The Arab world continues to underperform economically and remains a minor player in the area of international business, despite the oil boom and rise of sovereign wealth funds. That failure is partly because so much of the region still lies outside the globalized economic system, including regional and international treaties and bodies.
In particular, the region remains seriously under- represented in the World Trade Organization (WTO), with ten out of 22 Arab League members not having acceded. Moreover, there is a suspicion that states already part of the organization are not making effective use of their membership while those countries that are in the process of acceding, or otherwise outside the WTO, could enhance significantly their positions.
At the same time, there is a great deal of interest in the WTO in the Arab region, and several countries have completed their accession over the past few years while other states are in the process of acceding or have otherwise expressed an interest in doing so. Yet, along with this momentum, there is a large knowledge gap among Arab officials, the media, civil society organizations and the public as to what the WTO is and how it operates.
Against this background, and in a difficult and complex regional context where political and security policies play a part, six Arab countries are negotiating to join the WTO. Among these, the case of Lebanon is one of the most interesting. Lebanon was one of the founding members of the precursor to the WTO, the old General Agreement on Tariffs and Trade (GATT) in 1947, but pulled out a few years later. Now the Lebanese are edging back to membership, though the path has not been smooth. An application to join the WTO was submitted in January 1999, yet getting on to a decade later Lebanon’s accession is still not a done deal. Most other applicants have acceded in a lot less time.
Progress in negotiating halted due to conflict with Israel in 2006 and the political instability around it; the latter could prove to be a stumbling block, with legislation piled up in parliament. Certain measures the government will have to take to qualify for WTO membership may be unpopular, and enacting these amid political tension could be difficult.
At the last WTO meeting on Lebanon’s accession, in May 2007, among the issues raised was the state of intellectual property rights (IPR) in the country. Current economic reforms include several draft laws on intellectual property, and Lebanon appears to be on the road to better protection of IPR. However, it was not always so: in 2000 the private US Business Software Alliance watchdog group estimated Lebanon’s piracy rate as the highest in the region — today, it is clear that piracy, while still a serious problem, is not as widespread as it was a decade ago. As recently as last year, Lebanon remained on the US IPR official Priority Watch List, the positive initiatives started by the Lebanese government in early 2006 (including the formation of a police High Tech Crime Unit) interrupted by political unrest. The good news is that for 2008 Lebanon is no longer in the ‘Priority’ category, but has been shifted to the less serious ‘Watch List’. (Interestingly, Israel remains on the former, while some of Lebanon’s regional colleagues in the latter category include Algeria, Egypt, Kuwait, Saudi Arabia, and Turkey.)
Respect for IPR is a key condition of WTO accession; not coincidentally, Lebanon acquired observer status at the WTO shortly after passage of the 1999 Copyright Law. Problems exist not only because of deficient legislation. Lebanon’s tarnished reputation as a haven for piracy is partly due to lack of awareness. Experts (mainly from Western countries and companies) come to Beirut to address businesses, the general public, the media, as well as information technology companies on the need to respect IPR. Promoting the benefits of using legal software and other IPR goods focuses on awareness and education more than on enforcement; yet, the going is tough in an atmosphere of economic difficulty and lack of respect for authority.
Lessons of earlier accessions in and out of the region suggest that countries like Lebanon should promote open deliberations in parliament and in the media on the accession process. Another important point for acceding countries to keep in mind is that they should tap the experience of recently acceded WTO members in similar developmental circumstances. For example, some Arab countries that are seeking to join the WTO have consulted Jordan and used its expertise to aid the accession process, an interesting and successful example of South- South cooperation. Hopefully, such practices will spread, easing the transition of countries like Lebanon into the WTO.
Riad al Khouri, co-founder and principal of KryosAdvisors, is senior fellow of the William Davidson Institute at the University of Michigan, Ann Arbor