December 17, 2015 marked a historic moment for Afghanistan. On that day, ministers formally approved the country’s terms of accession to the World Trade Organization (WTO) at the 10th Ministerial Conference (MC10) in Nairobi, Kenya. Although WTO accession is not yet fully complete —Afghanistan has until June 30, 2016 to ratify the deal and become a full-fledged member — the approval at MC10 was hailed as a significant milestone in the Central Asian nation’s evolution as a participant in international trade.
How does WTO accession change the trade landscape for Afghanistan? After the process is complete, Afghanistan will begin to follow internationally recognized rules and dispute resolution mechanisms that govern 95 percent of global trade. Adhering to these rules opens many lucrative markets for Afghan businesses and provides protection and avenues for dispute resolution to the country under established trade laws.
Humayoon Rasaw, head of the Ministry of Commerce and Industries, the main government organization involved in shepherding the country through this process, described the long-term economic value of accession: “We view adherence to WTO agreements as critical for strengthening the rule of law, increasing transparency, and building the foundation for sound economic development in Afghanistan.”
WTO membership also sends a strong message to the rest of the world. It shows that Afghanistan’s business environment has improved; it is now much more predictable, transparent, and cost-efficient. Membership also signals to potential investors that their rights will be protected and that a strong legal system is in place.
Afghanistan’s road to the WTO began more than a decade ago, when it first submitted a request for accession in 2004. Yet, despite the formation of a working party soon after to begin the process, progress stalled in the years immediately following. The necessary institutional and technical support simply did not exist.
This changed in 2009, with the launch of the USAID Trade and Accession Facilitation for Afghanistan (TAFA) program, implemented by Chemonics. Although TAFA had several goals, its main priority was to support the government in moving toward WTO accession. A big element was to provide guidance on legislative and business reforms that would create the environment to support WTO-adherent policies at the regional and international level. The Ministry of Commerce and Industries became a key partner in this process, developing policy reforms and educating government officials on the benefits of accession.
