The Bhutanese economy is characterized by vulnerability where the country remains highly interdependent on its neighbors for sustenance and economic support. Approximately 35 laws, acts, and regulations will need to be adopted to ensure compliance with international trade law, ones that may conflict with local socioeconomic and environmental interests. This report sheds light on the various drawbacks the Kingdom of Bhutan will face from joining the World Trade Organization (WTO).

The author sheds light on the country’s seminal sectors and how the WTO bundle of trade agreements will adversely affect them. The agriculture sector is mentioned first, and the unfeasibility of exposing local markets to foreign competition; followed by the industrial sector, and the associated risks of competing with better-established international products. Tariffs also pose a great danger for Least Developed Countries (LDCs) like Bhutan which cannot maneuver and keep high tariffs. As the economy grows, however, and graduates into developing country status, tariffs will be lowered and the market will be flooded with better, cheaper goods, with dire consequences for domestic goods and production.

The service sector shares a similar fate and has to be liberalized. Again, the author argues that that may not be the right course to take as services are designed to be unbound; where market forces and government are better suited to regulate the industry according to its needs. A number of observations are offered as conclusions, some of which are:

• most new WTO members are motivated by export potential and the desire to tap into fresh markets; Bhutan has not yet established economies of scale that can allow it to do so
• developing infrastructure and a robust industrial base should be at the forefront of the Kingdom’s priorities
• joining the WTO will not translate into real benefit for the country, but rather serve as a financial burden