RESTRICTED JOB/TNC/56 3 November 2015 (15-5821) Page: 1/9 Trade Negotiations Committee Original: English SUBMISSION OF BANGLADESH ON BEHALF OF THE LDC GROUP LDC PRIORITIES FOR THE WTO TENTH MINISTERIAL CONFERENCE IN THE DOHA DEVELOPMENT AGENDA (DDA) The following submission, dated 2 November 2015, is being circulated at the request of the delegation of Bangladesh on behalf of the LDC Group. 1 INTRODUCTION 1.1. Through paragraph 3 of the Doha Ministerial Declaration, Members committed to address the marginalization of Least Developed Countries (LDCs) in international trade and improve their effective participation in the multilateral trading system. In paragraph 42 of the Declaration, Members recognized that the integration of the LDCs into the multilateral trading system requires meaningful market access, support for the diversification of their production and export base, and trade-related technical assistance and capacity building. 1.2. Paragraph 47 of the 2005 Hong Kong Ministerial Declaration reaffirmed the commitment to effectively and meaningfully integrate LDCs into the Multilateral Trading System by addressing issues of their interest that include: Duty Free, Quota Free Market Access; simplified preferential rules of origin; services market access in sectors/modes of interest to LDCs; accelerate and facilitate negotiations of acceding LDCs; and technical and capacity building, among other important areas agreed in favor of LDCs in Annex F of the declaration. 1.3. The 2013 Bali Ministerial Declaration instructed members to develop a clearly defined work program on the remaining Doha Development Agenda (DDA) issues by December 2014. As this deadline was missed, the General Council on 27 November 2014 1 agreed that all members shall engage constructively on the implementation of all the Bali Ministerial Decisions in the relevant WTO Bodies including on the preparation of a clearly defined work program by July 2015 on the remaining DDA issues as mandated in paragraph 1.11 of the Bali Declaration. Paragraph 1.11 explicitly prioritizes work building on decisions taken in Bali on LDC issues. 1.4. The November 2014 decision further states: "As per paragraph 1.11 of the Bali Declaration, Members agree that the issues of the Bali package where legally binding outcomes could not be achieved, including LDC issues, shall be pursued on priority". 1.5. At the Trade Negotiations Committee (TNC) meeting held on 31 July, WTO Members were not able to agree on a post-bali Work Program. Recognizing that Members acknowledge the need to prioritize LDC issues for outcomes in Nairobi, the LDC group emphasizes that key DDA issues should be addressed in an effective manner. In the course of DDA negotiations, the LDC Group calls upon Members to proceed in accordance with all DDA mandates, decisions, and declarations agreed upon in all areas of interest to LDCs. 1 WT/L/941.
- 2-1.6. In preparation for the 10 th Ministerial Conference in Nairobi, this submission presents priority areas of interest to the LDC group. 1.7. It is imperative that Nairobi deliver concrete legally binding decisions in favor of LDCs in these areas. 1.8. The LDC Group may issue a revised submission if necessary. 2 LDCS PRIORITIES IN THE DDA 2.1 SPECIAL AND DIFFERENTIAL TREATMENT PROPOSALS 2.1. LDCs attach great value to S&D provisions contained in the WTO Agreements as well as Ministerial, General Council, Committee and other relevant decisions, and have been consistently laying emphasis on strengthening S&D provisions so that they accrue targeted and meaningful benefits to their development and integration into the multilateral trading system. 2.2. In line with paragraph 44 of the Doha Ministerial Declaration, the LDC Group has examined all S&D provisions in WTO Agreements and Decisions. Given the severe capacity constraints along with the imprecise and voluntary nature of S&D provisions and decisions, LDCs could not take advantage on many of the S&D related provisions/decisions including outcomes of Annex F of Hong Kong Ministerial Declaration. The LDC Group, together with the ACP and African Groups, have identified twenty-five S&D provisions and made specific textual proposals with a view to strengthening these S&D provisions and making them "more precise, effective and operational". The proposals are contained in document JOB/TNC/51; JOB/DEV/29. 2.3. Members shall agree on these textual proposals in fulfilment of the mandate of paragraph 44 of the Doha Ministerial Declaration. 2.2 RULES OF ORIGIN 2.4. Building upon the 9 th Ministerial Conference Decision on Preferential Rules of Origin applicable to LDCs, and in order to fulfill the commitment made at the Hong Kong Ministerial Conference, 2 preferential rules of origin shall be streamlined and simplified by the preference granting countries so that these are no more barriers to LDCs to fully avail their non-reciprocal market access opportunities. 2.5. Towards this end, the WTO Members shall agree to the request contained in LDC submission in JOB/TNC/53 on a priority basis. 2.3 SERVICES NEGOTIATIONS 2.6. Ministers affirm that any outcomes on the services pillar of the DDA do not undermine Article IV. 3 of the General Agreement on Trade in Services (GATS); the Negotiating Guidelines and Procedures paragraph 2; the LDC Modalities for the Special Treatment for Least-Developed Country Members in the Negotiations on Trade in Services, particularly paragraphs 3, 4, and 5, concerning expectations from LDCs in the negotiations and paragraph 12 on the provision of technical assistance; the Hong Kong Declaration paragraph 26 that LDCs are not expected to undertake new services commitments, and Annex C LDC provisions. 2.7. If a Member has notified any of its DDA offers as preferential treatment pursuant to the LDC Services Waiver Decision, which allows a GATS Article II derogation from MFN treatment, the Member shall preserve the preference for LDCs when finalizing and notifying any new GATS schedules of specific commitments. 2.8. Any package for agreement in Nairobi, or any other result on domestic regulations negotiations thereafter, shall include principles in favor of LDCs, in particular that LDCs are not required to undertake any obligations. To advance the integration of LDCs into the multilateral trading system and to facilitate the competitiveness of their services suppliers, disciplines shall 2 Paragraph 47 and Annex F, Decision 36 (iii) (b) of the Hong Kong Ministerial Declaration.
- 3 - also include reduction of administrative procedures and reduction of fees for visas, work permits, resident permits and licenses in favor of LDC contractual service suppliers and independent professionals. 2.4 LDC SERVICES WAIVER 2.9. LDCs applaud the results of indications made at the high-level meeting held in February 2015 pursuant to the 2013 Bali Decision on the Operationalization of the Waiver Concerning Preferential Treatment to Services and Service Suppliers of Least-developed Countries (WT/L/918) and the notifications submitted so far. Without notification of preferential treatment, the Bali Decision will not achieve the purpose to operationalize the Eighth Ministerial Conference Decision on Preferential Treatment to Services and Service Suppliers of Least-developed Countries ("LDC Services Waiver") (WT/L/847) agreed in 2011. Furthermore, paragraph 2 of the 2011 Decision specifies that preferential treatment must be notified. In addition, the notification must contain information on the "preferential treatment made available, the sectors or sub-sectors concerned and the period of time during which the Member is intending to maintain those preferences." 2.10. Building on the results from the Bali Decision on LDC Services Waiver and acknowledging that LDCs have collectively identified sectors and modes of supply of interest to the LDC Group and restrictions of concern to their services suppliers found in the LDC collective request submitted in July 2014, 3 Members shall agree the following: i. Further to the definition provided in the 2011 LDC Services Waiver Decision, paragraph 1, that preferential treatment is to services and service suppliers of LDCs" with respect to the application of measures described in Article XVI and any other measures annexed, than to like services and service suppliers of other Members", preferential treatment shall be defined as the removal of restrictions, and/or the provision of, special access or procedures, in favor of LDC suppliers over non-ldc suppliers, unless the preference is accorded to LDCs drawn from other pre-existing or future preferential arrangements; In this regard, notifying Members and Members that have already notified, shall improve their notifications, respectively; ii. Further to paragraph 1 of the 2011 LDC Services Waiver, where Members utilize the LDC Services Waiver Decision to provide LDC service suppliers preferential treatment based on existing commitments, or from their applied regimes, that contain restrictions, Members shall remove such restrictions for LDCs in order to demonstrate clear preferential treatment for LDCs compared to treatment for other Members for whom the restriction is maintained; iii. Members in a position to provide preferences shall include reduction of administrative procedures and reduction of fees for visas, work permits, resident permits and licenses in favor of LDC contractual service suppliers and independent professionals; and waive restrictions in order to allow recognition of qualification of LDC professionals and accreditation of LDC institutions in accordance with the sections B and C of the LDC collective request respectively 4 ; iv. When notifications are submitted with preferences that fall outside of Article XVI of the General Agreement on Trade in Services (GATS) as permitted by the LDC Services Waiver, the Council for Trade in Services shall expeditiously convene a meeting and Members shall authorize those preferences; and v. Considering the fact that the waiver decision was taken in December 2011 and the notification on preference was submitted starting from mid-2015, the duration of the LDC Services Waivers hall be modified to provide that preferential treatment notified pursuant to the Decision (WT/L/847) will apply for individual notifying Members 15 years from the date the notification is submitted by that Member. 3 S/C/W/356, S/C/W/356/Corr.1 and S/C/W/356/Corr.2. 4 For example, see S/C/W/356, S/C/W/356/Corr.1 and S/C/W/356/Corr.2.
- 4-2.5 DUTY FREE AND QUOTA FREE (DFQF) MARKET ACCESS FOR LDCS 2.11. In the context of the implementation of the Decision on Measures in Favour of Least- Developed Countries contained in decision 36 of Annex F of the Hong Kong Ministerial Declaration and Bali Ministerial Decision on duty-free and quota-free market access for LDCs, full and faithful implementation of Hong Kong Ministerial decision is the priority of LDCs. Towards this end, Members agreed at a dedicated session of the CTD held on 23 September 2015 that the WTO Secretariat would complete a study on implementation of Hong Kong Ministerial decision on DFQF market access by mid-november 2015. The LDC Group is hopeful that the study will serve as a tool to provide necessary inputs towards finding convergence in implementing DFQF market access in time for Nairobi. 2.12. Building on the paragraph 1.11 of Bali Ministerial Decision, the LDCs will submit a specific proposal towards full implementation of the decision for consideration of the members on a priority basis. 2.13. Upon reaching a meaningful outcome on the implementation of Hong Kong Ministerial Decision on DFQF market access for LDCs by all developed country members and the developing country members in a position to do so, Preference granting countries shall make DFQF market access binding through appropriate scheduling. 2.6 AGRICULTURE 2.14. It is an established fact that, unlike the rest of the World, LDCs are heavily dependent on the agriculture sector which contributes significantly to employment, poverty reduction and GDP. However LDCs are also faced with several challenges that include being net food importers. 2.15. Most LDCs have a large underutilized production potential in agriculture. There is no possibility to fight poverty and to promote development without a major improvement in the agricultural sector's productivity and production. 2.16. Food security is a major objective in all LDCs. The growing dependence on imports to feed the population is a major concern for our countries. Low income at the household level and limited foreign exchange resources make LDCs extremely vulnerable to price fluctuations and scarcities on the international food market. 2.17. The great majority of our farmers are small, semi-subsistence farmers. Their productivity can only be increased if we integrate them into the market. They need access to technology, inputs, financing and, most importantly, access to markets. Small farmers in order to increase their income and to develop have to specialize in their comparative advantage rather than having to concentrate on producing for their own consumption. 2.18. The current international environment, however, hampers the LDCs' ability to increase agriculture productivity and production due to trade distorting subsidies and changing and unpredictable standards (SPS). The objectives of LDCs in the area of agriculture therefore aim to: (i) improve food security through increased agricultural production and productivity; (ii) increase export earnings; and (iii) protect their producers in cases of prices decline or import surges. 2.19. The present submission therefore aims to contribute towards the establishment of an international environment that is conducive to the development of LDCs' agricultural sectors and allows their governments to have a market oriented agricultural policy. 2.6.1 Domestic Support 2.20. Cognizant of harmful effects of agricultural trade distorting subsidies and the importance of disciplining subsidies, any package for agreement in Nairobi, or any other result on domestic support negotiations thereafter, shall substantially reduce all forms of market distorting subsidies, towards their eventual elimination. The outcome in this regard should promote LDCs economic growth and development, food security, and enhance poverty alleviation efforts. LDCs' flexibilities embedded in the Revised Draft Modalities for Agriculture TN/4/Rev.4 must be preserved. These flexibilities inter alia include: exemption from tariff and domestic support reduction commitments,
- 5 - flexibilities for NFIDCs, and flexibilities regarding the implementation of special safeguard mechanism. 2.21. In addition to reduction of trade distorting domestic support, any disciplines on green box should go beyond transparency and monitoring of notification requirements so as to restrain countries from engaging in trade distorting practices that impact LDC trade. Innovative and practical approaches should be considered to avoid box-shifting practices by Members that impact trade distorting domestic support reduction commitments. Where box-shifting is occurring, specific disciplines shall be required to avoid trade distorting effects. 2.6.2 Public Stockholding 2.22. Purchase of food at administered prices by LDCs under public stockholding schemes for food security purposes will be exempted from the de minimis calculation. 2.6.3 Export Competition 2.23. In accordance with the Hong Ministerial Declaration and further reaffirmed by the Bali Ministerial Declaration on Export Competition, all forms of export subsidies and disciplines on all export measures with equivalent effect shall be eliminated. Bearing in mind the missed deadline of 2013 as set out by the 2005 Hong Kong Ministerial Declaration for the elimination of all forms of export subsidies, Members shall phase them out, in equal installments, over a period of (3) years for developed countries and (6) years for developing countries from the date of this decision. 2.6.4 Export Restrictions 2.24. In view of ensuring food security in LDCs, no non-ldc Member, shall apply any export restriction on any foodstuff imported by any LDC, if the exporting member is a net exporter of the foodstuff concerned. 2.6.5 Market Access 2.25. Developed Country Members, and developing countries in a position to do so, shall provide duty-free and quota-free market access on a lasting basis, for all agricultural products originating from all LDCs, in a manner that ensures stability, security and predictability. 2.6.5.1 Preference Erosion 2.26. There should be clear and effective disciplines in place to address erosion of preferential tariffs on agricultural exports by LDCs. In accordance with the July Framework and the Revised Draft Modalities for Agriculture, these disciplines shall include the provision of targeted technical assistance, including additional financial and capacity building assistance to help meet adjustment costs, address supply side constraints, and promote the diversification of production including through technology transfer leading to competitiveness. 2.6.5.2 SPS and Food Safety Protocols 2.27. LDCs which are often newcomers on export markets face higher inspection costs than their established competitors who benefit from much fewer inspections thanks to risk profiling, which reduces LDCs exports' competitiveness. Given the high cost of SPS inspection controls in some importing markets, Members shall establish, under their aid for trade programmes, a scheme for the full cost recovery of SPS inspection controls on imports from LDCs so as to minimize their trade costs and to assure a level playing field with their competitors. 2.6.5.3 Special Safeguard Mechanism 2.28. In order to address potential problems generated by import surges or price decline, LDCs shall have recourse to a simple and effective special safeguard mechanism (SSM). In this regard, LDCs support the G-33 proposal.
- 6-2.6.6 Cotton 2.29. The LDC group notes with concern the lack of progress made in implementing the results of the WTO Ministerial Conference held in Hong Kong in December 2005, with regard to cotton, an issue that must be handled "ambitiously, expeditiously and specifically" with a view to eliminating all trade distorting policies affecting the sector. Cotton is a major issue for LDCs, and appropriate solutions must be found to address the difficulties faced by this sector of economic activity in these countries. 2.30. In light of the foregoing, and building upon the decision taken on cotton at the Ninth (9 th ) WTO Ministerial Conference in Bali in December 2013 (WT/L/916) and the draft modalities texts for agriculture (TN/AG/W/4/Rev.4 of 6 December 2008), LDCs call upon WTO Members to examine and negotiate on a priority basis an outcome on cotton on the basis of the following text, which is contained in submission TN/AG/GEN/38; TN/AG/SCC/GEN/14: 2.6.6.1 Market Access i. Developed country Members, and developing country Members in a position to do so shall grant, as from 1 January 2016, duty free and quota free market access for cotton produced and exported by Least Developed Countries (LDCs) on the markets of developed and developing importing countries. ii. Developing country Members declaring themselves not in a position to grant duty free and quota free market access for exports of cotton from the cotton exporting LDCs shall undertake, as from 1 January 2016, to look positively at the possibilities for increased import opportunities for cotton from LDC Members. iii. Developed country Members, and developing country Members in a position to do so, shall grant, as from 1 January 2016, the duty free and quota free market access for the cotton products indicated in Annex 1 to the Agreement on Agriculture and for products derived from cottonseed that are exported by Least Developed Countries (LDCs) to the markets of importing developed and developing countries. iv. Developed country Members and developing country Members which grant duty and quota free access for cotton and products derived from cotton, as defined in the lists mentioned above, are urged to review the list of products derived from cotton covered, as from 1 January 2018, on the basis of updated trade data and statistics provided by Members importing and exporting cotton and products derived from cotton. 2.6.6.2 Domestic Support i. The vital question of cotton shall be resolved while upholding the commitment made by WTO Members to address the issue ambitiously, expeditiously and specifically. ii. In order to achieve the basic objective of the reforms required in order to operate on the international cotton market, the support given to cotton by developed country Members under the Amber Box shall be reduced according to the following schedule three (3) successive tranches which shall not be less than those indicated below, namely: 50% of the cumulative amount for such support at 1 January 2016; 75% of the cumulative amount of support at 1 January 2017; and 100% of the cumulative amount of support at 1 January 2018. iii. The Blue Box limit applicable to cotton shall amount to one third of the product specific limit that would otherwise have been applicable for the Amber Box, according to the aforementioned schedule. iv. The base value of support calculated shall be the arithmetic average of the amounts notified by Members for cotton in supporting tables DS:4 from 1995 to 2000.
- 7-2.6.6.3 Special and Differential Treatment i. Developing country Members with relevant AMS and Blue Box commitments for cotton otherwise applicable under the relevant provisions of this Agreement shall reduce domestic support for these two categories in five (5) successive tranches of 20% each over the period from 1 January 2017 to 31 December 2021. ii. Members shall pursue their efforts to draw up criteria and disciplines, including placing a cap on Blue Box support and other provisions which will prevent the transfer of support for cotton from the Amber Box to the Blue Box, and from the Amber and Blue Boxes to the Green Box. They also undertake to ensure effective monitoring of the types of support which distort international trade in cotton. 2.6.6.4 Export Competition i. Export subsidies for cotton are prohibited in accordance with the mandate contained in paragraph 11 of the Hong Kong Ministerial Declaration, which calls for all forms of export subsidies for cotton to be eliminated in 2006. ii. Developing country Members which have any export subsidy entitlements referred to in that paragraph shall comply with this prohibition no later than 1 January 2018. iii. To the extent that new disciplines and commitments for export credits, export credit guarantees or insurance programmes, agricultural exporting state trading enterprises and international food aid create new and additional obligations for Members as regards cotton, any such obligations shall be implemented by 1 January 2016 for developed country Members, and by 1 January 2018 for developing country Members. 2.7 NON-AGRICULTURAL GOODS MARKET ACCESS (NAMA) 2.7.1 LDC Tariff Reduction Commitments 2.31. The Doha Ministerial Declaration in paragraph 16 inter alia provides Members with the mandate to negotiate the reduction and/or elimination of tariffs, including the elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers. 5 It further provides that the negotiations shall fully take into account the special needs of least-developed Members. To this end, Ministers should agree in Nairobi that in the context of any agreement on NAMA, LDCs shall be exempted from tariff cuts 6 and will not be expected to increase the level of tariff binding commitments. LDCs shall also be accorded safeguard policy space for industrial development. 2.32. LDCs in customs unions with non-ldcs shall not take on reduction obligations arising from commitments of the non-ldcs. 7 2.33. In the event that LDCs in a customs union are affected by tariff reduction obligations of the non-ldc members in the customs union, commensurate compensation in the form of financial, technical and technological support shall be provided to assist in addressing the impact of Common External Tariff reductions. 2.7.2 Preference Erosion 2.34. There should be clear, compensatory, and effective disciplines to address erosion of preferential tariffs of NAMA products from LDCs including adjustment periods as well as technical assistance through initiatives such as the Enhanced Integrated Framework and Aid for Trade. 8 5 Fourth Revision of Draft Modalities for Non-Agricultural Market Access, TN/MA/W/103/Rev.3. 6 Ibid, paragraph 14. 7 Ibid, paragraph 7. 8 TN/MA/103/Rev.3, paragraphs 28-31.
- 8 - Moreover, the NAMA modalities must ensure that no LDC shall pay duties higher than any non-ldc Member at any point in time. 9 2.7.3 Non-Tariff Barriers 2.35. The elimination of Non-Tariff Barriers (NTBs) shall be an integral part of outcomes for Nairobi. Specifically, decisions in this area shall aim to reduce or eliminate, NTBs, in particular on products of export interest to LDCs and to enhance market access opportunities achieved. 2.36. The LDC Group calls upon Members to agree to refrain from imposing NTBs that obstruct LDC exports. 2.7.4 Capacity Building Measures 2.37. Capacity building measures for LDCs will be enhanced in order to address their inherent supply side capacity constraints and the challenges that may arise from increased competition as a result of MFN tariff reductions. Such measures including the Enhanced Integrated Framework and Aid for Trade shall be designed to enable LDCs take advantage of increased market access opportunities, including through diversification of export products and markets, and to meet technical standards/requirements and address other non-tariff measures, as provided for in the TN/MA/103/Rev.3 10 as well as any other relevant initiatives. 2.8 RULES 2.38. While recognizing the considerations reflected in the 2011 Rules negotiating group Chairman's report, 11 if any modalities and outcomes on antidumping and countervailing duties pursuant to paragraphs 28-29 of the Doha Declaration are agreed, special flexibilities in favour of LDCs shall be maintained. 2.39. Any transparency rules set forth across the rules negotiation pillars of antidumping, countervailing duties, regional trade agreements and fisheries subsidies, for consideration by Members, shall include special provisions for LDCs, in particular that LDCs are not required to take new commitments. 2.40. As a contribution to an early harvest for LDCs, Members shall refrain from imposing antidumping duties on imports from LDCs. In addition, Members shall agree that the threshold for volume of imports referred to in Article 5.8 of the Agreement on Antidumping shall be increased from 3 percent to 7 percent in the case of LDCs and LDCs shall be exempted from cumulation. 12 2.41. Considering the increased importance of regional trade agreements and free trade agreements in setting international rules and standards, along with the meager participation of the LDCs, criteria should be developed to include in those agreements, provisions in favor of all LDCs, whether or not LDCs are party to the agreements. 2.42. Technical assistance and capacity building mechanisms should be developed to support LDCs in addressing implications for their exports and imports. 2.8.1 Fisheries Subsidies 2.43. For LDCs, fisheries represent a significant source of employment, livelihood and food security and, as such, play a critical role in promoting rural development and poverty reduction. 2.44. For these reasons, the LDC group considers that fisheries subsidies are an essential element of the DDA. Therefore, negotiations aimed at strengthening disciplines on fisheries subsidies should focus on sea fisheries and disciplining subsidies that contribute to IUU, over capacity and the overexploitation of fish stocks and that undermine development prospects in LDCs. 9 Report of the Ministerial Meeting of the WTO LDC Consultative Group Geneva, 29 November 2009. 10 Ibid, paragraph 27. 11 TN/RL/W/254. 12 See WT/MIN(01)/17, paragraph 13 and JOB(01)/152/Rev.1.
- 9-2.45. Any discipline in fisheries subsidies shall not prevent LDCs from maintaining subsidies that do not contribute to overfishing or the depletion of fish stocks. Future disciplines should fully incorporate appropriate and effective special and differential treatment provisions for LDCs in accordance Hong Kong Mandate, and taking into account LDC minimal share of wild catches and the vital importance of the sector to the national socio-economic development of LDCs. 2.8.2 Technical Assistance and Capacity Building 2.46. Taking into account the institutional and financial constrains faced by many LDCs, targeted technical assistance and capacity building shall be provided to effectively support LDCs in meeting any future commitments under possible new disciplines. 3 ACCESSIONS 3.1. As a systemic WTO issue and as LDCs represent a significant proportion of countries remaining outside its membership, the LDC Group places high priority to this issue in line with WTO Ministers' commitment to "facilitate and accelerate" LDCs accession. 3.2. The LDC Group, therefore, calls upon the WTO Membership to fully operationalize the 2002 and addendum of 2012 General Council decisions on the LDC accession guidelines, with a view to conclude remaining LDC accessions expeditiously. 3.3. The LDC Group requests convening a special dialogue meeting between acceding LDCs and WTO Members under the guidance of the Sub-Committee on LDCs, during the second half of 2016, in order to discuss ways and means to effectively move LDCs accessions to their respective conclusion.