South Sudan prepares for accession to WTO membership

Legislation | | MIC Customs Solutions |

The WTO is preparing to welcome South Sudan to its fold.

Preparations have been taking place to advance accession negotiations that will see South Sudan eventually become a fully-fledged member of the World Trade Organization (WTO).

The first meeting of the Working Party on the Accession of South Sudan took place last week, with WTO members widely expressing their support for working with the newly independent nation and their hopes that membership will lead to its increased economic prosperity.

Ready to welcome South Sudan

Chief negotiator and presidential advisor on economic affairs Aggrey Tisa Sabuni led the 13-strong panel and said he is confident South Sudan "stands committed to undertake the required reforms for WTO accession in accordance with the principles of the rule of law, transparency, good governance and respect for human rights".

He pointed out that at present, the nation is not meeting its full export potential since much of its wealth comes from oil. However, Mr Sabuni added that South Sudan has much to offer the world in terms of agriculture, mining, fisheries, forestry and tourism.

"Accordingly, we believe opening up to the rest of the world is critical to attracting foreign investment, which is needed to develop and realise South Sudan's potential in other sectors," he said.

South Sudan only gained independence in July 2011 and first submitted an application to become an 'observer' nation in the WTO the following year. However, a period of civil war put this on hold and it was not until December 2017 that the government could submit a request for WTO accession.

This was widely welcomed at the WTO Ministerial Conference in Buenos Aires and work began to integrate South Sudan into the rules-based multilateral trading system, as well as to examine its foreign trade regime and regulatory framework.

The WTO has now encouraged the South Sudanese government to stay on track in terms of progress towards membership and to start developing its market access offers on goods and services.

It also wants the nation to ensure the private sector supports the peace-building process.

Deputy director-general Alan Wolff said he is heartened to see members and aspiring members of the WTO keen to use trade as a tool for ending conflict and generating prosperity.

"I think perhaps the most compelling reason for optimism for the multilateral trading system is that conflict-affected countries like South Sudan see in the WTO what the founders of the multilateral trading system saw in its creation in 1947. You see a path toward economic growth, leading to greater domestic stability and a better chance to attain and sustain peace. South Sudan is the timely reminder of the backbones of the multilateral trading system," he added.

South Sudan already appears to be working towards its commitment to joining the WTO, having signed a deal just this week with a Chinese company that will see it embark on the construction of major highways linking the capital Juba to the remote countryside.

It is hoped this will facilitate trade and create the infrastructure necessary for a burgeoning economy.

The economy of South Sudan

South Sudan is currently only the 141st largest export economy in the world, with the top products it sends out being crude petroleum, scrap iron, aircraft parts, sawn wood and gas turbines. Its biggest export partners are China, India, Uganda, Ukraine and Jordan.

The biggest imports for the nation are raw sugar, postage stamps, beer, railway cargo containers and palm oil, which mostly come from Uganda, Kenya, China, the Netherlands and the US.

During the five years to 2017, South Sudanese exports have increased at an annual rate of 16.2 per cent, while imports have also gone up by 33.9 per cent. Ever since its independence, it has recorded trade surpluses due to its heavy reliance on oil and still-small import demand.

The country is keen to change this and has gradually moved closer to the East African Community, becoming a member of the bloc in August 2016.

On top of this and its aspiration to join the WTO, it has also been looking into boosting demand for its other products, including coffee. South Sudan only exported coffee for the first time in 2015, but it is already predicted that the crop could soon become the second biggest source of exports after oil.

Among the companies expressing interest were Nespresso (Nestle), which stated that South Sudan's coffee is unique because it is wild coffee that grows naturally and therefore has huge commercial viability.

Why WTO membership is a key goal

Membership of the WTO remains coveted by nations across the world because it ensures all member states are treated in the same way and that they have lower trade barriers with each other, including tariffs, import quotas and regulations.

It also offers developing countries immediate access to developed markets at the lower tariff rate and all members access to a dispute resolution system that aims to prevent retaliatory trade warfare.

South Sudan will undoubtedly be hoping it can start to reap these rewards sooner rather than later as its accession is processed.