Of the 48 countries designated by the United Nations (UN) as Least Developed Countries (LDCs), 34 are World Trade Organization (WTO) Members and a further eight are in the process of acceding to the WTO. The LDC WTO Members account for more than one fifth of the WTO Membership and therefore represent an important constituency in the WTO.

Considerable progress has been made in integrating LDCs into the multilateral trading system (MTS) over the last 20 years. The establishment of the WTO has supported LDCs to become more active players in the system, resulting in provisions aimed at increasing the trade opportunities for these countries. As a result, the participation of LDCs in global trade has seen gradual improvement over the last 20 years. LDCs increased their share in world trade of goods and services from 0.59% in 1995, to 0.80% in 2005, to 1.23% in 2013.

The increased trade opportunities have also been complemented by enhanced flexibilities for LDCs in implementing WTO rules and disciplines as well as in undertaking commitments. Members have shown willingness to respond to concerns and needs of LDCs to beneficially integrate them into the MTS. The special situation of LDCs and its commensurate recognition in the negotiations has thus been one of the defining features of the MTS; and special provisions are continually being introduced to assist LDCs in their development efforts.

This Secretariat Note has been written as part of WTO’s 20th Anniversary Event dedicated to LDCs titled “Twenty Years of Supporting the Integration of Least Developed Countries into the Multilateral Trading System” scheduled for 12 October 2015. This study traces the 20-year relationship between the WTO and LDCs, in particular the key developments and decisions taken in favour of LDCs, the institutional support provided and the trade capacity-building initiatives put in place.

This Note focuses on the measures taken in favour of LDCs following the establishment of the WTO, though the evolution of the MTS has seen special consideration for LDCs, even prior to the establishment of the WTO in 1995. The importance of development in the MTS advanced in 1964 when a dedicated chapter on trade and development was added to the GATT as Part IV, which spelled out the principle of non-reciprocity in the MTS. The principle of non-reciprocity, and Part IV more generally, created a stronger basis for developing countries to seek flexibilities in trade negotiations and special action with respect to their trade interests.

One of the key achievements of the GATT period was the adoption of the “Enabling Clause” during the Tokyo Round in 1979. This decision, titled “Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries”, made a first mention of LDCs in a legal instrument under the GATT period. The Enabling Clause formed an important basis of subsequent special and differential treatment (S&D) for developing countries in the MTS. It, inter alia, facilitated specific preferences for LDCs among developing countries.