Ethiopia's Long Walk to WTO Membership: Exploring the Implications of the 2012 WTO Accession Guidelines for Least Developing Countries

This paper builds an index to measure the depth of accession commitments and estimate the impact of World Trade Organization (WTO) accession. We find that WTO accession has a positive and significant influence on an economy’s trade and investment. The impact of WTO accession on the ratio of trade to gross domestic product is significantly higher than in previous studies on developing countries. Trade in services also tends to increase after accession. Moreover, greater openness does not negatively affect the trade balance of Article XII members. The results on investment, be it domestic or foreign, are also encouraging, but are not fully conclusive.

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Does the WTO Accession Stimulate Inward FDI in Developing Countries? Accentuate on TRIMS, TRIPS or Trade Liberalization

International Journal of Accounting and Financial Reporting ◽

10.5296/ijafr.v8i1.12825 ◽

2018 ◽

Vol 8 (1) ◽

pp. 277

Author(s):

Md. Shakib Hossain

Keyword(s):

Developing Countries ◽

Human Capital ◽

Foreign Direct Investment ◽

Trade Liberalization ◽

Financial Development ◽

Direct Investment ◽

Research Work ◽

Market Size ◽

Wto Accession ◽

Macroeconomic Stability

The propensity of WTO always ensure to strengthening and consolidating the integration approach with country to country. Manifold accession like TRIMS, TRIPS and trade liberalization agenda facilitate to enlarge the attractiveness of foreign direct investment in many more developing countries. This study is concentrates on judgment of the WTO accession like liberalization, TRIMS and TRIPS stimulate the flow of FDI in developing countries and also to observe that the other relevant important variables such as macroeconomic stability, infrastructure, human capital, geographic location, financial development, agglomeration, market size has helped the incessant inflow of FDI for developing country. Some research penetratingly interpreted that TRIMS, TRIPS and trade liberalization accession are controversial subject matter for the developing countries. For accomplishing the research work the paper has used panel data of 58 different developing countries over the years 1990-2014. Through that work the paper has explore that because of the adopting liberalization polices, relinquishing market distortions with the connection of TRIMS and harmonization of IPR standards throughout TRIPS escalate the foreign direct investment in the developing countries, it means that there is a significant relationship of FDI along with TRIPS, TRIMs and trade openness. Other pertinent factors like market size, macroeconomic stability, agglomeration and engagement of WTO membership have also significant impact on FDI inflows. Others common factors like infrastructure, human capital, financial development, geographical location also make significant impact on facilitating foreign direct investment. Developing countries always requires strengthening their superiority and protecting rights and ensuring negotiation process and encouraging market liberalization process for accomplishing economic competitiveness.

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