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
Date: 2012-09-24
Institutions: European Commission
Subjects: Laos, World Trade Organisation, enlargement of an international organisation

EUROPEAN COMMISSION 

Brussels, 24.9.2012  
COM(2012) 534 final 

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 

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I. INTRODUCTION 

EXPLANATORY MEMORANDUM 

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  

– 

– 

Services  

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%. 

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 

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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. 

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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) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

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. 

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. 

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. 

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

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. 

The Protocol of Accession should therefore be approved. 

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, 

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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 

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