Timor-Leste is en route to become the newest member of the World Trade Organization (WTO). The country submitted its candidacy in 2015, but the official negotiations only started in October 2020. Joaquim Amaral, the country’s coordinating minister of economic affairs and official in charge of leading the negotiations, shares with fDi the reasons why a WTO membership will be transformative for the country. 

Q: What is the strategic value for Timor-Leste of a WTO membership in terms of trade and investment opportunities? 

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A: Participation in the multilateral trading system is an essential element of development. Trade is a fundamental driving component of the process. 

As a full member, the country will be able to diversify its economy, become part of the value chain of global economies and bring about more cross-border business opportunities. We will increase productivity, improve the business environment, diversify exports, and maximise the involvement of our small and medium-sized enterprises in global value chains. The WTO membership will make us better suited to attract foreign investors and our companies will have a better opportunity to grow and expand beyond our borders. 

Q: When do you expect the WTO membership to come through? 

A: First, please let me highlight that the accession of Timor-Leste to the WTO is a strategic national priority supported by all leaders, political parties, and civil society. According to our accession roadmap, it is our objective to conclude all accession negotiations by the end of this year, in order to become a WTO Member in 2023. 

Q: Are you upgrading the country’s infrastructure to accommodate more trade? 

A: Timor-Leste’s new Tibar Port is on track to open before the end of this year — it’s a deep-water port which will handle up to 350,000 containers annually, possibly going up to more than 750,000 eventually. The port was built through Timor-Leste’s first financial Public-Private-Partnership.

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The development of Tibar Bay aims to turn the area around into an economic hub, attracting new industries and businesses to set foot in the country and generating employment opportunities. Overall, total investment is expected to reach $490m once all works are done.

It’s the largest infrastructure project ever to be carried out in Timor-Leste. The government also plans on creating industrial and free trade zones. Feasibility plans are already finalised and the government is currently preparing the required legislation to put them in place. 

Q: What other reforms are you pushing on the road to a WTO membership? 

A: For developing countries in general, and least developed countries in particular, a WTO accession is transformational in terms of policy reform (policies and processes) and institution building. The path to accession brings greater stability, predictability, consistency, accountability and all the accompanying benefits of comprehensive reform. 

The Timorese government is fully committed to the process and has been introducing reforms in many sectors in the past few years to cope with the requisites of the accession process. We have been swiftly harmonizing our legislation to create a solid legal framework in line with the most up-to-date international legal standards. 

Q: Will a WTO membership open the doors to membership of the Association of South East Asian Nations (Asean), too?

A: Last week, president José Ramos-Horta mentioned at the UN general assembly that senior expert missions from the Asean, covering its three pillars — political-security, social-cultural and economic — have conducted thorough reviews of Timor-Leste Asean accession preparedness. 

Timor-Leste is waiting for these comprehensive reports, which will be shared with us soon. We expect that they will confirm our readiness to join the Asean.

We consider both processes to be intertwined, especially considering that many of the requisites for acceding the WTO are similar with ASEAN Economic Pillar. Asean and WTO accessions are driven by Timor-Leste's own economic interests, such as domestic economic reform process to ensure healthy enabling environment for foreign direct investments and national investment, and diversification of our economy. 

Q: What are the main sectors you are willing to promote among foreign partners and investors? 

A: Our economy is now strongly dependent on oil and gas, and we need to diversify to be able to explore our potential in many other sectors. Of course, we will continue boosting our oil and gas industries together with the mining sector but, at the same time, boosting the development of other economic areas is essential for us. We decided to continue promoting agriculture — we have one of the best coffees in the world.

Based on our potential in fisheries and tourism, we have also decided to bet strongly on the blue economy and its transformational possibilities.  

We aim to create a sound and high-quality processing industry able to compete in the international markets. Research and development will follow eventually. 

This article first appeared in the October/November 2022 print edition of fDi Intelligence. View a digital edition of the magazine here.