Accession will depend on ongoing assessments and consultations to ensure sustainable economic growth and development

Thukten Zangpo

The government has not shelved its bid to join the World Trade Organisation (WTO) but is treading cautiously, Minister for Industry, Commerce, and Employment said during the 10th Meet-the-Press yesterday.

Bhutan has made several attempts to secure WTO membership, the latest being last year, ahead of its graduation from the least developed country status (LDC) in December. Joining before the transition would have afforded the nation a three-year grace period, extendable by two years, to align with WTO rules and standards.

Lyonpo Namgyal Dorji said that the government recognises that WTO membership can be a significant step toward achieving Bhutan’s long-term development goals, including becoming a high-income nation by 2034.

“WTO offers opportunities to integrate into the global economy, ensuring access to markets in 166 member countries, which is critical following Bhutan’s graduation from least developed countries status and the reduction of preferential market access,” Lyonpo said.

The government continues to engage with stakeholders to review domestic legislation against WTO requirements, conduct sensitisation and capacity-building programmes on WTO-related issues, and collaborate with the WTO Secretariat for technical guidance.

“The decision will be informed by ongoing assessments, including how WTO membership aligns with initiatives like the Gelephu Mindfulness City, ensuring any integration supports Bhutan’s developmental aspirations,” he said.

Lyonpo outlined some potential benefits of WTO membership, including non-discretionary access to member nations’ markets and reduced dependence on bilateral trade agreements. Membership would also position Bhutan to participate in the formulation of multilateral trade rules, ensuring the country has a voice in global trade negotiations.

“A predictable trade environment under WTO rules will boost investor confidence and attract foreign direct investment,” he said, adding that the membership would facilitate the free flow of goods, services, and capital, while negating the need for separate preferential trade agreements with individual countries.

However, the minister acknowledged that WTO membership is not without its challenges.

Increased competition from international markets could strain local industries, Lyonpo cautioned, while membership costs, including compliance with regulatory and reporting obligations, would add fiscal pressure.

As a member country, Bhutan cannot ban the import of goods. At the same time, the member country cannot impose tariffs on goods agreed upon earlier. Tariffs are customs duties on merchandise imports. Tariffs give a price advantage to locally-produced goods over similar goods which are imported, and they raise revenue for governments.

However, he said that Bhutan could face potential challenges of regulatory adjustments where aligning domestic policies with WTO rules will require significant effort and resources. In addition, there will be competition among industries since it will expose international markets to local industries.

Moreover, the WTO membership entails costs for institutions to meet regulatory and reporting obligations, Lyonpo said.

“The government is carefully weighing these advantages and challenges to ensure WTO accession supports Bhutan’s economic growth, sustainability, and developmental goals, “ he said. “A clear timeline will depend on the outcomes of these assessments and continued stakeholder consultations.”