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In the last few years WTO members have concentrated
a lot of efforts into improving the condition of least-developed
countries (LDCs) inside the multilateral trading system, both in terms
of market access and technical assistance. Measures taken in the
framework of the WTO can help LDCs increase their exports to other WTO
members and attract investment.
In many developing countries, pro-market reforms
have encouraged faster growth, diversification of exports, and more
effective participation in the multilateral trading system. Excluding
countries at war or in transition, export growth in developing
countries has risen from 4.3% a year in the 1980s to 6.4% in the
1990s. Growth in GDP per person has risen from 0.4% year to 1.5% per
year.
Even the least-developed countries are doing
slightly better, though not as well as other developing countries.
Again, excluding countries at war or in transition, export growth in
LDCs has risen from 2.9% a year in the 1980s to 3.2% in the 1990s. And
whereas GDP per person fell by 0.6% a year in the 1980s, it rose by
0.8% a year in the 1990s.
Specifically, the WTO has
“delivered” for
LDCs in the following areas:
First, there have been significant improvements in
market access opportunities for LDCs. Twenty eight WTO members have
pledged market access improvements. Many of them have actually agreed
to drop all barriers and provide “duty-free and quota-free”
treatment to all LDC exports. They join a number of other countries
who already provide open markets. The average non-weighted tariff
applied by major trading partners to LDCs exports has fallen from
10.6% in 1997 to 6.9% in the first quarter of 2001.
For example:
- Canada, effective 1 September 2000, added a further 570 tariff
lines to the list of goods from LDCs eligible for duty-free
treatment. About 90% of all LDC imports will now receive duty-free
treatment;
- New Zealand, since 1 July 2001, offers duty-free and quota-free
access to all imports from LDCs
- The European Union, Norway and Switzerland provide duty-free,
quota-free market access for all LDC exports (except arms). A
transition period is in place for a few specific products.
- Japan in December 2000, announced its
“99%-initiative on
Industrial Tariffs”. Following implementation, in April 2001,
the coverage of duty and quota-free treatment for LDCs industrial
product exports increased from 94 to 99% and includes textile and
clothing exported from LDCs;
- The US has further elaborated on the African Growth and
Opportunity Act (AGOA) adopted in May 2000. Thirty four
Sub-Saharan countries have been designated as beneficiaries under
AGOA in October 2000, who can avail new GSP benefits from 1835
tariff lines as from December 2000.
- Hungary, the Czech Republic and the Slovak Republic provide duty
free and quota free access to all imports from LDCs.
- Egypt notified tariff reductions ranging from 10% to 20% of
existing applied duties for 77 products of export interest to LDCs,
and provides duty free access for about 50 products. In addition,
Egypt bound customs duties, with a 10% reduction for industrial
products imported from LDCs.
Second, the Integrated Framework (IF) — the joint
IMF, ITC, UNCTAD, UNDP, World Bank and WTO technical assistance
program for LDCs — has been redesigned and is in operation on a
Pilot Basis in Cambodia, Madagascar and Mauritania. It will help LDCs
mainstream trade into their national development plans and strategies
for poverty reduction. It will help ensure trade, as an engine for
growth, is central to development plans. It will also ensure that
trade-related technical assistance and capacity building is delivered
within a coherent policy framework rather than on a stand-alone basis.
The possibility of the extension of the IF Pilot Scheme is being
examined, based on progress reported at the Fourth WTO Ministerial
Conference.
The agencies have set up a Trust Fund for the
Integrated Framework to which several donor countries contributed in
total $6.2 million.
The first-ever joint seminar of the six agencies of
the Integrated Framework was held in January 2001. It demonstrated the
rationale and techniques for mainstreaming trade into LDCs’
development plans and poverty reduction strategy papers and showed how
the re-designed Integrated Framework can operate as a mechanism for
poverty reduction and delivery of trade-related technical assistance.
Technical assistance to enable LDCs implement their
rights and obligations under WTO Agreements is also being provided.
For instance, under the Joint Initiative on Technical Cooperation for
LDCs by WIPO and WTO, assistance is being offered to make best use of
the intellectual property system of these countries.
Third, WTO members are currently looking at means
to assist as much as possible those LDCs in the process of joining the
WTO. LDCs acceding to the WTO have to learn and to understand how the
WTO works. They need to draft domestic laws that comply with WTO
rules. They need to establish mechanisms for enforcing those rules.
And they need to negotiate with existing members suitable conditions
of entry to the WTO. LDCs currently in the process of accession to the
WTO are: Bhutan, Cambodia, Cape Verde, Lao People’s Democratic
Republic, Nepal, Samoa, Sudan, Vanuatu and Yemen. In addition,
Ethiopia and Sao Tome & Principe are WTO observers.
Fourth, WTO members have taken a host of
initiatives to help LDCs participate more fully at the WTO. These
include:
- activities for non-resident members and
observers to ensure that
those countries not represented in Geneva can still follow the
daily business of the WTO and still be an integral part of the WTO
process;
- the
“Geneva Week”: an annual event bringing together
senior officials from capitals and European-based missions — not
only of LDCs but also of other small economies — to learn and
exchange views concerning critical areas of the WTO work;
- improvement of the WTO’s Trade Policy Review Mechanism: as
well as shedding light on a country’s trade rules, it now helps
trade policy capacity building and the mainstreaming of trade
priorities into national development plans and poverty reduction
strategies;
- expansion of the WTO training and policy courses;
- establishment of WTO reference centres connecting LDCs’
capitals to WTO sources of information through the Internet;
- establishment of a new programme to fund interns within country
missions in Geneva;
- facilitating the participation of LDCs at WTO Ministerials —
for example, financing LDC trade ministers’ travel and hotel
expenses.
Fifth, and finally, the WTO provides a forum where
LDCs can and do raise particular problems relating to food safety and
quality standards. Indeed, LDCs can find it difficult to comply in
their exports with developed countries’ sanitary standards. WTO
agreements limit importing countries’ scope to impose arbitrary
requirements on LDCs’ exports, and encourage the use of
internationally developed standards. The Director-General himself has
initiated high-level discussions with the secretariats of
international standard-setting bodies to improve LDCs’ participation
and capacity to make full use of international standards.
LDCs in the WTO
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The WTO recognizes as least-developed countries (LDCs)
those countries which have been designated as such by the United
Nations. There are currently 49 least-developed countries on the UN
list, 30 of which to date have become WTO members.
These are:
Angola; Bangladesh; Benin; Burkina Faso; Burundi; Central African
Republic; Chad; Congo, Democratic Republic of the; Djibouti; Gambia;
Guinea; Guinea Bissau; Haiti; Lesotho; Madagascar; Malawi; Maldives;
Mali; Mauritania; Mozambique; Myanmar; Niger; Rwanda; Senegal; Sierra
Leone; Solomon Islands; Tanzania; Togo; Uganda; Zambia.
Nine additional least-developed countries are in the process of
accession to the WTO. They are: Bhutan; Cambodia; Cape Verde; Laos;
Nepal; Samoa; Sudan; Vanuatu and Yemen.
Furthermore, Ethiopia and Sao Tome & Principe are WTO
Observers.
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