Latvia joins the WTO [14.10.1998]
Today General Council of the World Trade Organization approved the completion of Latvia's accession process to the WTO. In his speech foreign minister Mr Valdis Birkavs said that "with the admission to the WTO Members recognizes the market access of Latvia and the high quality." Together with Kyrgyz Republic Latvia is the first country from the Baltic States and CIS to join the organization. Membership to the WTO confirms Latvia's readiness to start negotiations with the EU.
The WTO membership is momentous for Latvian producers due to the following reasons. Locally produced goods no longer will face an arbitrary discrimination on export markets. Similarly Latvian producers will not encounter increased customs tariffs, subsidies, voluntary established standards and other conditions not compatible with the legal system of global trade. The WTO guarantees a fair competition in the markets of 131 Members.
As the WTO eliminates discriminatory trade barriers, Latvian producers will gain access to the markets of 131 WTO Members. The major impact will be on the export orientated production sectors.
Membership to the WTO gives assurance to local producers on the stability of the legal regime of its trade partner, as the WTO Members have a harmonized set or rules. Also countries that are currently in the accession process, like Russian Federation and other CIS countries, will have to comply with the requirements of the WTO trade rules. The WTO ensures that trade relations between Latvian producers and their trading partners will not be affected by various political considerations. That is particularly important with respect to trade relations with Russia and other CIS countries.
The WTO membership means that Latvia enjoys most favored nation regime with 131 countries – WTO Members. For example, with Japan, Egypt, Chile, Korea, Mexico and Argentina – countries with whom Latvia previously did not have agreements concerning trade relations.
Membership to the WTO will allow Latvia to protect its entrepreneurs against discriminatory treatment in foreign trade. If, however, local producers do encounter discrimination, the WTO system provides an effective remedy mechanism.
Latvia now as a WTO Member also is entitled to take an active part in multilateral trade negotiations with a view to constantly reduce obstacles to a smooth functioning of global trade. The next round of multilateral negotiations on global trade liberalization will start in 1999 and Latvia accordingly will be a full member of these negotiations that will include also the conditions for trade in agricultural products.
The WTO gives a positive long term effect for the attraction of foreign investment to Latvia, thus the membership to the WTO will be an argument why to choose Latvia as the place for investment.
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