Bhutan returns to the WTO negotiating table after 18 years, signalling readiness for deeper global trade integration following LDC graduation, economic growth, and ambitious reforms including the Gelephu Mindfulness City project.
Bhutan has formally restarted negotiations to join the World Trade Organisation after an 18-year interruption, marking a pivotal step in the Himalayan kingdom’s long-running effort to integrate more fully into the global trading system. At the fifth meeting of the Working Party on the Accession of Bhutan, held in Geneva on 9 July 2026, WTO members welcomed the country’s return and its reaffirmed commitment to membership.
The session was the first since January 2008. Bhutan’s Minister for Industry, Commerce and Employment, Lyonpo Namgyal Dorji, led a high-level delegation that included Tashi Wangmo, Ministry Secretary and Chief Negotiator, along with senior officials from multiple ministries and representatives linked to the Gelephu Mindfulness City project. Working Party Chair Ambassador Alexander Kmentt of Austria opened the meeting by highlighting the potential positive role WTO participation could play in Bhutan’s ongoing transformation.
A Country Transformed Since 2008
Minister Dorji told members that Bhutan returns “as a country that has grown its economy, modernised its regulatory environment, strengthened its institutions, and developed the capacity to negotiate, implement, and benefit from WTO membership.” He pointed to clear progress over the intervening years: GDP nearly tripled from US$ 1.3 billion in 2008 to US$ 3.8 billion in 2025, infrastructure investment expanded, the economy began diversifying beyond traditional sectors, and poverty rates declined significantly.
The minister framed the timing as deliberate. “We return to this Working Party after 18 years because we believe the time is right,” he said, expressing the country’s “readiness to engage, negotiate and become a constructive, responsible and committed WTO member” and its “unwavering commitment to bring this accession process to a successful conclusion.” At the same time, he underscored structural realities that must shape any durable agreement: Bhutan’s landlocked geography, small domestic market, narrow economic base, and vulnerability to climate change. “A durable and credible accession agreement must be built upon an honest understanding of the economy it will govern,” he noted.
Building on LDC Graduation
Bhutan’s renewed push comes after its formal graduation from the United Nations least-developed country category on 13 December 2023 – the seventh country to achieve this milestone. Graduation followed years of progress on income and human assets criteria and a five-year preparatory period aligned with national development planning. While it ends certain preferential trade treatments and support measures, it also reflects stronger economic resilience and positions the country to seek membership on terms suited to its post-LDC status.
Deputy Director-General Xiangchen Zhang, speaking on behalf of WTO Director-General Ngozi Okonjo-Iweala, described the July meeting as “a significant milestone in Bhutan’s renewed commitment to WTO accession and to the multilateral trading system, its principles and values, building on Bhutan’s recent graduation from least-developed country (LDC) status.”
Director-General Okonjo-Iweala later congratulated the Bhutanese delegation publicly, praising the constructive Working Party session and noting that while good progress has been made, substantial work remains.
Substantive Preparations and Discussions
Bhutan arrived well prepared. It submitted 14 negotiating documents covering technical barriers to trade, sanitary and phytosanitary measures, import licensing procedures, and agricultural export subsidies. A revised Legislative Action Plan listing 174 pieces of legislation was circulated, along with updated market access offers on goods and services. The WTO Secretariat, working with Bhutan, produced a fully updated second revision of the Draft Working Party Report ahead of the meeting.
Members engaged in a full day of detailed discussions, examining regulatory developments since 2008 and seeking clarifications on investment rules, foreign exchange and payments, policies affecting trade in goods and services, and trade-related intellectual property rights. Bhutan reported bilateral contacts with several members interested in launching or restarting market access negotiations and delivered presentations on legislative reforms and the Gelephu Mindfulness City – a special administrative region designed as a sustainable economic hub on the Himalayan kingdom’s southern border with India.
The chair characterised the exchanges as “substantive and very constructive.” Next steps include circulation of a new set of questions and replies, further revision of the Draft Working Party Report, submission of additional updated supporting documents by Bhutan, and intensified bilateral market access talks. A date for the next Working Party meeting will be set once inputs are received.
National Roadmap Targets 2028
According to Bhutan’s Ministry of Industry, Commerce and Employment, the decision to resume formal negotiations was approved by the Lhengye Zhungtshog (Cabinet) in 2025 after extensive domestic preparations. The government’s approved WTO Accession Roadmap aims for membership by the end of 2028, contingent on successful conclusion of negotiations and fulfilment of remaining requirements. Bhutan first applied for accession in 1999; its Working Party was established that October, with four meetings held between 2003 and early 2008 before momentum faded amid domestic debate over the balance between trade liberalisation and the country’s Gross National Happiness philosophy.
Broader Economic Context
Bhutan’s economy remains heavily reliant on hydropower exports, tourism, and close trade ties with India, which accounts for the overwhelming share of its external commerce under a long-standing bilateral agreement. Recent growth has been solid, with projections in the range of 6 to 8 per cent in the mid-2020s supported by new hydropower capacity, tourism recovery, and capital spending under the 13th Five-Year Plan. The plan targets a GDP of around US$5 billion by 2029 and a high-income Gross National Happiness economy by 2034. Poverty has fallen sharply, though vulnerability persists for a portion of the population.
The Gelephu Mindfulness City project, announced by King Jigme Khesar Namgyel Wangchuck, forms a central pillar of this vision. Spanning roughly 2,500 square kilometres as a special administrative region with its own regulatory framework, it seeks to attract investment in green energy, wellness, education, finance, agri-tech, logistics, and tourism while embedding Bhutanese cultural and environmental values. Officials have linked the city’s development to broader efforts to diversify the economy, create high-value jobs, and strengthen regional connectivity.
WTO Accession is Complex
WTO accession is a complex, multi-year process involving multilateral examination of a country’s trade regime and bilateral market access negotiations with interested members. For a small, landlocked economy that has only recently left LDC status, the path requires careful sequencing of legislative reforms, institutional strengthening, and capacity building. Bhutan has signalled it is prepared to advance on all fronts while insisting that the final terms reflect its unique circumstances.
Members welcomed the resumption and encouraged continued legislative reforms and regular updates. With updated documentation already on the table, bilateral talks beginning to restart, and a clear national target of 2028, the July 2026 meeting has restarted a process long in abeyance.
Whether Bhutan can convert renewed political will and improved economic fundamentals into membership within the stated timeframe will depend on sustained engagement, constructive flexibility on all sides, and the ability to craft an accession package that supports rather than undermines its distinctive development model.
The return of Bhutan to the negotiating table after nearly two decades underscores the particular challenges faced by small, environmentally vulnerable economies seeking to join it on terms that preserve national priorities.
