Afghanistan: rush to WTO membership could endanger development

Afghanistan’s fight against poverty could suffer if it rushes to join the World Trade Organization, international aid agency Oxfam warned today.

The report “Getting the fundamentals right – the early stages of Afghanistan’s WTO accession process” says that joining the WTO too soon may not boost Afghan exports as promised but instead open vulnerable sectors of agriculture and industry to strong foreign competition. In the short-to-medium term, tariffs and other measures are necessary to protect local industries and rural trades, and to foster economic development.

The average cost of implementing each WTO agreement is $100 million but there is no guarantee that Afghanistan’s accession to the WTO would lead to increased trade or investment. Securing favorable terms of membership is essential for promoting sustainable and equitable economic growth.

Given the WTO demands being placed on least-developed countries such as Afghanistan, Oxfam is calling for urgent reform of WTO accession rules to ensure that the poorest countries receive lasting preferential treatment.

Matt Waldman, head of policy for Oxfam International in Afghanistan, said: “Liberalizing the Afghan economy too soon could undermine vital efforts to reduce poverty and suffering. Careful preparation and negotiation for accession is the only way for Afghanistan to get the maximum benefit from the WTO and to avoid onerous obligations imposed on other very poor countries, such as Cambodia or Nepal. The accession process should reflect the development needs of Afghanistan, not the demands of existing members.”

“Afghanistan demonstrates the urgent need for reform of WTO accession rules for the least developed countries, to prioritise their development and give them substantial and lasting preferential treatment.”

The report also says:

• Afghanistan needs special measures to ensure that it retains a significant proportion of the benefits of a more open foreign investment regime.
• The country must not be pressured to liberalise its essential services sectors too quickly, or be required to reform its legal structures without careful consideration
• More aid and technical assistance must be provided to carry out poverty and social impact analysis to assess the potential impact of accession on vulnerable sectors of the economy.