A Diamond’s Eye View of the World

a multi-faceted look at the middle east, and the middle west

A nation of traders looks forward to more

Posted by adiamondinsunlight on March 20, 2007

The Oxford Business Group published another update on Lebanon recently – this one on the country’s bid to join the WTO.

For the moment, it seems to be largely a case of tilting at windmills. Lebanon has several major hurdles to pass through before it has a chance of joining the WTO – including shutting down the massive pirated cd and dvd operations that form so much of Tripoli’s “SME” economic base.

It does make sense in the larger scheme of things, though. Lebanon is a nation of traders and businessmen (and women) par excellence. The lack of reforms in this country hinders its progress; pursuing smart reforms would be a godsend for Lebanon’s tanking economy.

On the road to the World Trade Organization

Lebanon is to launch a concerted drive to be accepted into the World Trade Organisation (WTO) by the end of the year, though it is still a long way from complying with all of the membership criteria.

On March 15, Economy and Trade Minister Sami Haddad announced there would be a new round of negotiations with the WTO in May, talks that he said would hopefully culminate in Lebanon’s membership of the organisation.

However, while confident, Haddad acknowledged that Lebanon still had a number of issues to deal with to comply with WTO requirements, especially regarding international copyright law and pharmaceutical laws.

“We are negotiating on a bilateral basis with many of our trading partners such as the United States and Japan to clear some of the hurdles and to speed up the accession of Lebanon to the WTO,” said Haddad in an interview with the local press on March 15.

While the minister said that political consensus would assist in ending copyright infringements there also needed to be a greater awareness of the problem.

“The media should underline the importance of intellectual property because it would improve Lebanon’s record and bring in investments in the future,” he said.

If the minister’s optimism is borne out, it will be the end of a long and at times troubled road since Lebanon first launched its bid for membership of the WTO in 1999. However, Lebanon has other issues it needs to deal with before being invited to join the WTO. These include its laws and regulations on anti-dumping, Customs duties and food safety standards.

The last round of talks were held in March last year, when the Lebanese delegation was told that further delays in approving the necessary legislation would result in an extended hold up in Lebanon’s membership bid.

However, further progress at the negotiating table came to a shuddering halt due to the conflict with Israel in the middle of the year and the ongoing political instability that followed it. Indeed it is the latter that could prove to be the biggest stumbling block, with a backlog of legislation piling up in parliamentary committees and on the parliament’s debate schedule needing to be deliberated on and passed.

One possible advantage that the Lebanese government may have in its efforts to enter the WTO is the broad based goodwill enjoyed at the international level, an example of which was seen at the Paris III donors’ conference in January.

The West, and in particular the US, are keen to shore up the government of Prime Minister Fouad Siniora and backing Lebanon’s WTO bid and thus boosting the country’s economic recovery may be seen as one way of doing this.

Washington has been especially active in its support of Lebanon’s accession process. On February 6, Raouf Youssef, the Lebanon mission director for the US Agency for International Development, and Haddad signed a memorandum of understanding to provide assistance to Beirut’s WTO bid.

Among the measures covered by the memorandum, the US will aid Lebanon to develop its technical capacity to negotiate and implement reforms to bring its foreign trade regime into line with WTO requirements and evaluate Lebanon’s policies, laws, regulations and institutions to pinpoint problems and assist policy reform. The US also committed to help Beirut to prepare the documentation for negotiations and complete the required accession documents.

According to a statement issued by the US embassy, the objective of the assistance is to support the government of Lebanon in its efforts to strengthen the economy, create employment and extend economic prosperity to all Lebanese citizens.

“Lebanon’s accession to the WTO offers the prospect of a more dynamic and robust private sector in Lebanon, with increased employment and opportunity for Lebanon’s talented workforce,” the statement said.

In 2005, USAID also provided a grant of almost $3m to the ministry of economy and trade to fund a 12-month technical assistance program ahead of Lebanon’s third round of WTO talks.

Not everyone is happy with Lebanon’s efforts to comply with WTO requirements, despite the promise of increased access to overseas markets and higher levels of investment.

On March 4, Lebanese consumer advocacy group Consumers Lebanon called on the government to reintroduce price monitoring after it was scrapped three months ago in line with WTO standards.

Consumers Lebanon’s president, Zuheir Berro, said that the ending of the process of monitoring the monthly increase in individual merchants’ percentage of profit had resulting in higher inflation.

While some of the measures that the government will have to take to qualify for WTO membership may be unpopular in certain quarters, there is little overall opposition to Lebanon joining the organisation. However, enacting those measures in a climate of political instability will be the difficult part of the journey.

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