Agreements on free trade in services and investment
2.1. Background of negotiation process
Due to the growing role of global integration processes in the implementation of international trade and economic cooperation, one of the most important goals of the foreign trade policy of the Republic of Belarus is accession to the World Trade Organization (the WTO). Participation in that organization will allow Belarus to maintain existing positions and conquer new niches in the international trading community, ensure stable and predictable trading conditions, and become a “certificate” of the quality of the Belarusian economy for foreign investors, creditors, producers and consumers.
Belarus applied to join the WTO in 1993.
In 1997–2005 seven meetings of the WTO Working Party on Belarus' accession were held. After 2005, the work continued in the mode of informal consultations (5 rounds of consultations of the Chairman of the Working Party with the participation of WTO Members).
Belarus, as a Member of the Eurasian Economic Union, has de facto been living under the rules of the WTO since 2012, as these rules, as well as the obligations of the Russian Federation in the WTO, formed the basis of the legislation of the EAEU.
In 2016, the President and the Government made decisions to intensify the negotiation process on Belarus' accession to the WTO: the formulation of the Intergovermental Commission on the accession of the Republic of Belarus to the WTO was updated; a negotiating delegation was formed; chief negotiator was appointed.
Since 2017, the practice of holding meetings of the WTO Working Party on the accession of Belarus has been resumed (five meetings of the Working Party were held, the last, 12th meeting, was held in July 2019), as well as full-scale rounds of bilateral negotiations within the framework of accession to the WTO. The transition from the Consolidated Report to the draft Working Party Report, i.e. to the final stage of the negotiation process on accession to the WTO, has been ensured.
In 2019, according to the annual report of WTO Director-General Roberto Azevedo, Belarus was for the first time assigned to the countries being in the strategic focus of the WTO Secretariat.
In general, 2019 was a defining year in terms of agreeing on the parameters of Belarusian WTO membership. Together with the WTO Secretariat, an indicative roadmap for completing the accession of Belarus to the organization was developed, containing a list of measures necessary for implementation on the external circuit by interested republican government bodies and other organizations in order to complete the negotiation process.
Due to the unfavorable epidemiological situation in the world in 2020, the next 13th meeting of the Working Group on WTO accession has been postponed.
2.2. Current negotiation status
As of January 2022, bilateral market access negotiations have been completed with 22 WTO Members:Australia, Argentina, Armenia, Afghanistan, Bulgaria, Guatemala, Dominican Republic, India, Iceland, China, Chinese Taipei, Republic of Korea, Cuba, Kyrgyzstan, Moldova, Norway, Panama, Turkey, Switzerland, Ecuador, El Salvador, Japan.Negotiations with 12 of them were completed in 2017-2020.
Negotiations continue with 7 WTO Members: on access to the services market - with the EU, Canada, the USA and Ukraine, on access to the goods market - with Brazil, the EU, Canada, Costa Rica, New Zealand and the USA.
In addition, within the multilateral format Belarus maintains consultation to finalize the draft Working Party Report on the accession of the Republic of Belarus to the WTO, the Legislative Acts Plan and other negotiating documents.
2.3. Assessment of the socio-economic consequences of Belarus’ accession to the WTO
According to international experts’ assessments, in terms of macroeconomic results, the impact of accession to the WTO on the economy of Belarus will be generally positive. However, the overall effect will depend on the commitments made by the country upon accession.
It is estimated that only due to internal transformations within 5 years after joining the WTO, Belarus' GDP can grow by 1.2 - 1.8%, depending on the commitments made, while welfare can increase from 1% to 3.2%. Accession to the WTO will also lead to the growth of wages by creating jobs in more efficient sectors and cutting jobs in the least efficient ones.
Changes in economic policy that have the greatest impact are as follows:
reduction of regulatory barriers associated with existing bureaucratic barriers (individual impact of this measure: GDP growth by 0.86%, welfare growth by 0.58%, price level decline by 0.27%, export growth by 0.83%, import growth by 0.41%);
liberalization of trade in services: openness in the service sector will encourage investment, a significant increase in sales in the domestic market and a reduction in imports of services.
Accession to the WTO can also contribute to the geographic diversification of exports (there may be some decrease in Belarus' exports to the EAEU, while exports to the EU, China and other countries will increase).
Provided that a significant liberalization of the trade and economic regime takes place, the accession of Belarus to the WTO may have the following advantages for the national economy:
GDP growth over 5 years after accession by $4.9 bln;
elimination of unreasonable barriers for Belarusian products in foreign markets and “unblocking” of growth potential of exports of goods and services by more than 1.3 billion dollars USA ;
growth in agricultural and industrial production up to 13% in certain industries;
increase in accumulated foreign direct investment up to $12 bln within 5 years after accession;
attracting of external borrowings from international financial organizations and institutions on more favorable terms;
access to the WTO Dispute Settlement Body, which allows defending the foreign trade interests of the country.
2.4. Competences of the Ministry of Economy
The scheme of responsible government bodies for the accession of the Republic of Belarus to the WTO was approved by the Resolution of the Council of Ministers of the Republic of Belarus of August 27, 1999 No. 1338.
The Ministry of Economy takes an active part in the negotiation process on Belarus' accession to the WTO, both on the multilateral and bilateral tracks.
The Ministry of Economy is responsible for the following issues within the framework of the accession of the Republic of Belarus to the WTO:
- Investments regime;
- Privatization and state ownership;
- State trade enterprises;
- Licensing of types of activity;
- Export subsidies (except agricultural export subsidies);
- Industrial policy, including subsidies;
- Trade related investment measures;
- Free economic zones;
- Organizational and legal forms of business (foreign branches);
- Policy affecting trade in services (including access to the services market);
- Forms the position of Belarus in bilateral negotiations on access to the services market;
- Designation of the market economy country status.
The Ministry of Economy has also developed the Questionnaire on State Trade Enterprises and the Questionnaire on Industrial Subsidies.