Working Party head underlines Bhutan’s LDC status

The Working Party for the accession of the Kingdom of Bhutan to the WTO held its second meeting on Thursday October 6,2005 with a review of the state of play in the bilateral market access negotiations, a review of legislative developments and the continued examination of the Foreign Trade Regimes as supplied by the authorities.

Bhutan has now developed its initial offers in goods and services and has provided detailed action plans in respect of areas where they need transitional periods to comply with WTO rules. The chairman of the Working Party, ambassador Wolgang Petritsch, of Austria, expressed his hope to members that in their negotiations they will keep in mind “Bhutan's special situation as a land-locked, least developed country.”

As an LDC, Bhutan will benefit from guidelines for market access negotiations approved by the General Council in December 2002 for Least-Developed Countries. This guidelines provides for LDC's to undertake commitments and concessions commensurate with their individual development, financial and trade situation and for members no to refrain form making excessive demands on acceding candidates.

The head of Bhutan's delegation was the minister of Trade and Industry, Lyonpo Yeshey Zimba. In his intervention the minister explained that the government has identified four major pillars to guide the country's economic development: economic growth and development, preservation and promotion of cultural heritage, environmental conservation and good governance. The minister also said that “in an increasingly interdependent world, Bhutan must create an open and liberal environment for private sector promotion, export growth and integrate into the regional and multilateral trading system”. He also said that “at the same time we have to ensure that the pursuit of economic development and globalization does not adversely affect our fragile mountain environment and degrade the rich culture and heritage”. He also urged members to take this into consideration.

The GDP of Bhutan grew 8,7% in 2004 with an inflation rate of 3,9% although the country has experienced persistently large trade deficits that amounted to US$87.3 million or 14% of GDP in 2003/2004. Bhutan's trade is heavily concentrated in a narrow range of commodities and with few countries. India takes 96% of the country's exports and is a source of almost 90% of the imports.

Bhutan submitted its application for membership in 1999 and the fists meeting of the Working Party was in November 2004.