LEAST-DEVELOPED COUNTRIES Enhancing trade opportunities

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Doha decision on least-developed countries 

At the Doha Ministerial Conference in November 2001, members renewed their commitment to help least-developed countries (LDCs). Concretely, members committed themselves to “the objective” of duty-free, quota-free market access for products originated from LDCs. They also promised to consider additional measures to improve poorest countries' access to their wealthier markets. And they agreed to make it easier for least-developed countries to join the WTO.

On 12 February 2002, the Sub-Committee on Least-Developed Countries agreed to a work programme in order to implement the commitments of the Doha Declaration.

On market access, members will

• work to identify and examine all market access barriers confronting least-developed countries’ products
    
• annually review all market access improvements
    
• examine possible additional measures to improve market access for least-developed countries’ products.

On technical assistance, priority is to be given to least-developed countries. Members are encouraged to significantly increase their contribution to technical assistance programmes for these countries.

Additional measures to improve market access include helping least-developed countries diversify their exports. Members will consider proposals related to trade and relevant to diversification, and will support the work of other international agencies in this field.

The sub-committee will annually review and possibly make recommendations on the participation of least-developed countries in the multilateral trading system.

  

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Least-developed countries in the WTO 

The WTO recognizes as “least-developed countries” those given the designation by the United Nations. There are currently 50 least-developed countries on the UN list, of which 32 are WTO members: Angola, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Democratic Republic of the Congo, Djibouti, Gambia, Guinea, Guinea Bissau, Haiti, Lesotho, Madagascar, Malawi, Maldives, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Senegal, Sierra Leone, Solomon Islands, Tanzania, Togo, Uganda, Zambia.

On 10 December 2002, the General Council adopted a decision which sets guidelines to help least-developed countries join the WTO more quickly and easily. The decision says WTO members will restrain in seeking concessions and commitments from LDCs negotiating membership. It also says they will be given the transition periods and transitional arrangements foreseen for least-developed countries that were members since the WTO creation.

Since then, two LDCs have successfully concluded their negotiations to become members of the WTO: Nepal and Cambodia, in 2003 (see separate note on accession). There are ten least-developed countries currently negotiating WTO membership: Afghanistan, Bhutan, Cape Verde, Ethiopia, Laos, Samoa, Sao Tome and Principe, Sudan, Vanuatu and Yemen.

  

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Participation in world trade 

Between 1990 and 2004, least-developed countries have increased their merchandise exports share from 0.5% to 0.7% and their merchandise imports share from 0.7% to 0.8%. But they remain marginal participants in world trade. Their merchandise exports, as a group, grew by 34 per cent in 2004 to US$62 billion which can mainly be attributed to oil and commodity-exporting LDCs. The merchandise imports of LDCs continue to exceed exports, rising by more than 17 per cent to US$ 71 billion.

The picture is similar in services. Globally, in 2003, trade in commercial services accounted for about one-fifth of total trade. But for least-developed countries, commercial services trade accounted only for about one-eighth of their total exports , that is, US$7 billion. Imports of LDCs in commercial services increased to US$17 billion. The least-developed countries’ deficit of US$10 billion in commercial services trade continues to be larger than their deficit in merchandise trade.

  

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Preferential market access 

Several developed and transition economies — including some of the major markets for least-developed countries’ exports — granted duty-free and quota-free market access for all or almost all exports from least-developed countries. They include Canada, the EU, New Zealand, Norway and Switzerland. Among the major developing countries, Singapore and Hong Kong, China already offer duty-free and quota-free access on virtually all products, including products from least-developed countries.

Some other developing countries such as Mauritius, Egypt, and the Republic of Korea, have also given least-developed countries preferential duty-free access to their markets, albeit for more limited ranges of products.

Some of the preferences are based on regions. For instance, India gives preferential access to least-developed fellow-members of the South Asian Association for Regional Cooperation (SAARC). Morocco gives preferential access to 33 African least-developed countries. And the US gives enhanced market access opportunities for 25 least-developed countries of the 37 Sub-Saharan African beneficiaries under the African Growth and Opportunity Act (AGOA).

Recent initiatives have also been taken by member governments. For instance, the expansion of the European Communities, which came into force 1 May 2004, has effectively enlarged the market destination from 15 to 25 countries for LDC exports which enjoy duty free and quota free access. Since January 2004, China has extended the tariff concessions to India under the Bangkok Agreement. This initiative came in addition to the preferential tariff rates granted to Bangladesh, India, Laos, the Republic of Korea and Sri Lanka.

  

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Participation in the WTO’s work 

In the past few years, least-developed countries have become more active in the WTO and its negotiations. Some issues are of vital interest to them, such as cotton which is negotiated in a sub-committee under agriculture (see separate note). But their participation is hampered by the small size of their delegations and, for some, the lack of a mission in Geneva.

To increase the number of WTO experts in those countries, the WTO Institute for Training and Technical Cooperation has stepped up its activities. They include: national and regional seminars, technical missions, workshops, conferences and symposiums. In 2004, least-developed countries have been involved in a total of 204 activities, which represented 40 per cent of all technical assistance activities. More specifically, in 2004, 13 national activities in LDCs covered one of the four areas referred to in the July package.

For non-residents — delegations which do not have an office in Geneva — “Geneva Weeks” are organized. Least-developed countries’ representatives in other European cities and officials from the capitals are invited to Geneva for a briefing on the state of play of work in the WTO. Non-residents are also kept up to date through briefing notes from the Secretariat. There are 22 WTO members and 9 observers who are not represented permanently in Geneva, 14 of them least-developed countries.