1.1. Of the 48
countries designated by the United Nations (UN) as Least Developed Countries (LDCs),
34 are World Trade Organization (WTO) Members and a further eight are in the
process of acceding to the WTO.[2] The
LDC WTO Members account for more than one fifth of the WTO Membership and
therefore represent an important constituency in the WTO.
1.2. Considerable
progress has been made in integrating LDCs into the multilateral trading system
(MTS) over the last 20 years. The establishment of the WTO has supported LDCs
to become more active players in the system, resulting in provisions aimed at
increasing the trade opportunities for these countries. As a result, the
participation of LDCs in global trade has seen gradual improvement over the
last 20 years. LDCs increased their share in world trade of goods and services
from 0.59% in 1995, to 0.80% in 2005, to 1.23% in 2013.
1.3. The increased
trade opportunities have also been complemented by enhanced flexibilities for
LDCs in implementing WTO rules and disciplines as well as in undertaking
commitments. Members have shown willingness to respond to concerns and needs of
LDCs to beneficially integrate them into the MTS. The special situation of LDCs
and its commensurate recognition in the negotiations has thus been one of the
defining features of the MTS; and special provisions are continually being
introduced to assist LDCs in their development efforts.
1.4. This
Secretariat Note has been written as part of WTO's 20th Anniversary Event
dedicated to LDCs titled "Twenty Years of Supporting the Integration of
Least Developed Countries into the Multilateral Trading System" scheduled
for 12 October 2015. This study traces the 20-year relationship between the WTO
and LDCs, in particular the key developments and decisions taken in favour of
LDCs, the institutional support provided and the trade capacity-building
initiatives put in place.
1.5. This Note
focuses on the measures taken in favour of LDCs following the establishment of
the WTO, though the evolution of the MTS has seen special consideration for
LDCs, even prior to the establishment of the WTO in 1995. The importance of
development in the MTS advanced in 1964 when a dedicated chapter on trade and
development was added to the GATT as Part IV, which spelled out the principle
of non-reciprocity in the MTS. The principle of non‑reciprocity, and Part IV
more generally, created a stronger basis for developing countries to seek flexibilities
in trade negotiations and special action with respect to their trade interests.
1.6. One of the key
achievements of the GATT period was the adoption of the "Enabling
Clause" during the Tokyo Round in 1979. This decision, titled "Differential
and More Favourable Treatment Reciprocity and Fuller Participation of
Developing Countries", made a first mention of LDCs in a legal instrument
under the GATT period. The Enabling Clause formed an important basis of
subsequent special and differential treatment (S&D) for developing
countries in the MTS. It, inter alia,
facilitated specific preferences for LDCs among developing countries.
1.7. Following the Introduction,
Section 2 illustrates how LDC issues were included in the Uruguay Round and the
WTO Agreements. Section 3 assesses the period between the establishment of the
WTO and the start of the Doha Round. Section 4 covers a number of LDC issues in
the context of the Doha Round up to the Bali Ministerial Conference in 2013.
Section 5 discusses the LDC elements of the Bali
package. Section 6 explains the institutional support provided and capacity‑building
initiatives taken in favour of LDCs. Section 7 summarizes the main developments
over the past 20 years and points to remaining challenges for LDCs to better
integrate into the MTS.
2 The
Uruguay Round and the WTO
Agreements
2.1. The Uruguay
Round (1986-1994) expanded the scope of multilateral trade rules and at the
same time strengthened the development component of the MTS. The preamble to
the Marrakesh Agreement Establishing the WTO further recognized the need for
positive efforts to ensure that developing countries and especially LDCs secured
a share in the growth of international trade that is commensurate with the
needs of their economic development. By the end of 1994, 30 LDCs had joined the
GATT and after signing the new WTO agreements, became Members of the WTO.[3]
2.2. The outcome of
the Uruguay Round of negotiations has seen greater flexibility for LDCs in the
application of rules and disciplines of the MTS. While the provisions of the
WTO Agreements for differential and more favourable treatment of developing
country Members are all applicable to LDCs, many S&D provisions contain
additional benefits for LDCs. In fact, one of the central features of the WTO
Agreements has been the specific treatment of LDCs in view of their special
needs.
2.3. The WTO
Agreements contain some 129 S&D provisions, several of which make explicit
reference to LDCs or provide LDCs with more favourable treatment.[4] Additional
S&D provisions for LDCs are contained in decisions and declarations that
have been adopted during the Uruguay Round as well as since the establishment
of the WTO.
2.4. The LDCs have
received favourable treatment over and above other developing countries in
almost all broad types of S&D provisions classified in WTO Agreements, namely,
provisions that relate to: (i) increasing the trade opportunities of developing
Members; (ii) safeguarding the interests of developing Members; (iii)
flexibilities regarding commitments, actions and policy instruments; (iv) transitional
time-periods; and (v) technical assistance.
2.5. One example of provisions
aimed at increasing trade opportunities of LDCs can be found in the GATS. Explicit
reference to LDCs is made in Article IV.3 in the GATS, which asks
developed Members to give special priority to LDCs, inter alia, in the liberalization of market access in sectors and
modes of supply of export interest to them, through negotiated specific
commitments. Article IV provided an useful basis for the subsequent adoption
of a services waiver in 2011, allowing WTO Members to grant preferential
treatment to services and service suppliers from LDC Members.[5]
2.6. Some provisions
that require Members to safeguard the interests of developing Members
specifically apply to LDCs. For example, Article 3.5(j) of the Agreement on
Import Licensing asks Members to give special consideration to importers of
products from LDCs when allocating non‑automatic import licences. According to
Article 24.1 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes (DSU), particular consideration shall be given to the
special situation of LDCs in all stages of a dispute involving an LDC and
Members shall exercise due restraint in raising matters involving an LDC.
2.7. A number of
S&D provisions grant LDCs flexibility with respect to commitments, actions
and the use of policy instruments. For example, Article 15.2 of the Agreement
on Agriculture exempts LDCs from undertaking reduction commitments in
agricultural market access, domestic support or export subsidies. In fact,
during the Uruguay Round while the developing countries were subject to
undertake tariff reduction commitments, LDCs were not required to do so. And
many LDCs have bound their agricultural tariff lines at ceiling levels. Another
example of concrete flexibility can be found in Article 27.2 of the Subsidies
and Countervailing Measures (SCM) Agreement which, in conjunction with paragraph (a) of its Annex VII, exempts LDCs
from the prohibition of export subsidies. More importantly, this exemption is generally
not time bound.
2.8. LDCs have
benefitted from a number of transitional time-periods to implement WTO
Agreements, some of which were LDC-specific or longer compared to the ones
granted to other developing Members. For instance, Article 27.3 of the SCM Agreement
allowed LDCs to continue using local content subsidies for a period of eight
years as compared to five years in the case of other developing Members. While transition
periods in a number of WTO Agreements have expired, Members have demonstrated
flexibility and granted several extensions in some areas to implement WTO rules
and disciplines. For instance, Article 66.1 of the TRIPS Agreement
provided LDCs with an initial 11-year transition period for the implementation
of the TRIPS Agreement, with possibility for future extensions. Section 4.8
further explains that this transition period has been extended twice by
Members.
2.9. The WTO
Agreements also contain a number of S&D provisions that relate to technical
assistance. For instance, Article 11 of the Technical Barriers to Trade (TBT)
Agreement calls upon Members to give priority to the needs of LDCs when providing
advice and technical assistance with respect to issues covered by the
Agreement.
2.10. The Decision
on Measures in Favour of LDCs, adopted in 1993 as part of the Uruguay Round
Package, has been instrumental in the integration of LDCs into the MTS and has
served as a reference for subsequent instruments and decisions with respect to
market access, flexibilities in the implementation of WTO rules and technical
assistance for LDCs.
2.11. Amongst
others, the decision reiterated that LDCs would only be required to undertake
commitments "consistent with their individual development, financial and
trade needs, or their administrative and institutional capabilities". Furthermore,
LDCs were given the additional time of one year to submit their schedules as
required by Article XI of the Marrakesh Agreement Establishing the WTO. The
Decision also recognized the specific needs of LDCs in the area of market
access, and that "continued preferential access remains an essential means
for improving the trading opportunities". The decision further called for
substantially increased technical assistance for LDCs. Finally, Members agreed
to "keep under review the specific needs of the least-developed countries
and to continue to seek the adoption of positive measures which facilitate the
expansion of trading opportunities in favour of these countries".
3.1. Following the
establishment of the WTO in 1995, the implementation of the WTO Agreements
became the focus of the WTO's work and the integration of LDCs into the MTS
remained a priority for Members. At the First WTO Ministerial Conference in Singapore in 1996,
Ministers agreed on a Plan of Action for LDCs as well as to organize a high-level
meeting with UNCTAD, the International Trade Centre (ITC) and other agencies in
1997 to foster an integrated approach to assist LDCs enhance their trading
opportunities.
3.2. The
Comprehensive and Integrated WTO Plan of Action for LDCs was adopted at the Singapore
Ministerial Conference on 13 December 1996.[6] It
included measures to implement the "Decision on Measures in Favour of LDCs"
and measures in the areas of market access and capacity building.
3.3. The Plan of
Action suggested measures that could help to effectively implement the "Decision
on Measures in Favour of LDCs", including: (i) strengthened efforts of
Members to improve the capacity of LDCs to meet their notification obligations;
(ii) a biennial review in the Committee on Trade and Development (CTD) on the
implementation of measures in favour of LDCs[7];
and (iii) WTO Bodies that can identify means to assist LDCs in
implementing their WTO commitments.
3.4. With respect to
market access, the Plan of Action suggested that developed and developing
Members, on an autonomous basis, would explore possibilities of granting
preferential duty-free access for LDC exports. This option of granting duty-free
access on an autonomous basis was also explicitly referred to in the Singapore
Ministerial Declaration. Hence, the Plan of Action constituted an important
step towards advancing duty-free quota-free (DFQF) market access for LDC
products.
3.5. With respect to
capacity building, the Plan of Action envisaged a closer cooperation and
division of labour between the WTO and other multilateral agencies, which was
to be implemented through a high-level meeting of LDCs in 1997.
3.6. The High-Level
Meeting on Integrated Initiatives for LDCs' Trade Development was organized
jointly by the WTO and other international organizations on 27-28 October in
1997. The meeting initiated the establishment of the Integrated Framework (IF)
through six international organizations: WTO, UNCTAD, ITC, IMF, UNDP and World
Bank.[8]
The IF was designed as a collaborative technical-assistance programme to
address the specific needs of LDCs to help them enhance their trading opportunities.
In addition to endorsing the establishment of the IF, Members also reported on
preferential market access initiatives that they provided autonomously to LDCs.[9]
3.7. At the Second
WTO Ministerial Conference in Geneva in May 1998, Members renewed their
commitment to ensure that the benefits of the MTS were extended as widely as
possible, taking into particular consideration LDCs.[10] Ministers
furthermore committed to improve market access for LDCs "on as broad and
liberal a basis as possible" and called on Members to implement market
access commitments undertaken at the high-level meeting in 1997.
3.8. In 1999, an
important step was made in the MTS as Members agreed to a waiver allowing
developing Members to provide preferential tariff treatment to products of
LDCs. This waiver initially granted for a period of ten years has been extended
until 30 June 2019.[11]
4 From
Doha to Bali
(2001-2013)
4.1. The Doha Round,
commonly known as Doha Development Agenda (DDA), was launched at the Fourth WTO
Ministerial Conference in Doha
in 2001. Members recognized the "particular vulnerability" of LDCs and
committed to address their marginalization in international trade and to
improve their effective participation in the MTS.[12] The
Doha Declaration further set out a work programme which allowed for special
consideration of LDCs.
4.2. Pending the
full conclusion of the Doha Round, significant progress has been achieved on a
number of LDC issues, which is enumerated in more detail below. Since there has
not been commensurate progress in all areas of negotiations, discussion in this
section includes progress in selected areas while recognizing the fact that
issues of interest to LDCs are being addressed in all areas of negotiations.
4.3. WTO Members reaffirmed
in paragraph 44 of the Doha Declaration that all S&D provisions are an integral
part of the WTO Agreements and agreed that these provisions should be
"reviewed with a view to strengthening them and making them more
effective, precise and operational". To this end, Ministers endorsed the
creation of a Work Programme on S&D.
4.4. The Work
Programme on S&D, a key area of the DDA negotiations, has seen concrete
deliverables for LDCs. While general progress in the S&D negotiations has
been limited, Members advanced on LDC-specific S&D provisions.
4.5. At the Hong
Kong Ministerial Conference in 2005, Ministers agreed to five LDC Agreement‑specific
proposals, contained in Annex F of the Ministerial Declaration. The five
adopted proposals fall on mainly three WTO legal instruments: (i) the
Understanding in Respect of Waivers of Obligations under the GATT 1994; (ii)
the Agreement on Trade Related Investment Measures; and (iii) the Decision on
Measures in Favour of LDCs. The five proposals include an agreement to provide DFQF
market access to products originating from LDCs which is described in Section
4.2.1.
4.6. It may be noted
that during the course of the Doha Round, the proponents, including the LDCs, had
tabled 88 Agreement-specific proposals, which have been the focus of work in
the Special Session of the Committee
on Trade and Development (CTD SS). Almost one quarter of these proposals
related to S&D provisions which specifically related to LDC interests in
the WTO.
4.7. Proposals by
LDCs and other developing countries covered the following broad approaches:
that best endeavour provisions be made mandatory; that there is adequate
flexibility in the implementation of rules that enables them to pursue broader
development objectives; that the provisions are interpreted and clarified in a
manner that facilitates development processes and strategies; that certain
transition arrangements in WTO Agreements be adequately extended so as to
promote adjustment and development processes; that certain procedures deemed
cumbersome such as on notifications and other processes, be simplified; and
that there is predictability in the obligation to provide technical assistance.
4.8. As an integral part of S&D negotiations,
developing countries also sought the development of an instrument to monitor
the implementation of S&D provisions. In 2002, the General Council,
following a recommendation by the CTD, agreed to establish a Monitoring
Mechanism (MM) for S&D and instructed the CTD SS to elaborate the
functions, structure and terms of reference of such a MM.[13] The negotiations on the MM were concluded
in 2013 when Ministers at the Bali Ministerial Conference adopted a decision to
establish the MM (section 5.5).
4.2 Market Access
4.9. Right from the First
WTO Ministerial Conference in Singapore
in 1996 and the High-Level Meeting on Integrated Initiatives for LDCs' Trade
Development in 1997, Members have taken steps to provide preferential market
access for LDC products. A number of developed countries announced improvements
in their preferential market access schemes prior to the Doha Ministerial
Conference. For example, the European Union (EU) adopted its "Everything
But Arms" (EBA) initiative in 2001 to grant DFQF market access to LDC
products.
4.10. At the Doha
Ministerial Conference in 2001, Ministers committed to the objective of
providing DFQF market access to LDC products, as well as to consider additional
measures for progressive improvements in market access for LDCs. This provided
further impetus towards enhanced DFQF access for LDC products.
4.11. Concrete
progress was made prior to the Hong Kong Ministerial Conference in 2005, where developed
Members, including Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland,
and developing Members, including Republic of Korea, Chinese Taipei and Turkey, either adopted DFQF schemes or improved
upon their existing schemes.
4.12. The
so called DFQF Decision contained in Annex F of the Hong Kong Ministerial
Declaration, inter alia, stated that
Members would provide DFQF market access for at least 97% of products
originating from LDCs by 2008 or no later than the start of the implementation
period. Developing countries were accorded flexibility with respect to coverage
and phasing in of their DFQF schemes. The
Decision also set out the notification procedure for the implementation of the
schemes adopted in this regard, as well as provisions on preferential rules of
origin and technical assistance. It may be noted that the timeline provided in
the Hong Kong Decision gave Members the option to give effect to it at the
start of the implementation period of the Doha Round.
4.13. Since the Hong
Kong Decision, a number of developed Members have made efforts in providing enhanced
DFQF access to LDC products. In 2007, Japan
and Switzerland
amended their respective GSP schemes resulting in the expansion of the DFQF
coverage of LDC products. The full liberalization of the transition provisions
for imports of rice and sugar, under the EU's EBA scheme was also completed in
September 2009. The Russian
Federation notified its GSP sub-scheme for
LDCs in 2013.
4.14. The United States,
through the US African Growth and Opportunity Act (AGOA), provides preferential
market access to eligible countries in Sub-Saharan Africa, including DFQF
market access to LDCs. Similarly, the United
States provides DFQF market access to Haiti through
the Caribbean Basin Trade Partnership Act (CBTPA). The United States
also maintains a GSP programme, which has recently extended its DFQF treatment
to LDCs on a number of cotton tariff lines.
4.15. It may be
noted that a number of developing Members have introduced DFQF schemes for LDCs
over the last decade. For example, India
and China
adopted DFQF schemes for LDCs in 2008 and 2010, respectively, and gradually
expanded their coverage. Chile
and Thailand
introduced their DFQF schemes for LDCs in 2014 and 2015, respectively. Several
of these developing countries offer significant degree of DFQF market access
for LDC products.
4.16. Since the Hong
Kong Decision, the CTD has been conducting annual reviews of the steps taken by
Members to provide DFQF market access to LDCs. Moreover, it is now a standing
item on the CTD's agenda. In addition, market access issues are also examined
by the Sub-Committee on LDCs, including on the basis of annual studies by the
Secretariat.[14]
4.17. Members remain
committed to further improving market access for LDCs. At the Bali Ministerial
Conference in 2013, Members agreed to take further steps to provide enhanced
DFQF market access to LDC products.
4.2.2 Preferential Rules of
Origin
4.18. The DDA
negotiations have also resulted in some tangible results for LDCs in the area of
rules of origin associated with preferences – an issue that these countries
have been pursuing particularly since the launch of these negotiations in 2001.
LDCs have repeatedly called for simple and transparent rules of origin, as they
consider that stringent rules of origin requirements negate the benefits of
preferential market access.
4.19. The Doha
Declaration invited Members to consider additional measures for progressive
improvements in market access for LDCs. Progress was made at the 2005 Hong Kong
Ministerial Conference, where Ministers addressed the demands of LDCs for
liberal rules of origin by agreeing to "ensure that preferential rules of
origin applicable to imports from LDCs are transparent and simple, and
contribute to facilitating market access" (Annex F of the Hong Kong
Ministerial Declaration).
4.20. In order to
initiate work on rules of origin, the LDC Group submitted a communication in
2006, which was revised on several occasions, with detailed suggestions for
preferential rules of origin associated with preference schemes.[15] One
of the key demands of LDCs has been to secure a lower threshold of value
addition, taking into account their level of development.
4.21. Taking into
account the proposals made by LDCs, Ministers adopted multilateral guidelines for
preferential rules of origin for LDCs at the Bali Ministerial Conference in
December 2013.[16]
This Bali Decision and the most recent developments in the Committee on Rules
of Origin are described in Section 5.
4.22. The
agriculture sector plays an important role in the economy of most LDCs,
accounting for 24% of GDP and more than a third of employment in LDCs.[17] A
key negotiating priority has therefore been to support reform of agriculture
rules including market access, domestic support and export competition.
4.23. Accomplishing
the main objectives of the agriculture negotiations, i.e. substantial
improvements in market access, phasing out of all forms of export subsidies and
substantial reductions in trade-distorting domestic support would constitute a
positive outcome for LDCs, which remain vulnerable to the effects of
trade-distorting agricultural policies followed by other Members.
4.24. WTO Members
have recognized the special needs of LDCs by providing them with specific
flexibilities. Some flexibility for the LDCs was agreed through the Framework
for Establishing Modalities in Agriculture contained in Annex A of the
so-called July package in 2004.[18] For
example, paragraph 45 of the framework stipulated that LDCs are not required to
undertake reduction commitments. The framework modalities also recognized the
importance of long-standing preferences and the need to address the issue of
preference erosion. These and other flexibilities were reflected in the 2008 Draft
Modalities for Agriculture.[19]
4.25. The LDCs have
a special interest in the negotiations with respect to food aid and rules on
export credits. The agriculture negotiations have sought to ensure that
disciplines developed in the area of food aid do not limit the role of bona
fide international food aid. Provisions have been contemplated aimed to ensure
that food aid does not have the effect of disrupting the domestic markets of
recipient countries, or of displacing commercial exports of other countries, or
of being used as a disguised means to circumvent export subsidy commitments. The
disciplines would also allow LDC governments to play their due role in the food
aid operations and would allow monetization of in-kind food aid under certain
conditions on the territory of LDC Members. Members have also considered
differential treatment for LDCs and net food-importing developing countries (NFIDCs)
with respect to possible provisions on export credits.
4.26. Cotton is another
area of critical importance to a number of LDCs, constituting significant
shares in GDP and export earnings particularly in Western and Central African
countries. Cotton has become a priority in the work of the WTO following a proposal
for a sectoral initiative on cotton by the so-called "cotton four"
countries Benin, Burkina Faso, Chad and Mali as part of the agriculture
negotiations in 2003.[20]
4.27. Subsequently,
in the General Council Decision of 1 August 2004, often referred to as
July package, Members agreed to address the issue of cotton "ambitiously,
expeditiously and specifically, within the agriculture negotiations".[21]
The General Council further decided to create a Sub-Committee on Cotton in 2004
to deal with all trade-distorting policies affecting the sector.
4.28. In the 2005
Hong Kong Ministerial Declaration, Ministers expressed their commitment to
achieve a decision on cotton ambitiously, expeditiously and specifically
covering the three pillars of market access, export subsidies and domestic
support. For instance, Members agreed to reduce trade-distorting domestic
subsidies for cotton production more ambitiously than under whatever general
formula for domestic support reduction would be agreed on during the
negotiations.
4.29. In the 2004
July package, Members also stressed the complementarity of the trade- and
development-related aspects of cotton. As a result, in 2004, the
Director-General initiated a Consultative Framework Mechanism on Cotton
(DGCFMC) under which the DG consults with the development community on the
mobilization of resources towards the development of economies in which cotton
plays a vital role. In November 2005, the Evolving Table on Cotton (ET) was established
to track and tally both the specific assistance and infrastructure-related
assistance to the cotton sector. Over the years, the ET has become the
reference monitoring tool in identifying cotton projects and programmes,
overseeing their implementation status and giving precise numbers on aid for
cotton.
4.30. So far, 23
DGCFMC Rounds have been held, including a high-level meeting in March 2007. The
continued engagement of WTO Members and participants in the DGCFMC had, over
the years, consolidated a strong partnership between providers of cotton
development assistance and the cotton proponents. The constructive dialogue and
information exchange on issues related to cotton in the DGCFMC has helped to
maintain the cotton issue high on the WTO agenda and has contributed to the
overall efforts to consolidate the development dimension of the MTS.
4.31. This dual
track approach of addressing simultaneously the trade and development aspects
of cotton has been a unique initiative in the WTO's response to the specific
concerns of LDCs. Section 5 describes how the decision on cotton at the Bali
Ministerial Conference in 2013 has helped keep the development and trade
aspects of cotton a priority in the work of the WTO.
4.32. Like in the
area of agriculture, the framework modalities for Non-Agricultural Market
Access (NAMA) adopted by Members in 2004 stipulate that LDCs are not required
to apply the tariff reduction formula nor participate in the sectorial
approach. They are only expected to substantially increase their level of
binding commitments, which is voluntary in nature and where LDCs are the judge
of the extent and level of bindings of their tariff lines. The framework
modalities also take into account the market access interests of LDCs, calling
upon developed countries and developing countries, which so decide, to grant on
an autonomous basis DFQF market access for non‑agricultural products from LDCs.
Subsequently, the provisions relating to DFQF market access had been included
in the draft NAMA modalities text of 2008.[22]
4.33. A majority of
the LDCs are preference dependent. As a result, the challenges LDCs may face
from erosion of preference margins resulting from most-favoured nation (MFN)
tariff reductions had been an important issue in the NAMA discussions; and
solutions had been explored, including through longer transition periods to
delay the implementation of MFN tariff cuts on certain products vulnerable to
preference erosion in the markets of the EU and the US, as well as through
mechanisms such as the Enhanced Integrated Framework (EIF) and the Aid-for-Trade
Initiative.[23]
However, it may be noted that, there has been little discussion on these issues
in recent years in view of lack of progress in the DDA negotiations, as well as
lack of convergence on the basis for further negotiations.
4.34. The reduction
or elimination of non-tariff barriers (NTBs) has also been an integral part of
the NAMA negotiations. The LDCs have shown active interest in the NTB
discussions, and have underlined the need to address NTBs in various fora in
the WTO. They are part of the proponents of the horizontal proposal on
procedures for facilitating solutions to NTBs.[24]
The proposal for such a horizontal procedure remains under consideration in the
NAMA negotiations.
4.35. It can be said
that the NAMA negotiations have sought to take into account the trade interests
of LDCs. Lack of progress in the NAMA negotiations did not come in the way of
LDCs benefiting from improved market access opportunities for their industrial
products as both developed and developing Members have adopted DFQF schemes for
LDCs. In recent years, Members have been considering different approaches to
revive the NAMA negotiations, especially on matters related to tariffs.
4.36. The LDCs have
also received special attention in the area of services negotiations. In 2003,
the Special Session of the Council for Trade in Services adopted modalities for
the special treatment of LDCs in the services negotiations.[25]
These modalities served both defensive and offensive interests of LDCs in
services negotiations. On the one hand, they provided LDCs with maximum
flexibility in undertaking commitments. On the other, the modalities asked
Members to give priority to providing effective market access to sectors and
modes of supply of export interest to LDCs. They furthermore asked Members to
develop appropriate mechanisms with a view to achieving the full implementation
of Article IV:3 of the GATS and facilitating effective access of LDCs' services
and service suppliers to foreign markets.
4.37. As
a result of these discussions, at the Hong Kong Ministerial Conference, WTO
Members agreed to the full and effective implementation of these modalities,
including by developing appropriate mechanisms for according special priority
to sectors and modes of supply of export interest to LDCs. Ministers further recognized
the particular economic situation and difficulties of LDCs and acknowledged
that they would not be expected to undertake new commitments.
4.38. Following
requests from LDCs and discussion amongst Members, Ministers adopted the
services waiver decision at the Ministerial Conference in 2011, which allows Members
to provide preferential treatment to services and service suppliers of LDCs.[26] The objective of
the services waiver is to promote services trade in the sectors and modes of
supply that are of particular export interest to LDCs. The preferential
treatment can cover market access measures described in Article XVI of the
GATS or other measures if approved by the Council for Trade in Services. The
services waiver, which is valid for 15 years (2011-2025), constituted a
significant step towards facilitating the increased participation of LDCs in
services trade.
4.39. In light of
the fact that, two years after its adoption, the waiver had not been utilized
by any Member, Ministers adopted a decision to operationalize the waiver at the
Bali Ministerial Conference in 2013. Section 5 describes the content of this
decision and the progress made in this regard.
4.6 Trade Facilitation
Negotiations
4.40. As part of the
General Council's "July package", WTO Members agreed to commence
negotiations on Trade Facilitation with to clarify and improve relevant aspects
of GATT Articles V (freedom of transit), VIII (fees and formalities connected
with importation and exportation) and X (publication and administration of
trade regulations), as well as to develop provisions on customs cooperation.
The negotiation modalities in Annex D contained important flexibilities for
developing countries and LDCs. For the first time, it was recognized that the
extent and timing of entering into commitments should be related to their
implementation capacities. LDCs received even more extensive S&D. It was
agreed that they would "only be required to undertake commitments to the
extent consistent with their individual development, financial and trade needs
or their administrative and institutional capabilities".[27]
4.41. The modalities
also encouraged Members to assess their trade facilitation needs and
priorities. The importance of such assessments was reiterated in the Hong Kong
Ministerial Declaration. In response, the WTO Secretariat in cooperation with
other organizations (IMF, OECD, UNCTAD, WCO and the World Bank) launched a
programme to provide technical assistance to WTO Members and Observers, upon
request, to conduct a national self-assessment of their individual trade
facilitation needs and priorities. A Self-Assessment Guide was developed to
support this process. Since 2007, 64 trade facilitation needs assessments have
been conducted in 37 LDCs.
4.42. In addition to
the regular technical assistance and capacity-building activities on trade
facilitation conducted by the WTO Secretariat at national and regional level,
support has been provided in the form of funding capital-based experts to
attend meetings of the Negotiating Group on Trade Facilitation in Geneva.
4.43. While the
LDCs, as a group, have not tabled any proposal specific to the three GATT Articles
under the trade facilitation negotiations, several LDCs have co-sponsored
proposals teaming up with developed and developing countries. Examples include:
(i) a proposal by Rwanda, together with Paraguay and Switzerland, on improving
and clarifying the provisions of GATT Article V with a view to expediting the
movement of goods in transit[28]; (ii)
a proposal by Uganda, with the United States, on the prohibition of
requirement of consular transactions, including consularization related fees
and charges in connection with the importation of goods[29];
and (iii) a proposal by the Solomon Islands, with Barbados, Cuba, Fiji and
Papua New Guinea, on regional approaches to trade facilitation, including on
the establishment of Enquiry Points.[30]
4.44. At the group
level, LDC engagement in the trade facilitation negotiations has largely
focused on S&D treatment, including on technical assistance and capacity
building. In July 2007, the LDC Group, jointly with the African Group, ACP
Group and the Core Group of Developing Countries, submitted a proposal on
technical assistance and capacity-building support linked to the implementation
of trade facilitation obligations.[31]
Of special concern to the LDCs have been the potential cost implications and
their ability to effectively implement the disciplines that may be agreed on in
the negotiations.
4.45. Negotiations
reached a successful outcome at the Bali Ministerial Conference in 2013, when
Members agreed to the Trade Facilitation Agreement. Section 5 describes in more
detail the S&D provisions of this Agreement and the creation of the Trade Facilitation
Agreement Facility aimed at supporting developing countries in the
implementation of the Agreement.
4.7 Trade-Related Aspects of
Intellectual Property Rights (TRIPS)
4.46. In the context
of implementation of WTO Agreements, LDCs have received special flexibility and
Members have continued to be responsive to the needs of LDCs. As noted in Section
2.2 on S&D in the WTO Agreements, Article 66.1 of the TRIPS Agreement
originally provided LDCs with a eleven-year transition period, allowing them to
delay the implementation of the provisions of the TRIPS Agreement other than
those containing the core non-discrimination principles. Following requests by
the LDC Group[32],
the TRIPS Council has extended this general transition period twice, in 2005
and 2013, with the latest extension running until 1 July 2021.[33]
4.47. The November
2005 Decision also called on LDCs to provide information on their individual
priority needs for technical and financial cooperation in order to assist them
in taking the necessary steps to implement the TRIPS Agreement. Pursuant to
this provision, Bangladesh, Madagascar, Mali, Rwanda, Senegal, Sierra Leone,
Tanzania, Togo and Uganda submitted their needs assessments to the TRIPS
Council between 2007 and 2013.[34]
These reports were discussed at the TRIPS Council. At the request of the LDC
Group, the Secretariat also held a number of symposia on LDC priority needs to enhance coordination among Members
and IGOs and to align available resources with the needs identified by LDCs.
4.48. The WTO
Secretariat's technical-assistance programme in the area of TRIPS has
prioritized assistance to LDC Members. The emphasis on the individual priority
needs of LDCs has been carried through in programme delivery and through close
interagency coordination. Cooperation with the World Intellectual Property
Organization (WIPO) has been a key feature in these activities, based on the
1995 cooperation agreement between the two Organizations, and the WIPO-WTO
Joint Initiative on Technical Cooperation for Least Developed Countries
launched in June 2001.
4.49. Besides providing LDCs with flexibility with respect to
implementation, the TRIPS Agreement also aims at fostering technology transfer
to LDCs to enable them create a sound and viable technology base. In
particular, Article 66.2 asks developed Members to incentivize technology
transfer between enterprises and institutions in their territories and LDCs. At the Doha Ministerial Conference, as part of the Decision
on Implementation-Related Issues and Concerns, WTO Ministers agreed that the
TRIPS Council would "put in place a mechanism for ensuring the monitoring
and full implementation of the obligations". Pursuant to this Decision, in
February 2003, the TRIPS Council adopted a Decision on "Implementation
of Article 66.2 of the TRIPS Agreement", which requires developed
country Members to submit annual reports on actions taken or planned in
pursuance of their commitments under Article 66.2.[35]
4.50. Since the
adoption of the Decision, the TRIPS Council has conducted several such annual
reviews, based on reports from developed countries. In addition, since 2008,
the WTO Secretariat has been organizing workshops on TRIPS on an annual basis
in order to achieve a better understanding of the operation of Article 66.2 and
to establish a dialogue between LDC beneficiaries and donors.
4.51. LDCs have
stressed the importance of applying the TRIPS Agreement in a manner supportive
of their rights to protect public health, including access to medicines for
HIV/AIDS, tuberculosis, malaria and other epidemics which continue to plague
the lives of their population. The Doha Ministerial Declaration on the TRIPS
Agreement and Public Health, adopted in November 2001, ensured that the
TRIPS Agreement is to be interpreted in a way that it protects public health
and promotes access to medicines for all.[36]
The Declaration exempted LDCs from providing patent protection for
pharmaceutical products until 1 January 2016. This was given legal effect through
a Decision of the TRIPS Council[37],
and another Decision of the General Council that waived the exclusive marketing
rights provisions of Article 70.9 for the same period.[38] In
February 2015, the LDC Group requested that these two decisions
specifically relating to transitional arrangements in respect of pharmaceutical
products be extended further.[39]
This request is currently being discussed under the auspices of the TRIPS
Council.
4.52. Furthermore,
Ministers in Doha also recognized the problem of countries with insufficient or
no manufacturing capacities in the pharmaceutical sector in making effective
use of compulsory licensing. In particular, as Article 31(f) of the TRIPS
Agreement provided that products made under compulsory licensing must be
"predominantly for the supply of the domestic market", Members
expressed concerns that this could limit the amount of medicines that could be
exported to countries which are unable to produce them domestically.
4.53. In order to
solve this problem, on 30 August 2003, the WTO General Council adopted a
Decision that waives in certain circumstances Articles 31(f) and (h) of the
TRIPS Agreement and thereby allows countries with insufficient manufacturing
capacities to import medicines produced under compulsory licensing in another country.[40]
Rwanda has so far been the first and only LDC to make use of the system in 2007
in order to import a generic version of an AIDS therapy drug from Canada.
4.54. WTO Members
agreed in December 2005 to amend the TRIPS Agreement making the waiver a
permanent solution for countries with insufficient or no manufacturing capacity
such as LDCs to obtain cheaper generic versions of patented medicines.[41]
The amendment will come into force when two thirds of the WTO Members notify
their acceptance to it.
4.55. The MTS over
the last twenty years has also seen development of broad as well as some specific
guidelines to facilitate accession of LDCs to the WTO. At the Doha Ministerial
Conference in 2001, WTO Ministers stressed the importance of concluding
accession negotiations, in particular those of LDCs, "as quickly as
possible" and agreed to work to "facilitate and accelerate accession
negotiations with acceding LDCs". Pursuant to these calls, WTO Members
adopted a set of Guidelines on LDC Accession in December 2002.[42]
The Decision calls for LDCs' accessions to be facilitated and accelerated
through simplified and streamlined procedures with a view to concluding the
negotiations as quickly as possible, and sets out guidelines with respect to:
(i) market access; (ii) WTO rules; (iii) the process; and (iv) TRTA and
capacity building.
4.56. These
Guidelines expedited the adoption of the accession packages for Cambodia and
Nepal by WTO Members at the Cancún Ministerial Conference in September 2003.
Cambodia and Nepal were the first two LDCs to complete their accession under
Article XII of the WTO Agreement. In December 2007, Cape Verde concluded its
accession negotiation before its graduation from the LDC status on 1 January
2008. Samoa also joined the WTO in 2012 but graduated from LDC status in 2014.
Other Article XII LDC Members include Vanuatu (2012), Lao PDR (2013) and Yemen
(2014). Together, they constitute over 20% of 33 Article XII Members in the
WTO. As of today, eight LDCs are at various stages of the accession process to
join the WTO, with Liberia on the threshold for completion in 2015 and
Afghanistan at the final stage of the accession process.[43]
4.57. Pursuant to
the calls of acceding LDCs for the strengthening of the 2002 Guidelines, the
General Council adopted a Decision in July 2012 to "further strengthen,
streamline, and operationalize the 2002 LDC accession guidelines".[44]
The 2012 guidelines established benchmarks on market access negotiations on
goods and services, and included provisions on S&D (including transition
periods), transparency and technical assistance.
4.58. The accession
of LDCs has received special attention in the Sub-Committee on LDCs, which
through the WTO Work Programme for the LDCs regularly monitors the accession of
LDCs, including based on reports by the Secretariat. In addition, the WTO
Director-General annually reports on LDC accessions in his report to the WTO Membership.[45]
The Sub-Committee also serves as a forum where acceding LDCs and Members
exchange views and share experiences.
4.59. The WTO
continuously makes efforts to improve its engagement with LDCs' accessions.
Greater priority is accorded through outreach, technical assistance, policy
advice and support. Since 2009, periodic dialogues have been held between
acceding LDCs and WTO Members to deepen engagement on LDCs' accessions and to
build on efforts for strengthened transparency.[46]
The process of engagement between Members and LDCs was also reinforced at the
Roundtable on LDCs' accessions hosted by Cambodia in September 2009. In
addition, the Accessions Division regularly holds briefings with the LDC and
other regional groups on WTO Accessions, including LDC accessions.
4.60. Furthermore,
in 2011, the Government of China and the WTO established China’s LDCs and
Accessions Programme (the "China Programme") that aims at
strengthening LDCs' participation in the WTO and assisting acceding LDCs to
join the organization through two pillars: (i) the WTO Accessions Internship
Programme; and (ii) Annual Round Tables on WTO Accessions. Under the Accession
Internship Programme, three out of the five interns under the China Programme
are from LDCs, including acceding ones.
4.61. Despite
efforts to facilitate the accession of LDCs, they encounter a number of
challenges including human and institutional capacity constraints during the
accession process and the post‑accession phase. The WTO Members as well as the
Secretariat recognize these difficulties. The good offices of the
Director-General, periodic reports on LDC accessions, regular dialogues on LDC
accessions, policy advice based on best practices, and targeted technical
assistance during accession and post accession are expected to further advance
the LDC accessions in the WTO. However, it is important to note that accession
is part of a domestic reform process which must be led by each of acceding
LDCs, with the support of Members and the Secretariat.
5.1. At the Ninth WTO
Ministerial Conference in Bali in 2013, Members adopted the so-called Bali
package, of which three decisions were specific to LDCs, namely, on DFQF market
access, preferential rules of origin and the LDC services waiver. Furthermore,
the decisions on cotton and the Monitoring Mechanism for S&D were also of
importance to the LDCs.
5.2. At
the Bali Ministerial Conference, Members agreed to take further steps to
provide enhanced DFQF market access to LDC products. This
Decision, inter alia, stated that developed
Members that do not yet provide DFQF market access for at least 97% of products
originating from LDCs, defined at the tariff line level, shall seek to improve
their existing DFQF coverage prior to the next Ministerial Conference. Furthermore,
developing Members, declaring
themselves in a position to do so, shall seek to provide DFQF market access for
products originating from LDCs, or shall seek to improve their existing DFQF
coverage prior to the next Ministerial Conference.[47]
5.3. The Bali
Decision further stipulated that the annual reviews on DFQF market access in
the CTD will be aided by Secretariat reports on DFQF market access at the
tariff line level based on Members' notifications. The CTD's annual DFQF review
in 2014 showed that nearly all developed Members provide either full or
significant DFQF market access to LDC products and that the exceptions to DFQF
treatment relate to a few sectors and to a limited number of developed Members.[48] A
number of developing Members have also put in place DFQF schemes, which provide
significant degree of DFQF market access to LDC products. In September 2015, a
CTD meeting was convened to discuss DFQF market access for LDCs, which provided
an opportunity to Members to have an in-depth exchange on issues involved.
5.2 Preferential Rules of
Origin
5.4. Section 4 explained
that the 2005 Hong Kong Ministerial Declaration provided direction regarding
rules of origin by calling on Members to ensure that they are simple and
transparent. In the preparations for the Bali Ministerial Conference, the LDC
Group submitted a proposal for multilateral guidelines for preferential rules
of origin.[49]
After discussion amongst Members, for the first time Ministers adopted multilateral
guidelines for preferential rules of origin for LDCs at Bali, with the aim of helping LDCs to better utilize
preferences accorded to them.[50]
The decision encouraged Members to draw upon elements of the guidelines when
they develop or build the rules of origin of their preferential market access
schemes for LDCs.
5.5. The decision stipulated that rules of
origin should be as transparent, simple and objective as possible. It further
provided examples of best practices about how rules and procedures can be
developed under different methods to determine a substantial or sufficient
transformation, which is required to confer origin.
5.6. The decision
also enhanced transparency, including the notification of preferential rules of
origin as per the established procedures in the WTO. It also asks the Committee
on Rules of Origin to annually review developments in preferential rules of
origin. In October 2014, the first such review was undertaken by the Rules of
Origin Committee, at which the LDCs presented a paper outlining the challenges
they face in complying with preferential rules of origin under unilateral
preference schemes.[51]
5.7. While the decision does not oblige Members to strictly
follow these guidelines, the strength of the decision lies in the marriage of
normative guidance with the discretion allowed to the governments. For example,
the guidelines contain some illustrations of different possibilities of
cumulation of inputs which can help LDCs source materials in an efficient and
competitive manner. Moreover, the guidelines invite governments to consider
flexible compliance rules that would require minimal administrative effort from
the LDCs. The adoption of the guidelines has also initiated a process of
exchange of experiences and dissemination of best practices in the WTO.
5.8. LDCs have
followed up the Bali decision by actively engaging in the Committee on Rules of
Origin. In April 2015, the LDC Group made a submission to the Committee on
Rules of Origin in the form of questions to preference giving countries in
order to stimulate a discussion on how they considered addressing the various
elements contained in the Bali Decision.[52]
5.9. The informal
dedicated session of the Committee on Rules of Origin held in July 2015, provided
an opportunity to LDCs to have an in-depth dialogue with preference granting
countries on their existing rules of origin frameworks for LDCs and how they
addressed the guidelines adopted by Members at the Bali Ministerial Conference.
In September 2015, the LDC Group submitted a proposal aimed at operationalizing
the guidelines, identifying some specific elements for Members' consideration
at Tenth WTO Ministerial Conference.[53]
5.10. It is to be noted that number of important trading partners
of LDCs (e.g., Canada, EU, Japan) have undertaken measures in their respective preferential
rules of origin frameworks for LDCs, which broadly correspond to the letter and
spirit of the guidelines and which have been considered beneficial for the
LDCs.
5.11. Since Members
had not yet utilized the LDC services waiver since its creation in 2011,
Members adopted a decision on the operationalization of the waiver at the Bali
Ministerial Conference in 2013 outlining the process that would lead to such
operationalization.[54]
5.12. The Bali Decision instructed the
Services Council to convene a high-level meeting six months after the
submission of a collective request by the LDCs. Following the submission of the
collective request by the LDCs in July 2014, the high-level meeting of the
Services Council took place on 5 February 2015.[55] Some 25
delegations indicated sectors and modes where they intended to provide
preferences to LDC services and service suppliers. Members also agreed to an indicative
timeline of end July 2015 for the notification of preferences. So far, 15
Members (Australia; Canada; China; Hong Kong, China; India; Japan; the Republic
of Korea; Mexico; New Zealand; Norway; Singapore; Switzerland; Chinese Taipei;
Turkey, and the United States) notified preferences. Two further Members, the EU
and Chile, circulated to the Services Council a submission stating their
intention to notify preferences.
5.13. The
Bali decision instructed the Council for Trade in Services to periodically review
the operationalization of the waiver and, in case, make recommendations on how
to enhance the operationalization. Furthermore, the decision also recognized
the need to strengthen LDCs' domestic service capacity to make use of existing
opportunities and any preferences in the future. A number of institutions have
come forward to assist LDCs in order to benefit from the operationalization of
the waiver.
5.14. It may be
recalled that in 2002, the General Council agreed to establish a Monitoring Mechanism
(MM) on S&D, whose scope, structure and terms of reference were
subsequently negotiated and agreed at the Bali Ministerial Conference in 2013.[56] The function of
the MM is to review all aspects of implementation of S&D provisions with a
view to facilitating integration of developing and least-developed Members into
the multilateral trading system. Following the review
of S&D provisions, the MM can recommend to the relevant WTO body either the
consideration of actions to improve the implementation of a S&D provision
or the initiation of negotiations aiming at improving the reviewed S&D
provision(s).
5.15. The potential of the MM is yet to be fully exploited. After
three dedicated sessions, the MM is still waiting for the first written
submission requesting the review of particular S&D provisions. The MM can
become particularly useful for LDCs as they rely the most on S&D provisions
amongst developing Members. The MM allows developing countries and LDCs to initiate
discussions on the effectiveness of the implementation of a particular S&D
provision. Thereby, the MM enhances the responsiveness of the WTO to the needs
and problems of its developing Members and to the more effective implementation
of S&D provisions.
5.16. The Bali
package also contained a decision on post-Bali work, which tasked Members to prepare
a work program to finalize the remaining DDA issues. As an input to a possible
work program, in February 2015, the LDC Group tabled a list of 25 S&D
provisions, across various WTO Agreements.[57]
Subsequently, in July 2015, a G90 submission has been received in the CTD SS that
contains detailed textual proposals which subsumed the LDC proposals submitted
earlier.[58]
Negotiations are under way with a view to developing recommendations for the
Nairobi Ministerial Conference in December 2015.
5.5 Cotton
5.17. In the Bali Decision on Cotton,
Ministers acknowledged the vital importance of cotton to a number of developing
country economies and particularly the LDCs amongst them.[59]
The Bali Decision continued to put a spotlight on both the development and
trade policy aspects of the cotton dossier.
5.18. Ministers reaffirmed the importance
of the development assistance aspects of cotton and, in particular, highlighted
the work of the DGCFMC in reviewing and tracking cotton-specific assistance as
well as infrastructure support programs or other assistance related to the
cotton sector. Ministers committed to continued engagement in this Consultative
Framework Mechanism to strengthen the cotton sector in the LDCs.
5.19. The Decision also reiterated
Members' commitment to make progress in the trade-related negotiations on
cotton. In order to enhance transparency and monitoring of the trade-related
aspects of cotton, Members agreed that the Committee on Agriculture in Special
Session (CoASS) should meet twice a year to examine trade-related developments
across the three pillars of market access, domestic support and export
competition in relation to cotton.
5.20. The dedicated discussions on
cotton have enabled a constructive and
factual exchange of views regarding Members' trade-related policies and
relevant developments for cotton. These discussions have been focusing,
as per the mandate, on all forms of export subsidies for cotton and all export
measures with equivalent effect, domestic support for cotton, and tariff and
non‑tariff measures applied to cotton exports from LDCs in markets of interest
to them. The dedicated discussions provide Members with a better understanding
of the various trade policies impacting cotton markets and are complementary to
the negotiation track, allowing for substantive consideration of outstanding
issues with a view to delivering on the cotton mandate.
5.21. Negotiations on
trade facilitation were successfully concluded at the Bali Ministerial
Conference, where Ministers agreed to the Trade Facilitation Agreement (TFA),
which aims at, inter alia, making
trade less costly and faster through simplified customs procedures. It may be
noted that Niger and Lao PDR have become the first two LDCs to ratify the TFA.
5.22. In addition to
the expected positive economic impact from the implementation of the TFA, it is
of particular importance to developing countries and LDCs because of the novel
approach taken by S&D provisions contained in Section II of the Agreement.
In particular, the S&D provisions link the requirement to implement the TFA
with the implementation capacity of developing countries and LDCs. By
classifying the provisions of the TFA into three different categories (A, B and
C), LDCs have full flexibility in determining the timing of the implementation
of the provisions. Furthermore, the implementation of provisions that are
classified under category C is conditional on the acquisition of
implementation capacity through technical assistance.
5.23. In comparison
to other developing countries, LDCs have been granted additional flexibility. They
were given longer timeframes to comply with their obligations, in addition to
other preferential treatment. For instance, developing countries are required
to notify category C commitments upon entry into force of the TFA, including
information on required technical assistance. LDCs benefit from transition
periods of one year for the notification of category C commitments and two
years for the notification of information on required technical assistance. Preferential
treatment also extends to a so-called "early warning mechanism" under
which developing countries can request additional time for the implementation
of category B or C provisions if they experience difficulties in the
implementation of the provisions by the notified date. The extension will be
automatic if the additional time requested does not exceed three years in the case
of LDCs and 18 months in the case of other developing countries.
5.24. In order to
support developing and least developed Members with the implementation of the
TFA, the WTO launched the TFA Facility in July 2014. The functions of the TFA
Facility include supporting LDCs and developing countries to identify their
technical assistance needs, providing information on technical assistance
possibilities and helping developing countries find donors, and, in certain
circumstances, providing grants for project preparation or project
implementation.
5.25. Regional
workshops were conducted for Parliamentarians in Africa, Asia, and the Pacific
Islands to help them understand the TFA that they may be called on to ratify.
In addition, through a new programme of one-on-one meetings with interested
Members, the Facility has started to assist new LDC country delegates to gain a
better understanding of the S&D provisions and the notification
requirements in the TFA and how they can assist their country to get the needed
support. The Facility is also in the process of finding donors for the
implementation of specific provisions at the request of one LDC Member. The
Facility has already fulfilled similar requests from developing countries and
expects the same positive response from donors and partner organizations for
LDC requests.
6.1. During the past
20 years, the WTO has not only advanced trade policy issues in the interest of
LDCs but also supported LDCs to participate more actively in trade negotiations
and regular work of the institution. The WTO Secretariat, under the guidance of
the Director-General, has accorded special attention to the needs and concerns concerning
the LDCs' participation in the MTS. This is reflected in day-to-day support
provided to the LDC Consultative Group and the work carried out in the Sub-Committee
on LDCs according to a dedicated work programme for LDCs. Moreover, LDCs are
accorded priority in the delivery of WTO's TRTA activities.
6.2. It has long
been acknowledged that LDCs need additional support in developing their
productive capacities and in overcoming their supply-side constraints, so that
they can take better advantage of the opportunities presented by multilateral
liberalization. The WTO has been working with partners to assist LDCs in their
efforts to tackle these core supply-side issues through initiatives such as the
Aid-for-Trade Initiative, the Standards and Trade Development Facility (STDF)
and the EIF.
6.3. Several LDC governments
have severe resource constraints, especially at the level of personnel
capacities. Permanent Missions often have one person dedicated not just to the
work of the WTO but to that of other intergovernmental organizations in Geneva,
including UNCTAD, ITC, WIPO and others. This reality means that LDCs have often
faced challenges in participating in the work of the WTO.
6.4. Around the time
of the launch of the Doha Round negotiations, LDCs requested that the WTO
support their preparatory processes for participation in the negotiations. The
response was, inter alia, the
establishment of an LDC Unit within the Development Division of the WTO in 2003,
whose function would be to service the LDC Consultative Group. Since then, the
LDC Unit has been at the service of LDCs, providing day-to-day support in the
coordination of their preparatory processes to engage in the work of the WTO.
6.5. The LDCs,
including Members and Observers, set up an LDC Consultative Group in Geneva in
2001, with the aim of ensuring their participation in the MTS on the basis of
their own priorities. While it is an informal group, it serves as a pivotal
platform for the Group's positions in the DDA negotiations by ensuring that LDC
delegations meet regularly, share information, brainstorm, articulate their
positions, and as necessary, act together to pursue their common interests and to
efficiently use their often limited resources.
6.6. Consisting of
expert and Ambassador-level processes, which form the base for proposals that
are, from time-to-time, signed off by LDC Ministers, the Group remains a
cornerstone for the increased participation of LDCs in the work of the WTO.
Upon creation of this Group, the LDCs submitted a large number of proposals in
the DDA negotiations.
6.7. Apart from
negotiating as a Group, Members of the LDC Consultative Group have also joined
different alliances to advance their specific interests. For instance, more
than a dozen alliances have been formed in the area of agriculture
negotiations, several of which include LDCs. Examples of alliances include LDC
participation in the G33, the African Group, the ACP Group and the Cotton-4
Group. Such alliances and groups have provided LDCs with a platform to voice
their specific interests and needs with other Members with whom they may share
common interests.
6.8. At the highest
level, LDCs meet at the level of Ministers to prepare for WTO Ministerial
Conferences with a view to adopting a common position and advancing proposals
regarding issues of interest to LDC. The first LDC Trade Ministers meeting was
held in Zanzibar, Tanzania, in July 2001, prior to the Doha Ministerial
Conference. Since then, the LDCs have convened eight Ministerial meetings of
LDC Trade Ministers.
6.9. At the institutional
level, the prioritization of LDCs manifested itself in the establishment of a
Sub-Committee on LDCs as a subsidiary body to the CTD in 1995. The mandate of the
Sub‑Committee was to give particular attention to the special and specific
problems of LDCs, to review periodically the operation of the special
provisions in the multilateral trade agreements and related Ministerial
Decisions in favour of LDCs, to consider specific measures to assist and
facilitate the expansion of LDCs trade and investment opportunities, and to
report to the CTD for consideration and appropriate action.[60]
6.10. Following a
directive from Members at the Doha Ministerial Conference, a WTO Work Programme
for the LDCs was adopted in 2002. This Work Programme, revised in 2013, sought
to address systematic issues of interest to LDCs in the multilateral trading
system.[61] The
Sub‑Committee has been focusing on the implementation of this Work Programme,
which identified seven core issues: (i) examining market access issues for
LDCs; (ii) monitoring TRTA and capacity-building initiatives for LDCs; (iii)
supporting agencies assisting with the diversification of LDCs production and
export base; (iv) mainstreaming trade-related elements of the UN Programme of
Action for the LDCs into the WTO work; (v) reviewing the participation of LDCs
in the MTS; (vi) monitoring the accession of LDCs to the WTO; and (vii) following
up WTO Ministerial Declarations/Decisions.
6.11. Over the last
decade, the Sub-Committee has commissioned specific studies to help LDCs better
understand their issues of interest in the WTO as well as to better participate
in the work of the WTO. These include studies on topics such as supply-side
constraints (WT/COMTD/LDC/W/33), textiles and clothing business
(WT/COMTD/LDC/W/37), non-tariff measures on products of export interest to LDCs
(WT/COMTD/LDC/W/39), market access issues in services (JOB(07)/148) and
agriculture commodity prices (WT/COMTD/LDC/W/43). It may be noted that every
year the Secretariat prepares a factual study on the overall trade trends and
market access conditions of LDCs which has become the flagship document under
the aegis of the Sub-Committee.
6.12. The main
objective of WTO's TRTA activities is achieving cumulative and sustainable
capacity building and enhancing efficiency and impact of the WTOs TRTA in
developing countries and the LDCs. It is part of the broader spectrum of
ongoing bilateral, regional and multilateral efforts to enhance the delivery of
Aid for Trade and substantially improve its impact on the ground.
6.13. At the Doha
Ministerial Conference, Members confirmed that technical assistance and
capacity building are "core elements of the development dimension of the
multilateral trading system".[62]
Such issues were further highlighted and strengthened at the Hong Kong
Ministerial Conference in 2005. As a result, priority is accorded to LDCs in
the delivery of TRTA, including for Geneva-based training courses. On average,
LDCs are associated with some 45% of the WTO's TRTA activities annually even
though they represent less than a third of beneficiaries. Since 2001, nearly
20,000 officials from LDCs have benefited from the training and technical-assistance
activities organized in Geneva or in the field. Such TRTA activities included
national activities held in LDCs, regional seminars, workshops and training
activities.
6.14. In light of
specific challenges faced by LDCs, various activities have been developed to
help LDCs participate in the MTS. For example, three-week introduction courses
for LDCs are organized twice a year (one for Anglophone LDCs and another for
Francophone LDCs). Furthermore, LDCs are eligible for more national TRTA
activities compared to other Members. While other developing countries are
eligible for two national TRTA activities per year, LDCs are entitled to three
national activities, as well as receiving priority attention in the accession
process. Also, support is provided in the preparation of the LDCs' needs
assessments for trade capacity building which provides the basis to request
technical assistance.
6.15. The
Secretariat provides four long-term trainee and internship programmes which
benefit developing countries and LDCs, i.e. the Netherlands Trainee Programme
(NTP), the Mission Internship Programme (MIP), Regional Coordinator Internships
(RCI), and China’s LDCs and Accessions Programme. The NTP is designed to assist
in the economic and social development of LDCs, low income countries and
comparable small and vulnerable economies in areas related to trade policy and
to provide junior public officials with the opportunity to learn about matters
dealt with within the WTO. The MIP enables young professionals from selected
developing countries, including LDCs, to support their Permanent Representations
to the WTO in participating more actively at the WTO. Interns of the RCI
programme assist the coordinators of regional groupings, including of the WTO
LDCs' Consultative Group. The China Programme aims to strengthen the
participation of LDCs in WTO activities and consists of five elements,
including WTO accessions internships, WTO accessions round table meetings,
LDCs’ participation in WTO meetings, South‑South dialogue on LDCs and development,
LDCs Trade Policy Review follow-up workshops. On average, around 60% of interns
under these programmes come from an LDC.
6.16. In addition,
assistance designed to address LDCs' specific needs and concerns includes the
Geneva Week, the Reference Centres, and support provided during Trade Policy
Reviews and their follow-up. The Geneva Week is a week-long event held twice a
year that aims at informing officials from WTO Members without permanent
missions in Geneva about the ongoing work and trade negotiations at the WTO.
Since the first Geneva Week in 1999, a total of 30 Geneva Weeks have been
organized with the 31st one scheduled prior to the Nairobi
Ministerial Conference.
6.17. In the first
Geneva Week in November 1999, 18 LDCs participated, three of which had Observer
status. In contrast, in the 30th Geneva Week in July 2015, only three
LDCs participated, one of which held Observer status. The decline in
participation of LDCs reflects a positive development that LDCs have opened
more missions in Geneva, and as a result they can participate more actively at
the WTO.
6.18. Under the WTO
Reference Centres Programme, developing countries can benefit from the
establishment of reference centres that are geared towards providing support to
government officials in the performance of their duties, including getting
access to databases, documents and other resources published by the WTO and
available on the internet. Reference Centres can also be accessed by other
institutions and are sometimes based at academic institutions and universities,
thus providing a larger access to WTO-related information. Presently, some 20
Reference Centres are in operation in LDCs.
6.19. Finally,
mention should be made of the WTO Chairs Programme, which at present includes
21 Chairs, and of which two are located in LDCs (Benin, Senegal). A total
of 14 Chairs were selected in the first phase of the Programme, the other seven
were identified following a highly competitive process in 2014, with the start
of the second phase of the Chairs programme. The aim of the Chairs program is
to conduct work under three pillars, i.e. research, curriculum development and
outreach and to link the academic work more closely to the design and
implementation of government policies. The WTO provides grants to each of the
Universities in support of the programmes.
6.20. At the Sixth
Ministerial Conference in Hong Kong in December 2005, WTO Ministers launched
the Aid-for-Trade Initiative with the aim of helping developing countries, in
particular the least developed, "to build the trade-related infrastructure
and supply-side capacity they need to implement and benefit from WTO Agreements
and more broadly to expand their trade". In 2006, the Director-General
formed a Task Force, with the aim of operationalizing Aid for Trade. The
subsequent Task Force Recommendations outlined, inter alia, the rationale for Aid for Trade, its scope, guiding
principles, objectives and four thematic areas of focus for operationalization:
strengthening the demand side (by mainstreaming trade objectives into national
development plans); mobilizing donor response (by mainstreaming trade support
into development programming); reinforcing the bridge between demand and
response; and improving monitoring and evaluation.[63]
6.21. Since 2007,
biennial Global Reviews of Aid for Trade have provided a platform for the trade
and development communities to dialogue on Aid for Trade, monitor its progress
and evaluate its impact on-the-ground, with a particular focus on LDCs. Global
Reviews are the centrepiece of biennial Aid-for-Trade work programmes and
provide an opportunity to share the results of a monitoring and evaluation
exercise that assesses mainstreaming efforts by developing countries and their
development partners, resource mobilization efforts and monitors the impact of
Aid‑for‑Trade projects and programmes.
6.22. With respect
to strengthening the demand side and mainstreaming, the Aid-for-Trade Task
Force noted that "a commitment to country ownership and country-driven
approaches – as well as a commitment of governments to fully mainstream trade
into their development strategies – is key to the effectiveness of Aid for
Trade".
6.23. Global Reviews
of Aid for Trade have shown that LDCs are getting better at articulating,
mainstreaming and communicating their trade-related objectives and strategies.
In 2009, 60% of LDC respondents to the monitoring exercise reported that trade
was fully mainstreamed into national development plans, with the remaining LDCs
reporting partial mainstreaming. In 2015, 97% of LDC respondents reported that
they had Aid for Trade priorities and 92% stated that they had mainstreamed new
priorities into national development strategies.
6.24. In order to strengthen
donor response and resource mobilization, the Aid-for-Trade Task Force
recommended that additional, predictable, sustainable and effective resources
should be mobilized to meet developing countries trade objectives. Aid-for-Trade
resources for LDCs experienced a strong upward trend since the Initiative was
launched. Commitments to LDCs amounted to US$18.2 billion in 2013, which represents an increase of 178%
since the 2002-2005 baseline period. In
the same period, the share of total Aid for Trade received by LDCs grew from
27% of total Aid-for-Trade commitments to 33% of total Aid-for-Trade
commitments in 2013 – although disbursements remained constant at 26%. Total Aid-for-Trade commitments rose from
an average of US$25.2 billion to reach US$55.4 billion in the same period.
6.25. Aid-for-Trade commitments to LDCs have grown
most in the category of economic infrastructure in absolute terms (an increase
of US$7.8 billion in 2013 as compared to the average of 2002-2005) and in trade
policy and regulation in percentage terms (300% over the same period) – the
latter being a category which includes assistance for trade facilitation.
6.26. A total of 29 bilateral donors and 15 multilateral
donors provided Aid-for-Trade assistance to LDCs in 2013. Six donors (the EU,
Japan, the US, the African and Asian Development Banks and the World Bank)
accounted for 71% of Aid-for-Trade disbursements to LDCs in 2013. Monitoring for
the Global Reviews suggests that support from South-South partners to LDCs is
also growing.
6.27. Concerning monitoring and evaluation, research
conducted for the Fifth Global Review of Aid for Trade in July 2015 highlights
that trade costs continue to fall heavily on LDCs, constraining their economic
growth and trade development. Such costs include those related to transport and
logistics, onerous border procedures, weak policies and regulatory frameworks
and a low capacity to meet standards. The 2015 Aid for Trade at a Glance Report
concluded that while LDCs are gaining traction on trade costs, they still find
it hard to make a "transformative shift" because of the high absolute
costs from which they start (particularly landlocked countries), limited
institutional capacity and resource constraints.
6.28. The EIF is the
only global Aid-for-Trade programme exclusively designed for the LDCs and is
therefore uniquely placed to support countries to use trade as a tool for
sustainable development and benefit from being part of the global trading
system. It is a partnership of 48 LDCs, 23 donors and eight agencies including the
WTO.[64] Through
a multi-donor trust fund, it provides financial and technical support to build
trade policy and institutional capacity, together with the ability to
coordinate and leverage additional Aid-for-Trade resources in the LDCs.[65]
The EIF has its roots in the IF, which was established in 1997 following the
High-Level Meeting on Integrated Initiatives for LDCs' Trade Development. In
September 2005, the joint World Bank-IMF Development Committee endorsed
proposals for an enhanced IF with expanded resources and scope in order to make
it more effective. Subsequently, the IF Steering Committee established a Task Force
to develop recommendations for the enhancement of the IF.
6.29. At the Hong
Kong Ministerial Conference, Ministers approved that the Task Force should
elaborate recommendations to improve the implementation of the IF by
considering ways to: "(1) provide increased, predictable, and
additional funding on a multi-year basis; (2) strengthen the IF
in-country, including through mainstreaming trade into national development
plans and poverty reduction strategies; more effective follow-up to diagnostic
trade integration studies and implementation of action matrices; and achieving
greater and more effective coordination amongst donors and IF stakeholders,
including beneficiaries; (3) improve the IF decision-making and management
structure to ensure an effective and timely delivery of the increased financial
resources and programmes".[66]
Following the recommendations of the Task Force in 2006, Phase One of the EIF
began in 2009.[67]
6.30. The EIF
supports LDCs to undertake Diagnostic Trade Integration Studies (DTIS), which
help LDCs to identify constraints to trade and opportunities for trade
expansion while ensuring that the EIF process is aligned with the priorities of
the LDC government. The priorities and needs identified by the DTIS are
captured in an Action Matrix, which functions as a blueprint for coordination
of future EIF and other Aid-for-Trade interventions. The EIF also supports LDCs
to build the institutional capacities and structures required to mainstream
trade into national development strategies and to coordinate the delivery of
Aid for Trade. In order to maintain the momentum of this support, the EIF also supports
feasibility studies and small-scale priority projects identified in the DTIS
Action Matrix. Countries are encouraged to leverage these funds to secure additional
bilateral resources.
6.31. The first
phase of the EIF (2009-2015) received pledges from 23 donors totalling
US$252 million. As of August 2015, US$202 million of contributions have
been received. Over Phase One, the EIF supported 136 projects. Specifically,
EIF support has been used to undertake 41 DTIS to identify national trade
related priorities; formulate and implement trade strategies in 29 countries;
integrate trade in national development plans of 32 countries; establish
public-private trade policy consultation mechanisms in 32 countries; establish
regular trade related donor coordination in 28 countries and government-donor
mechanisms in 30 countries; and undertake 36 projects which are helping
countries to address specific barriers to trade and increase their ability to
trade.
6.32. In 2014, an
independent evaluation of the first phase of the EIF found that the EIF remains
highly relevant to the trade needs of LDCs with respect to mainstreaming trade,
defining trade-related priorities and bringing stakeholders together.[68]
Results can be observed, many of which with good prospects for sustainability.
The evaluation also highlighted remaining challenges including, the need to
strengthen in-country capacity to implement plans and strategies, donor
coordination and building broad-based support for the trade agenda, and
leveraging additional resources at the country level. Based on the findings of
the 2014 Evaluation, the EIF Steering Committee endorsed the recommendation of
the EIF Board to extend the programme for a second phase from 2016 to 2022.
6.33. The
Programme's relevance was also reiterated at the Bali Ministerial Conference in
three decisions on cotton, the LDC services waiver, and the TFA. In these
decisions, it was emphasized that LDCs should use the EIF as a gateway for Aid
for Trade to help in the coordination and implementation of WTO Ministerial
Decisions related to cotton, the services waiver and trade facilitation.
6.34. Building upon
the positive findings of the independent evaluation, over 200 stakeholders
across LDCs, donors and agencies were brought together at the EIF Global
Platform in March 2015 to design Phase Two of the EIF. As a result of these
consultative discussions, substantive measures were introduced into the EIF
Programme Framework for Phase Two which will strengthen effectiveness,
efficiency, sustainability of results and value for money. The EIF Programme Framework
for Phase Two has been designed to produce a more dynamic and results driven
EIF that continues to build on providing customized support to LDCs.
6.35. Phase Two of
the EIF was launched at the Fifth Global Review of Aid for Trade. At the
launch, the new EIF logo was unveiled along with the tagline for the EIF: Trade
for LDC development. The EIF Programme for Phase Two includes streamlined
processes, strengthened programme and results based management, deepened tailor
made support, enhanced governance arrangements and a flexible approach to
accommodate emerging trends in the global trading environment for LDCs.
6.36. To maintain
the momentum of the results achieved over Phase One and ensure the sustainability
of the impact on the ground, a pledging conference to replenish the EIF Trust
Fund for Phase Two will be organized at the outset of the Tenth WTO Ministerial
Conference in Nairobi.
6.37. The
STDF is a global partnership that was launched in 2001 during the Doha
Ministerial Conference.[69]
The WTO partners with the Food and Agriculture Organization of the United
Nations (FAO), the World Organisation for Animal Health (OIE), the World Bank
and the World Health Organization (WHO). In September 2004, these organizations
formally established the Facility, with seed funding from the World Bank and
the WTO. Other organizations with sanitary and phytosanitary (SPS) expertise or
implementing SPS-related technical assistance projects, bilateral donors and
selected developing country SPS experts, including from LDCs, participate
actively in the Facility's work. The Secretariats of the Codex Alimentarius
Commission and the International Plant Protection Convention (IPPC) also
participate in the partnership, either in their own right of through the
involvement of their parent organizations.[70]
6.38. The Facility
supports developing countries, and in particular LDCs, to implement
international SPS standards, guidelines and recommendations as a means to
improve their human, animal and plant health status and their ability to gain
and maintain market access. By bringing together the SPS expertise and skills
of its founding partners, other organizations and developing countries, the
STDF provides a unique platform to exchange information, encourage
collaboration and synergies in SPS capacity building, enabling the stakeholders
involved to achieve more effective and sustainable results together, than would
be possible alone. The STDF raises awareness about the importance of building
SPS capacity, mobilizes additional Aid for Trade resources and identifies and
disseminates good practice. The STDF work is focused, inter alia, on best ways to identify and prioritize SPS needs and
investment options for market access, the use of economic analysis to inform
SPS decision-making, public-private partnerships to build SPS capacity and,
more recently, trade facilitation in an SPS context.
6.39. As a financing
mechanism, the STDF provides seed funding to support project formulation based
on appropriate assessment of SPS-related capacity building needs and
priorities. Applications are particularly encouraged from LDCs. Project
proposals can be funded through external funding or through the STDF, in
particular if projects: (i) are relevant to the identification, development and
dissemination of good practice in SPS capacity building, including projects
that develop and apply innovative and replicable approaches; (ii) address SPS
constraints through regional approaches; and (iii) are collaborative and
inter-disciplinary, focused on the inter-linkages between food safety, animal
and plant health and trade.
6.40. Since its
inception in 2004, a total of 72 projects have been approved for STDF funding.
The STDF has devoted 56% of its resources available for projects and project
preparation grants (PPGs) to LDCs and other low-income countries (OLICs).
Hence, the STDF is consistently meeting its target to devote at least 40% of
its project and PPG resources to LDCs and OLICs. In particular the allocation
of PPG resources to LDCs and OLICs remains high, with LDCs receiving 74% of the
overall budget for PPGs.
7.1. It is clear
that during the past 20 years, the WTO has supported LDCs in their efforts to
integrate into the rules-based MTS. Special provisions specifically for the
LDCs have been put in place to facilitate the participation and integration of LDCs
into the MTS. At the same time, substantive measures have been taken to help
LDCs increase their trade flows. This has helped improve the trade performance
of LDCs, as a group. The share of LDCs in world merchandise exports stood at
1.2% in 2013, up from 0.5% in 1995. While trade in services has grown in
importance for a number of LDCs, the overall share of LDCs in world trade in
commercial services has seen a modest increase, from 0.4% in 1995 to 0.7% in
2013.
7.2. Special
consideration for enhancing LDCs' participation in world trade had already been
made during the GATT period. The "Enabling Clause", adopted in 1979,
was the first important decision that explicitly used the term LDCs and allowed
developed countries to treat LDCs on a different footing than other developing
countries. Specific needs of LDCs were recognized during the Uruguay Round
negotiations, resulting in special flexibilities for LDCs, over and above their
access to S&D provisions applicable to all developing countries. These favourable
treatments have often been extended to help LDCs pursue their development
objectives. A clear illustration of this is the TRIPS Agreement, where the general
transition period for LDCs to implement the TRIPS Agreement has been extended
several times with the current extension valid until 1 July 2021.
7.3. The Decision on
Measures in Favour of LDCs adopted in 1993 during the Uruguay Round has served
as an important reference point for subsequent instruments and decisions with
respect to market access, flexibilities in the implementation of WTO rules and
technical assistance for LDCs.
7.4. The Doha Round
of negotiations seeks to advance the interests of LDCs in the WTO. LDC issues have
received special attention in almost all areas of the Doha Work Programme. Pending
the full conclusion of the Round, Members have adopted a number of significant
decisions in favour of LDCs. The Hong Kong Ministerial Conference (2005) and
the Bali Ministerial Conference (2013) have adopted a set of decisions for
LDCs, which aim at improving the participation of LDCs in world trade, and at
the same time, according LDCs the flexibility to pursue their development
objectives.
7.5. Though DFQF
market access was granted to LDCs by some Members even prior to the launch of
Doha negotiations, the Hong Kong Ministerial Conference and the Bali
Ministerial Conference both took important decisions in this regard. At present,
most developed Members grant either full or significant DFQF market access to
LDC products. An increasing number of developing Members are also providing
DFQF market access to LDC products.
7.6. The multilateral
guidelines for preferential rules of origin adopted at the Bali Ministerial
Conference constitute an important step forward encouraging Members to develop
rules of origin that are transparent and simple, and facilitate exports from
LDCs. These guidelines, the first of its kind, invite Members to consider
certain elements in the design of their rules of origin conditions for LDCs. A
number of key trading partners of LDCs have introduced measures for LDCs to
meet the rules of origin conditions with ease, which has also resulted in
increased exports to these markets.
7.7. Legal
instruments have continually been contemplated for the LDCs to enable their
greater integration in world trade. In this regard, one important outcome has
been the adoption of the LDC Services Waiver in 2011 enabling Members to grant preferential
treatment to LDC services and service suppliers. A good number of Members,
involving both developed and developing countries, have undertaken preferences
for LDCs and notified them to the WTO.
7.8. During the past
decade, Members have also shown their responsiveness to address particular
issues of concern to LDCs. As part of the agriculture negotiations, cotton has
become a priority issue. The WTO has addressed both the trade and development
aspects of cotton through special treatment in agriculture negotiations and a
consultative framework under the auspices of the WTO Director-General,
respectively.
7.9. Another area
where positive results have been achieved is with LDC accessions. Since 1995,
seven LDCs, two of which have in the meantime graduated from LDC status, have
undergone the accession process and joined the WTO. In order to facilitate and
accelerate the accession of LDCs, Members have drawn up broad as well as some
specific guidelines for LDC accessions. The first set of guidelines were
adopted in 2002 which, inter alia,
calls upon Members to exercise restraint in seeking commitments and concessions
from acceding LDCs. These guidelines were strengthened in 2012 with the
introduction of benchmarks for market access negotiations under the accession
process. These guidelines may serve as an important instrument for the LDCs
currently in the accession process to negotiate their terms of entry to the
WTO.
7.10. The LDCs have
continued to receive special priority in the delivery of WTO's TRTA. They are,
on average, associated with 45% of the WTO's annual TRTA activities. Since
2001, nearly 20,000 officials from LDCs have benefited from activities
organized in Geneva or in the field. The WTO has engaged in partnerships, including
through the Aid-for-Trade Initiative, the EIF, the STDF and the TFA Facility to
support LDCs in developing their trade capacity. The Aid-for-Trade Initiative
has helped mobilize resources to address supply-side constraints of LDCs, which
benefitted from an 178% increase in Aid-for-Trade commitments between a
2002-2005 baseline period and 2013. The extension of the EIF for a second phase
from 2016 to 2022 highlights its continuing high relevance for the trade needs
of LDCs.
7.11. The prioritization
of LDCs has manifested itself also in the institutional structure of the WTO.
In the Sub-Committee on LDCs, Members discuss issues of interest to LDCs,
including market access, TRTA and accessions, as guided by the WTO Work
Programme for the LDCs. This Work Programme, which was adopted in 2002 and
revised in 2013, provides the basis to address systemic issues of interest to
LDCs in the MTS. Over the last decade, the Sub-Committee on LDCs has
commissioned a number of studies of specific interest to LDCs, with a view to
deepening the understanding of LDCs on multilateral trade issues.
7.12. Since the
launch of the DDA negotiations, the WTO has witnessed the emergence of an
active LDC Group in its work. Realizing the importance of the Doha
negotiations, the LDC Consultative Group was formed in early 2001. Since then,
the Group has become a key constituency in the decision-making process of the
WTO, serving as a forum to articulate the common interests of LDCs in the WTO. The
WTO has supported the participation of LDCs at the WTO through the creation of
an LDC Unit in 2003, which has provided LDCs day-to-day support to engage in
the work of the WTO and the Doha Round negotiations. The effectiveness of the LDC
Group is demonstrated through the submission of numerous substantive proposals
in the negotiations as well as in the regular work of the WTO. The growing human
and institutional capacity in the LDCs to effectively take part in the MTS is a
welcome development.
7.13. Notwithstanding
the progress made in advancing the integration of LDCs into the MTS, it is
important to acknowledge that LDCs continue to face a number of trade and
development challenges. Most of the LDCs continue to rely on a narrow range of
export products. While some degree of diversification has taken place with
respect to merchandise exports, the domestic supply base of LDCs in services
trade is very limited. There has not been significant improvement in the
productive capacity in LDCs, and trade transaction costs in many LDCs deny the
full potential of preferences accorded to them. Enhancing the integration of
LDCs into the global economy will therefore involve initiatives over a broad
front and require addressing both the exogenous as well as the endogenous
constraints faced by the LDCs.
7.14. The Tenth WTO
Ministerial Conference in Nairobi offers an opportunity to further help LDCs
benefit from the MTS and to integrate better into the global economy. Building
on the substantial progress made at Bali Ministerial Conference, Members have
been engaged to work towards a substantive outcome at the Nairobi Ministerial
Conference that places LDCs at its core.
7.15. The Bali package
for LDCs took decisions to improve the market access for LDCs in both goods and
services. To consolidate these gains, ongoing work will need to progress in a
number of areas. DFQF market access for LDC products remains an important issue
for Members and the CTD meeting held on 21 September 2015 provided an
opportunity to Members to have an in‑depth exchange on issues involved. The
adoption of multilateral guidelines at the Bali Ministerial Conference can
guide Members to develop preferential rules of origin which facilitate the
utilization of preferences by LDCs and provide a basis for further work. The notifications
of preferential treatment of services and services suppliers from LDCs by a
number of Members constitute an important step towards facilitating market
access in services for LDCs. Helping LDCs take advantage of these preferences
will require continued efforts and measures from Members pursuant to the LDC
services waiver as well as enhanced technical assistance and capacity building.
7.16. The overall
conclusion of the Doha Round will also contribute to improve the trade
prospects of LDCs along with enhanced flexibility to pursue their trade and
development strategies. As an immediate priority, it is therefore important
that Members continue their efforts to deliver a meaningful package for LDCs at
the Nairobi Ministerial Conference.
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