Largest Economy Outside WTO Poised to Join

If given the option to choose an economy that is the largest non-World Trade Organization (WTO) member, most people would not guess Iran. Most people would be wrong.

If given the option to choose an economy that is the largest non-World Trade Organization (WTO) member, most people would not guess Iran. Most people would be wrong.

Iran, ostracized for years, is poised to join the WTO. To do so, it will use its considerable economic power to persuade WTO members that it deserves a seat at the table. Of course, the move to join the WTO follows (and is likely only possible because of) the landmark nuclear deal Iran reached with the United States and other nations earlier this year. The agreement ended years of increasingly harsh sanctions. 

Addressing the WTO’s 162 member nations, Iranian ministers said, “Now that years of intensive negotiations have finally cleared all the misunderstandings around Iran’s nuclear activities, we are taking the next step towards integrating more deeply into the global economy.”

Iran’s nuclear trade agreement exchanged greater transparency and curbing certain activities that would have likely been useful solely for producing a nuclear weapon for relaxation of economic and trade sanctions that had persisted for years, crippling the Middle Eastern nation’s economy. Following the agreement, a number of foreign business interests are expressing interest in doing business in and with Iran. 

Joining the WTO would further strengthen Iran’s position on the global stage, though the move would undoubtedly involve a long and difficult series of negotiations and compromises. Key to joining the WTO will be matters like opening up trade opportunities, providing greater protections to investors, and pursuing more stable economic and political relations with neighbors and trading partners. 

As the largest non-WTO economy in the world, membership in the WTO could benefit not only Iran, but many other nations of the world, as well. It would also help to underscore the WTO’s position as a truly universal organization for promoting free and prosperous trade among nations. 

Despite having some great advantages, like some of the world’s biggest oil and gas reserves, Iran has experienced stunted economic growth for decades thanks to its political policies that have invited global sanctions. Moreover, the recent drop in energy prices and high domestic interest rates has further hampered its efforts. Countries seeking to join the WTO must bring their own laws into line with WTO rules, but they also have to negotiate their way in with existing members.

Joining the WTO would mean changing laws that impose limits on Iran’s tariffs, as well as requiring greater transparency. However, Iran would gain the right to bring trade disputes against other members of the WTO. It would also join negotiations on new trade rules, where every member has an effective veto.