Moldovas Accession to the World Trade Organization (WTO)

Moldovas Accession to the World tack composition (WTO)The World Trade Organization (WTO), successor of the General Agreement on Tariffs and Trade (GATT) founded in 1947, today represents a common institutional frame- work for the development of consider relations among its members, establish on the principles harmonized at the international level through a number of miscellaneous agreements. At present the WTO includes 140 countries, with a nonher 32 countries having an commentator status. Moldova, Armenia, China and Vanuatu atomic number 18 at the nett stage of admission fee. Today only a few countries with planned economies in their past and some developing countries receive remained outside the WTO. Integration, of the developing countries and of the countries with their economies in transition, into the international make out system offers a good opportunity to take full advantage from the participation to enter the globalization exhibit. Countries with their economies in transition view the WTO, whose rules of international trade atomic number 18 being established and monitored, as a structure that offers an important opportunity for integration into the terra firma economy and of the improvement of their national juristic manakin in the economic and commercialised field.The WTO basic functions atomic number 18 as followsto facilitate the application, administration and successful go of the WTO laws and regulatory fabricto promote the achievement of objectives of each WTO agreement that concerns specific trade issuesProceeding from these functions, the WTO screw be viewed as an international structure, which for its member states represents the hobbya forum for talkss of issues concerning trade relations and matters incorporated into international multilateral treatiesa forum for future international negotiations, representation of each members interestsa legal and institutional framework for the application of the results of talks be tween statesa framework ensuring the application of rules and procedures for settling disputes between statesa framework providing for the use of the mechanisms of scrutinizing and ensuring enhancer of commercial policies.3.1. Advantages of the World Trading SystemThe world trading system is non perfect, particularly taking into account the attempts of the Member States to allow after their improver, the current rules revised. However, since the brass of the WTO in 1995, countries involved in this system maintain that a state outside the system should be aware of the advantages the WTO offers to its members and of the reasons in favor of the WTO membership.In some casings, the decision of countries to apply for the WTO membership was influenced mainly by political factors, as their economic and commercial interests were not one of the major factors in initiating the accession process. On the other hand, candidate countries were conscious of certain(p) disadvantages of staying away from the WTO bilateral and multilateral agreements are not sufficiently comprehensive, the image of a non-member state among contrasted investors is not favorable enough etc. In this order of ideas we suggest looking into the advantages of accession to the WTO.As it was mentioned above, the WTO rules were produced on the basis of the world trading system, specific all in ally a set of rules established by the consensus of all 140 Member States of the World Trade Organization.These rules are said to make life easier for everybody, since the decisions within the WTO are taken by consensus, likewise all multilateral agreements hold up been negotiated and then ratified by the parliaments of each Member State. The WTO agreements are compulsory for every country, developed or less developed, big or small. Without a multilateral forum, such as the WTO, the more developed countries would have had more freedom to impose unilaterally their impart on their smaller partners.Free trad e reduces living expenses. A great deal of research has been done on the conflict between protectionism and free trade. Protectionism is dear(predicate) it always raises prices. The WTO system pursues the goal of removing trade barriers by following the rules of the game set by mutual agreement and is base on the principle of non-discrimination. This brings pooh-pooh production costs, lower prices for goods and services, and as a result, life croaks less expensive.The world trading system offers a much wider range of various products. Import provides for a better choice of goods and services of different quality. Even the quality of local goods can be improved in conditions of competition generated by import. Imported goods are not used only as a finished product, but also as materials, components and equipment for the production of local goods. This allows manufacturers to broaden the range of products, services and technologies applied, which in the end contributes to the inc rease of exports.Trade increases incomes. Analysis and estimates of the restore of the Uruguay Round (in other words, of the establishment of the WTO) or of the creation of the European Union (EU) common market, proved that these processes brought about respectable auxiliaryal revenues, which greatly stimulated economic development. Trade incurs challenges and certain risks local manufacturers have to offer products of the same quality as the imported ones, yet not all producers succeed in this. However, the fact that there are additional revenues doer that there are resources for the presidential terms allowing for redistribution of the available benefits. This can help business operators become more competitive in the traditional fields or in the new-sprung(prenominal)ly developed and promising ones.Trade stimulates economic growth, which implies, among other things, creation of new jobs. It is true, however, that some jobs are lost as a result of the expanding commercial a ctivities. The same applies to the technological progress the implementation of new technologies creates new jobs, while at the same time, cuts down jobs requiring an un- skilled labor force. In both cases, a coherent policy facilitates settlement of the employment problems, frankincense ensuring a better final result, particularly in conditions of a free trade, and also provides for the use of advanced technologies.It is known that trade, which ensures a more efficient and adequate use of production resources, generates divergence of labor among countries. An additional advantage offered by the WTO system is an increase of efficiency with less expenses. This becomes possible due to the important principles laid on the basis of the system. These principles are as follows non-discrimination, transparency of rules and regulations, commitments to remove trade barriers and increase the access on other markets, fostering trade through making customs procedures easier and uniform, and ot hers. In the WTO framework governments are in a better position to defend themselves from being lobbied by some smaller groups. Thus, governments can carry on a commercial policy that satisfies the interests of all parties involved in the economy. At first sight, the application of certain restrictions on imports seems to be an efficient method of supporting the economic sector. In fact, it imbalances the economy and affects other sectors. At the same time, it is well known that making exceptions leads indirectly to tax evasion and corruption. In some cases, even the protected sectors are affected. When the policy of support given by the State is incoherent and is not rendered until the final consolidation of the capacities of enterprises, the latter at a certain point can go bankrupt or be swallowed by big corporations.Due to the fact that the WTO framework covers a wide range of sectors, if there is a case in which a pressure group resorts to lobbyism in order to be protected, the government can put up resistance to such pressures, motivating it by the fact that an agreement suitable for all sectors of the economy has to be reached. In practice governments practically invoke such a reason.The system encourages good government. Governments often use the WTO framework as a practical external restriction for the elaboration of economic policies, by giving the following reason, we cant act other than because its against the WTO regulations. According to the WTO rules, once a commitment has been undertaken, it would be difficult to change this decision. For business this means a greater demonstration and clarity in conditions of trade. For governments this means more discipline and correctness.Also, the world trading system contributes to peace consolidation. It seems a bit exaggerated, and yet, the system contributes to strengthening peace in the world, since, to some extent, peace is a result of the application of the two basic principles of the WTO, particul arly, ensuring continuous trade and offering a fair and constructive way to settle trade disputes. An eloquent mannequin is the trade war of 1930, when the involved countries competed in raising trade barriers in order to protect local manufacturers. This fact deepened the Great Crisis and played a certain role in the outbreak ofWorld War II. A key-element of the WTO system is the fact that disputes are solved in a constructive way. Naturally, the development of trade may generate trade disputes which can lead toserious conflicts. Therefore, a great deal of tense international trade situations can be settled by the organizations specializing in tackling trade disputes, such as the WTO. A increase number of disputes brought before this organization reflects closer economic ties throughout the world, a growing number of the WTO members and an increasing confidence in the capacity of this system to settle disputes 2.To summarize the advantages of the WTO membership, we can name some of thema) the implementation of the WTO agreements, in general, offer wider trade opportunities to the Member Statesb) multilateral regulations with a higher degree of restrictions ensure a safer and a more stable trade environment and provide more certainty in trade relationsc) only Member States can take advantage of the rights laid down in the WTO agreementsd) the WTO agreements have substantially improved transparency of commercial policies and of the practices of trade partners, a fact that strengthens safety and stabilizes trade relationse) only the WTO members have an access to the mechanism of settling disputes with a view to fend for their rights and commercial interestsf) membership status offers an opportunity to take part in multilateral negotiations, thus, ensuring the promotion of each members commercial and economic interests.3.2. The republic of Moldovas Accession to the WTOAccession, over(p) in the appropriate conditions, is a rather difficult and complicated pr ocess that may be delayed and that requires a high level of competence and coordination of government institutions, as well as a political consensus to efficiently promote national interests.The accession process involves thorough bilateral and multilateral negotiations with all WTO members bear on in the policy carried on by the candidate, which can procrastinate the process of accesion. Countries in the process of accession are bound to examine and adhere to all multilateral agreements, and, optionally, to the two plurilateral agreements, adhesion to which de jure is not compulsory. In fact, the contracting parties to these agreements expect that the candidate becomes a party of these agreements in the accession process to the WTO. This condition turns mechanically into a commitment, also observed in the context of discussions and positions of the WTO member states during multilateral trade negotiations.Accession of the Republic of Moldova to the WTO was determined by the advanta ges offered using the legal framework of international trade and by the reasons in favor of WTO membership. Back in 1993 the Government of the Republic of Moldova applied to join GAIT. The request, which following the creation of the WTO in January 1995, had been reiterated by Moldova. The purpose of accession to the WTO was to urge the process of integration into the world economy, which provides for building a democratic society, an economy based on market economy principles. The accession was motivated also by specific disadvantages of a non-member status in the WTO, in conditions when bilateral trade agreements were not sufficiently developed. It was also motivated by an adverse image, especially among foreign investors, generated by the out of the system status.Accession negotiations coincided with the structural and systematic reforms program and with the elaboration of the countrys economic policy, including the commercial one. However, an underdeveloped administrative system and a lack of human and financial resources directly affected technical capacities providing for this complex process of accession to be conducted shortly and efficiently.Besides, in addition to the fact that it was necessary to adopt a concept to promote a commercial policy which would comply with the WTO multilateral obligations, Moldova, as any applier country, was mandatory to accept concessions with regard to the access to the goods market and to the consolidation of customs tariffs, as well as with regard to the commitments in the field of internal support in agriculture, and the special commitments concerning trade in services. It should be mentioned that in the course of Moldovas accession the attitude of the main trade partners towards the applicant countries became harsher compared to the period of accession to GATT. The standards of adhesion have been raised considerably. Some WTO members took a firm position requiring the applicant countries to accept a higher level of obligations compared to the one accepted by the initial members, having already included the eventual results of the next future multilateral negotiations. In practice, this means that the Republic of Moldova had to accept the level of tariffs consolidation and certain commitments in the services realm comparable to the level of the developed countries. At the same time, the Republic of Moldova did not have the opportunity to benefit from certain provisions stipulated by the WTO agreements, which provide a special and preferential regime offered to the developing countries. The status of a developing country was not given to any applicant country with their economy in transition during the period in wich they entered into the accession negotiations with the WTO. This situation made negotiations a lot harder for Moldovathan for other candidates included in the UN list of developing countries.Despite these difficulties, as compared with the other CIS states, Moldova launched a very active process, being outrun only by Kyrgyzstan and Georgia. Initially, in conformity with the accession procedure, a memorandum on the foreign trade regime was presented. Later, a Working Group for the accession of the Republic of Moldova was created comprising 24 WTO members (the European Union having one vote), followed by rounds of questions and answers. Numerous bilateral and multilateral negotiations have been conducted on the access to the goods and services market, on offering subsidies in agriculture and on aligning national legislation on the WTO regulationsThe most knifelike negotiations were conducted with Australia, Bulgaria, Canada, the Czech Republic. India, Japan, Mexico, Poland, Slovakia, USA, Turkey and the EU The longest in duration and the most consistent were the negotiations with the EU, the United States, Australia, Canada, India, and Bulgaria A special part in the accession process was both the adjustment of the current legislation to the regulations adopted by the Uruguay Round, and the elaboration of new laws in the areas that have a direct or indirect impact on foreign trade.The negotiation process lasted long due to a negative influence of a number of factors, some of which have already been mentioned. another(prenominal) important factor was the absence of an adequate institutional framework and of mechanisms of elaboration of policies necessary for the operation of a market economy at the beginning of the negotiation process, which was supposed to ensure rapid development of the latter, ft is also known that frequent changes in the upper level of administration affect and considerably tarry, the accession process. These reasons have slowed down the elaboration and adoption of an adequate national legislation, a fact noticed by the Working Group members on the accession of the Republic of Moldova to the WTO.Protraction of the Republic of Moldovas accession has partially offered some facilities to the WTO members that only the WTO framework can offer. Since the presentation of the memorandum on the foreign trade regime and, later, of the replies to the questions of the working(a) group members for working out the Report of the Working Group and of the Protocol of Accession, Moldova had to submit a great deal of information from different fields link to commercial policies, which required significant expenses. The more this process was delayed, the more information was requested, which sometimes indirectly allowed the member states to speculate on some of the plans or strategies of the applicant countries. For example, in the process of the accession of the Republic of Moldova, information in the following areas was required practices and prices regulations, the taxation system, subsidies in agriculture, foreign investments, the environment, customs tariffs, including preferential tariffs, payments for customs procedures, right from customs duties, license on import, export regulations, trading enterprises owned by the state, standardization of imported goods, sanitary and phyto-sanitary standards, foreign exchange operations, and the protection system of intellectual property rights, etc. It should be mentioned that the presentation of this information was compulsory or unavoidable, since the purpose pursued was to advance the accession process.On the other hand, all these have led to facilitation of the aims of the major WTO actors, who use different levers in the accession process in order to have the applicant countries undertake anticipated commitments within the WTO, thus ensuring their alignment on the subjects discussed during multilateral negotiations.As a non-member country we have already missed many opportunities to negotiated on various bilateral agreements with the states of Central and eastern Europe the WTO members. Foreign business operators are discouraged by the lack of a clear set of rules, which would allow them to set up their business on the basis of internat ionally recognized principles. The relations of cooperation in the economic and commercial fields with the countries of the European Union or of the Central Europe Free Trade Area (CEFTA) have been blocked or not given pertinent importance. Treatment of the economic system of the Republic of Moldova as one that is not based on market principles