But first, look forward to a rehash of all the old pros and cons of joining the world body
Trade: After sitting on it for more than a decade, the government is to soon give its decision on whether Bhutan will join the World Trade Organisation (WTO) or not.
The move is also in line with government’s pledge to explore the possibilities of joining WTO, and the economic affairs minister Norbu Wangchuk said the ministry would be making a presentation to the cabinet next month.
Bhutan’s accession process started in 1999, when it was given observer status, and the first working party was formed the same year. Bhutan almost acceded to WTO in 2009 but decided against it.
The WTO quandary popped up again during a high level workshop on national competitiveness on March 23.
The former trade minister of the Republic of Korea, Taeho Bark, said it was important for Bhutan to resume the WTO negotiations.
“Accession to WTO is the key towards futuristic economic vision,” he said. “It offers a chance to evaluate the overall trade system and improve it while getting technical support.”
Although it comes with a cost, he said, accession to WTO would facilitate trade in a landlocked country, with enhanced capacity for managing sound trade policy and legal tools.
Some participants said joining WTO was a part of globalisation, which was inevitable, and that the benefits of economic integration would eventually compensate the costs incurred.
The cost refers to the financial resource that the country needs to amend or abolish existing acts and regulations to make them coherent with WTO rules and agreements, and even to establish new institutions for that matter.
Officiating economic affairs secretary Sonam P Wangdi said the accession process took time because the government didn’t want to act in haste. “An extensive debate would explore more benefits and adverse implications for the country,” he said.
Going by the studies conducted in the past, membership in the WTO would give Bhutan a stake on direction of international trade.
The country can also reap the benefits from access to open market and ensure that Bhutanese goods are not discriminated in the market.
Reducing the tariff and non-tariff barriers is one of the impacts, which means that Bhutan gains by importing goods at competitive prices, and loses if its goods cannot compete with those of other members in the same market.
Under the “most favoured nation” (MFN) principle of WTO, Bhutan will also be obliged to trade with China or any other country, as equally as it trades with India, with which Bhutan’s trade is about 90 percent.
The MFN principle states that, if a country improves the benefits that it gives to one trading partner, it has to give the same “best” treatment to all other WTO members, so that they all remain “most-favoured,” and this is where competition comes in.
This again implies that the country can enjoy multi-lateral trade without having to sign trade agreement with each of the nations.
But past studies have also pointed out that Bhutan’s advantage of joining the WTO is always accompanied by an equal number of factors resisting it.
“It all depends on how intelligently Bhutan negotiates and the country’s economic preparedness,” states one such assessment.
By Tshering Dorji