will is a must

Well-trained, motivated Technical Team (Start-End)

All relevant gov.institutions be involved for home-work

All concessions to be asked, only on sound sectorial analysis back-up

Do not change the Negotiation Team

Put clear objectives to achieved for maximisationof effect, while minimizing the possible negative consequences of the accession.

Democratic and market economy reforms can be speed-up during the period of accession, by ◦ Meanstreaming in the legislation WTO principles

and rules

◦ More transparent and predictable enviroment for business and investors

Public awareness of Business Implications of WTO norms – is a must during the entire process, as well as immediately after ACC.

Pay attention to Factors affecting the benefits and risks of joining the WTO:◦ the level of involvement public institution for effective implementation of

the WTO rules and principles

◦ The strategic economic interests of the country;

Need of active participation of the state in maintaining and protecting the domestic industries, especially in the initial period after accession, following the accepted instruments;

Study of the competitiveness of the national economy in the world;

Accept only those liberalizations, which Belarus will be able to implement within the agreed period.

Always follow-up WTO rules and norms efficiently get the full benefits of the Membership;

The results are mixed. There are both positive effects and the controvesial – disputed effects ( avoid saying negative).

Accession to the WTO

it is a necessary decision in political and economic terms,

provides conditions for trade negotiations and developments related to various aspects of the country-relationship, based on general accepted principles rules.

it is one of the essential steps towards integration into the regional structures (for MD – in EU)

facilitates the transition to a new quality of relation between government and business, business and consumers

Helps in identification of overall strategic priorities within new conditions of international competition and globalilzation.

access to DSU - mechanism to resolve disputes on trade (WTO)