Economy & Trade, Headlines, Middle East & North Africa

LEBANON: Stepping Nearer the WTO

Mona Alami

BEIRUT, Jul 27 2009 (IPS) - Lebanon could be stepping closer to joining the WTO following years of political instability that have held up reforms.

“We are in the final stages of the process, which is built on multilateral, bilateral and legislative tracks,” says Lama Oueijan, advisor to the minister of the economy and head of the World Trade Organisation (WTO) unit in Lebanon.

Four laws need to be ratified relating to the budget and better business practices, Oueijan told IPS. These include changes to company registration fees under which international companies must pay a fee that goes partly to the mutual funds of Lebanese judges.

Director-general of the WTO Pascal Lamy told IPS that Lebanon’s move to joining the WTO is on the right track in spite of the delay in formation of a new government.

“The actual accession process is good,” Lamy told IPS at a WTO seminar on trade and sustainable development organised by the Friedrich-Ebert-Stiftung (FES) foundation in Geneva earlier this month. “Lebanon is at the top of the list of countries joining the WTO. Much of the legislative work that needs to be done resides in the domains of intellectual property, the registration of companies and the removal of technical obstacles to trade.”

But such changes can mean a major challenge to the new government. In Lebanon piracy has become a way of life, and protecting property rights will not be easy.

The technical obstacles pointed out by Lamy concern mainly agricultural trade, and include measures to protect humans, animals and plants from pests and diseases.

Another obstacle could be liberalisation in areas such as telecoms. “Privatisation was a global economic trend…however, now things have changed (because of) the economic crisis,” Walid Jumblat, a leader from the parliamentary majority was quoted as saying in local media.

Oueijan says liberalising the telecom industry should not constitute a problem, because only management could be privatised, without selling off the state asset.

“The WTO is primarily concerned with transparency of processes,” says Ouaijan. “The government can open a bid to any company, whether Lebanese or international, with equal opportunities for everyone. We do not face a similar problem in the banking sector, which is already very liberal.”

Another point of contention is the WTO requirement to cut tariffs. Local manufacturers fear such a move may damage the local economy in agriculture, cement, ceramics, cables and clothing.

Agriculture Minister Elias Skaff has said that the WTO can be a double-edged sword. “It is true that we will be able to access more markets, but we will also face more intense competition when it comes to agriculture.” Higher labour expenses mean Lebanese products are more expensive than in other countries in the region, he said.

Imad Bsat, owner of Bfresh, a company that sells fresh agricultural produce, says the local market is ill-prepared for the WTO. “The fresh produce market is totally unstructured, and operates in a chaotic way. There are no real standards when it comes to size packaging, price or quality, which will ultimately hinder Lebanese farmers if they join the WTO before organising the sector properly.”

Oueijan says “sensitive sectors can be protected by special tariffs that can go up to 70 percent.” Such tariffs would be negotiated between Lebanon and concerned parties.

Requirements for Lebanon are challenging, but WTO supporters say membership will bring increased trust in Lebanese commodities. This, in turn, would increase exports. Accession, they claim, will help reduce prices, increase competition, and improve the quality of services.