Source: World Trade Organisation
H.E. Dr. Abdulrahman Al Hamidy, Director General of the Arab Monetary Fund,
Eng. Mohammad Jamal Al Saati, Director General, Regional Hub and center of excellence of Dubai, Islamic Development Bank
- Good day. On behalf of the WTO, I would like to extend a warm welcome to all to the High-Level Regional Dialogue on WTO Accessions for the Arab Region. I am pleased to see the participation of 37 representatives from eight Arab countries at the first activity focused on “Arab Perspectives on WTO Accessions and the Multilateral Trading System.”
- I would also like to express our appreciation to our partners, the Arab Monetary Fund and the Islamic Development Bank, for the realisation of this joint event. The WTO has long collaborated with these two institutions and looks forward to enhancing these partnerships to support the participation of Arab countries in the WTO.
- This year, the WTO is celebrating its 25th anniversary. Accession is one of the most significant achievements of the Organization’s history. Since 1995, the membership has been expanded by 36 new members which successfully completed their accession negotiations, resulting in 98% of world trade being carried out under WTO rules today. Four of these are Arab countries – the Kingdom of Jordan (2000), the Sultanate of Oman (2000), the Kingdom of Saudi Arabia (2005) and Yemen (2014).
- 2020 is also a special year for the Arab region and the Multilateral Trading System. Jordan celebrated its 20th anniversary in April, Oman will celebrate its 20th tomorrow, with a special commemorative event being hosted for this occasion. Saudi Arabia will celebrate its 15th anniversary in a month’s time, on 11 December. These events are part of the celebration of 25 years of WTO accessions where we will have an opportunity to reflect on the contributions of WTO accessions to the MTS to date and to the future of the system.
- However, the Arab region is also one of the areas of the world with the largest number of countries outside the Multilateral Trading System. Of the 22 members of the Arab League, nine countries are original WTO Members(1) and eight countries are in the process of accession – Algeria, Comoros, Iraq, Lebanese Republic, Libya, Somalia, Sudan, and the Syrian Arab Republic, accounting for more than one-third of the 23 on-going accessions. In addition, Palestine has participated in all WTO Ministerial Conferences as ad hoc observer since 2005.
- It is interesting to note the diversity of these Arab accessions processes. For instance, the length of the accession process – the accession of Algeria is the longest-running in WTO history at 33 years, Sudan’s process has taken 26 years so far, while Somalia, one of the youngest acceding governments, started its process in 2016. The Region also has one of the most advanced accessions – Comoros, which aims to conclude its accession by the next Ministerial Conference, while some countries (e.g. Libya and Syria), have not tabled any documentation to start the process. In addition, some accession Working Parties have not formally met for a long time (e.g. Iraq since April 2008, Lebanon since October 2009 and Algeria since March 2014).
- This situation partly reflects the fact that many Arab acceding governments are fragile and conflict-affected, suffering or having suffered from the social, economic and political consequences of conflicts. It is due to these circumstances that we launched the “Trade for Peace” initiative in late 2017. Through this initiative, we have brought together the trade community and the peace community, so that the pillar of trade could be factored into peace building work, highlighting how economic integration can be a driver for sustainable and inclusive peace. I am pleased that you will have a dedicated session on Trade for Peace during the High-Level Dialogue.
- The Arab region is remarkably rich with its natural resources and diverse cultures stemming from the earliest cradles of civilization. With a population of 380 million, the region which comprises 22 Arab countries spans from as far as the Atlantic Ocean in the west to the Indian Ocean in the East. Nevertheless, with so much potential, the share of the Arab region in world trade is only 4.7 percent. Excluding oil, the Arab region’s non-oil exports make up 2% of world exports. Intra-Arab trade is also very low, at less than 10%.
- Furthermore, during the last eight months, the world has experienced unprecedented levels of disruptions in people’s daily lives and their economic activities due to Covid-19. The world is not near the end of this crisis. Despite these challenging times, trade has played a key role in addressing local shortages of food, medical supplies and other essentials during the pandemic. Trade will have to play an even greater role in supporting recovery of the global economy going forward. In this context, we should recognise the important role played by Saudi Arabia in steering the G20 during this difficult year, urging collective and multilateral cooperation. The Riyadh Initiative is a praiseworthy effort endorsed by the G20 nations.
- The Arab region has not escaped the dire economic consequences of this pandemic. For some, the steep fall in oil prices has aggravated existing problems. A crisis, however, also presents opportunities for closer international cooperation to limit the harm from the pandemic and to spur the recovery.
- These issues demonstrate that more, not less, global and regional trade integration is required. Integration into the world economy goes hand in hand with necessary domestic reforms. This is where WTO accession makes particularly valuable contributions. Those engaged in the reform-driven accession process are likely to experience a quicker recovery and greater resilience in the future.
- Based on evidence from the 36 accessions which have been successfully completed, the WTO accession process has served as an effective external anchor for domestic reforms, acting as a catalyst in realizing the potential of their economies. According to the last WTO Director-General’s Annual Report on WTO Accessions, Article XII Members have registered higher growth rates of GDP and trade (exports and imports), as well as increased flows of inward FDI stocks, in the years following their accession compared to the rest of the world. These results indicate that integrated, open economies tend to grow faster. In addition, by signalling a government’s commitment to international rules, WTO membership appears to also encourage the inflow of foreign investment.
- The accession process has been used by resource-based countries to diversify their economies. Economic diversification is one of the major priorities for the governments in the Arab region. Our 2016 study examined whether countries’ export structures became more diversified after gaining WTO membership. This was true for about half of the recently acceded Members, which increased the number of exported products, measured in HS chapters, accounting for more than 60% of their exports after accession. This was achieved often through re-branding their economies with WTO membership and attracting increased FDI.
- With this in mind, it is reassuring to see that many acceding governments, including from the Arab world, have remained active during the pandemic on their WTO accession despite numerous challenges on the ground. For instance,
- Somalia submitted its Memorandum on the Foreign Trade Regime in April, and the Accession Working Party Chairman (Amb. Mikael Anzen of Sweden) has just been appointed.
- For Iraq, following the appointment of a new Trade Minister, the Working Party Chairman (Amb. Omar Hilale of Morocco) in August held a series of consultations with Members, the Secretariat and, of course the team in Baghdad, to discuss how to relaunch the accession process.
- In September, Comoros resumed its Working Party after a break of 2.5 years, expressing its desire to conclude its accession by the 12th Ministerial Conference.
- In recent weeks, engagement with Sudan is also increasing, especially with the arrival of a new Ambassador (Amb. Ali Ibn Abi Talib Abdelrahman Mahmoud) in Geneva.
- These positive developments should continue despite the issues that the region is facing. While the process has undoubtedly become more difficult due to the current situation, WTO accession has become even more necessary to face the challenges ahead.
- This program is an excellent platform upon which to discuss, over the next three days, technical, substantive and procedural issues on WTO Accessions for all of the Arab countries engaged in that process.