BOSNIA AND HERZEGOVINA  AND WTO

ACCESSION PROCESS OF BOSNIA AND HERZEGOVINA TO THE WORLD TRADE ORGANIZATION (WTO) 

Bosnia and Herzegovina is fully committed to the complete integration of its economy into the international multilateral trading system established within the World Trade Organization (WTO) and to draft its trade legislation based on the rules and principles underlying this organization. In that context one of the primary goals of the foreign policy of Bosnia and Herzegovina is the country’s full membership in this organization.

CHRONOLOGICAL OVERVIEW OF ACTIVITIES PRIOR TO STARTING THE NEGOTIATION PROCESS 

• On 18 May 1999, the BiH Presidency accepted the Initiative of the Council of Ministers of BiH and adopted a Decision to open negotiations for the accession of BiH to the WTO along with adoption of the Activity plan of State and Entity Bodies, and designated the Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina as the principal body in charge of these activities.
• In May 1999, BiH submitted to the Secretariat of the WTO an official request for accession to this organization.
• On 15 July 1999, at the session of the WTO General Council, an observer statusin this international organization has been granted to BiH. 
•  At the same session  a working party with the following terms of reference: “to examine the application of the Government of Bosnia and Herzegovina to accede to the WTO Agreement under Article XII of the  Marrakesh Agreement, and to submit to the General Council recommendations which may include a draft Protocol of Accession"has been established. 
• Mr. P.R. Jenkings  was appointed as the Chairperson of the Working Party for BiH.  Just before the third round of negotiations, the Ambassador Istavan Major (Hungary) has been appointed as the new Chairperson.
• In September 2002, a Memorandum on the Foreign Trade Regime of BiH was submitted to the WTO Secretariat as a basis for opening accession negotiations with   BiH.

THE RULES NEGOTIATIONS 

As the final result of the negotiations, Bosnia and Herzegovina should accede to the "Marrakech Agreement Establishing the World Trade Organization" and their Annexes: 

• Annex 1A –  the General Agreement on Tariffs and Trade ( GATT 1994) with 11 single agreements regulating trade in goods:

1. Agreement on Agriculture;
2. Agreement on the Application of Sanitary and Phytosanitary Measures;
3. Agreement on Implementation of Article VI of the GATT 1994 (Anti-Damping);
4. Agreement on Implementation of Article VII of the GATT 1994 (Customs valuation);
5. Agreement on Import Licensing Procedures;
6. Agreement on Preshipment Inspection;
7. Agreement on Rules of Origin;
8. Agreement on Safeguards;
9. Agreement on Subsidies and Countervailing Measures;
10. Agreement on Technical Barriers to Trade;
11. Agreement on Trade-Related Investment Measures (TRIM)

   Note:The Trade Facilitation Agreement  entered into force on 22 February 2017and forms an integral part of Annex 1A.

• Annex 1B -  General Agreement on Trade in Services (GATS); 
• Annex 1C -  Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS);

Accession to the aforementioned agreements shall be negotiated and the relevant legislation agreed upon with these Agreements shall be provided.

Following the conclusion of BiH negotiations, the country also has the obligation to accede to the following Annexes to the Marrakech Agreement on the Establishing the World Trade Organization, which cannot be negotiated: 

• Annex 2. -    Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU);
• Annex 3.  -   Trade Policy Review Mechanism 

which implies accepting unreservedly the rules governing the international trade disputes within the WTO and the periodic mechanism of trade policy review of WTO member countries after joining this organization.

Although negotiations for accession to the World Trade Organization are a unique process, they can be conditionally divided:

Regarding the subject of negotiation into the three separate fields:

- Negotiations in the field of trade in goods;

- Negotiations in the field of trade in services;

- Negotiations in the field of intellectual property rights protection.

Regarding the mode of negotiation also into three parts:

1.   Negotiations on the Foreign Trade Regime of BiH - the phase of multilateral negotiations with all members of the WTO Working Party for BiH (started in 2002 by submitting Memorandum on the Foreign Trade Regime  of BiH);

2. Bilateral negotiations with interested members of the WTO Working Party for BiH on market access; 

3. Plurilateral negotiationson domestic support to agriculture and export subsidies. 

Negotiations on the Foreign Trade Regime of BiH 

The objectives of the negotiations on the foreign trade regime of BiH are as follows: 

•  assessment of compliance of BIH legislation and practice with WTO rules and identification of differences
•  determining the obligations regarding harmonization of legislation and practice with WTO rules (amendments to existing or new regulations). 

This is the phase of multilateral negotiations with all members of the WTO Working Party for BiH that take place in series of written questions and replies. An examination of the BiH foreign trade regime started in 2002 by submitting a Memorandum.

In accordance with the procedure, the negotiations in this part take place in the series of questions of the Working Party members in all areas of BiH legislation on trade in goods and services, in order to assess the compliance with the rules and principles on which the WTO system is based.

Each round of questions and replies is formally completed at the meeting of the WTO Working Party for Bosnia and Herzegovina, which outlines the state of play and records the remaining obligations. In the current negotiations, 12 (twelve) rounds of negotiations were held. The status of negotiations in this field is monitored through two documents:

•  „Legislative Action Plan of Bosnia and Herzegovina“which presents a systematic overview of:
  •  adoption of the new laws and subordinate legislation to regulate certain fields covered by single WTO agreements;
  •  adoption of the amendments to existing regulations in order to harmonize them with the provisions of the WTO Agreement;
  • establishment of the new institutions for the purpose of more efficient application of domestic regulations in accordance with the WTO rules;
  • establishment of the enquiry points within BiH institutions to inform the WTO members about regulations and practices in the field of technical regulation and trade in services;
  •  accession to international treaties and conventions in the field of intellectual property rights.

and

• "Draft Report of the Working Party for BiH", which records the state of play and changes in all fields during the negotiations and formulates the final commitment that Bosnia and Herzegovina will assume after completed negotiation and which will form an integral part of the Final Report of the Working Party and the Protocol on Accession.

Bilateral market access negotiations 

Market access negotiations are part of the WTO accession negotiations and at the same time their final phase. This part of negotiations process begins after the negotiating stage in the previous phase has achieved significant progress in the harmonization of domestic legislation and practice with the rules and requirements set out in single WTO agreements or required by conditions of the WTO membership.

The specificity of the market access negotiations is that they are conducted on a bilateral basis with the interested members of the WTO Working Party. 

 Bilateral market access negotiations include: 

a)       Negotiations on tariff concessions on trade in goods and

b)       Negotiations on specific commitments on trade in services.

The rule is that the country accessing the World Trade Organization in the final phase of its negotiations gives certain concessions in the form of tariff concessions (reduction of customs duties) on trade in goods or undertakes the specific commitments on trade in services, in the sense of their further liberalization.

a) Negotiations on tariff concessions and commitments on trade in goods include negotiations to reduce customs duties and undertake the commitments to limit their future increase.  The rule is that the customs duties rates currently imposed are the starting point for these negotiations. 

b) Negotiations to undertake the specific commitments on trade in services include negotiation on  market access limitation for supplying services to all domestic and foreign legal and natural persons (limitation of "access to the market"), as well as  negotiations on national treatment limitations only for foreign legal and natural persons ("National treatment").
These negotiations are conducted in accordance with the CPC classification of services in 12 sectors and over 150 subsectors for all four modes of supply:

(1)     Cross-border supply of services;

(2)     Consumption of services abroad;

(3)     Providing a service through commercial presence in the country:

(4)     Providing a service through presence of natural  persons;

 Negotiations on domestic support to agriculture and export subsidies

Negotiations on domestic support to agriculture and export subsidies are conducted on a plurilateral basis with interested members of the Working Party. The essence of these negotiations is to determine the amount (level) of subsidies that are granted through measures falling within the group for which there is a reduction commitment  if they exceed de minimis support (5 to 10% of total production). 

Negotiations in this field are based on a document entitled "Information on domestic support and export subsidies in agriculture for the most favourable three-year period" (WT /ACC /4) 

This document provides an overview of the following measures in the field of support to domestic agricultural production for the observed period: 

1.  Measures exempted from the reduction commitments include: 

a)“Green Box” measures

b) Measures related to "Development Programs" in agriculture

c) Measures related to direct payments through production restriction programs.

    2.  Measures for which there is a reduction commitment if de minimis support (5 to 10% of total production) and AMS calculation (Aggregate measurement of support) are exceeded.

     3.  Measures representing direct export subsidies.

THE STATE OF PLAY OF NEGOTIATIONS

Multilateral negotiations on the Foreign Trade Regime of BiH

•  Legislative Action Plan is fully implemented;
• The WTO Secretariat has prepared an updated version of the Draft Working Party Report (DWPR) on accession

As a prerequisite for scheduling the XIII session of the Working Party, the documents have been forwarded to the members of the WTO Working Party for BiH.

 Bilateral market access negotiations on goods and services 

• Negotiations in this field have been fully completed with fourteen countries and bilateral
  Protocols were signed with Canada, Norway, Japan, China, Switzerland, El Salvador, Honduras, Dominican Republic, the EU, India, Korea, Mexico, Ecuador and Panama. 
• Negotiations with the U.S. have been finalized, the text of the bilateral Protocol is harmonized, an agreement on the date of signing is expected;
• Negotiations in this field are still active with Brazil, Ukraine and the Russian Federation.

 Plurilateral negotiations on domestic support to agriculture

With conclusion of the XII session of the Working Party, negotiations in this field are over. There will be a formal verification of the negotiations results at the XIII session of the Working Party.