Least developed countries (LDCs) have called on WTO members to consider their group’s list of priorities after the December 2015 ministerial conference in Nairobi. These priorities, outlined at a 24 June meeting of the WTO’s Sub-Committee on LDCs, would serve as a ‘roadmap’ for the group’s engagement in post Nairobi work at the WTO in the months ahead.

LDC Group Coordinator Ambassador Eloi Laourou (Benin) emphasized, in particular, the need to address domestic support in agriculture, including cotton and implement preferential treatment for LDC services. The coordinator drew attention to these and other priorities contained in the submission, which the group had prepared based on deliberations they undertook at a retreat in April.

Effective implementation of the Nairobi decisions is needed, said the coordinator. He also reiterated that the LDC group would be revisiting proposals on special and differential treatment raised in the run-up to the ministerial conference in Nairobi. These proposals aimed  to build on the rights for LDCs and developing countries to be treated more favourably in consideration of their level of development.

Meanwhile, discussions on how to review the implementation of ministerial declarations and decisions meant to favour LDCs will have to continue, as the Sub-committee chair Ambassador Roderick van Schreven (Netherlands) reported that consultations with members have so far not yielded an agreement.

The LDC group coordinator also drew members’ attention to specific trade and investment measures meant to help LDCs achieve the objectives of the Istanbul Programme of Action (IPoA) for LDCs, such as to double their share in global exports to 2% by 2020. Last year, the LDCs’ share in global exports stood at just  below 1%. Recommended measures, which included a call for donor countries to allocate 0.2% of their gross national income as official development assistance to LDCs, are contained in the ‘Political Declaration’ made at the midterm review of the IPoA in May.

The Sub-Committee also heard an update on technical assistance and training provided to LDCs as well as plans and funding for the second phase of the Enhanced Integrated Framework, a multi-donor program which helps LDCs play a more active role in the global trading system.

Finally, the European Union reminded members of its new system for certifying the origin of goods from exporters that participate in its Generalized Scheme of Preferences, which allows developing countries to pay lower or no duties on their exports to the EU. The new ‘registered exporter (REX)’ system will allow exporters to self-certify their shipments’ origin starting 1 January 2017.

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LDC Group Post-Nairobi Priorities in the WTO

Communication from Benin on behalf of the Least Developed Countries (LDC) Group

The LDC Group presents this first communication to reflect its collective view on WTO work post-MC10, building on the elements contained in the Nairobi Ministerial Declaration, as a contribution to the work ahead and to identify issues of priority for LDCs. It should be recalled that Ministers in Nairobi instructed that Members address LDC issues and interests on a priority basis, as provided in paragraph 24 of the Declaration.

The LDC Group considers that the Ministerial Declaration reflects the interests and concerns of Members of the WTO and is a good basis to advance the work of the institution and conclude the Doha Development Agenda.

It is also important to achieve concrete results, reflecting the efforts of Members since about fifteen (15) years. The LDC Group stresses the need that Members focus their work mainly and primarily, on the remaining areas to be covered, which represent major challenges for LDCs in their integration and participation in the multilateral trading system, and in response to the Sustainable Development Goals.

Implementation of decisions in favour of LDCs

Agriculture

The LDC Group is of the view that like all other Ministerial Decisions Nairobi Decisions on Agriculture as the Decisions of highest Decision making Body of the WTO are to be implemented and are enforceable. Towards this end, the LDC group asked Members to implement the Decisions on export competition and cotton in letter and spirit.

Regarding Bali and Nairobi Decisions on public stockholding for food security purposes, and noting that the scope of the interim mechanism established in Bali covers only existing programs, the negotiations for a permanent solution within the Agriculture Committee in Special Session should take into account the needs of LDCs that do not yet have public stockholding programs. The LDC Group will submit a communication to the Committee on Agriculture Dedicated Session to identify issues which are important to LDCs.

Cotton: LDCs call on Members to ensure the implementation of the Decision adopted in Nairobi on duty-free, quota free treatment of cotton and to eliminate export subsidies and all other measures with equivalent effect on cotton. Members must commit to the negotiations on domestic support pillar for cotton, and achieve appropriate outcomes under this pillar of agricultural multilateral trade negotiations. The LDC Group urges Members to participate in the WTO Director-General’s Consultative Mechanism on aspects of development scheduled for 1 July 2016.

Duty-Free, Quota-Free Access

All Ministerial Decisions taken in favour of LDCs on Duty-Free Quota Free Market Access (DFQF) must be effectively implemented. The LDC Group urges all WTO members to engage on issues that advance the implementation of Hong Kong Declaration, Annex F, and the Bali Decision on Duty-Free Quota Free Market Access.

The LDC Group will soon finalize Terms of Reference for a clinical examination of DFQF market access regimes for a study to be undertaken by the WTO Secretariat. The Terms of Reference will be submitted for review and validation of the Committee on Trade and Development at its next session.

Decision on preferential rules of origin for LDCs

The Decision on Rules of Origin for LDCs should be implemented effectively. In line with the decision of Nairobi and discussions at recent meetings of the Committee on Rules of Origin (CRO), particularly in response to the communication of the LDC Group this year, the LDC Group urges Members to submit to the CRO, relevant updated information on measures they will take to implement this Decision. Developing country Members with preferential schemes for LDCs are also invited to expedite the implementation of the Decision.

Other issues raised in LDCs communication should be treated in a manner to advance on the implementation of the Decision of Nairobi, with the fundamental objective of making progress in 2016.

Implementation of the Decision on the exemption for services for LDCs

The LDC Group places a priority on the implementation of the MC8 LDC Waiver Decision, as amended by the Nairobi Decision on Implementation of the LDC Services Waiver, and relevant elements of the Bali Decision on the operationalization of the LDC services waiver. All 23 notifications are important contributions toward implementation of the LDC services waiver and are appreciated by the LDC Group. For those notifications received after the November 2015 Dedicated Session, the LDC Group will seek bilaterals for clarifications and assessment in advance of Council for Trade in Services (CTS) meetings. The LDC Group also calls upon other Members who have not yet submitted notifications to do so as soon as possible in 2016.

The LDC Group intends to initiate discussions in the CTS to review the process of operationalizing notified preferences along with other issues that should be addressed in order to facilitate benefits from notified preferences as mentioned in the Nairobi LDC Services Waiver Decision. Implementation of the notifications submitted to the WTO is imperative. LDC services suppliers must be able to report that they are actually benefiting from the implementation of notified preferences.

Paragraph 3.2 of the 2014 LDC Collective Request, which is now contained in paragraph 1.4 of the Nairobi LDC Services Decision, should be implemented in a manner to assist LDC suppliers in the utilization of notified preferences.

Data should be collected, including how Members are building awareness among their consumers about the preferences granted by their country to LDC suppliers. Mechanisms should be devised to orient LDC services suppliers and to create awareness in LDCs of the benefits of the notified preferences. “Supply-side” support in-country should be provided to enable utilization of the preferences.

Remaining areas of the Doha Development Agenda (DDA) of priority to LDCs

Agriculture

Large-scale domestic supports continue to distort prices of some agricultural products, thereby excluding LDC producers from the international market, also causing unfair competition in local and regional markets. LDCs are affected by domestic supports in all key markets where they are applied. As commodity prices continue to decline from 2011 record levels, it is important and urgent to address the impact of trade distortions resulting from these domestic support policies.

Transparency is also important so that LDCs can determine the nature and extent of the support applied. Therefore, the LDC Group has submitted a communication to the Special Session of the Agriculture Committee with specific questions to obtain information on current levels of domestic support applied under the different categories and their impact on agricultural products produced and exported by LDCs. The LDC Group will also present other contributions to stimulate negotiations in order to achieve the final outcomes on domestic support.

The LDC Group will submit findings on practices of subsidies, impacting on LDCs economies, especially on the Agriculture sector. In that regard, consultations will be held with key players to determine where those countries can focus on outcomes needed for LDCs.

Cotton Domestic Supports

The LDC Group supports the C4 Sectoral Initiative on Cotton to reach an agreement on the substantial reduction toward elimination of trade distorting domestic supports on cotton. Appropriate and measurable results should be achieved by the MC11.

Non-tariff Barriers

Sanitary and Phytosanitary (SPS) and Technical Barriers to Trade (TBT), are also of concern to LDC exports. Work must be done in the post-Nairobi phase to address measures that restrict market access.

Key remaining DDA Special and Differential Treatment for LDCs

The LDCs are in the process of revisiting the proposals submitted for negotiation at MC10, at the Nairobi Ministerial Conference. LDCs will engage with partners to come to concrete decisions based on LDC specific proposals. LDCs remain engaged with the G90 to ensure that the Doha mandate on special and differential treatment proposals will be strengthened and made legally binding, wherever it is appropriate and relevant to the LDC development needs and in the spirit of the momentum created by the 2030 Sustainable Development Agenda.

LDCs, by nature, must be assured flexibilities under WTO rules so that they can benefit from the multilateral rules based system and integrate into the multilateral trading system. It is important to recognize that after the establishment of WTO, only a few LDCs have been able to graduate from LDCs status, while most of them are far from being able to graduate. Therefore, flexibilities should be provided in the rules to allow both the implementation of these rules and respect of the principle of flexibilities for the participation of WTO’s weakest members of the WTO.

Disciplines on fisheries subsidies

The LDC Group supports multilateral negotiations to reach agreement on fisheries subsidies that have an impact on development. In this context, these negotiations should aim to achieve effective disciplines, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing.

Negotiations should aim primarily industrial fishing on a large scale and include among others, disciplines on:

1. subsidies for any vessel engaged in illegal, unreported and unregulated fishing (IUU); and

2. subsidies for operating expenses granted to a fishing vessel or fishing activity negatively affecting overfished stocks.

As part of these negotiations, Members should pay effective attention to:

1. the need for special and differential treatment, including flexibilities for subsidies provided by LDC, which do not contribute to overfishing or depletion of fish stocks; and

2. the provision of technical assistance and capacity building to address the institutional and financial constraints faced by many LDCs in the implementation of disciplines, including against IUU fishing impacting their fish stocks.

In other areas related to the rules negotiations, the LDC Group will prepare submissions to reflect the concerns and expectations of LDCs, as appropriate.

Non-agricultural goods market access (NAMA)

While LDCs should benefit from DFQF treatment for all exports, including industrial products granted by, the developed country, and the developing country in a position to do so, such preferential arrangements should ultimately be reflected in the WTO as binding commitments, supported by flexible rules of origin in accordance with the Nairobi Ministerial Decision.

Any outcome on NAMA tariff negotiations should place the objective in paragraph 30 above, as a priority, in accordance with paragraph 24 of the Ministerial Declaration of Nairobi, and the principles of Annex F of the Hong Kong Declaration. Moreover, LDCs are interested in the examination of options in the context of NAMA negotiations that promote their participation and upgrading regional and global value chains in a manner that will support value addition in LDC manufactured goods and promoting their industrialization.

Non-tariff barriers

Notwithstanding the benefits of DFQF treatment for agricultural and non-agricultural products from LDCs, non-tariff barriers are increasingly becoming the most troubling barriers to market access in key destinations for LDC exports. LDCs also call for the examination of non-tariff barriers impacting LDC exports and to explore options to address adequately the problems faced by LDCs.

WTO initiatives, Enhanced Integrated Framework, and other WTO related issues of interest to LDCs

The LDC Group appreciates the commitment of donors who made announcements in Nairobi as part of Phase 2 of the Enhanced Integrated Framework (EIF). Other donors who have not yet made a contribution are invited to make commitments, without delay. The LDC Group also stresses the importance that non-traditional donors participate and make contributions to the EIF.

Aid for Trade (AfT)

Building on the progress to date, the LDCs have identified as a priority the need to address supply-side capacity constraints, and constraints to conform with standards imposed by trading partners, to the extent that they present real challenges for LDC exports. Conformity with technical standards and regulations defined by trading partners should be supported by appropriate technical assistance, capacity building programmes with predictable resources. In addition, resources should be allocated to support LDC diversification and competitiveness in the supply of value-added products in the areas of agriculture, fisheries and services. Support should be provided to LDC efforts to ensure the structural transformation of their businesses to promote diversification and industrialization, and in the fight against poverty. In facilitating the above, it is important and necessary that these measures take into account the diversity and specific needs of individual LDCs in order to ensure effective results.

Availability of Trade Information and Reliable and Updated Statistical Data

The LDC Group underlines the need for trade information and reliable, updated statistical data for conducting relevant trade negotiations at the post-Nairobi phase. This information should be provided by the WTO Secretariat and circulated to the wider Membership. Information should also be provided by other related and relevant institutions whose activities focus on the promotion of trade and development for LDCs, including UNCTAD, ITC, WCO, the World Bank, IMF, etc.

Accessions

The LDC Group calls on Members to facilitate and accelerate the accession process for LDCs, in accordance with accession guidelines of 2002 on the process for LDCs acceding to the WTO revised in 2012. The Group also requested that acceding LDCs receive assistance for capacity building and adequate technical assistance to ensure their integration into the multilateral trading system.

News issues and paragraph 34 of the Nairobi Ministerial Declaration

LDC Group stresses that discussions on any so-called new issues are conducted for exploratory purposes, in appropriate consultation formats. The conclusions and recommendations to be derived from these consultations must respect the decision making procedures of the WTO and in accordance with paragraph 34 of the Nairobi Ministerial Declaration. A consultation schedule should be developed to avoid conflicts with work on the remaining issues of the Doha Development Agenda. Proponents of new issues should present the issues in a manner to clearly demonstrate their relevance to the interests of LDCs.

Sustainable Development Goals

The LDC Group recalls that both Sustainable Development Agenda and Istanbul Programme of Action, set a target for doubling the share of LDCs in global export from 1% to 2% by 2020. Toward this end, the LDCs calls up on the Members to hold a discussion on this issue, in the Sub-Committee on LDCs.

Conclusion

The LDC Group would like to reiterate the importance and necessity that the results of the ongoing process of negotiations ensure the effective participation of LDCs in international trade, promote economic growth and contribute to the fight against poverty and the realization of the 2030 Agenda for Sustainable Development.

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Draft Terms of Reference for the Clinical Examination of Implementation of the Decision on the Duty-Free and Quota-Free (DFQF) Market Access for LDCs

Submission by the Delegation of Benin on behalf of the Least Developed Countries

Under paragraphs (a)(i), (ii) and (b) of Decision 36 on Measures in Favour of Least Developed Countries, contained in Annex F of the Hong Kong Ministerial Declaration of 2005:

“Members should provide duty-free and quota-free market access on a lasting basis, for all products originating from all LDCs by 2008 or no later than the start of the implementation period in a manner that ensures stability, security and predictability

Members facing difficulties at this time to provide market access as set out above shall provide duty-free and quota-free market access for at least 97% of products originating from LDCs, defined at the tariff line level, by 2008 or no later than the start of the implementation period. In addition, these Members shall take steps to progressively achieve compliance with the obligations set out above, taking into account the impact on other developing countries at similar levels of development, and, as appropriate, by incrementally building on the initial list of covered products

Members shall notify the implementation of the schemes adopted under this decision every year to the Committee on Trade and Development. The Committee on Trade and Development shall annually review the steps taken to provide duty-free and quota-free market access to the LDCs and report to the General Council for appropriate action”.

The Bali Ministerial Decision (of 7 December 2013) reiterated these objectives.

It is important to recall that members are at different stages of implementation of the Ministerial Decisions on Duty Free and Quota Free Market Access for LDCs. The LDC Group continues to experience divisions on how the implementation of DFQF will affect their garment industry.

During the 96th Session of the WTO Committee on Trade and Development, held on 23 September 2015, Members agreed that a clinical examination would be conducted by the WTO Secretariat on the implementation of the decision on duty-free and quota-free market access for LDCs. During the session, the Chairman said that it would be necessary to define the parameters of the proposed study to be conducted by the Secretariat. He indicated that a draft outline of the study would need to be prepared as soon as possible, after which informal consultations would be held.

At the Committee’s session on regional trade agreements, held on 16 March 2016, the Chairperson provided an update on the implementation of the Committee’s decision that the Secretariat would carry out the clinical examination. During this session, the chairman reaffirmed that a written proposal from the LDC Group on the parameters of the secretariat study would help to move the process forward.

The delegation of Benin, on behalf of the LDC Group, stated that the Group would submit draft terms of reference for the clinical examination at the July session of the Committee on Trade and Development.

Scope and Parameters of the Clinical Examination

The clinical examination will be carried out on the basis of the following parameters:

1. Diagnosis of the fundamental problem in implementing the decision on DFQF market access for LDCs with a view to establish why has there been a problem in the implementation since Hong Kong more than 10 years ago

2. An examination of the level of implementation of the Ministerial Decision on DFQF Market access by preference granting countries for LDCs.

3. Major global and regional markets of LDCs’ exports and export revenues of individual LDC to each market.

4. Number of MFN tariff lines dutiable in all of those countries, distribution of dutiable lines over HS chapters and average tariff faced by the LDCs.

5. An identification of textile and clothing export of individual LDCs to major export markets between 2000-2015.

6. An identification of major worldwide importers of textile and Clothing products and a comparison of the market shares in textile and clothing products at HS heading and sub-heading levels in these markets, of suppliers, including LDCs, for the period 2000-2015.

7. Establishing why have textiles and garments been a problem in the implementation of the decision on DFQF Market Access.

8. The overall contribution of DFQF MA to the Gross Domestic Product (GDP) of LDCs, and in particular the contribution of textile exports to the GDP of LDCs as a proportion of total exports.

9. A comparison of most exported tariff lines from LDCs to the USA market not covered by current US DFQF arrangements with the tariff lines that are currently covered by other arrangements such as AGOA, HELP and HOPE with MFN tariffs ranked by value of US imports.

10. A comparison of tariff lines for clothing products most exported from AGOA, HELP and HOPE beneficiaries with the TPP list of tariff concession by the USA to TPP countries ranked by value of exports and tariff phase down.

11. Based on last experiences of the negative impact of the expiration of the Multifiber Agreement on the LDCs exports, evaluate the impact of these liberalization trends on exports and export diversification in textile and apparel in particular from AGOA/HELP/HOPE LDC beneficiaries.

Approach

The Secretariat should also identify the medium- and long-term development trends for exports on the global market as from the implementation of the decision on DFQF MA for LDCs.

The statistical and trade information provided by Members, as well as the information available from the databases of the WTO Secretariat, UNCTAD, the ITC, the World Bank, USITC, the OECD and all other official sources of documentation, could be used for this study.

Timetable

The results of the study shall be made available as soon as possible but in any case not later than two months from the July Session of the Committee on Trade and Development.

The Committee on Trade and Development will review the study with a view to identifying the problems hindering implementation of the DFQF Market access decision for LDCs, and coming up with recommendations.