Briefing note: Least Developed CountriesThe poorest part of the world community is the Least Developed Countries (LDCs). According to the United Nations, they comprise more than 880 million people (about 12 per cent of world population), but account for less than 2 per cent of world GDP and about 1 per cent of global trade in goods.
The WTO recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations. There are at present 48 LDCs on the UN list, 31 of which are members of the WTO and another 12 countries are in various stages of the accession process.
WTO members recognize that LDCs need special treatment and assistance for their development. WTO agreements include provisions aimed at increasing LDCs’ trade opportunities through market access; provisions requiring WTO Members to safeguard the interest of developing countries; provisions allowing LDCs flexibilities in the implementation of WTO rules and commitments, including longer implementation periods; and provisions for technical assistance.
The special and differential treatment (S&D) provisions (see page: Work on special and differential provisions) are contained in WTO agreements to give developing countries, in particular least developed countries, special rights and which give developed countries the possibility to treat developing countries more favorably than other WTO Members. An overview of special and differential treatment for least-developed countries can be found in document WT/COMTD/W/135.
The assistance to LDCs include training and technical assistance to LDCs’ trade officials (see page: WTO technical assistance and training) and a coordinated effort to develop the trade-related skills and infrastructure needed to implement and benefit from WTO agreements and to expand their trade (see page: Aid-for-Trade). The LDCs benefit from the Enhanced Integrated Framework (EIF), a global Aid for Trade partnership for LDCs, involving LDCs, donors and international organizations, which support LDCs to be more active players in the global trading system by helping them tackle obstacles to trade. (See: www.enhancedif.org)
Decisions at the MC8
At the eighth Ministerial Conference held in Geneva on 15-17 December 2011 (hereinafter “MC8”), a number of decisions related with LDCs are to be adopted by Ministers.
A draft decision on LDC accessions (document: WT/COMTD/LDC/19), with a view to further strengthening the 2002 LDC accession guidelines, was agreed to by members and will be forwarded to the 2011 Ministerial Conference for consideration.
Becoming a member of WTO, or “accession to” the WTO, involves complex technical work and negotiations that can last for years — see here for a full explanation of accession procedures. Least-developed countries face special difficulties in completing their accession process, and in implementing their commitments after accession.
WTO members reaffirmed in the Doha Ministerial Declaration that accession of LDCs remains a priority and agreed to work to facilitate and accelerate negotiations with acceding LDCs. Subsequently, guidelines for accessions of least-developed countries (document: WT/L/508) were adopted in December 2002.
Since the adoption of the guidelines, two LDCs — Nepal and Cambodia — have acceded to the WTO, in April and October 2004, respectively. Cape Verde graduated out of the LDC classification in 2007 prior to becoming a WTO member in July 2008. The working parties on the accession of two other LDCs — Vanuatu and Samoa — concluded work on the terms of accessions in 2011.
The draft decision on LDC accessions, to be considered at the Ministerial Conference, would instruct the Sub-Committee on LDCs to develop recommendations to further strengthen the 2002 guidelines, by including benchmarks of accession commitments for acceding LDCs, particularly in the area of goods. Such benchmarks would take into account the level of commitments undertaken by existing LDC members. There is also a possibility to work out some benchmarks in the area of trade in services.
The draft decision would also recognize the need to enhance transparency in accession negotiations. There is a broad understanding that bilateral market access negotiations will be complemented with multilateral frameworks. The decision also invites members to consider requests from acceding LDCs for additional transition periods, beyond the ones provided for in the 2002 accession guidelines.
The decision recognizes the need for enhanced technical assistance and capacity building for LDCs in all stages of the accession process. Members have agreed to develop appropriate tools to assess the needs of acceding LDCs in technical assistance, as well as to ensure greater coordination in the delivery of technical assistance to acceding LDCs. There is also a call for optimal use of all facilities available to acceding LDCs, including the EIF.
Under the guidance of the Ministerial decision, the Sub-Committee on LDCs would continue the work and make recommendations to the General Council no later than July 2012.
A draft decision to consider extending the deadline for least developed countries to protect intellectual property rights (document: IP/C/59/Add.2) was agreed by WTO members meeting as the TRIPS Council and forwarded to the 2011 Geneva Ministerial Conference. Under WTO procedures, the ministers will invite the TRIPS Council to give full consideration to a duly motivated request from LDCs members for an extension of their transition period before the present deadline expires in mid-2013 and report thereon to the WTO Ninth Ministerial Conference.
Least developed countries, like all WTO members, are bound by the TRIPS Agreement. But WTO members recognize that these poorest countries face economic, financial and administrative constraints in their efforts to bring their domestic legal systems into conformity with the provision of the TRIPS Agreement. Article 66.1 of the TRIPS Agreement specifies a transition period for LDCs to delay protecting intellectual property under the Agreement.
This means that as far as the WTO is concerned, least developed countries are not obliged to protect trademarks, patents, copyright, geographical indications and other types of intellectual property. The transition period does not prevent least developed countries from protecting intellectual property if they want to. But if they do — and several do provide at least some kind of protection — then they have to comply with the TRIPS Agreement’s non-discrimination clauses, on treating trading partners equally and on equal treatment between domestic and foreign players.
The deadline does not apply to pharmaceutical patents. The 2001 Doha Declaration on TRIPS and Public Health extended the period for least developed countries to comply with provisions on pharmaceuticals to 2016.
As least developed countries use their transition period to prepare to implement the WTO’s intellectual property provisions, they have been asked to identify their priority needs for technical assistance in order to receive support. An overview of the process of identifying and responding to least developed countries’ needs can be found here.
A draft decision permitting preferential treatment to services and service suppliers of least-developed countries (document: TN/S/37) was agreed by members of the special session of the Council for Trade in Services, and will be forwarded to the Ministerial Conference for adoption.
In general, the WTO's services agreement specifies that each member shall provide non-discriminatory treatment to services and service suppliers of other WTO members . (GATS Article II: Most-Favoured-Nation Treatment). The draft decision on a service waiver, however, makes an exception to this principle. The waiver, once adopted at the Ministerial Conference, would allow WTO members to deviate from their most-favoured nation (MFN) obligation, allowing Members to undertake preferential market access commitments in favour of LDCs.
Although members are not obliged to grant such preferential treatment, each member who decides to do so must submit a notification to the Council for Trade in Services, prior to granting or modifying the preferential treatment.
The waiver recognizes that the special economic situation of LDCs, and their development, trade and financial needs, amounts to an exceptional circumstance that prevents LDCs from securing an adequate share in the growth of world trade in services. Article XIX:3 of the WTO's General Agreement on Trade in Services (GATS) requires the establishment of modalities for the special treatment for LDCs in the negotiations on trade in services. These modalities were established in September 2003 (document: TN/S/13). Annex C of the Hong Kong Ministerial Declaration of December 2005 (document: WT/MIN(05)/DEC) also provided guidance in this regard and called upon WTO members to establish appropriate mechanisms to give effect to the modalities.
This waiver would last for 15 years from the date of adoption.