ID :
9832
Wed, 06/11/2008 - 17:32
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http://m.oananews.org//node/9832
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Bhutan likely to join WTO by 2009
Thimphu, Jun 11 (PTI) Bhutan is likely to join the World Trade Organisation by 2009, but the country will not immediately open up its financial and services sectors completely, trade officials have said.
Bhutan has so far agreed to open up 54 of 155 services and all of 5,820 goods with fixed maximum duty rates, including all agricultural items. However, these numbers may change after some final discussions.
The country will now have 152 countries as potential trading partners.
A WTO negotiation team of key ministries left last Saturday to the WTO headquarters for preliminary talks, however, the final decision on joining the body will be taken by the National Assembly.
"The opening up of the service sectors, however, is not uniform and all foreign companies will have to have Bhutanese partners, with maximum equity limited to 70 percent to a minimum of 49 percent," said trade director and deputy WTO negotiator, Sonam P. Wangdi.
"They'll also have to be registered as a legal Bhutanese
company and will be subject to our domestic laws on trade, tax, labour laws and on," Wangdi said, adding only "a portion" may be opened up in the financial sector.
So far, the USA has expressed interest in Bhutan's finance and energy sector, China in exporting some goods, Japan in establishing direct car showrooms and workshops, Canada in increasing days of business visa, officials said.
"Even if we are a small market, we still matter because we are a growing one and countries can come in when they think the opportunities are right," said WTO officer Pema Rinchen.
Wangdi said getting in investments, capital, skills and transfer of technology to Bhutan is now possible because a WTO tag means "you are safe and credible for any business".
"A major advantage is also that it will now also be easier for the government and commercial sectors to look for markets in any of these countries for our export items like bio-food and handicrafts," he said.
Another advantage would be a set of transparent strong domestic trade laws based on international trade laws, which will promote good governance.
According to officials, Bhutan, as a least developed country, will also get some concessions, including tariff rates and the pace of opening up, apart from some assistance from WTO.
However, on the downside, unlimited exports from non-rupee countries could have an impact on trade balance and foreign exchange reserves.
There could be increased competition to domestic players, smaller and weaker ones may have to shut down, they said.
Another area of possible negative impact is agriculture, which is plagued by poor technology, accessibility and marketing, all unfriendly to exports, the Kuensel reported.
"In spite of free trade with India and agricultural imports, our agricultural products are much more popular in the market. Moreover, joining WTO doesn't mean we develop overnight but we have time," said Wangdi.
Bhutan applied for WTO membership in 1999. Since then it has made legislative changes in conformity with WTO regulations.
Bhutan has so far agreed to open up 54 of 155 services and all of 5,820 goods with fixed maximum duty rates, including all agricultural items. However, these numbers may change after some final discussions.
The country will now have 152 countries as potential trading partners.
A WTO negotiation team of key ministries left last Saturday to the WTO headquarters for preliminary talks, however, the final decision on joining the body will be taken by the National Assembly.
"The opening up of the service sectors, however, is not uniform and all foreign companies will have to have Bhutanese partners, with maximum equity limited to 70 percent to a minimum of 49 percent," said trade director and deputy WTO negotiator, Sonam P. Wangdi.
"They'll also have to be registered as a legal Bhutanese
company and will be subject to our domestic laws on trade, tax, labour laws and on," Wangdi said, adding only "a portion" may be opened up in the financial sector.
So far, the USA has expressed interest in Bhutan's finance and energy sector, China in exporting some goods, Japan in establishing direct car showrooms and workshops, Canada in increasing days of business visa, officials said.
"Even if we are a small market, we still matter because we are a growing one and countries can come in when they think the opportunities are right," said WTO officer Pema Rinchen.
Wangdi said getting in investments, capital, skills and transfer of technology to Bhutan is now possible because a WTO tag means "you are safe and credible for any business".
"A major advantage is also that it will now also be easier for the government and commercial sectors to look for markets in any of these countries for our export items like bio-food and handicrafts," he said.
Another advantage would be a set of transparent strong domestic trade laws based on international trade laws, which will promote good governance.
According to officials, Bhutan, as a least developed country, will also get some concessions, including tariff rates and the pace of opening up, apart from some assistance from WTO.
However, on the downside, unlimited exports from non-rupee countries could have an impact on trade balance and foreign exchange reserves.
There could be increased competition to domestic players, smaller and weaker ones may have to shut down, they said.
Another area of possible negative impact is agriculture, which is plagued by poor technology, accessibility and marketing, all unfriendly to exports, the Kuensel reported.
"In spite of free trade with India and agricultural imports, our agricultural products are much more popular in the market. Moreover, joining WTO doesn't mean we develop overnight but we have time," said Wangdi.
Bhutan applied for WTO membership in 1999. Since then it has made legislative changes in conformity with WTO regulations.
