# EUR-Lex - 52012PC0534 - EN

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# 52012PC0534

**Proposal for a COUNCIL DECISION establishing the European Union position within the General Council of the World Trade Organization on the accession of the Lao People's Democratic Republic to the World Trade Organization /* COM/2012/0534 final - 2012/0255 (NLE) */**

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EXPLANATORY MEMORANDUM

I. INTRODUCTION

Members of the World Trade Organization
(WTO) and the Lao People's Democratic Republic (Lao PDR) have reached the
concluding stage of an agreement on the terms for Lao PDR's accession to the
organization. This comes after 14 years of negotiations, which began when Lao
PDR submitted its application to join the WTO in 1997. Lao PDR's request for
accession has been examined in accordance with the guidelines set out in the
WTO General Council Decision of 10 December 2002 on the accession of
least-developed countries (LDC) and there must now be a Council Decision
approving the terms of Lao PDR's accession, before the EU can formally support Lao
PDR's entry.

A summary of the terms of the accession is
set out below.

II. SUMMARY OF TERMS OF LAO PDR'S WTO
ACCESSION BY SECTOR

Schedule of commitments

The average final bound rate (FBR) in the
accession schedule of Lao PDR is 18.4 %.

Whilst the average FBR is slightly lower at
17.8% for agriculture products than the 18.6% observed for industrial goods,
the tariff peaks are higher in agriculture (90% versus 50%) .

Lao will implement the FBRs from the date
of accession, with only a few products with a transition period for
implementation (rice, cereals, petrol products).

These average
levels for tariffs are quite reasonable considering the LDC status of Lao PDR
as well as the small size and vulnerability of its economy. Past EU practice in
relation to LDCs has been to accept as reasonable these tariff levels for
comparable-sized economies.

Industrial Goods

–
The average FBR for non-agriculture products is
18.61%.

–
The highest averages of around 35% are observed
in the leather, furniture and wood sectors.

–
The lowest, around 7%, relates to Information
Technology (IT) products, agricultural equipment and steel products.

–
The highest tariff peaks in the different
industrial sectors are all equal or below 50%, the only exception being
motorcycles at 60%.

Agricultural goods

–
The average FBR for agriculture products is
17.9%.

–
The highest tariff peaks in agriculture are in
rice at 80% and 90%, followed by tobacco and coffee at 60%.

Services

Lao PDR's schedule of specific commitments
in services is satisfactory considering its LDC status. Lao PDR will undertake
market access and national treatment commitments in a broad range of services
sectors, including professional, computer and other business services,
communication services (courier services and telecommunications), construction,
distribution, private educational, environmental, financial (insurance and
banking), private health related services, tourism and transport services (air
transport).

Protocol commitments

In the final, multilateral stage of the
accession process, WTO Members collectively sought to ensure the basic
compatibility of Lao PDR's trade laws and institutions with WTO rules and
agreements, setting these out in the Protocol of accession and Working Party
Report. The following issues are of particular interest to the EU:

Trading rights

Lao PDR confirmed that it would grant any
natural or legal person of a WTO Member, regardless of physical presence or
investment in Lao PDR, the right to be the importer of record no later than two
years from the date of WTO accession for a limited number of products (rice,
petroleum and gas, specific articles of iron and steel), and from the date of
accession for all other goods. Pursuant to the same timelines, Lao PDR will grant trading rights in a non-discriminatory
and non-discretionary manner in conformity with the WTO Agreements. From the date of accession, all
fees and charges for services rendered, applied on or in connection with
importation and exportation will conform to the WTO Agreements.

Customs valuation

By the date of accession, Lao PDR will
fully apply the WTO provisions concerning customs valuation, including the WTO
Agreement on the implementation of Article VII of the GATT 1994 and Annex I
(Interpretative notes).

Main areas where a transition period has
been requested

Safeguard legislation: Lao PDR has engaged in the process of drafting legislation but
required a transition period of 5 years after accession to enact legislation in
conformity with the provisions of the WTO Agreement on Safeguards. Lao PDR
stated that in the meanwhile, it would generally only take action in conformity
with the said provisions.

Technical Barriers to Trade (TBT): Lao PDR will progressively implement the WTO Agreement on TBT with
full implementation as from 1 January 2015.

Sanitary and Phytosanitary measures
(SPS): Lao PDR submitted an action plan for implementation
of the SPS Agreement. Lao PDR's legal framework on food security, animal and
plant health will be in compliance with the SPS Agreement by 31 December 2012.
Full implementation will start as from 1 January 2015.

Intellectual property rights: By the date of accession, Lao PDR will have passed legislation
bringing its intellectual property scheme into conformity with the WTO rules;
full implementation will be ensured by December 2016.

Transparency:
Lao PDR took the commitment to establish the Official Gazette within 3 years
after accession. In the meanwhile, Lao PDR will fulfill
its publication commitments through the use of official websites or newspapers.

III. RECOMMENDATION

In submitting the terms of Accession of Lao
PDR to the WTO for approval by the Council, the Commission considers these
terms as representing a balanced and ambitious package of market opening
commitments, which will bring substantial benefits to Lao PDR and its WTO
trading partners alike.

2012/0255 (NLE)

Proposal for a

COUNCIL DECISION

establishing the European Union position
within the General Council of the World Trade Organization on the accession of
the Lao People's Democratic Republic to the World Trade Organization

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Articles 91, 100(2) and
207(4), in conjunction with Article 218(9) thereof,

Having regard to the proposal from the
European Commission,

Whereas:

(1)       On
16 July 1997 the Government of the Lao People's
Democratic Republic (Lao PDR) applied for accession to
the Marrakesh Agreement establishing the World Trade Organization (WTO),
pursuant to Article XII of that Agreement.

(2)       A Working Party on the accession of Lao PDR was established on 19 February 1998 in
order to reach agreement on terms of accession acceptable to Lao PDR and all
WTO Members.

(3)       The Commission, on behalf
of the Union, has negotiated a comprehensive series of market opening
commitments on the part of Lao PDR which satisfy the Union's requests and are
in line with the development level of Lao PDR.

(4)       These commitments are now
embodied in the Protocol of Accession of Lao PDR to the WTO.

(5)       Accession to the WTO is
expected to make a positive and lasting contribution to the process of economic
reform and sustainable development in Lao PDR.

(6)       The Protocol of Accession
should therefore be approved.

(7)       Article XII of the
Agreement establishing the WTO provides that the terms of accession are to be
agreed between the acceding Member and the WTO, and that the Ministerial
Conference of the WTO approves the terms of accession on the WTO side. Article
IV.2 of the Agreement establishing the WTO provides that in the intervals
between meetings of the Ministerial Conference, its functions shall be
conducted by the General Council.

(8)       Accordingly, it is
necessary to establish the position to be taken by the Union within the General
Council of the WTO the accession of Lao PDR
to the WTO,

HAS ADOPTED THIS DECISION:

Sole Article

1.           The position to be taken
by the European Union within the General Council of the World Trade Organization on the accession of
the Lao People's Democratic Republic to the WTO is to approve the accession.

2.           This Decision shall enter
into force on the day of its adoption.

Done at Brussels,

For
the Council

The
President