History and Timetable of Moldova s accession to WTO

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2 History and Timetable of Moldova s accession to WTO Motivation and Goal for Accession Effects of WTO Accession On Policy Making On Economic Performance Controversial Impact RECOMMENDATIONS FOR BELARUS CONCLUSIONS

3 Nov GoM submitted an application to join the GATT 1947, which after the creation of the WTO in 1995, the application has been reiterated WP on the MD Accession to GATT 47 set in Dec 93 - WP on Accession to WTO (Jan 95) Sep GoM presented to WP the Memorandum on Foreign Trade Régime Followed (starting with May, 97 ) by rounds of Questions & Replies By Aug 2000 the WP consisted of 25 WTO members (counting EU as one) Between June 1997 Feb six official WP Meetings took place at WTO Feb WP approved the Report on the accession of Moldova to the WTO, including Schedules on Goods and Schedules on Services ( Sch.of Concessions and Commitments). May 8, General Council approved and signed the Protocol MD accession to WTO June, 2001, The Parliament of the Republic of Moldova approved all documents by Law, 218/ 2001, and ratified the Protocol of Accession to the WTO. June 26, 2001 The MFA deposited instruments of ratification to the WTO Secretariat. The Republic of Moldova became a 142 WTO member

4 Advantages offered by the international trade environment For being part of the international system Trade and economic policy existed after the collapse of Soviet Union: lack of natural resources and energy & small size of domestic market

5 Creation of a democratic society with an economy based on market economy principles; Ensuring stability in development of country trade relations on the basis of adopted WTO rules and regulations, as instruments of economic diplomacy; Developing a sound trade legal framework based on international standards (WTO; WCO, WIPO, ISO, etc);

6 Effects on POLICY MAKING Effects on ECONOMIC PERFORMANCE

7 Creation of Legal and Institutional framework that provides an well being society environment Reduction of level of lobbying interests of certain groups, enabling the participation of more aimed at the development of trade and economic cooperation Improving the competition that has positive impact on pricing and quality Increase in transparency, non-discrimination and other aspects help to reduce the potential for the adoption of ambiguous or erroneous decisions.

8 Trade Liberalization Privatization Licensing of Business Activities (items ) Business Regulatory Reforms (2004-present) Custom & TF Reforms (2002-present) Competition policy reforms (2009) TBT reform (permanent on going) Food Safety Reform Gov. Procurement reform Consumer Protection reform (on-going)

9 Russia Federation 120 Ukraine 152 Moldova 81 Croatia 80 Regional Average Eastern Europe and Central Asia Ministry of Economy of Moldova 9

10 Increase in Doing Business Ranking Creating a favorable investment climate Increase in trade partners Increase in trade volumes Maintaining macroeconomic stability and ensure economic growth (GDP growth 5-7%); Transition from an agrarian-based economy to information and innovation with the subsequent development of industry and services

11 GDP yearly comparison actual level and 1999 s levels, in % GDP recovering recession compared to the same period of 2010, % 10,8 8,6 8 8,3 6,2 6,4 4,3 4,7-0,8 Q I 2008 Q II 2008 Q III 2008 Q IV 2008 QI 2009 Q II 2009 Q III 2009 QIV 2009 Q I 2010 Q II 2010 Q III 2010 Q IV ,9-8,6-7,5 11 Ministry of Economy of Moldova

12 Transition from an Agro-industrial -based economy to Services, information and innovation GDP by type of resources, trend, in % Ministry of Economy of Moldova 12

13 Foreign trade structure Export structure in % Import structure in % Ministry of Economy of Moldova 13

14 Foreign trade dynamics Development export structure, in % Ministry of Economy of Moldova 14

15 Foreign Direct Investments Yearly FDI inflow 541,3 711,5 FDI inflow, in mln USD 103,4 84,1 73,1 146,2 190,7 258,5 145,3 197, Cumulative FDI stock FDI stock, in mln USD 2596, ,6 3163,3 1876, ,9 843,9 1020,2 1278, Source: NBM, 2011 Ministry of Economy of Moldova 15

16 Ministry of Economy of Moldova 16

17 900 Agriculture ,4 764,8 747, ,2 532,9 536,5 Industry ,4 408,6 388,6 333,7 314, ,3 Construction Services** (includes retail trade, public administration, TC, etc.)

18 Controversial impact on Moldova's accession to the WTO 900,0 800,0 770,4 764,8 747,1 700,0 600,0 583,2 532,9 536,5 500,0 Agriculture 422,4 408,6 388,6 400,0 300,0 Industry 333,7 314,7 323,0 200,0 100,0 0,

19 Controversial impact on Moldova's accession to the WTO. The economically active, employed and unemployed population (aged 15 to 60 years) 3000,0 2500,0 2311,8 2341,1 2372,8 2394,3 2421,6 2449,4 2474,6 2465,1 2483,6 2498,4 2507,5 2504,4 2497,8 2000,0 1500,0 1654,7 1616, ,6 1432,5 1422,3 1514, ,1 1357,2 1313,9 1302,8 1265,3 1235,4 1257,5 1214,5 1000,0 1356, ,7 1257,3 1247, ,4 1143,4 1173,5 1146,8 500,0 140,1 117,7 109,8 117,1 116,5 103,7 99,9 66,7 51, ,7 0, aged population Economically active population Employed population Unemployed population

20 1990* 1991* 1992* 1993** 1994** After accession - Increase in both nominal and real level of wages Wages HH Income (per individum) Minimum subsistence

21 Since joining the WTO, has actively grow Trade deficit

22 Trade Balance Deficit Foreign trade dynamics Ministry of Economy of Moldova 22

23 Trends in per capita GDP and the flow of remittances (from 1995 to 2010) GDP per capita Remittances

24 Political will is a must Well-trained, motivated Technical Team (Start- End) All relevant gov.institutions be involved for home-work All concessions to be asked, only on sound sectorial analysis back-up Do not change the Negotiation Team Put clear objectives to achieved for maximisation of effect, while minimizing the possible negative consequences of the accession.

25 Democratic and market economy reforms can be speed-up during the period of accession, by Meanstreaming in the legislation WTO principles and rules More transparent and predictable enviroment for business and investors Public awareness of Business Implications of WTO norms is a must during the entire process, as well as immediately after ACC.

26 Pay attention to Factors affecting the benefits and risks of joining the WTO: the level of involvement public institution for effective implementation of the WTO rules and principles The strategic economic interests of the country; Need of active participation of the state in maintaining and protecting the domestic industries, especially in the initial period after accession, following the accepted instruments; Study of the competitiveness of the national economy in the world; Accept only those liberalizations, which Belarus will be able to implement within the agreed period. Always follow-up WTO rules and norms efficiently get the full benefits of the Membership;

27 The results are mixed. There are both positive effects and the controvesial disputed effects ( avoid saying negative). Accession to the WTO it is a necessary decision in political and economic terms, provides conditions for trade negotiations and developments related to various aspects of the country-relationship, based on general accepted principles rules. it is one of the essential steps towards integration into the regional structures (for MD in EU) facilitates the transition to a new quality of relation between government and business, business and consumers Helps in identification of overall strategic priorities within new conditions of international competition and globalilzation. access to DSU - mechanism to resolve disputes on trade (WTO)