Latvia and the WTO

Latvia became a Member of the WTO in 1998, completing the accession negotiations, which lasted 6 years (the chronology of events).

After Latvia joined the EU on May 1, 2004, the procedure in which Latvia was implementing its WTO membership has been rearranged. According to Article 133, EC Treaty on the competence of EU common commercial policy, Latvia in the WTO together with the other Member States is represented by the European Commission. EU to the WTO is represented according to the principle – one representative (Commission) with 25 votes (Member States).

Thus as a result the WTO negotiations on behalf of Latvia is now led by the European Commission, or more precisely DG Trade – responsible for external trade issues.

Accordingly, joining the EU Latvia transferred to the Commission the rights to complete its bilateral negotiations in process with the WTO acceding countries. Now all negotiations are led on behalf of EC, having respect to the interests of all 25 Member States. Similarly, the multilateral trade negotiations (DDA) on behalf of 25 Member States are led by the European Commission as from May, 2004.

Nonetheless being in the EU, Latvia continues to effectively implement its membership to the WTO in close cooperation with the European Commission. Mostly this cooperation is carried in the framework of Ad Hoc Article 133 Committee. The Committee is established with the Council decision and acts as an independent, consultative body, in which represented are all 25 Member States.

Commitments, which Latvia undertook when acceded to the WTO[1] are to be changed according to EU requirements. Schedules of Latvia's commitments will be replaced with the single EU schedule in the corresponding area (goods, services). When such replacement of commitment schedules will cause losses to third countries – WTO Members, they will be entitled to claim for compensation. Compensations are understood as increased market access to the EU market for imports from the said third country. The Commission and the third country will agree with regard to particular goods and concessions. 

The commitments of Latvia and EU are comparatively similar, providing for a considerable market opening in both goods and services sectors, whereas the certain level of the defense of agricultural market is maintained. Thus there is not supposed to be a large scale of third country requests to compensate the lost market access due to the EU enlargement. The most significant changes instigated by overtaking the EU commitments to the WTO are opportunity to use export subsidies in agriculture[2], that so far was not possible, also increased limits of domestic agricultural subsidies, as well as increased level of "tariff roof " with regard to products that are subject to Common Agricultural Policy (CAP) – grain, sugar, dairy, meet, etc.  

The enlargement of the EU will be examined in the WTO Committee on Regional trade agreements. The Committee will assess the compatibility of the EU enlargement with the requirements of General Agreement on Tariffs and Trade, Article XXIV (Article XXIV on territorial application, frontier traffic, customs unions and free-trade areas: full text and understanding), and General Agreement on Trade in Services (GATS), Article V (Article V on economic integration: full text and understanding).

Regardless of membership to the EU, Latvia retains its right to permanent representation to the WTO and with regard to technical assistance issues and formation of the WTO budget as these matters are within the competence of EU Member States.

[1] Each WTO Member with the accession to the WTO undertakes certain commitments with respect to other Members in relation to market access of goods and services. 

[2] It must be noted that according to the so called Framework Agreement of 30/07/2004 (Doha Work Program) Members have agreed to eliminate export subsidies.