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Moldova: Chisinau Marking Big Step With WTO Membership

  • Mark Baker

Moldova last week became the sixth former Soviet republic to join the World Trade Organization, entering the group ahead of larger and richer countries like Russia, Ukraine, and Kazakhstan. RFE/RL correspondent Mark Baker spoke to a WTO representative, Josep Bosch, to ask what membership will mean for Moldova, and also what is holding up the applications of some of the other former Soviet states.

Prague, 31 July 2001 (RFE/RL) -- Moldova has joined the World Trade Organization, becoming the sixth former Soviet republic to accede to the trade body. Formal entry came last Thursday (26 July) and capped eight years of often-difficult negotiations.

The Geneva-based WTO regulates trade rules and tariffs among its 142 member states. The United States and the countries of the European Union are members, but Russia, Kazakhstan, and Ukraine, among former Soviet republics, have not yet met the conditions to join.

Our correspondent spoke to WTO representative Josep Bosch this week and asked him what the country's 4.3 million citizens will gain from membership.

Bosch says joining the world trade body brings advantages in both political and economic terms. He explains:

"In political terms, [membership] confirms [the country's] sense of independence -- [after] all they've been through and after belonging to the Soviet Union, in some cases."

He says it's especially important for former Soviet states to assert their identities as sovereign nations after being dominated by Moscow for a such a long time.

Bosch says membership protects a country and shores up its bargaining position in trade disputes with others. He says, for example, if a strong country is imposing high tariffs or other barriers to free trade on a weaker country, that country can seek recourse from the WTO:

"If [a country does not] belong to an organization like [the WTO], say, maybe a big trading power can actually do whatever they want with them bilaterally. If they belong to an organization like this, they participate in the collective bargaining of the liberalization of world trade."

Moldova, with a per capita income of less than one U.S. dollar a day, is Europe's poorest country.

While WTO membership will not bring prosperity overnight, Bosch says that the rigorous preparations for membership -- particularly improving local laws to an international standard -- can catalyze foreign investment and lead to long-term improvements:

"A country becomes more attractive to foreign investors, because a foreign investor likes to go to a country knowing what are the rules of engagement. Knowing that there is a legal system in force, so they can also know where to go, what are the conditions in terms of access to loans, or bringing money in, or customs duties or permits."

Bosch says that Moldova will join a small but active grouping of former communist states -- including the Czech Republic, Hungary, the Baltic states, Bulgaria, and Romania among others -- that look out for the needs of transition economies:

"In many countries in transition, like the case of Moldova, the process of reform and the process of joining the WTO go hand in hand. And I know that now that Moldova is a member, Moldova is going to join a group of countries -- an informal grouping -- [called] 'economies in transition.'"

Bosch says that Moldova may be small and poor but it is not isolated.

Moldova's membership in the WTO capped eight years of intense negotiations. Bosch says the sheer scope of modifying every law to conform to the organization's standards can take a very long time.

Russia has been in talks with the WTO now for six years, and the discussions are expected to continue for several more. China -- which also desires WTO membership -- has been negotiating for a decade and a half and is only now approaching the point of joining.

Bosch says that because Russia, for example, is so much bigger, the process will take much longer:

"Well, the negotiation [with Russia] is advancing slowly because of the problem of adapting the legislation, the legal framework, to the WTO requirements. Remember that up until very recently there were even restrictions in the movement of goods inside the country from one region to the other. If that is the case inside one country, then imagine what is the case across the borders, across the international borders."

The former Soviet republics that have joined the WTO so far -- the three Baltic states, Georgia, Kyrgyzstan, and now Moldova -- are all relatively small. The other former Soviet republics, with the exception of Turkmenistan, all say they want to join and have started negotiations.

Bosch says, however, that joining the WTO is simply a first step. Member countries must demonstrate a commitment to the organization's ideals -- meaning they must not only have the right laws on the books, they must also enforce them.

He mentions intellectual property rights in this regard. He says violations of intellectual property laws -- things like pirating music CDs or computer software -- happen every day in both rich and poor countries. He says WTO members must demonstrate the will to enforce these laws.