Content Group 2 of Bhutan

• Bhutan is not yet a member of the World Trade Organization (WTO). Its Working Party was established in October 1999, when the country started its WTO accession negotiations. The Working Party met for the fourth time in January 2008 (most recent meeting), but progress has stalled due to the resistance of the previous government.


• A WTO Reference Centre was inaugurated by Lyonpo Lekey Dorji, Bhutan's Minister of Economic Affairs, at the Department of Trade in Thimphu, Bhutan, on September 14, 2016. The Reference Centre will serve as a centre of information on WTO issues and international trade for government officials, the private sector, academic institutions and the general public.


• Bhutan has an average tariff rate of 10%, the fourth highest in the South Asia region (out of eight countries), as well as numerous non-tariff barriers.


• Various logistical and technical barriers exist to trade development and diversification in Bhutan. The main hurdle is the underdevelopment of Bhutan's supply chain. That said, market access and demand for Bhutan's goods and services are rather favourable due to the country's completely open access to the Indian market as part of one of the most liberal trade agreements in the world (meaning that Bhutan's trade with India is not restricted by tariffs or rules of origin). It also has duty-free and quota-free access to European and United States markets as a Least Developed Country through the European Union's General System of Preferences and Everything But Arms programmes (although, so far, Bhutan has not been able to make full use of this facility). Nevertheless, the World Bank 2018 Ease of Doing Business Report ranks Bhutan 26th out of 190 states in the Trading Across Borders index.


• Bhutan accepts sanitary and phytosanitary (SPS) measures of other countries using internationally recognised and accepted SPS approaches in practice. Since neighbouring countries tend to have similar pest and disease profiles, SPS barriers to trade tend to be relatively low. However, SPS barriers to trade with industrialised countries may be very significant.

Sources: WTO – Trade Policy Review, Fitch Solutions