Dr. Al-Najar: The private sector’s role is to support the government negotiator working to protect private sector interests [Archives:2006/938/Reportage]

April 17 2006

Yemen is one of the countries that have been trying for many years to join the World Trade Organization (WTO). Yemen's government has thought seriously about joining the international organization since introducing its 1995 economic and administrative reforms program. Since then, the government has been coordinating its efforts in this regard.

To shed light on how far Yemen's efforts have reached in this regard, learn about steps taken so far and what remains for Yemen to achieve its goal, Dr. Hamoud Ali Al-Najar, chief of the WTO's Communication and Coordination Office at the Ministry of Industry and Trade was interviewed by Mohammed Khidr and Yasser Al-Mayasi.

Please give a brief account of steps already taken in efforts to join the WTO.

Coordinating steps for Yemen to join the WTO began rather early, specifically when Yemen's government began the economic reforms process in 1995. In February 1998, the Yemeni Cabinet decreed forming a government committee grouping representatives from the Ministries of then Supplies and Trade, Planning, Industry and Finance, in addition to a Central Bank of Yemen representative. The committee was assigned to study requirements to join the WTO and determine practical steps for the accession objective.

Accordingly, a Communication and Coordination Office was created with the WTO. In the same year, the government presented its program to Parliament, for the first time incorporating WTO accession into it. That was followed by a decision issued by the prime minister to form a national committee to prepare and negotiate with the WTO.

In 1999, Yemen requested observer member status in the WTO and was accepted. A year later, Yemen applied for full membership, with its application unanimously accepted at the organization's April 2000 General Council meeting. In July 2000, the WTO set up a working party to consider procedures and steps Yemen must follow to be granted full membership status.

The WTO's first demand was that Yemen prepare a memorandum on its commercial policies, a request Yemen completed and presented to the organization's secretariat in November 2002. The WTO's accession section studied the memorandum's contents concerning Yemen's accord with required conditions and then accepted it.

Thus, some WTO member states began to put forth questions and queries, most of which were from the United States, the European Union, Canada and Australia. Such questions numbered 167. Yemen answered all of them, returning them to the organization in 2004, which prepared the stage for beginning the first steps to negotiate WTO accession.

Why were the replies to questions so late and were they accepted?

Answering 167 scientific questions is not an easy task. As much as possible, we tried to make our replies successful and useful in order to take the right steps toward accession. The answers were presented, thereby meeting preliminary conditions to hold a meeting between the WTO working team and Yemen's negotiator.

The first batch of answers was accepted; therefore, we requested the first meeting November 2004 to inaugurate multi-lateral negotiations for Yemen's accession. Our first replies were accepted at that meeting and the Yemeni delegation received a fresh group of questions from WTO members, in addition to requirements Yemen must provide.

This did not mean that it failed to answer the previous questions. Issues and queries usually arise based on answers given in a quest for accurate and more detailed replies as an advanced step in the course of negotiating accession. In addition to such explanations were demands to prepare goods and services supply, as well as a plan for legislative amendment of trade laws, including intellectual property laws. All of that was completed last October in a working party meeting.

There also was a second working team meeting to review the first goods and services offers, in addition to presenting several other documents and replies to the new explanations. This resulted in the so-called factual summary revised by the negotiating national committee before holding the meeting. After the meeting late last year, a number of WTO member states came up with several new questions, which were more accurate, analytical and detailed. That meant we had reached a very advanced stage in negotiations because there were issues the members thought needed additions.

The national committee recently met to approve replies to the third batch of questions, which we will return to the WTO secretary in coming days. Additionally, we already sent the replies to a number of experts for technical revision. So far, this is what has been done in this regard.

What is needed is to finish up discussions concerning the goods and services offers and if we receive government agreement to negotiate, we will be prepared to hold bilateral negotiations, particularly with the U.S. and the EU, as they are major parties in the organization. Negotiations with the WTO are carried out in parallel tracks. They are multi-lateral, collective and bilateral negotiations.

We have begun negotiating concerning the goods and services offers and market access for them. Other issues related to botanical health, trade impediments and customs evaluation will be discussed within collective negotiations. Answers to the new group of questions on the foreign trade system, in addition to various other requirements that should be finalized, must be made before the middle of 2006.

Do you have a clear-cut strategic vision for negotiation leading to WTO accession?

We do have a strategy. Through negotiation, Yemen seeks to achieve accession terms compatible with its trade, financial and development needs. This means that WTO member states wishing to negotiate with Yemen must take into consideration that we are one of the least developed states and aim to protect Yemen's long-term economic and trade interests. Our strategy stems from Yemen's circumstances and needs. To realize hoped for and targeted results requires the joining of all efforts, including those of the private sector.

Are Yemen's negotiations with the WTO different in nature from those of other nations?

We can confirm that negotiations for WTO accession are very complicated and toilsome because they involve more than compatibility with the organization's numerous agreements. Yemen still is in need of compatibility with many of them, in addition to bilateral negotiations regarding access to goods markets, especially fixing customs duties ceilings at certain levels. After WTO accession, those ceilings are not allowed to be exceeded except through negotiation, which may lead to offering suitable compensation. Moreover, bilateral negotiations on services are related to liberalization and opening service sectors important to WTO members.

Yemen still is among the world's least developed countries and in need of surmounting many barriers, especially pertaining to production and export capabilities. Therefore, we hope that WTO member states, particularly the big ones, will understand Yemen's economic circumstances and its development needs.

Is it possible during negotiations to take advantage of preferential dealing and exceptions regarding developing countries?

I would like to affirm that Yemen's position as a developing country will be taken into consideration. WTO members have realized the difficulties facing the least developed states, including Yemen. The WTO issued a decision containing a number of guidelines and recommendations, calling on member states to consider least developed nations' circumstances and needs during negotiations.

Consequently, Yemen's negotiator will seek to benefit from those instructions and exceptions and opportunities from which we can benefit. For instance, the WTO's latest decision stipulates permitting the least developed nations to enter advanced countries' markets without customs tariffs being imposed, a right which must be taken advantage of correctly.

Since there are many unavailable circumstances, why does Yemen want to join the WTO?

This is a frequently asked question. We think WTO accession is an indisputable result of economic policies pursued since initiating 1995's financial and administrative reforms based on belief in market strength and competition. Yemen has followed successful liberal policies and canceled the imposed licensing system which impeded competition.

Under the licensing system, a merchant was unable to import certain goods unless he obtained a license from the former Ministry of Supplies and Trade. The system was considered a detriment to competition in both internal and external trade. Moreover, the policy of replacing imported goods with domestic products did not succeed and did not achieve any purpose – not only in Yemen, but in all countries that tried it – and all proved to be a failure.

Thus, the entire world is heading toward the multi-lateral commercial system and many countries have benefited from it, especially Southeast Asian countries. As a country, Yemen is situated in an important strategic position and cannot live isolated from a world currently governed by a multi-lateral commercial order under the umbrella of the WTO. This system is governed by more than 20 agreements and dominates approximately 97 percent of international trade exchange. Does Yemen want to be away from the world? We in Yemen are open to the commercial system and to all forms of regional cooperation.

Can Yemen's economy meet WTO conditions regarding competition abilities with other countries?

I would emphasize that joining the WTO has become an important and inevitable question. Yemen and other nations cannot remain outside this entity that is supervising world trade. Therefore, it is necessary to incorporate into it and work in accordance with its internationally agreed upon rules.

Yemen's economy does not differ much from many of the least developed member states, as some of them possess rather less capability and potential than our economy. For this reason, Yemen will manage to incorporate into the world economy. I would like to stress that under the world system, competition with the outside is easier than competition without it. It is true that our agricultural and industrial base is not at a standard qualifying it to compete, but let's begin working and endeavor to solve our problems.

What measures must Yemen take to develop domestic industry?

WTO accession dictates that Yemen must possess a program to develop local industry and products so that they will be acceptable at the world level when entering competition. The Ministry of Industry and Trade has an ambitious program to develop industries by building a number of industrial zones. In this regard, we plan to build three industrial zones. These projects encourage and support the private sector so that it will be able to contribute with high-quality industry and products capable of competing with other member countries' industries. The private sector is the major axis for developing the industrial sector.

Where do you place the private sector on the map of negotiating with the WTO and have you taken its fears into account?

Negotiations to join the WTO are carried out by the government and consequently the private sector's role is to support the government negotiator working to protect private sector interests. The private sector is not excluded; rather, the government endeavors to engage it more effectively.

Openness to the world does not mean not encouraging the private sector. On the contrary, I think openness encourages the private sector and opens the door to competition with the foreign private sector. The local private sector will not be successful unless a competitor brings technology to the local economy. For instance, some local private sector businessmen invest in many other countries, so why do we in Yemen not give priority to qualifying our local sector to invest in the country rather than the foreigner? This goal is completely in accord with steps we are taking to join the WTO.

WTO accession also will grant Yemen a certificate, according to which many foreign investors will come to invest in Yemen. The first question a foreign investor will ask is whether Yemen is a WTO member. Thus, WTO accession will create a climate whose rules are in accord with most world countries' rules.

Dr. Hamoud Ali Al-Najar is a graduate of American Universities, specialized in economic studies. During his career, he worked as a professor at the College of Trade and Economics, Economics Department. Currently, he is chief of the WTO's Communication and Coordination Office.