The cabinet around a month ago decided that Bhutan will not join the World Trade Organization (WTO) for now.
This is after a joint committee of officials from the Ministry of Economic Affairs (MoEA) and Ministry of Foreign Affairs (MFA), set up around two years ago to study the matter recommended that Bhutan join the WTO.
The committee in its note to the cabinet essentially said that joining WTO and being WTO compliant would help attract foreign investments.
Another reason put forward was that some of Bhutan’s largest trading partners like India are already WTO members and so joining WTO would not make a major difference.
Lyonchhen said, “We have considered everything already and one of the biggest constraints is that right now WTO is seen as being anti-GNH and so it could really distract us from creating conditions necessary for GNH.”
The PM said the government was carrying out various economic reforms like bringing down loan interest rates etc and joining WTO would mean that these measures would be seen in the wrong light.
Lyonchhen said that WTO is still a contentious issue in Bhutan and currently Bhutan is not ready. “We would need a more harmonious position on the issue,” the PM added.
Lyonchhen, “The question also is that do we really have the resources and the expertise to benefit from WTO.”
He said that he was willing to hear the argument of many people that joining WTO would be against the principles of GNH, and that the principals of joining a liberal global market can threaten GNH.
Lyonchhen said that some people made the argument that joining WTO now would give more bargaining power at this point but he said that the country must also be careful of any pitfalls.
Bhutan established its first working party for WTO accession discussions in 1999 and Bhutan was granted an observer status in the same year. After years of negotiations on various provisions including goods and exemption lists Bhutan was all set to join the WTO in 2009.
However, a political decision by the former government saw the joining being put off.
The current government had pledged to look into the issue but has decided that the risks outweigh the benefits for now, especially given a generally unfavorable perception of WTO in Bhutan.