Rabih
November 11th, 2008, 09:13 AM
Lebanon set to join WTO by 2009 - official
Most experts doubt that country will meet requirements for membership within one year
By Dana Halawi
Special to The Daily Star
Friday, November 07, 2008
BEIRUT: Lebanon is expected to join the World Trade Organization (WTO) by the end of 2009, a senior official at the Trade and Economy Ministry has said. "Lebanon is not late for accession to the WTO which is a process that goes through several phases and requires extended periods of negotiations," Lama Ouweijan, an adviser to the Lebanese economy and trade minister, told The Daily Star.
"Most countries applying to the WTO require five to 15 years for accession," she added.
A Trade and Economy Ministry study, issued in October 2000, outlined the mechanism adopted by the Lebanese government to join the WTO and provided an assessment of the economic and legislative reform required for conformity to the requirements of the WTO.
In June 2001, The Memorandum of Foreign Trade Regime, which covered all aspects of Lebanon's trade and legal regime, was presented to a working party tasked with hammering the path to accession.
"We submitted the application in 1998 but documents gathering and facts finding started in 2000. A document containing details about the trade related legislation and environment in Lebanon was sent to the WTO in 2001. Based on this document, real negotiations started on October 14, 2002, the day of the first working party meeting which took place in Geneva," Ouweijan said.
"A six-year period is not too long given that Lebanon was exposed to a very critical security and political situation. I think we are doing a very good job," she added.
The study noted that several laws are expected to be ratified by the parliament in December 2008. One of the proposed laws is the competition law, which aims to ensure consumer welfare and economic efficiency by securing competition and enhanced market access through the prevention of market monopolies and anticompetitive agreements and partnerships.
"As for the procedure, a drafting committee would finalize the draft to pass it for approval by ministries, the Cabinet, [and] the Specialized Parliamentary Committees to be finally ratified by the Parliament," Ouweijan said.
She added that this process could take up to three to seven years depending on the number of laws that needed to be introduced and the speed at which the Parliament ratified draft laws.
The length of the accession process has led a number of leaders in the Lebanese financial sector to question the reasons behind the delay in membership to the WTO - one of the world's elite economic institutions, to which 153 countries representing 98 percent of total world trade already belong.
According to Fadi Abboud, president of the Lebanese Industrialists Association, the Lebanese government has not been strict enough in implementing the reform actions necessary for the accession to the WTO.
He mentioned the national production protection law which, he said should have been implemented six years ago. "The national production protection law is a joke. It is clear that our neighbors, the Arabs, are subsidizing their costs of production and dumping the Lebanese markets with many of the items they produce," said Abboud.
The law aims to protect national production under the rules of the global financial body, and to take firm actions in fighting subsidies which can subvert market competitiveness and fairness.
But Ouweijan argued that this law has existed in Lebanon since it was ratified by Parliament in October 2006 and passed to the Cabinet in 2007. She cited the example of the Uniceramic which submitted an application under the law's provisions after its ratification.
Louis Hobeika, an economic expert, underlined a separate reform that would help facilitate WTO accession: the need to get rid of exclusive agencies
According to Hobeika, exclusivity is limiting competition and increasing prices. "When we get rid of exclusive agencies, imports will be free and therefore competition will increase while prices are expected to go down by around 30 percent which will benefit consumers," he said.
Abboud cited a similar complaint, saying that "sole representatives in Lebanon are doing their best not to go through change and the total liberalization of the economy. They are used to making money this way and they wouldn't want to do it in a competitive economy."
While many Lebanese economists and financiers are excited by the prospect of membership to the WTO but unhappy with Lebanon's efforts to comply with WTO requirements, others have expressed fear about the potential effects of WTO membership.
According to Antoine Howayek, president of the Association of Lebanese Farmers, the greatest drawback to agriculture stems from the government's decision to cancel the Export Plus program, which had contravened WTO accession principles. The program, introduced by the Investment Development Authority of Lebanon a few years ago, helped to finance the export of Lebanese agricultural products to Europe and the Arab world.
"Lebanon's agriculture will not benefit from open markets. This is clearly reflected by the Association Agreement on trade signed between the European Union (EU) and Lebanon which was supposed to provide the latter with the opportunity to benefit from the potential EU market for its exports, but it did not," said Howayek.
"The main reason lies in the fact that Lebanese farmers must conform to European quality standards to be able to export to the EU and this applies to other countries to which Lebanon is exporting," added Howayek.
A study issued by the European Union in September 2008 showed a decrease in EU agricultural imports from Lebanon from 20.6 percent in 2005 to 12 percent in 2007.
However, Ouweijan contended that membership to the WTO would not harm agriculture in Lebanon because most of the country's exports were going to Arab markets and not to European countries because of the European market's quality standards.
In addition, she noted that all the tariffs between Arab countries were reduced to zero as a result of the Greater Arab Free Trade Area agreement which came into effect in 2005.
"Syria, Jordan and Egypt are Lebanon's main competitors in agriculture, but we are trading at zero between those countries anyway. So whether we enter the WTO or not, it will not change the competition that the agriculture is facing," Ouweijan said.
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Most experts doubt that country will meet requirements for membership within one year
By Dana Halawi
Special to The Daily Star
Friday, November 07, 2008
BEIRUT: Lebanon is expected to join the World Trade Organization (WTO) by the end of 2009, a senior official at the Trade and Economy Ministry has said. "Lebanon is not late for accession to the WTO which is a process that goes through several phases and requires extended periods of negotiations," Lama Ouweijan, an adviser to the Lebanese economy and trade minister, told The Daily Star.
"Most countries applying to the WTO require five to 15 years for accession," she added.
A Trade and Economy Ministry study, issued in October 2000, outlined the mechanism adopted by the Lebanese government to join the WTO and provided an assessment of the economic and legislative reform required for conformity to the requirements of the WTO.
In June 2001, The Memorandum of Foreign Trade Regime, which covered all aspects of Lebanon's trade and legal regime, was presented to a working party tasked with hammering the path to accession.
"We submitted the application in 1998 but documents gathering and facts finding started in 2000. A document containing details about the trade related legislation and environment in Lebanon was sent to the WTO in 2001. Based on this document, real negotiations started on October 14, 2002, the day of the first working party meeting which took place in Geneva," Ouweijan said.
"A six-year period is not too long given that Lebanon was exposed to a very critical security and political situation. I think we are doing a very good job," she added.
The study noted that several laws are expected to be ratified by the parliament in December 2008. One of the proposed laws is the competition law, which aims to ensure consumer welfare and economic efficiency by securing competition and enhanced market access through the prevention of market monopolies and anticompetitive agreements and partnerships.
"As for the procedure, a drafting committee would finalize the draft to pass it for approval by ministries, the Cabinet, [and] the Specialized Parliamentary Committees to be finally ratified by the Parliament," Ouweijan said.
She added that this process could take up to three to seven years depending on the number of laws that needed to be introduced and the speed at which the Parliament ratified draft laws.
The length of the accession process has led a number of leaders in the Lebanese financial sector to question the reasons behind the delay in membership to the WTO - one of the world's elite economic institutions, to which 153 countries representing 98 percent of total world trade already belong.
According to Fadi Abboud, president of the Lebanese Industrialists Association, the Lebanese government has not been strict enough in implementing the reform actions necessary for the accession to the WTO.
He mentioned the national production protection law which, he said should have been implemented six years ago. "The national production protection law is a joke. It is clear that our neighbors, the Arabs, are subsidizing their costs of production and dumping the Lebanese markets with many of the items they produce," said Abboud.
The law aims to protect national production under the rules of the global financial body, and to take firm actions in fighting subsidies which can subvert market competitiveness and fairness.
But Ouweijan argued that this law has existed in Lebanon since it was ratified by Parliament in October 2006 and passed to the Cabinet in 2007. She cited the example of the Uniceramic which submitted an application under the law's provisions after its ratification.
Louis Hobeika, an economic expert, underlined a separate reform that would help facilitate WTO accession: the need to get rid of exclusive agencies
According to Hobeika, exclusivity is limiting competition and increasing prices. "When we get rid of exclusive agencies, imports will be free and therefore competition will increase while prices are expected to go down by around 30 percent which will benefit consumers," he said.
Abboud cited a similar complaint, saying that "sole representatives in Lebanon are doing their best not to go through change and the total liberalization of the economy. They are used to making money this way and they wouldn't want to do it in a competitive economy."
While many Lebanese economists and financiers are excited by the prospect of membership to the WTO but unhappy with Lebanon's efforts to comply with WTO requirements, others have expressed fear about the potential effects of WTO membership.
According to Antoine Howayek, president of the Association of Lebanese Farmers, the greatest drawback to agriculture stems from the government's decision to cancel the Export Plus program, which had contravened WTO accession principles. The program, introduced by the Investment Development Authority of Lebanon a few years ago, helped to finance the export of Lebanese agricultural products to Europe and the Arab world.
"Lebanon's agriculture will not benefit from open markets. This is clearly reflected by the Association Agreement on trade signed between the European Union (EU) and Lebanon which was supposed to provide the latter with the opportunity to benefit from the potential EU market for its exports, but it did not," said Howayek.
"The main reason lies in the fact that Lebanese farmers must conform to European quality standards to be able to export to the EU and this applies to other countries to which Lebanon is exporting," added Howayek.
A study issued by the European Union in September 2008 showed a decrease in EU agricultural imports from Lebanon from 20.6 percent in 2005 to 12 percent in 2007.
However, Ouweijan contended that membership to the WTO would not harm agriculture in Lebanon because most of the country's exports were going to Arab markets and not to European countries because of the European market's quality standards.
In addition, she noted that all the tariffs between Arab countries were reduced to zero as a result of the Greater Arab Free Trade Area agreement which came into effect in 2005.
"Syria, Jordan and Egypt are Lebanon's main competitors in agriculture, but we are trading at zero between those countries anyway. So whether we enter the WTO or not, it will not change the competition that the agriculture is facing," Ouweijan said.
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