Detailed Presentation of the Least- Developed Countries in the WTO

WTO E-LEARNING COPYRIGHT 12 Detailed Presentation of the Least- Developed Countries in the WTO OBJECTIVES Explain the special status of the LDCs in the WTO; Describe the work programme for the LDCs; Introduce a number of WTO studies and reports on LDCs; Introduce the DDA and the LDCs; Describe LDCs and TRIPS. M y C o u r s e s e r i es

I. INTRODUCTION The least-developed countries (LDCs) category was established in 1971 by the UN as a special group of developing countries characterized by a low income level and structural impediments to growth. Since the establishment of the category, the Committee for Development Policy (CDP) an expert body under the UN ECOSOC has been responsible for undertaking a review of the LDC list every three years on the basis of which it advises the ECOSOC regarding countries that should be added to or those that could be graduated from the list. The CDP identified a list of 25 LDCs in 1971 based on a set of criteria (per capita income, share of manufacturing in GDP and adult literacy). While the specific benchmarks have evolved over the past years, these criteria currently are based on three indicators: a low income, as measured by the gross national income per capita; weak human resources, as measured by a composite index; 1 and a low level of economic diversification, as measure by another composite index. 2 In almost four decades, only three countries have graduated from LDC status 3: Botswana (1994); Cape Verde (2007); and Maldives (2011). However, the number of LDCs has nearly doubled from 25 in 1971 to 48 in 2011. The 48 LDCs comprise roughly 11 per cent of the world's population, but account for close to 1 per cent of the world's GDP. The LDCs contribute around 1 per cent of global trade in goods and half of one per cent of global trade in commercial services. Thirty-three LDCs are in Africa, 14 are in the Asia-Pacific and one in the Caribbean. The LDC category often overlaps with other structural categories of developing countries. Sixteen LDCs are landlocked developing countries (LLDCs) while ten LDCs are small island developing states (SIDS). LDC economies are characterized by their limited productive capacities, export dependence on a limited number of products (often primary products), poor infrastructure, low levels of productivity that limit the level, diversity, and quality of economic output in these countries. WTO uses the UN list to identify which countries are LDCs in the WTO. Out of 48 LDCs, 31 were Members of the WTO at the end of 2011. WTO LDC Members represent one fifth of WTO Membership (153). Samoa and Vanuatu completed their accession process in 2011 and are expected, after national ratification, to officially join the WTO in 2012, increasing the number of LDC WTO Members to 33. This reduces to ten, the number of LDCs which are at various stages of their accession process in the WTO, representing 40 per cent of acceding governments. The acceding LDCs enjoy observer status in the WTO. 1 The Human Assets Index is based on indicators of life expectancy at birth, per capita calorie intake, combined primary and secondary school enrolment, and adult literacy. 2 The Economic Vulnerability Index is based on the share of manufacturing in gross domestic product, the share of the labor force in industry, annual per capita commercial energy consumption, and the merchandise export concentration index reported by the United Nations Conference on Trade and Development. 3 The graduation criteria were first introduced in 1991. The CDP at that time determined that countries with a population exceeding 75 million should not be considered for inclusion in the list of LDCs. The concept of a smooth transition was introduced in the graduation procedures in 2004, which stipulates a three-year transition period following a decision by the UN General Assembly of a particular LDC's graduation. 2

II. SPECIAL STATUS OF LDCS IN THE WTO The LDCs are granted special recognition in the WTO, and enjoy special flexibilities in the implementation of WTO Agreements, including through Special and Differential Treatment (S&D) Provisions. S&D provisions can generally be classed in five main groups: provisions aimed at increasing trade opportunities through market access; provisions requiring WTO Members to safeguard the interest of developing countries; provisions allowing flexibility to developing countries in rules and disciplines governing trade measures; provisions allowing longer transitional periods to developing countries; and provisions for technical assistance. LDCs are accorded special S&D treatment over and above that given to other developing countries. For instance, the Agreement on Agriculture, negotiated during the Uruguay Round, exempted LDCs from undertaking reduction commitments, even though the average tariff reduction that developing countries were required to make was 24 per cent. The average binding level for the LDCs is around 78 per cent, with a number of them having bound rates above hundred per cent. 4 Another example of unique flexibility given to the LDCs is that under the Agreement on Subsidies and Countervailing Measures, the LDCs are exempted from prohibition of export subsidies on non-agricultural products this derogation is not allowed to any other WTO Member. Many WTO Agreements provide transition periods to the LDCs so as to implement those Agreements in a gradual manner. One such example is the TRIPS Agreement. The LDCs are given ten years of transition period to implement the TRIPS Agreement, with the possibility to extend this period further. The LDCs have been allowed further extensions of this transition period (see section F: LDCs and TRIPS). Out of 48 LDCs, 31 are Members of the WTO, two more are expected to formally join the WTO in 2012, and 10 are negotiating their accession to the organization. WTO takes the LDC list as decided by the UN. LDCs benefit from a wide range of S&D provisions of WTO Agreements and Decisions. The degree of flexibility is over and above that provided to other developing countries. A summary of S&D provisions are provided in document TN/CTD/W/33. 4 Bound tariffs are like a maximum ceiling that could be applied for any tariff line, thereby providing certainty and market security to exporters and investors alike. Applied tariffs normally cannot exceed these bound rates that are indicated in every countries schedule to the WTO. 3

III. IMPLEMENTATION OF THE WTO WORK PROGRAMME FOR THE LDCS 5 LDCs receive special attention by WTO Members. Issues of importance to LDCs can be addressed across all WTO Committees, depending on the nature of the issue. In order to give particular attention to issues of specific interest to LDCs, the Sub-Committee on LDCs (hereafter "the Sub-Committee") was established in July 1995 as a subsidiary body to the Committee on Trade and Development (CTD). The Sub-Committee is the only dedicated platform to address all issues of interest to the LDCs by WTO Members. Following a directive from Members at the Doha Ministerial Conference, a WTO Work Programme (hereafter the "Work Programme") for the LDCs was adopted in 2002. Since then, the Sub-Committee has been focusing on the implementation of this Work Programme. 6 The Work Programme has been designed to address issues of systemic importance and relevance to the LDCs, and seeks to add value to the work carried out in other Committees in the WTO. The Sub-Committee meets three to four times a year, and at each meeting it takes up two to three of the seven core issues identified in the Work Programme: (i) examining market access issues for LDCs; (ii) monitoring trade-related technical assistance and capacity-building initiatives for LDCs; (iii) supporting agencies assisting with the diversification of LDCs' production and export base; (iv) mainstreaming trade-related elements of the Programme of Action for the LDCs for the decade 2001-2010, into WTO's work; (v) reviewing the participation of LDCs in the multilateral trading system; (vi) monitoring the accession of LDCs to the WTO; (vii) reviewing measures taken by Members in fulfilment of WTO Ministerial Declarations/Decisions. (i) Market Access for LDCs Examination of LDCs' market access is a central feature of the Work Programme. At the Sub-Committee, Members examine market access initiatives taken in favour of LDCs, under the Enabling Clause. 7 The LDCs use this forum to seek clarifications or additional information on market access measures/initiatives taken by Members. For instance, since the Doha Ministerial Conference, the Sub-Committee has considered market access initiatives notified by Australia, Canada, Japan and Switzerland. The Work Programme mandates an annual review of market access for LDC exports. In order to assist this review by the Sub-Committee, the Secretariat undertakes comprehensive analysis on LDC trade and market access conditions faced by them in their export markets. Such documents also contain information on LDCs' export profile, major products, major markets, tariff treatment of LDC exports and track improvements made in the market access situation of LDCs. The latest note in this regard is contained in WT/COMTD/LDC/W/51 (October, 2011).The review of the market access situation of LDCs each year reveals that LDC exports are characterized by a highly concentrated export profile. This concentration is manifested in the composition of their exports as well as in their export destinations. Oil and minerals dominate the aggregate LDC exports. However, there are substantial variations or differences in individual trade performances among the LDCs. While these can be attributed to a mix of domestic and external factors, the major challenge for LDCs remains that of addressing supply-side constraints and diversification of their export base. 5 Document WT/COMTD/LDC/11. 6 This section focuses on the implementation of the WTO Work Programme for the LDCs. 7 In 1979, GATT Contracting Parties adopted the decision on "Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries" (the so-called Enabling Clause"), a derogation to 4

The market destination of LDC exports has also been limited. In 2010, China moved to the first place as market destination for LDCs exports, followed by the EU and the US. These three economies clearly dominate as market destinations for LDC exports Non-reciprocal preferential schemes have played an important role in promoting LDC exports, in particular, in developed country markets, many of which today provide 100 or near 100 per cent duty free and quota free (DFQF) market access. An example is the EU's Everything but Arms scheme (EBA). In addition, developed Members have been providing preferences to LDCs under various multilateral, regional and bilateral channels. The African Growth and Opportunity Act (AGOA) and Haitian Hemisphere Opportunity through Partnership Encouragement Act (HOPE-II) are illustrations of initiatives taken by the developed countries to promote imports from LDCs. The developing countries have also started to adopt preferential market access schemes for LDCs. Brazil, China and India today offer a significant degree of DFQF market access to LDC products. A number of decisions have been taken by WTO Members to provide opportunities for improved market access for LDCs. In 2009, the General Council adopted the extension of the waiver concerning preferential tariff treatment to merchandise trade from LDCs, originally granted in June 1999 (WT/L/304), for a further ten years i.e. until 30 June 2019. This waiver extension, contained in WT/L/759, continues to allow the developing country Members to provide preferential tariff treatment to products of LDCs without being required to extend the same tariff rates to like products of any other Members. The extension of the Waiver is hoped to encourage developing countries to establish preferential schemes for LDCs, and to further strengthen South- South cooperation in trade. In 2009, the General Council also adopted, among others, two waivers for US trade preference programmes, namely the AGOA and the Caribbean Basin Economic Recovery Act (CBERA). The Waiver Decision concerning AGOA (WT/L/754), which will remain valid until 30 September 2015, allows the US to provide duty-free treatment to eligible products originating in beneficiary sub-saharan countries which include a large number of LDCs. The Waiver concerning the CBERA (WT/L/753) was renewed until 30 December 2014, allowing the US to provide preferential tariff treatment to eligible products originating in designated beneficiary countries, including an LDC namely Haiti. Every year the WTO Secretariat prepares factual studies on the market access situation of LDCs. These studies reveal that most LDCs continue to depend upon a very small range of export products, with on average, the top three export commodities for each LDC accounting for over 70 per cent of each country's total merchandise exports. Oil and minerals account for a significant share of total LDC exports. The yearto-year variations in aggregate LDC exports are mainly attributed to the fluctuations in the prices of petroleum products. Nevertheless, the share of LDC exports in world merchandise trade has seen a gradual improvement which stood at slightly above one per cent in 2010 (1.08 per cent).. On the other hand, while in some sectors such as tourism and travel services LDCs have witnessed robust growth, the share of LDCs in global services trade remained static hovering around less than half of one per cent in the last decade ( 0.51 per cent in 2010). (ii) Accession of LDCs to the WTO The Work Programme for the LDCs attaches high importance to the accession of LDCs to the WTO. The Sub- Committee on LDCs monitors the progress in the accession of LDCs, including based on periodic Secretariat reports on the state of play of LDC accessions. The Chairpersons of LDCs' Accession Working Parties occasionally come to the Sub-Committee to brief Members on the progress made in their respective Working Parties. In so doing, the Sub-Committee serves as a forum where acceding LDCs and Members exchange the MFN principle, which allows developed country Members to give differential and more favourable treatment to developing countries and forms the legal basis for the GSP. 5

views and share experiences. Since 2009, regular dialogues, in particular under the aegis of the Sub- Committee, are held between acceding LDCs and WTO Members to deepen engagement on LDCs' accessions and to build on efforts for strengthened transparency. 8 Accession is a complex and time consuming exercise. It requires considerable human and institutional capacity to effectively participate in the accession process. Given the cumbersome and onerous procedures, the acceding LDCs have sought a more streamlined process of accession, under terms consistent with their development, financial and trade needs and commitments not higher than those of LDC Members in the WTO. As a result, and pursuant to the calls made at the Doha Ministerial Conference in 2001, WTO Members in 2002 adopted the Guidelines on LDC Accessions, which are aimed at accelerating and facilitating the accession of LDCs, and sets out Guidelines with respect to: (i) market access; (ii) WTO rules; (iii) the process; and (iv) trade-related technical assistance and capacity building. Specifically, the WTO Members are called upon to exercise restraint in seeking concessions and commitments on trade in goods and services from acceding LDCs, provide them with full benefits of special and differential treatment, grant transitional periods foreseen under specific WTO agreements to enable the acceding LDCs to effectively implement their commitments and obligations, and not seek commitments to accede to any of the plurilateral trade agreements or participate in any optional sectoral market access initiative as a precondition for accession to the WTO. 9 As a clear illustration of the importance the WTO membership attaches to the accession of LDCs to the WTO, WTO Ministers, during the 8th WTO Ministerial Conference in December 2011 adopted a Decision on Accession of LDCs, to operationalize further the 2002 Guidelines on LDC Accessions, in particular introducing the concept of benchmarking, as well as including elements on transparency, S&D and technical assistance and capacity building. 10 The 2002 Guidelines provided new impetus to LDC accessions, including the adoption of the accession packages for Cambodia and Nepal by WTO Members at the Fifth Ministerial Conference held in Cancún, Mexico, in September 2003. They became the first two LDCs to complete their accession under Article XII of the WTO Agreement. The Guidelines have also activated accessions of other LDCs which are at various stages of the process. In December 2007, Cape Verde concluded the accession negotiation before its graduation from the LDC status and became a full member in July 2008. 11 In 2011 much progress was made in the area of accessions of LDCs, with Samoa and Vanuatu both completing their accession process, reducing the number of acceding LDCs to ten. The Sub-Committee on LDCs played an instrumental role in developing the 2002 Guidelines on LDC Accessions and does so again in following up on the 2011 Ministerial Decision to operationalize them further. The Sub Committee on LDCs, through the Work Programme, regularly monitors the implementation of the Guidelines. Some of the challenges faced by the LDCs in accession process and the steps taken in response to these challenges are highlighted in document WT/COMTD/LDC/W/44. Efforts have been made to facilitate and streamline the accession process for LDCs. For example, the number of formal Working Party meetings - the forum where the accession negotiations are conducted has been reduced as much as possible for acceding LDCs, compared to other accessions. For non-resident delegations, formal or informal Working Party meetings are often scheduled on the margins of Geneva Week, a biannual briefing event organized by the WTO Secretariat which brings all non-resident delegations to Geneva. This pragmatic approach is aimed at placing greater emphasis on focused informal consultations between interested Members and the acceding LDC with the possibility of the Secretariat acting as a proxy in the negotiations. 8 The 2009 dialogue report is contained in document WT/COMTD/LDC/15. The report of the dialogue held in 2010 can be seen in document WT/COMTD/LDC/M/56. 9 The 2002 LDC Accession Guidelines are contained in document WT/L/508. 10 Document WT/L/846. 11 Cape Verde graduated from the LDC status effective 1 January 2008. 6

This has been done with a view to accelerating the accession process and lessening the financial and human resource burdens on the acceding LDCs. The Guidelines on LDCs' Accession emphasize the importance of technical assistance and capacity building in all aspects of the accession process. Most LDCs in the process of accession have joined the Enhanced Integrated Framework (EIF) or are currently seeking to be included in the programme. The preparation of the Diagnostic Trade Integration Studies (DTIS) as part of the EIF process has been found to stimulate domestic debate on trade reform reinforcing the potential synergy between the EIF and the accession process. Concretely, LDCs have the possibility to use the diagnostics phase of the EIF in support of trade reform and mainstreaming trade policy into their national development strategies and to request financial support for assistance to their accession process. Despite efforts to facilitate the accession of LDCs, their accession process is subject to a number of challenges including human and institutional capacity constraints. The WTO Members as well as the Secretariat recognize these difficulties. The 2011 Ministerial Decision on LDC Accession is proof of Members' willingness to act on this. The good offices of the Director-General, periodic (annual) reports on LDC accessions, regular dialogues on LDC accessions including the review of the implementation of the 2002 LDC Accession Guidelines and reports by the LDC Working Party Chairs are expected to further advance the LDC accessions in the WTO. 12 Each accession process involves negotiations between the acceding country and interested WTO Members. LDC accessions receive priority in the organization. LDC Accession Guidelines were adopted in 2002, calling upon Members to exercise restraint in seeking commitments and concessions from acceding LDCs. The Secretariat has taken a number of steps to facilitate and accelerate LDC accessions. Regular dialogues between Members and the acceding LDCs are being held. The acceding LDCs continue to urge for full and faithful implementation of the Accession Guidelines, which led WTO Ministers in 2011 to adopt a Decision to further operationalize these Guidelines to make LDC accession less onerous. (iii) Trade-Related Technical Assistance (TRTA) and Capacity Building Initiatives for LDCs TRTA and Capacity-building initiatives are an integral part of the Work Programme and regularly feature on the agenda of the Sub-Committee meetings. WTO's TRTA, the implementation of the EIF, of the Standards and Trade Development Facility (STDF), as well as technical assistance provided by other agencies are regularly reviewed at the Sub-Committee. LDCs are the primary beneficiaries of the WTO's TRTA, which aims at assisting developing countries adjust to WTO rules and disciplines, implement obligations and exercise the rights of membership, including drawing on the benefits of an open, rules-based multilateral trading system. The delivery of TRTA is based on a Biennial Technical Assistance and Training Plan, adopted by Members. 13 The plan accords special priority to LDCs. Specific products have also been developed for LDCs, in recognition of the particular challenges faced by LDCs in the multilateral trading system. For example, three-week introduction courses for the LDCs are organized two times a year (one for the Anglophone LDCs while another one for the Francophone). Moreover, a two-week advanced course for LDCs is to start in 2012. In delivering national TRTA activities, the Secretariat has allocated three activities to each LDC per year, compared to two activities for other developing countries. Other TRTA activities involving LDCs include two or three - months training courses (Geneva and regions), specialized training courses, the Reference Centre Programme, Geneva Week for non-resident Members and 12 The 2011 annual report by the Director-General is contained in document WT/ACC/15. 13 The latest Biennial Plan is contained in document WT/COMTD/W/180 (2012-2013). 7

Observers, trainee and internship programmes and support provided during the Trade Policy Reviews. addition, financial support is provided to LDCs to participate in WTO Ministerial Conferences. In The number of TRTA activities delivered by the WTO Secretariat has reached 450 to 500 per year. On average, LDCs are associated with 40 to 45 per cent of those activities, if not more. Furthermore, whenever possible, priority is also given to LDCs for Geneva based training courses and for specialized training on a particular subject matter. 14 The Secretariat provides a number of trainee and internship programmes, which include the Mission Internship Programme (MIP) and the Netherlands Trainee Programme (NTP). These internship programmes enable officials from LDCs to enhance their knowledge of the multilateral trading system, strengthen their understanding of the WTO, and support their Permanent Representations to the WTO in participating more actively in the daily activities at the WTO, and thereby facilitating the implementation of Members' commitments in the WTO. The WTO also funds interns to assist the rotating coordinator of regional groupings, including of the WTO LDCs' Consultative Group. Steps have been taken by the WTO to meet the special challenges faced by the Non-residents and to enhance their participation in the multilateral trading system. [Thirteen] LDCs do not have resident Missions in Geneva. In order to ensure that non-residents are kept abreast of developments in the WTO, the Secretariat organizes "Geneva Week" twice a year. In addition to the organization of Geneva Week, the Secretariat regularly sends briefing notes and news summaries to the non-residents. The Reference Centre Programme is another way through which the Secretariat disseminates trade related information and documents to Members through an electronic link to the WTO. Most of the LDC Members are covered under the Reference Centre Programme. WTO's core competence in TRTA lies in strengthening human and institutional capacity in developing countries and LDCs. The WTO cannot, on its own, meet the full complexity of the trade and development challenges faced by LDCs in their integration into the multilateral trading system. One such challenge is associated with their supply-side constraints. In recognition of the need for a broad based assistance for LDCs, WTO collaborates with other multilateral institutions equipped with appropriate technical expertise and financial resources. Some of WTO's partnership arrangements are: the EIF, the STDF, with as the umbrella, the Aid for Trade Initiative. The EIF: The six core Agencies - the IMF, the ITC, UNCTAD, UNDP, the World Bank, and the WTO established the first version of the IF in 1997, with a view to building trade capacity in the LDCs. The programme has since been constantly improved which has led to the current Enhanced Integrated Framework (EIF) The EIF is an international partnership of LDCs and their development partners (bilateral, regional and multilateral) to support the LDCs to be more active players in the global trading system thereby making trade a real engine of growth and a tool to implement their national development strategy. The EIF is aid trade in action for LDCs as it provides the concrete tools to LDCs to generate funds over and above those available in the EIF's Trust Fund. 15 At the Hong-Kong Ministerial Conference in 2005, WTO Members endorsed the enhancement of the IF, which comprises three elements: (i) provide increased, predictable, and additional funding on a multi-year basis; (ii) strengthen the IF in-country, including through mainstreaming trade into national development plans and poverty reduction strategies; more effective follow-up to Diagnostic Trade Integration Studies (DTISs) and implementation of action matrices; and achieving greater and more effective 14 Advanced Trade Policy Courses of twelve weeks each are annually organized at the WTO headquarters. In addition, the Secretariat organizes Regional Trade Policy courses of two months each in five different regions - the Caribbean, English-speaking Africa, French speaking Africa, Asia and the Pacific, and Latin America, to which LDCs are also invited to participate. 15 For further details, please refer to the EIF website: www.enhancedif.org. 8

coordination amongst donors and IF stakeholders, including beneficiaries; (iii) improve the IF decision-making and management structure to ensure an effective and timely delivery of the increased financial resources and programmes. The EIF became de-facto operational in2008. An Executive Secretariat (ES) has been established, housed in the WTO, which, inter alia, provides day-to-day support to the EIF beneficiaries. The United Nations Office for Project Services (UNOPS) plays an active role as EIF's Trust Fund manager. The EIF is currently helping 47 LDCs. Twenty-three donors have so far made contributions to the Multi-Donor EIF Trust Fund. An important aspect of the EIF is the preparation of a DTIS which assesses the competitiveness of the country's economy and identifies impediments to effective integration into the multilateral trading system and global economy. Based on the findings of the DTIS, an Action Matrix is developed with a view to feeding traderelated priorities into their PRSPs and donors' financing fora. The EIF is a mechanism for the LDCs to access broader Aid for Trade funding. The STDF: The STDF, which was formally launched in 2002, assists developing countries in enhancing their expertise and capacity to analyse and implement international sanitary and phytosanitary (SPS) standards, improving their human, animal and plant health situation, and hence their ability to gain and maintain market access. In doing so, it raises awareness on the importance of SPS issues, coordinates among technical cooperation providers, mobilizes funds, and facilitates the exchange of experiences and dissemination of good practice in relation to SPS-related technical cooperation. The STDF aims to devote at least 40 per cent of project grant resources to LDCs and other Low Income Countries. Since its inception in 2002, the STDF has consistently met this target by operating in synergy with other initiatives in the WTO, notably Aid for Trade and the EIF. Various projects have been developed and funded by the STDF in LDCs based on SPS needs identified in the DTISs prepared under the EIF process. For more information on the STDF, including its structure, on-going activities and projects, visit the STDF website (www.standardsfacility.org) Aid for Trade: The EIF and STDF are concrete examples of aid for Trade. The Aid-for-Trade initiative was launched in 2005 at the Hong Kong Ministerial Conference. The Hong Kong Ministerial Declaration states that: "Aid for Trade should aim to help developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade. Aid for Trade cannot be a substitute for the development benefits that will result from a successful conclusion to the DDA, particularly on market access." 16 The Aid-for-Trade is the trade-related component of official development assistance (ODA). It includes assistance for (i) trade-related infrastructure; (ii) building productive capacity; (iii) formulating trade policy and regulations; (iv) trade-related adjustment; and (v) any other trade related assistance. Aid for Trade has placed a spotlight on the nexus between trade, growth, aid and development. It is not a new concept, neither it refers to a new global development fund. The Aid-for-Trade initiative encourages the better utilization of existing mechanisms and channels to consolidate support for trade capacity building. WTO's role in the Aid-for-Trade Initiative is that of advocacy, analysis and debate, using its convening power and monitoring functions to mobilize Aid-for-Trade financing, to highlight the needs of its Members and Observers, and to showcase effective implementation. Since the launch of this Initiative, WTO has facilitated three Global Reviews of Aid for Trade (2007, 2009 and 2011). The Third Global Review, held in 2011 showed that Aid for Trade is achieving results. The Aid for Trade activities are being carried out on the basis of a Work 16 See document WT/AFT/1. 9

Programme..The most recent Aid for Trade Work Programme, entitled "Deepening Coherence" is in document WT/COMTD/AFT/W/30. Technical assistance continues to be important in enhancing LDCs integration into the multilateral trading system. Work on technical assistance and capacity building initiatives has taken into account the constraints faced by the LDCs in the multilateral trading system. LDCs are accorded special priority in the delivery of WTO's TRTA, and every year the LDCs are associated with 40 to 45 per cent of TRTA undertaken by the WTO Secretariat. The focus of WTO's TRTA is to build human and institutional capacity in the LDCs to assist them to effectively integrate into the multilateral trading system. In collaboration with other agencies, WTO seeks to address supply-side and other capacity constraints of LDCs in trade. The focus on Aid for trade, the EIF (which is Aid for Trade in action for LDCs) and STDF are just a few examples of WTO's collaboration with other partners. (iv) Participation of LDCs in the multilateral trading system The Work Programme for the LDCs attaches importance to enhancing the participation of LDCs in the multilateral trading system. The WTO Secretariat has accorded special attention to the needs and concerns of LDCs' participation in the multilateral trading system. This is reflected in, inter alia, (i) the creation of a dedicated LDC Unit in the WTO Secretariat; (ii) day-to-day support provided to the WTO LDCs' Consultative Group; (iii) priority accorded in the delivery of WTO technical assistance and training; and (iv) the partnership arrangements with other institutions to meet supply-side challenges of LDCs. The LDC Unit was established in February 2003 with a view to bringing coherent attention and approaches to LDC-issues dealt within the WTO Secretariat. Housed within the Development Division, the Unit is the focal point for LDC issues in the Secretariat, serving dedicated bodies for LDCs such as the Sub-Committee on LDCs and the WTO LDCs' Consultative Group (and the African Group), as well as representing the organization at the EIF meetings. The participation of LDCs in the work of the WTO has seen a gradual improvement over the last decade, especially since the launch of the Doha negotiations in 2001. The WTO LDCs' Consultative Group in Geneva, commonly called the LDC Group, was set up in January 2001. 17 The Geneva-based LDC delegations, often joined by trade officials from capitals, meet on a regular basis at the WTO. The Group meets at experts/trade officials' level several times a week, often on a daily basis at the WTO. In addition, the Group meets at an Ambassadorial level, generally once a week. The Coordinatorship function of the Group rotates, generally every six months. At all formal, informal, and "green room" meetings of the WTO, the Coordinator of the LDC Group speaks on behalf of the LDCs. The Group provides a platform to identify LDC interests, brainstorm, coordinate and articulate their positions. Today, the Group has become the key base for LDCs' participation in the DDA negotiations or other work in the WTO, initiating the Group's proposals and statements, as well as forging alliances with other groups on issues of common interest. The Group plays an instrumental role in organizing and servicing the periodic LDC Trade Ministers' meetings. The first LDC Trade Ministers' meeting was held in 2001 in Zanzibar, Tanzania. Since then, the LDC Trade Ministers are meeting at least every two years, normally preceding the WTO Ministerial Conference. The Declarations adopted in these meetings provide the overarching guidelines to the LDC negotiators in Geneva. 17 For more information about the activities of the LDC Group, see website: www.ldcgroups.org. 10

Greater efforts are being made by the WTO Secretariat to help LDCs participate effectively in the multilateral trading system. The LDC Unit in the Secretariat serves as the Institution's focal point for addressing the needs of LDCs. The launch of the DDA negotiations in 2001 witnessed the rise of the LDCs to the centre stage of the decision making process of the WTO. The LDC Group in the WTO is one of the most active informal groups in the WTO. (v) Diversification of LDCs' Production and Export Base The Work Programme calls for the Sub-Committee to consider proposals for technical assistance and capacitybuilding programmes consistent with WTO's mandate, and to support the work of other agencies, to assist in the diversification of LDCs' production and export base. Pursuant to this call, the Sub-Committee regularly invites multilateral agencies such as the ITC, UNCTAD and UNIDO, to share with WTO Members their initiatives and activities undertaken to assist in the diversification of LDCs' production and export base. The Sub- Committee thus provides a forum for information sharing and discussion on assistance given to the LDCs by other agencies and contribute to the information flows and coordination of TRTA provided by those agencies. (vi) Mainstreaming Trade-related Components of the UN LDC-III Brussels Programme Of Action (decade 2001-2010), and the LDC-IV Istanbul Programme of Action (decade 2011-2020) into the Work of the WTO The Work Programme for LDCs includes the monitoring of the WTO-relevant aspects of the Brussels Programme of Action for the LDCs for the Decade 2001-2010 (BPOA), adopted at the Third UN Conference on LDCs (LDC-III) in Brussels in 2001. Adapting it to more recent developments, there are suggestions in the Sub Committee on LDCs to update the LDC Work Programme, to instead refer to the Istanbul Programme of Action for the Decade 2011-2020 (IPOA), adopted by the Fourth United Nations Conference on Least Developed Countries (LDC IV), held at Istanbul in May, 2011. In 2001, at the same year the BPOA was adopted, the Doha Ministerial Declaration called on Members to consider means of implementing the traderelated elements of the BPOA into the work of the WTO. Since the adoption of the Work Programme for the LDCs, the Sub Committee has monitored the implementation of the trade-related elements of the BPOA. In the decade 2001-2010, the measures taken in the WTO have significantly contributed to achieving the goals and objectives of the BPOA. During the mid-term review of the Programme of Action in September 2006, the WTO Director-General submitted a report which provided information on the implementation of commitments in the area of trade. The report is contained in document WT/COMTD/LDC/13. In 2010, the DG submitted a Report covering the full decade 2001-2010, contained in document WT/COMTD/LDC/17, which is also available as a WTO Brochure. The report was an input into the preparations for LDC-IV. UN LDC-IV was held in Istanbul in May 2011, undertook an assessment of the results of the ten year action programme contained in the BPOA, and adopted the Istanbul Programme of Action for the decade 2011-2020, containing new measures and strategies for the next decade. The IPOA's main goal is to halve the number of LDCs by 2020 through a combination of strong economic growth, greater gender equality, decreased vulnerability to economic shocks and natural disasters and better governance. Trade proved to be one of the most difficult issues in the negotiations leading to the adoption of the IPOA. The Programme calls for a "timely implementation of Duty-Free Quota-Free (DFQF) market access on a lasting basis for all LDCs in line with the Hong Kong Ministerial Declaration" and "the abolition or reduction of arbitrary or unjustified trade barriers". 11

Measures taken in the WTO in favour of LDCs over the past decade have significantly advanced the goals of the BPOA, in particular addressing the trade-related commitments contained in it therein. For example, the momentum generated at Brussels in 2001 in providing DFQF market access to LDC products has culminated into a concrete decision in the WTO in 2005. The Sub-Committee regularly monitors and discusses the implementation of the elements of the BPOA in so far they fall within the competence of the WTO. Given that the BPOA has been replaced in 2011 by the Istanbul Programme of Action for the Decade 2011-2010, the Sub-Committee will from 2012 onwards monitor the WTO-relevant aspects of the IPOA. Market access and productive capacity building are among the highlights of the IPOA. (vii) Follow up to WTO Ministerial Decisions/Declarations The Work Programme for the LDCs invites Members to report on measures taken in fulfilment of WTO Ministerial Decisions/Declarations. The results of the Uruguay Round negotiations recognized the need to ensure LDCs' effective participation in the world trading system and to take measures to improve their trading opportunities. "The Decision on Measures in Favour of Least-Developed Countries", taken by the GATT contracting parties in 1993, which is an integral part of GATT 1994, inter alia, stipulates that, to the extent possible, most-favoured-nation (MFN) concessions on tariff and non-tariff measures agreed in the Uruguay Round on products of export interest to the LDCs could be implemented autonomously, in advance and without staging, and consideration would be given to further improving GSP schemes and other schemes for products of particular export interest to LDCs. It was also agreed to keep under review the specific needs of the least-developed countries and to continue to seek the adoption of positive measures which facilitate the expansion of their trading opportunities. The first WTO Ministerial Conference held in Singapore in 1996 adopted a comprehensive and integrated Plan of Action for the LDCs 18 aimed at providing a set of measures to facilitate implementation of the Decision on Measures in Favour of LDCs. The Plan of Action calls for "closer cooperation" between the WTO and other multilateral agencies. It aims to improve market access for exports of products originating in LDCs including through additional multilateral action and coordination. It also asked WTO to develop, in cooperation with relevant agencies, a comprehensive approach to build trade capacity in the LDCs. The Singapore Ministerial Declaration as well as the Plan of Action for the LDCs reiterates the importance of improving market access for LDC products and invite Members to explore the possibility of granting preferential duty-free access to LDC products. The Ministerial Conference in Singapore in 1996 also agreed to organize a high-level meeting to foster an integrated approach to help LDCs enhance their trading opportunities. 19 Pursuant to that mandate, the High- Level Meeting on Integrated Initiatives for Least-Developed Countries' Trade Development (HLM) was organized by the WTO with the support of other agencies in October 1997. This meeting included specific measures to improve market access, to support human and institutional capacity building, and to improve participation of LDCs in the multilateral trading system. It was at this meeting that the first version of the IF was adopted. 20 The high-level meeting was the first of its kind in the WTO and the first initiative to bring together the six agencies in a common endeavour to support LDCs in their trade and trade-related activities. 18 The Plan of Action is contained in WT/MIN(96)/14. 19 The Ministerial Declaration is contained in document WT/MIN(96)/DEC. 20 WT/LDC/HL/1/Rev.1. 12

The Second WTO Ministerial Conference held in Geneva in 1998, emphasized the need for effective implementation of the Decision on Measures in Favour of LDCs and urged Members to implement the market access commitments that they had undertaken at the High Level Meeting in 1997. 21 Members also committed to improve LDCs' market access conditions on a broad and liberal basis. The WTO Membership reaffirmed its commitment to improving market access conditions for products originating in LDCs, and urged for the implementation of commitments in this regard, undertaken at the High Level Meeting. At the Doha Ministerial Conference in November 2001, Ministers recognized the particular vulnerability of the LDCs and committed themselves to "addressing the marginalization of the least developed countries in international trade and to improving their effective participation in the multilateral trading system". 22 The Doha Ministerial Declaration explicitly recognized the particular needs, interests and concerns of LDCs in 21 different paragraphs. 23 Many of the concerns and needs referred to in these paragraphs are being addressed in the on-going Doha Round of negotiations. WTO Ministerial Declarations and Decisions contain provisions calling on Members to take measures to improve LDCs' trading opportunities. The Decision on Measures in Favour of Least-Developed Countries adopted during the Uruguay Round and the Comprehensive and Integrated WTO Plan of Action for the Least- Developed Countries adopted in 1996 are some of the initial instruments which call on Members to undertake measures for the expansion of LDCs' opportunities in the multilateral trading system. Members, through the Doha Declaration, committed to build on these commitments to improve the effective participation of LDCs in the multilateral trading system. 21 The Ministerial Declaration is contained in WT/MIN(98)/DEC/1. 22 The Doha Ministerial Declaration is contained in WT/MIN(01)/DEC/1. 23 These are paragraphs 2, 3, 9, 15, 16, 21-22, 24-25, 26, 27, 28, 32-33, 36, 38-39, 42-43, 44 and 50. 13

IV. SPECIAL STUDIES/REPORTS UNDERTAKEN TO ENHANCE THE UNDERSTANDING OF LDCS AND TO ADVANCE ISSUES OF INTEREST TO LDCS IN THE WTO A number of special studies/reports have been undertaken by the WTO Secretariat upon request by the members since the adoption of the Work Programme, demonstrating the responsiveness of Members towards the cause of the LDCs. Supply-side constraints: The issue of supply-side constraints is frequently referred to by the LDCs in various bodies of the WTO. In this regard, a note was prepared by the Secretariat entitled "Assistance to address supply-side constraints" (WT/COMTD/LDC/W/33). The paper shows how the WTO which recognizes the issue but does not have the competence to address supply-side constraints directly - is working with other partner institutions to meet this challenge. A follow up to the paper (WT/COMTD/LDC/W/33/Add.1) looks at the implementation of the actions identified in the Action Matrices of the DTIS under the IF in so far as these actions relate to strengthening of supply side capacity and identifies factors impeding progress in their implementation. Textile and Clothing: The Agreement on Textiles and Clothing (ATC) expired on 1 January 2005. In view of the termination of the ATC and to examine ways to help LDCs in the post-atc period, the Sub-Committee facilitated a study by the Secretariat. The study entitled "Options for LDCs to improve their competitiveness in textiles and clothing business" (WT/COMTD/LDC/W/37) inter alia throws light on the programmes of the IMF and the World Bank related to the textiles and clothing sector and suggests ways to improve non-reciprocal preference schemes extended to LDCs. It also lists other options for LDCs to improve their competitiveness in this sector. Non-tariff measures: Market access for LDCs is determined by both tariff and non-tariff measures. Hence, the Secretariat prepared a note on non-tariff measures (NTMs) on products of export interest to the LDCs (WT/COMTD/LDC/W/39). The note inter alia identifies the types of NTMs faced by LDC merchandise exports and discusses possible avenues by which some of the NTMs could be addressed. Services trade: LDCs as a group represent less than one half of one per cent of world exports of commercial services. However, a number of LDCs rely heavily on services activities. High levels of services activities (and exports) from LDCs often correspond to heightened activity in tourism and transportation services, and remittances from workers abroad. In order to better gauge the situation of LDCs in services trade, following a request from the Sub-Committee, the Secretariat compiled information on the global integration of the services sectors of LDCs. Information on services trade flows as well as service sector reforms have been provided in that compilation (JOB(07)/148). Food crisis: Many LDC exporters of agricultural and food products have been experiencing deficits in their trade balance for a long time. Moreover, food price inflation had produced challenges for the LDCs, especially in 2007 and 2008. In view of the importance of the subject matter, at the request of the Sub-Committee, the WTO Secretariat prepared a paper highlighting the price trends in food and agricultural products and their causes, factors affecting production and trade of food and agricultural products in the LDCs, domestic and international trade policy issues associated with the food crisis and the interface between food security and trade in the LDCs. The paper has been issued as document WT/COMTD/LDC/W/43. 14

As an input into the UN LDC-IV Conference, the WTO Director-General submitted a report providing an analysis of the measures taken in the WTO over the decade 2001-2010 towards the attainment of the goals and objectives set out in Brussels Programme Of Action, in particular under Commitment 5, entitled "Enhancing the role of trade in development". The report is contained in document WT/COMTD/LDC/17, also available as a WTO Brochure. The Sub-Committee on LDCs has been responsive to the cause of the LDCs, including by undertaking analytical work to advance issues of interest to LDCs in the WTO. In addition to the regular work as per the mandate of the Work Programme, special studies have been undertaken to enhance the understanding of LDCs on some of the topical as well as systemic issues. 15

V. THE DOHA DEVELOPMENT AGENDA AND THE LDCS The Doha Development Agenda (DDA), launched in 2001, has taken a number of decisions in favour of LDCs. Issues of interest to LDCs are being addressed in all areas of the negotiations under DDA. The Work Programme keeps track of the progress made in the negotiating agenda of the LDCs. Some of the major decisions concerning LDCs are summarized below. On 1 August 2004, the WTO General Council adopted a decision commonly referred to as the "July framework agreement". 24 The decision provides a framework for establishing modalities in the negotiations on agriculture and on non-agricultural market access (NAMA) and launches negotiations on trade facilitation. The modalities for both the negotiations on agriculture and NAMA exempt LDCs from reduction commitments, implying that LDCs will not be required to reduce their bound tariffs in either agricultural or non-agricultural products. Similarly, the modalities for negotiations on Trade Facilitation also seek to protect the interest of LDCs and to provide flexibility for undertaking commitments with separate provisions. For instance, it was agreed that LDCs would be required to undertake only those commitments consistent with their individual development, financial and trade needs or their administrative and institutional capabilities. The DDA attaches particular importance to the increased participation of LDCs in services trade. In September 2003, WTO Members adopted the modalities for the special treatment for LDC Members in the negotiations on Trade in Services (TN/S/13). The modalities ensure maximum flexibility for LDCs in undertaking commitments; at the same time, it asks Members to develop mechanisms to provide effective access of LDCs' services and service suppliers. At the Hong Kong Ministerial Conference in 2005, WTO Members agreed to developing methods for the full and effective implementation of the modalities, including appropriate mechanisms for according special priority to sectors and modes of supply of export interest to LDCs. Pursuant to this, at the 8th WTO Ministerial Conference in December 2011, WTO Ministers adopted the Decision on "Preferential Treatment to Services and Service Suppliers of LDCs" ("the Waiver", in document WT/L/847). It enables a derogation from MFN treatment so as to facilitate the extension of preferential market access to LDCs services and service suppliers without having to extend the same treatment to all other WTO Members on an MFN basis. At the Hong Kong Ministerial Conference in 2005 Members also agreed that LDCs are not expected to undertake new commitments in the DDA services negotiations. One of the major outcomes at Hong Kong was the adoption of the five LDC Agreement-specific proposals. These five agreed proposals have strengthened three Special and Differential (S&D) provisions contained in two WTO Agreements and one Decision. The most significant decision among those is the agreement to provide LDCs with duty-free and quota-free market access on a lasting basis for all products originating from them. Apart from that, some key decisions, inter alia, include the following: Requests for waivers by LDCs shall be given positive consideration and a decision taken within 60 days. Moreover, a decision needs to be taken within 60 days upon requests for waivers by other Members exclusively in favour of LDCs; LDCs have been given new transition period of seven years to maintain existing measures that deviate from their obligations under the TRIMs Agreement. Moreover, LDCs are allowed to introduce new 24 See document WT/L/579. 16