|November 11th, 2008, 09:13 AM||#1|
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Lebanon to join WTO
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.
|April 23rd, 2009, 09:01 AM||#2|
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Lebanon expects to receive approval for WTO accession, 'but much work remains'
The Daily Star
23 April 2009
BEIRUT: Lebanon is expected to be approved for its accession to the World Trade Organization (WTO) in 2010, Economy and Trade Minister Mohammad Safadi said Wednesday.
"There is a list of countries that are opposing our accession to the WTO and we have done a lot of work to deal with this at the Economy and Trade Ministry. The process is not easy because we have a lot of responsibilities and a lot of laws that we have to enact for us to get there," he said.
The remarks came during a conference organized by the American-Lebanese Chamber of Commerce and held at Phoenicia Intercontinental Hotel in Beirut on the occasion of the launch of the Better Business Group. The group is committed to promoting a corporate culture that applies with integrity the concepts of the Better Business Values by collaborating with a network of likeminded decision makers to build a trustworthy and business-friendly environment in Lebanon.
Safadi said Lebanon's experience with free-trade agreements signed with Arab countries had helped boost the country's exports except for certain industries which were unfortunately in need of preplanning support. He explained that WTO accession does not imply any country can freely export to Lebanon. "When we access the WTO we don't have to open our borders and let everybody export to us. It is not a free open-trade agreement where all barriers are down. Every economy has got its own situation and we agree with other countries about what's good for us and what's good for them," he said.
He added that negotiations take a lot of time because it is a product-by-product issue where every exported and imported item is discussed.
Salim Zeenni, president of the American Lebanese Chamber of Commerce, said that Lebanese traders and Industrialists have created a kind of a free-trade economy before the unfortunate problems that have been facing Lebanon since 1975.
"Before 1975 we were exporting everywhere and there were no barriers. Now we are a bit weak and we have to try and find some rules to help our industries, but this doesn't mean that we should close the doors to imports, otherwise we will be closing on ourselves other markets," he said.
Zeenni added that Lebanon should have been one of the first countries to access the WTO since it has already signed the General Agreement on Tariffs and Trade. "We would have avoided a lot of trouble throughout the years if we had only fulfilled simple conditions," he added.
Safadi believes that Lebanon enjoys a good reputation for being a center of trade but he said that a trading center can not flourish without having a solid base of key and business values. "If every financial institution adheres to values, we would be in a much better world today. We at the [ministry] are aware that today's business community is faced with increased challenges brought on by the information revolution and the new modalities that are changing the way that enterprises deliver products and services," he said.
Safadi said that corruption exists everywhere but in varying degrees because of business codes in addition to ethics and laws passed by governments and practiced over the years. "We are a young country and we have started on the wrong foot and we've been on the wrong foot for long years and we're still on the wrong foot. We do have administrative problems in governments as well as secular problems but this does not mean that we have to brand ourselves as a corrupt country."
He added that there is a concentrated joint effort between the government and the business community to work closely on a lot of issues and there has been an improvement by introducing systems whether in ports or airports to actually make sure that corruption is reduced to a minimal level.
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