To secure a peaceful and prosperous future for its youngest citizens, Liberia must ensure that they will have ample opportunity to succeed as the country enters its second decade of post-conflict stability. Membership in the World Trade Organization (WTO) will provide a foundation for establishing the rules-based system for growing the economy, attracting foreign investment, and securing that future for the country’s youth.
Liberia is the only country in ECOWAS that has yet to become a WTO Member. This places it at an economic disadvantage compared to its neighbors both for regional and international trade. As the June 15 deadline approaches for the lower house to ratify the country’s WTO accession package – Liberia must now ratify its accession agreement reached after nearly 10 years of negotiations with the WTO and trade partners.
With more than 50 percent of its population under 18 and facing limited prospects for gainful employment, Liberia desperately needs to create jobs through economic growth and diversification as called for in its 18-year development plan to reach middle income status by 2030.
WTO membership will provide the foundation for achieving this goal. This is not to suggest that WTO accession will be a panacea for all of Liberia’s economic challenges. Membership by itself will not automatically create a dynamic economy. It will, however, reduce impediments to trade that will help attract new investment and allow entrepreneurs, innovators and efficient producers to flourish.
But what’s in it for the average Liberian?
1. More jobs generated through improved transparency, a more predictable business environment, and new investment.
2. Enhanced export opportunities for Liberian products.
3. Lower prices at the store and improved access to services.
Now, my thoughts on these three benefits:
Liberia’s WTO Accession Protocol calls for enhancing Liberia’s investment climate to provide a transparent and predictable business environment. When Liberia joins the WTO, it will commit to establishing predictable tariff rates, ensuring transparency in the
publication and enactment of laws, and adherence to an enforceable mechanism for resolving disputes. Business thrives on predictability, so these initiatives will foster new investment, job creation and economic growth.
As to the benefits from lowered trade barriers to exports, look no further than the results of the African Growth and Opportunity Act (AGOA), which promotes trade with the United States. In 2014, non-oil AGOA trade was valued at $4.4 billion, a 250 percent increase from 2001, the first full year of AGOA. That trade supports an estimated 300,000 direct jobs in Africa. Just as AGOA has contributed to trade growth in Africa by providing expanded duty-free access for exports from the region, WTO membership will provide similar opportunities for Liberia.
Liberia’s accession would also give it a voice at the WTO table to negotiate tariff rates on goods and services, which can lead to substantial cost savings on some imported goods. For example, membership will open the door for the expansion of the telecom sector in
Liberia, and will allow international banks to operate within its borders. This will create new jobs, attract new investment, and bring in new financing options for Liberian companies. Liberia may also be able to respond to the dearth of physicians and other healthcare professionals through reciprocity agreements on granting license to non-Liberians.
These are just three reasons why it is incumbent upon the lower house to ratify Liberia’s WTO accession agreement by June 15 and secure the country’s rightful place among the world’s trading nations.
As President Ellen Johnson-Sirleaf noted at the conclusion of WTO accession negotiations last year, “Liberia’s accession to the WTO marks another turning point in our history, particularly in our journey of economic transformation for inclusive growth.” I truly look forward to watching and supporting that transformation.
Linda Thomas Greenfield was U.S. Ambassador to Liberia 2008 to 2012.