LEAST-DEVELOPED COUNTRIES Enhancing trade opportunities

Least-developed countries’ share of world trade is marginal, around 0.5% of the total. In recent years, WTO members have made significant efforts to help these countries increase their exports, through enhanced market access and technical assistance. Efforts have also been made to reinforce their participation in the work of the WTO.

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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. Concretely, they promised to give duty-free, quota-free market access improvements for products from these countries. They also promised to consider additional measures to improve least-developed 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 the products they make and export. 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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Joining the WTO

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. No least-developed country has gone through the full application process and joined the WTO since its creation on 1 January 1995. This decision should change that.

For example, the decision says WTO members will be restrained in seeking concessions and commitments on trade in goods and services from least-developed countries negotiating membership. The decision also says the least-developed countries joining the WTO are to be given the transition periods and transitional arrangements foreseen for all least-developed countries under specific WTO agreements. (These agreements allowed transition periods for developing and least-developed countries that were already members when the agreements took effect and the WTO came into being in 1995. Since then, new members have often agreed to implement the provisions as soon as they joined, without a transition period.)

The ten least-developed countries currently negotiating WTO membership are: Bhutan, Cambodia, Cape Verde, Ethiopia, Laos, Nepal, Samoa, Sudan, Vanuatu and Yemen.


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Participation in world trade

Between 1990 and 2002, least-developed countries have maintained their share of world trade, without any erosion. But they also remain marginal participants in world trade. Their merchandise exports, as a group, grew by 4% in 2002 to US$38 billion. Their merchandise imports continue to exceed exports, rising by 3% to US$45 billion in 2002.

The picture is similarly marginal in services. Globally, in 2002, services trade accounted for about one-fifth of total trade. But for least-developed countries, commercial services accounted for about one-eighth of their total exports, while imports of commercial services increased to US$16 billion. The least-developed countries’ deficit of US$10 billion in commercial services trade continues to be much 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 — have given duty-free and quota-free market access for all or almost all exports from least-developed countries. They include Canada, the Czech Republic, the EU, Hungary, New Zealand, Norway, the Slovak Republic and Switzerland. Among the major developing countries, Singapore and Hong Kong China already offer duty-free and quota-free access — without discriminating between WTO member countries — 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 African least-developed countries. And the US gives enhanced market access opportunities for 23 least-developed countries in Sub-Saharan Africa under the African Growth and Opportunity Act (AGOA).

Additional measures have also been taken or considered by member governments. For instance, at the third United Nations Conference on the Least-developed countries in 2001, the EU announced it would not use anti-dumping measures on least-developed countries’ exports. Other members have exercised similar restraint in the use of contingent trade remedies against imports of least-developed countries’ products that might be dumped, subsidized or surging. Several, including Canada, the EU, Norway and Switzerland, have simplified the rules of origin so that least-developed countries can make use of preferential schemes (such as generalized systems of preferences or GSPs) more easily.


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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. 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 for them. These include: national and regional seminars, technical missions, workshops, conferences and symposiums. In 2003, least-developed countries will participate in approximately 150 regional and 115 national activities.

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 24 WTO members and 12 observers who are not represented permanently in Geneva at all, 10 of them least-developed countries.


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Definition of LDCs

The WTO recognizes as “least-developed countries” those given the designation by the United Nations. There are currently 49 least-developed countries on the UN list. Thirty of them are WTO members: Angola, Bangladesh, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Democratic Republic of the Congo, 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.

Ten more are applying for WTO membership: Bhutan, Cambodia, Cape Verde, Ethiopia, Laos, Nepal, Samoa, Sudan, Vanuatu, and Yemen. They are observers.

Furthermore, Equatorial Guinea, and Sao Tome and Principe are also WTO observers without yet formally applying for membership.