Trade and development

Among the special and differential provisions are those permitting preferential market access for developing countries and LDCs and longer transition periods for them to implement WTO agreements. The aim is to help developing countries and LDCs increase trade opportunities and safeguard trade interests. Over 150 such provisions exist in the WTO's agreements and decisions.

At the 4th Ministerial Conference held in Doha, Qatar, in 2001, development issues and the interests of developing countries were placed at the heart of multilateral negotiations. Trade-related technical assistance activities were specifically elaborated to help them develop their trading capacities and expand trade opportunities.

Development-related decisions

Trade ministers have adopted several development-related decisions since 2001, including:  

• the Aid for Trade initiative launched at the 6th Ministerial Conference held in Hong Kong in 2005 to help mobilize resources to address the trade-related constraints identified by developing countries
• several decisions taken in favour of LDCs at the 6th Ministerial Conference, including one where members pledged to provide duty-free and quota-free market access to LDCs
• a “Monitoring Mechanism” on special and differential treatment, under which members may review special provisions for developing countries. Ministers established the mechanism at the 9th Ministerial Conference held in Bali in 2013.
• six ministerial decisions on agriculture, cotton and several initiatives in favour of LDCs adopted at the 10th Ministerial Conference held in Nairobi in 2015, as part of the “Nairobi Package”. These include a commitment to abolish subsidies for farm exports, a longstanding demand by developing countries to level the playing field in international farm trade.

Agreement-specific proposals

Since 2017, WTO members have been debating ten Agreement-specific proposals on special and differential treatment by the G90 group ⁽¹⁾ of developing countries and LDCs in the negotiating body of the Committee on Trade and Development, known as the "Special Session".

The proposals seek to strengthen existing special and differential treatment provisions by making them more precise, effective and operational and to create a more balanced rules-based system. The objective is to enable developing countries and LDCs to pursue policies aimed at achieving industrialization, structural transformation and diversification of their economies, to raise living standards and to further integrate into the multilateral trading system in a sustainable manner. The proposals are based on Paragraph 44 of the Doha Ministerial Declaration, which has been guiding the WTO's work on special and differential treatment since 2001.

Developed members have continued to express concerns with the scope of the proposals, in terms of the coverage and the nature of the proposed flexibilities as well as the lack of meaningful differentiation between developing countries at different levels of development. Without substantive changes to the proposals, several of these developed members continue to claim that progress cannot be made in these discussions. Extensive discussions, both formal and informal, have been conducted by the successive chairs of the special session.

Current discussions in the run-up to MC12

Many developing countries continue to call for development and special and differential treatment to be given utmost importance at the 12th Ministerial Conference (MC12) — scheduled to take place from 12 to 15 June in Geneva - and in the WTO's regular and negotiating work.

Small economies' integration into the trading system

WTO members agreed at a meeting of the Committee on Trade and Development's Dedicated Session on Small Economies on 19 October 2021 on a decision to be submitted to trade ministers at MC12 as part of the Work Programme on Small Economies stemming from the 2001 Doha Declaration. The objective of the work programme is to address the specific challenges that small economies face in participating in world trade due to a lack of economies of scale or limited natural resources, for example, without creating a separate category of WTO members.

The proposed decision calls for WTO members to address the issue of integrating small economies into post COVID-19 economic recovery by looking at the impact of the pandemic and the underlying challenges and opportunities that they face. The text also calls on the Dedicated Session on Small Economies to continue monitoring the progress of the small economies' proposals in WTO bodies and negotiating groups. In addition, it requests ministers to take note of the work undertaken to date in the Work Programme on Small Economies. The latest compilation paper prepared by the WTO Secretariat on this work is available here.

The previous Decision on Small Economies was taken at the 11th Ministerial Conference held in Buenos Aires in 2017. More information on the Work Programme on Small Economies can be found here.

LDC graduation

Graduating from the category of least-developed country is a major development achievement. However, this process comes with many challenges, including the loss of preferential access to the markets of other economies. In November 2020, the WTO's LDC Group submitted a draft ministerial decision for a smooth transition for graduating LDCs, proposing to extend all support measures benefiting LDCs for a period of 12 years after graduation.

In a revision to their proposal and in an attempt to secure an outcome at MC12, the WTO's LDC Group called on preference-granting members to extend and gradually phase out their preferential market access schemes over a period of six to nine years. Submitted in October 2021, the draft decision also proposes instructing the Sub-Committee for Least-Developed Countries to prepare a package of support measures for graduating LDCs and to report to the General Council at its first 2023 meeting.

A WTO member graduates from LDC status when it meets certain socio-economic thresholds set by the United Nations. The decision regarding graduation is taken by UN members on the recommendation of the Committee for Development Policy, an advisory body of the UN Economic and Social Council (ECOSOC). As of 2021, 16 LDCs out of 46 are on the path towards graduation from the LDC category. Of these, 10 are WTO members (Angola, Bangladesh, Cambodia, Djibouti, Lao PDR, Myanmar, Nepal, Senegal, Solomon Islands and Zambia) while four are in the process of negotiating their WTO accession (Bhutan, Comoros, Sao Tomé and Principe, and Timor-Leste). The other two LDCs are Kiribati and Tuvalu.

LDC Trade Ministers' Declaration

The LDC Trade Ministers' Declaration, adopted on 19 October 2021, further sets out the priorities of the LDC Group in various areas of negotiations for MC12 and beyond. These include:

• effectively implementing decisions taken in favour of LDCs (preferential rules of origin, the LDC Services Waiver and duty-free quota-free market access)
• taking positive actions on LDCs' graduation from the LDC category and accession to the WTO
• adopting flexibilities and special treatment measures in broader areas of negotiations, such as agriculture, fisheries subsidies and trade-related measures supporting the recovery from the COVID-19 pandemic.

The LDC Ministerial Declaration for MC12 can be assessed here.

A 2020 WTO report on the trade impacts of LDC graduation can be found here.

More on trade and development.

Notes:

1. The G90, otherwise known as the “Group of 90”, consists of the countries that are members of the Organisation of African, Caribbean and Pacific States (OACPS), the African Group and the LDC Group. back to text