RESTRICTED
WORLD TRADE WT/COMTD/LLDC/2
29March 1996
ORGANIZATION(96-1143)
Sub-Committee onLeast-Developed Countries
Second Meeting
27February 1996
NOTE ONTHE PROCEEDINGS OFTHE SECOND MEETING
Prepared bytheSecretariat
1. TheSecond Meeting oftheSub-Committee onLeast-Developed Countries washeldon
27February 1996under theChairmanship ofMissAnne Stoddart (United Kingdom). TheChairman
drew theattention ofdelegates totheagenda forthemeeting inWTO/AIR/267 andproposed thatthe
meeting takeupjointly thefirsttwoitems (i.e.items BandC)inthework programme adopted atthe
firstmeeting oftheSub-Committee. Theagenda wasthenadopted.
2. The Chairman said thefirst section oftheNote bytheSecretariat indocument
WT/COMTD/LLDC/W/1 of13February 1996provided abriefoverview ofsome ofthespecial and
specificproblemsfacingleast-developedcountries(LLDCs),particularlywithrespecttotakingadvantage
oftheopportunities provided bytheUruguay Round. Thesecond section presented asummary of
someoftherecent international initiatives intheareaoftradeandinvestment infavour ofleast-developed
countries.
3. Shestated thatnotwithstanding thelackofconclusions intheSecretariat Note, anumber of
inferences could bedrawn. Theeconomic situation inLLDCs wasextremely poor; theinternational
community clearly realized thatthiswasunacceptable andthatsomething needed tobedonetoimprove
theeconomic situation ofthese countries. Despite many initiatives, including theimplementation of
structural adjustment programmes andtheadoption ofinternational support measures, thesituation
ofleast-developed countries taken asawhole haddeteriorated markedly inthepast10years. She
wondered whether existing initiatives needed more timebefore taking effect, orwhether theefforts
ofvarious international organizations weretoodispersed. Astrong casecould probably bemade that
thefailure ofleast-developed countries totakeadvantage ofinternational support measures andother
programmes wasbecause ofthelackofanappropriate institutional structure.
4. Whereas itwastheresponsibility oftheWorld Trade Organization (WTO) toassist least-
developedcountriestotakeadvantageofthestrengthenedmultilateralrulesandnewmarketopportunities
arising fromtheUruguay Round, itwasalsoclearthatitcould notalone solve alltheproblems relating
tocapacity-building inthese countries. Measures taken attheinternational level needed tobe
underpinned byeducational infrastructure andappropriate government policies. There wastheneed
toensure thatprogrammes were notinitiated before basic capacities existed, andthatthere wasthe
necessary follow uptomonitor theprogress being made. Acollective andcoherent response from
theinternational community wasnecessary, aswellascloser cooperation between multilateral and
bilateral donors.WT/COMTD/LLDC/2
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5. TheChairman requested views from delegations, particularly those from least-developed
countries, onthematters shehadjustraised andonthespecific roletheWTO could playinimproving
thesituation. Emphasizing theimportance ofhearing theviews ofrepresentatives ofleast-developed
countries, shesaidtheproblems faced bythesecountries bothinterms ofhuman andfinancial resources
wereevident; onlyeightofthetwenty-two least-developed country Members oftheWTO hadMissions
inGeneva andonlyfouroftheeleven intheprocess ofratifying oracceding totheWTO hadresident
missions inGeneva. TheChairman indicated thatshewould givefirsttheopportunity totwo
organizations togiveadditional background information totheSub-Committee.
6. Therepresentative oftheInternational Monetary Fund (IMF) saidshewished toaddtothe
informationprovidedonconcessionalsourcesoffinancethatweredirectlyrelatedtotradeandinvestment
intheSecretariatdocument.ShereferredtotheIMF'sEnhancedStructuralAdjustmentFacility(ESAF),
andsaidprogrammes under thisfacility werehighly concessional andconstituted animportant source
offunding forLLDCs. Theprogrammes hadbeencatalysts forassistance fromothersources, including
fortradeandinvestment purposes. Thefacility wasestablished tohelplowincome countries implement
acomprehensive setofmacro-economic andstructural policies aimed atmaking theeconomy viable
inthemedium-term. Macro-economic stability wasafundamental condition forattracting external
andinternal investments. Since 1987, thirty-two LLDCs haddrawn onthisfacility. Theconditions
under which funding wasprovided were verygenerous. Theannual interest ratewasatpresent 0.5
percent, andrepayments would begin afterfiveandahalfyears withfullrepayment attheendof
thetenth year. Financing fortheESAF, including thesubsidized interest rate,hadbeenmobilized
fromabroad cross-section ofindustrial anddeveloping countries. Bymid-1995 disbursements were
overUS$7.5 billion. Actual experience under ESAF programmes hadbeenencouraging, leading to
theextension oftheprogramme bytheBoard oftheIMF. Aspartofthemonitoring ofthelending
programme, theIMFundertook astudy ofeconomic andfinancial developments innineteen low-income
countries (including twelve LLDCs) thathadentered intoESAF arrangements. Theavailable data
showed thatreforms under theprogrammes hadledtonotable improvements inanumber ofareas
suchasGDP growth, lower inflation, expansion ofexports, improved savings, investment ratios and
external reserves. Based onevidence accumulated between 1980-85 and1986-94, another study
compared reforming andnon-reforming countries against asetcriteria. Theresults werequitestriking
astheyshowed thegulfbetween strong adjusters andslowadjusters interms oftheirmacroeconomic
andtradeposition. These studies suggested thattheprogrammes werebeneficial anddidactually work.
However, thepicture forthelow-income group asawhole wasnotveryencouraging. Thegains of
thestrong adjusters hadbeenmasked bytheweak performance ofthenon-adjusting countries, some
ofwhich hadsuffered fromsevere civilwarsorother sources ofpolitical instability affecting economic
conditions. Thus, looking attheeconomic performance ofthegroup asawhole might mask many
positive stories. Thepessimistic statements onoverall trade andeconomic performance ofLLDCs
intheSecretariat document could giveaslightly different picture oftheimpact ofcountry reform
programmes, often supported bytheIMFortheWorld Bank. Thepicture would bedifferent ifa
disaggregated analysis wasundertaken.
7. TherepresentativeofUnitedNationsConferenceonTradeandDevelopment(UNCTAD)recalled
thatatthefirstmeeting oftheSub-Committee, information wasprovided onUNCTAD 'sprogrammes
andprojects forLLDCs andontheoutcome oftheMid-Term Global Review Meeting. Hestated that
UNCTAD 's1996 Report onLeast-Developed Countries, which wasgoing tobeusedasoneofthe
background documents forUNCTAD IXinSouth Africa, wasavailable todelegations atthemeeting.
Promoting growth andsustainable development inaglobalizing andliberalizing world economy would
betheunifying theme atUNCTAD IX.Itwould consider relevant international andnational policies
andstrategies which would permit developing countries totakefulladvantage oftheopportunities for
growth anddevelopment offered bythenewglobal environment. Strategies which would minimize
therisksofnewimbalances andinstabilities, including thepotential marginalization ofleast-developedWT/COMTD/LLDC/2
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countries andotherweaker economies, would bealsoconsidered. TheConference would alsoconsider
appropriate international support measures which would enable LLDCs toparticipate more effectively
intheglobalization andliberalization processes. Thelatitude tofollow inappropriate policies such
asovervalued exchange rateshaddiminished withtheincreasingly competitive nature ofglobal trade
andfactor markets. Thenature andquality ofdomestic policies, hesaid,would playacrucial role
indetermining whether least-developed countries could successfully adjust tothechanging demands
oftheglobal economy. Thischallenge would require major adjustment ineconomic policies, resource
allocation andproduction structures. Theimportance ofgoodmacro-economic polices andtheadverse
effects ofbadpolicies hadsignificantly increased; maintaining macro-economic stability wasnowa
keyobjective. Though theprimary burden ofadjustment hadinevitably tobeborne bythe
least-developed countries themselves, international support wasessential; national policy actions were
insufficient tomeetthese challenges. Least-developed countries needed tobeassisted inestablishing
thesound legalandinstitutional framework compatible withtheemerging international trading system,
informulating trade policies andmanaging trade dataandinformation geared tobuilding domestic
capacities formaximising thebenefit fromliberalized access tomarkets. Action wasrequired onthe
Ministerial Decision onMeasures infavour ofLeast-Developed Countries andtheMinisterial Decision
onMeasures Concerning thePossible Negative Effects oftheReform Programme onLeast-Developed
andNetFood-Importing Developing Countries .There wasalsotheneed tosetupcompensatory
mechanisms tofacilitate LLDC adjustment tothenewtrading environment. Concrete measures were
needed todealwiththedebtproblem, toimprove market access, andtoenhance LLDC capacity to
attract investment. Wellthought outpolicies could enhance thesupply capacity ofLLDCs toincrease
theproduction oftradeable goods andservices. Apart from suchmeasures atthemultilateral level,
therewasgreatpotential atthebilateral, sub-regional andregional levels forassisting least-developed
countries. Neighbouring countries withlargemarkets could improve market access forleast-developed
countryexports.Preferentialaccesscouldbegrantedtoexportsgeneratedbyinvestmentandtechnology
inputs from theimporting country. Thiswould encourage jointventures, andtheestablishment of
subsidiaries ofbusiness ventures through licensing arrangements.
8. TherepresentativeofBangladesh,speakingonbehalfoftheleast-developedcountries,welcomed
theSecretariatdocumentwhichhadtouchedonsomeoftheproblemsfacingtheleast-developedcountries.
Despite vigorous efforts, thesocio-economic situation ofmany least-developed countries hadcontinued
todeteriorate andtheyhadbeenunable toreach many oftheobjectives oftheProgramme ofAction
forthe1990s. Acombination ofdomestic andexternal factors suchaseconomic imbalances, poor
performance oftheproductive sector, civilstrife, declining share inworld trade, inadequate external
financing, persistent debtservicing difficulties, aidconditionalities andrecurrent natural disasters were
responsible forthedecline inliving standards. Structural handicaps made least-developed countries
particularly vulnerable toanunfavourable external environment. Theprocess ofglobalization and
liberalization, while offering opportunities forgrowth anddevelopment, entailed risksofinstability
andmarginalization duetothesizeandstructure ofthetradeandtheoverall levelofdevelopment and
competitive strength oftheireconomies. Inthemedium term, current account balances could worsen.
Theexternal support envisaged intheProgramme ofAction hadnotmaterialized. Thedebtburden
remainedveryonerous,seriouslycompromisingadjustmentanddevelopmentefforts.Despitethebroad-
based recovery under wayintheworld economy, theprospects forleast-developed countries remained
bleak. Thetrade andinvestment initiatives setoutintheSecretariat document were notnew. The
Substantial NewProgramme ofAction adopted in1981 envisaged thatreform programmes adopted
byleast-developedcountrieswouldbecomplementedbyinternationalsupportmeasures.Least-developed
countries asagroup, however, hadmade littleprogress andthere hadbeenasharp deterioration in
theirsocio-economic conditions. After whatcame tobeknown asthelostdecade ofthe1980s, the
Second UNConference adopted theParis Declaration andProgramme ofAction forthe1990s. The
basicobjective oftheProgramme wastoreactivate andaccelerate growth anddevelopment inasustained
manner. Notwithstanding itslaudable aims, least-developed countries asagroup hadfailed tomakeWT/COMTD/LLDC/2
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much progress; percapita incomes haddeclined andliving conditions haddeteriorated. Toequip
LLDCs tomeetthechallenges fortherestofthedecade, theHigh-Level Inter-Governmental Meeting
attheirMid-Term Review oftheProgramme ofAction recommended intensified policy commitment
atboththedomestic andinternational level. Trade Ministers atMarrakesh committed themselves to
assistleast-developedcountriestoexpandtheirtradeandinvestmentopportunities.Despitecommendable
efforts bysome donor countries, there hadbeenonlya50percentfulfilment oftheoverall aidtarget.
Inthemeantime,overallfinancingrequirementshadincreased,asthenumberofleast-developedcountries
hadrisen toforty-eight from thirty-one in1981. Theerosion inpreferential margins following the
Uruguay Round tariffcutshadnecessitated painful adjustments making itquiteessential forprovisions
infavour ofLLDCs tobeoperationalized. TheSecretariat document wascautious about thelikely
benefits toleast-developed countries. A"safety net"tomitigate anyadverse effects ofUruguay Round
Agreements hadbeen proposed byleast-developed countries. With regard toUNCTAD 'sTrade
Efficiency Programme andTrade Point Network, hesaidtheviability oftrade points needed tobe
examined asmostleast-developed countries hadbeenunable tosetthemup.Technical assistance could
playonlyamarginal roleinthedevelopment process. Tobenefit from themoves toglobalization
andliberalization, least-developed countries needed investment forcapacity-building anddiversification.
Helooked totheSingapore Ministerial Meeting togiveguidance forfuture action. Herequested the
WTO examine thepossibility ofproviding funds tobring representatives fromoutside Geneva toattend
meetings oftheSub-Committee.
9. Therepresentative ofZambia supported thestatement made byBangladesh, onbehalf ofleast-
developed countries. Pointing tothepoorrepresentation ofleast-developed countries atthemeeting,
heunderlinedtheimportanceoftherequestmadebyBangladeshforprovidingfundstofinanceattendance
atsuch meetings, which were infactquite infrequent. Hecontinued bysaying thatdespite
implementation ofstructural adjustment programmes andliberalization policies, andtheextension of
international support measures, least-developed countries hadnotexperienced anyrealgrowth and
theiroverall performance would notbebetter thaninthe1980s. Their share inworld tradehaddeclined
from1.6percentin1960to0.3percentin1994. Structural problems facing thesecountries prevented
them frombenefiting fromtheexpansion intheworld economy, andfrompreferential schemes such
astheGeneralized System ofPreferences (GSP). Hedidnotgivepriority toassessing theimpact
oftheUruguay Round onLLDCs; whatwasimportant wasassisting themtoovercome theirstructural
problems sothattheycould increase theirparticipation intheinternational trading system andshare
inthebenefits brought about bythesuccessful conclusion oftheUruguay Round. Ifstructural
impedimentswerenotremoved,thegoaloftheinternationalcommunitytoassistleast-developedcountries
toincrease theirparticipation intheinternational trading system would bedifficult toattain. The
problem, hesaid, wasnotmarket access butsupply capabilities. While hehadnodoubt about the
commitment oftheinternational community tosupplying technical andfinancial assistance andextending
support measures tocomplement national reform programmes, pastmeasures hadnotresulted ina
significant improvement anditwasnecessary tolookafresh ataidandassistance toleast-developed
countries. Underlining thestatement intheSecretariat paper that"Recent debtrelief measures
implemented bydonors andlenders hadnotprovided aneffective anddurable solution tothedebt
problems", hesaidthewriting-off ofthedebtowed byleast-developed countries should begiven top
priority. Suchadecisive action onthedebtofSub-Saharan African countries hadbeenurged byBritain 's
Debt Crisis Network ondonor countries andlenders suchastheWorld Bank andIMF. According
toit,these countries would beunable toplayasignificant roleintheinternational trading system if
theywereobliged tomake alltheirdebtrepayments. Thiswasthewayfortheinternational community
todemonstrate theircommitment toassist least-developed countries. These countries, hesaid,found
itdifficult toattract foreign investment andhecalled foranincrease inthelevelofOfficial DevelopmentWT/COMTD/LLDC/2
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Assistance (ODA). Emphasizing theimportance ofstrengthened institutional andhuman capacities
forcreating anenvironment necessary foreconomic growth, heurged coordinated assistance by
international institutions suchasUNCTAD andInternational Trade Centre (ITC) andtheinternational
community atlarge.
10. Endorsing thestatement made onbehalf ofleast-developed countries byBangladesh, the
representative ofTanzania saidtheextensive analytical document prepared bytheSecretariat provided
agoodbasisfordiscussion. Theconcentration ofexports andthenature oftheproducts werefactors
preventing least-developed countries from taking advantage oftheavailable opportunities. National
efforts andinternational assistance wereneeded tobring about vertical andhorizontal diversification
ofexports andtostrengthen human resources andinfrastructural capacity, ifthese countries wereto
beabletotakeadvantage ofthepost-Uruguay Round opportunities. Foreign direct investment, he
said, hadaveryimportant roletoplayinthedevelopment process, especially inleast-developed
countries. Herecognized thatthere wereproblems which discouraged potential investors. Hecalled
upon theirdevelopment partners todesign incentives which would encourage enterprises toinvest in
least-developed countries, some ofwhom hadimplemented necessary reform measures eveninthe
faceoflocalsensitivities. Heplaced importance ontechnical assistance instrengthening institutional
capacities ofLLDCs andenabling themtotakeparteffectively innegotiations, andinthereview process
suchastheoneplanned forSingapore inDecember 1996. Least-developed countries needed assistance
inidentifying obligations arising outoftheUruguay Round, particularly inthose areas where there
werenospecial arrangements forthem. Herecognized theefforts under waytointegrate least-developed
countries intheglobal trading system. TheDirector-General oftheWTO hadlearnt alotonthe
impediments facing African countries when hevisited Africa recently; heurged theDirector-General
tovisitsome least-developed countries during hisnextAfrican tour.
11. Therepresentative ofSwitzerland saidhewould liketoknow whatwasbeing donetoassist
theseven least-developed countries whowere intheprocess ofratifying theWTO Agreements. It
wasimperative fortheprocess tobecompleted bytheendofthisyear, otherwise theywould beobliged
tosatisfy themore exacting requirements which would come intoforce nextyear. Hethenwenton
toobserve thatasstatements from least-developed countries andtheSecretariat paper hadattested,
problems persisted despite active efforts bymany international organizations. Thequestion waswhether
therightthings werebeing doneattherightplace, andwhatcould bedonetoconcentrate efforts so
thatthepoorest countries weremostefficiently served. Given themandate oftheWTO, itcould only
playalimited roleintheprocess. Significant progress could, however, bemade atthebilateral level.
Swiss efforts infavour ofleast-developed countries gavepriority toimprovements inmarket access
conditions, particularly forpoorest countries. Efforts were alsodirected towards improving the
infrastructural andhuman resources ofLLDCs. Increased investment incommunication, transportation,
education andhealth, hesaid,could bethemissing linksinefforts toimprove andstrengthen institutional
capacities anddevelop adynamic andcompetitive production structure. This, hesaid,presented a
bigchallenge forbothLLDCs andtheinternational community. In1993, nearly 500million Swiss
Francs or70percentofSwiss ODA wasdirected specifically toleast-developed countries. Action
hadalsobeentaken torevise theGSPscheme ofSwitzerland inorder tocompensate fortheerosion
ofpreferential margins. Hisgovernment hadalsorefocussed itstechnical assistance andtraining
programmesinordertoassistLLDCstotakeadvantageoftheimprovedmarketaccessconditionsbrought
about bytheUruguay Round.
12. TheDeputy Director-General, Mr.Jesús Seade, inresponse totheinquiry bySwitzerland
regarding thecountries intheprocess ofratification, saidtheWTO wasdoing itspartbyproviding
thenecessary information andtechnical assistance tothese countries. Theprocess ofratification, he
said,wasessentially adomestic matter andinternal procedures should berespected. Theimplications
ofnon-ratification ornotification bytheendofyearhadbeenspeltoutclearly tothese countries. TheWT/COMTD/LLDC/2
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Secretariat wasincommunication withthecountries through theirmissions andother regular contacts.
Inonecase, atailor-made package ontheimplications andbenefits hadbeenprovided foruseduring
parliamentary deliberations. Duetothepolitical situation insome countries, contact hadbeenlost
temporarily. After noting thatthese countries haduptotheendoftheyeartocomplete theratification
process, heinvited delegations tomake suggestions forexpediting theprocess. Therepresentative
ofSwitzerland saidthatasdomestic administrative procedures could becomplicated, every effort should
bemade tohelpthese countries accede totheWTO bytheendoftheyear. Failing that,theywould
havetogothrough thecumbersome procedures which would beoperational asfrom nextyear. The
Chairman noted thatperhaps thedomestic situation insome countries might disrupt theprocess of
ratification, andthatitshould beborne inmind thatthere wasalimittowhat theSecretariat could
do.
13. TherepresentativeoftheEuropeanCommunitiessaidshehadtakencarefulnoteofthestatements
fromrepresentatives ofleast-developed countries. Regarding least-developed country representation
atfuture meetings, shesaidtheEuropean Communities wasopenandready toconsider anypossibilities
toincrease participation. Noting thatproblems could ariseinfinding financing within theregular WTO
budget, shesaidtheEuropean Communities waswilling toconsider different possibilities ofensuring
theparticipation ofagreater number ofleast-developed country representatives.
14. Therepresentative ofMadagascar saidhewasinfullagreement withprevious least-developed
country speakers, particularly Zambia, Bangladesh andTanzania. Hisstatement would focus onspecific
measuresthatcouldfacilitatetheexpansionofleast-developedcountrytradeandinvestmentopportunities.
Allstudies undertaken sofarwhether byOrganization forEconomic Cooperation andDevelopment
(OECD), IMForUNCTAD hadnoted thelessening flowofpublic funds andtheincreased importance
offoreign direct investment. Thestudies alsoshowed thatAfrican countries andotherpoorer countries,
especially theleast-developed ones, attracted onlyaminute fraction ofinvestment flows. Independently
ofwhattheleast-developed countries themselves could dointerms ofcreating anenabling environment,
heasked whether some form ofinternational cooperation andassistance could helpchannel more
investment tocountries where transnational companies werereluctant toinvest. Hesuggested afinancial
mechanism, suchasariskfundfinanced byprivate capital, which would aimatboosting investment
inAfrica, particularly intheleast-developed countries. Theprivate sector would haveacritical role
toplayintheprocess. Thegovernments ofindustrialized countries could contribute byexempting
allinvestment funds from taxation. Madagascar wasready tosubstantiate itsproposal.
15. TherepresentativeofNorwaysaidtheSecretariatpaperpointedtotheworseningsocio-economic
conditionsinleast-developedcountries.Furtherevidenceofthedeterioratingconditionsinthesecountries
could beseeninthereport oftheHigh Level Inter-Governmental Meeting, which tookplace in
NewYork lastautumn. Themost important sentence, andperhaps themost discouraging, inthe
Secretariat paper was: "Despite domestic policy reforms (sometimes asaresult ofadvice from the
International Monetary Fund (IMF) andtheWorld Bank) andtheadoption ofsupport measures by
theinternational community intheareasofaid,debtandtrade, theeconomies ofLLDCs hadcollectively
failed toregister anyrealprogress." Bearing inmind theconcrete measures andeconomic resources
thathadbeendirected towards least-developed countries bytheinternational community, onehadto
askwhether moretimewasneeded forthesemeasures toproduce results. Itshould alsobeasked whether
thefunds andactivities were effectively distributed orwhether theywere wrongly matched tothe
problems.Hewonderedwhetherthiswasthereasonwhyresourcesdidnotyieldcommensuratebenefits.
Donors should probably consider anintegrated approach tosolving theproblems ofLLDCs, witheach
oneproviding assistance intheareaithaddemonstrated expertize. Hestated thattheSub-Committee
should specialize in,andlimititself to,matters within thecompetence oftheWTO. Oncapacity-WT/COMTD/LLDC/2
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building, hesaidtheWTO hadaroletoplayintheareaoftrade rules. Issues suchasexport design
andquality should belefttoother institutions which haddemonstrated experience intheseareas. There
wastheclear needforinput from least-developed countries andNorway wasopen todiscussion on
provision offinancial resources forincreasing participation byleast-developed countries.
16. Therepresentative oftheUnited States saidtheWTO wasnotanaidorganization nora
specialized agency providing financial assistance. Heagreed withtherepresentatives ofNorway and
Switzerland thattherealissue waswhatcomplementary roletheWTO could playintheprocess of
assisting LLDCs toovercome theirproblems. Reading theSecretariat paper, hehadbeenstruck by
thefactthatoutofthetoptenleast-developed country exports, onlyone,namely textiles, wasa
manufactured product. Asthese countries lacked thecapacity tosupply goods forlocalconsumption
orforexport, much oftheWTO ruleswerequiteirrelevant forthem. Hestressed theneedforafocused
approach,particularlyvis-à-viswhatcouldbedoneattheSingaporeMeeting.Theprovisionofadditional
financial resources toLLDCs wasoutside thecompetence ofTrade Ministers whowould beatthis
meeting.Heagreedthatfinancialassistanceforparticipationinmeetings,thoughcertainlynotasolution,
wasanareawhere practical assistance could beprovided. Hethought effort should gointoselecting
officers withthenecessary commercial andlegal background, sothatLLDCs could haveabetter
understanding oftheworkings ofWTO anditslegalstructure. Thiswasastepinproviding LLDCs
withabetter understanding ofwhattheirspecific interests could be,andhowthesystem could work
forthem. Hehadlistened withparticular interest totheemphasis being placed byrepresentatives of
theleast-developed countries ontheneedforapredictable regime forattracting foreign investment.
Hiscountry wasofthesameviewthatmultilateral rulesoninvestment should benegotiated tosupersede
thecurrent bilateral andregional regimes existing intheworld. Whereas intheGeneral Agreement
onTrade inServices therewasthepossibility toprovide aservice bymeans ofacommercial presence,
therewasnotaparallel regime intheareaofgoods. Though financial assistance anddebtrelief could
assist LLDCs toovercome theirproblems andenable themtogainagreater share oftheworld 'swealth,
theyweremeasures beyond thecompetence oftheWTO. TheUnited States wasinterested inpursuing
howtheWTO could bemore responsive tobringing more least-developed countries intoWTO asreal
participants understanding thenuances ofthemany technical agreements. Hethought themeeting helped
tofocus onwhatcould bedone, particularly withregard togetting arealistic agenda fortheSingapore
meeting.
17. Therepresentative ofCanada saidtheSecretariat document hadfocused minds ontheneed
tointegrate least-developed countries intotheglobal economy. Many institutions shared thisconcern,
anditwasimportant toavoid duplication. Hewelcomed theinitiatives taken bytheDirector-General
oftheWTO andtheSecretary General ofUNCTAD toavoid duplication. Thesame needed tobe
done withother organizations which hadcomplementary objectives. Thedocument prepared forthe
review conference ofUNCTAD hadthesametheme asthatstressed byanumber ofdelegations; namely
capacity-building. Whereas least-developed countries attached priority tocapacity-building, anumber
ofdeveloping countries wereconcerned much more withmarket access conditions. Thequestion to
beaddressed waswhatkindofinstitutional support could theWTO provide tofacilitate theprocess
inacost-effective andefficient manner. Given theremarkable complexity ofWTO rules, there were
anumber ofareas where theWTO could playapositive role. Itcould, through itstechnical assistance
programmes, assist LLDCs intradenegotiations, andhelpthemcomprehend fullytherulesoftheWTO,
thuspaving thewayforthemtotakefulladvantage oftheirrights inthenewmultilateral trading system.
Noting theconcerns onthereduction offoreign investment toleast-developed countries, hesaidsome
ofthereasons, suchasfiscal andmonetary policy, were outside thecompetence oftheWTO. The
WTO could, however, lookattheproblem from adifferent angle. Heagreed ontheneedformore
input fromleast-developed countries atthefuture meetings oftheSub-Committee. While hewasnot
inaposition tosaywhat Canada could do,hisdelegation would bethinking about thisissue. He
expected theSingapore meeting toaddress theproblems ofleast-developed countries, butwasnotsureWT/COMTD/LLDC/2
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ofhowitwould bedone. Heagreed withtheUnited States ontheneedforrealism, andwished to
hearspecific suggestions notonlyonsubstance, butalsoontheforum where theissues would betaken
up.
18. Therepresentative ofDjibouti, agreeing withprevious speakers onthehandicaps facing least-
developed countries, thought there should beameans ofpinpointing thecauses oftheproblems, and
howtheWTO 'stechnical assistance programmes could bestrengthened. Astherepresentative ofthe
United States saidwhen commenting onthelimited range ofexports oftheleast-developed countries
andontheimportance offoreign investment, there wastheneedtoaskwhat could bedone bythe
WTO inintegrating LLDCs intothemultilateral trading system. Therootcauses oftheproblems
afflicting LLDCs were common knowledge; theWTO could, through itstechnical assistance
programmes, playapositive roleinredressing some oftheseproblems. Hethought collaboration with
UNCTAD andITCwould bebeneficial.
19. Attempting anoverall assessment ofthemeeting, theChairman saiditwasuseful tohavea
complete picture oftheconcerns ofleast-developed countries andthemeasures which could address
them, evenifsome werebeyond thecompetence oftheWTO. Itwasnecessary toseethewider picture
inorder tocome togrips withthedebtproblem, supply sideconstraints, problems inattracting
investment, andother factors which inhibit LLDCs from taking advantage ofthenewmarket access
opportunities. While some ofthese might fallwithin theremit ofother international organizations,
cooperation withinstitutions suchasITCandUNCTAD wasnecessary toensure thattheWTO had
thecorrect priorities, thereby paving thewayforittobeefficient andeffective. Shenoted thecomment
made byanumber ofdelegations thattheWTO should keeptoitsownspecialist role; forinstance
intraining tradeofficials fromLLDCs andexplaining therulessoastoenable themtotakefulladvantage
oftherights arising outoftheUruguay Round Agreements. Thequestion ofparticipation intheSub-
Committee, which hadbeenraised byleast-developed country representatives, wasinherviewpart
ofthegeneral problem ofunderstanding whattheWTO could do;itcould alsobeareason fordelayed
ratification oftheUruguay Round Agreements bysome countries. Shehadnoted withsatisfaction
thereadiness ofdelegations toconsider what practical measures could betaken toincrease the
participation ofLLDCs intheSub-Committee, andasChairman shewould becarrying outconsultations
onthisissue. TheSub-Committee should consider atitsnext meeting specific andrealistic
recommendationstobesubmittedtotheCommitteeonTradeandDevelopment,whichwouldbereporting
totheMinisterial Conference inSingapore. Shethought itwould bepossible tomake far-reaching
recommendations, eventhough Trade Ministers might bereluctant todealwithmatters outside their
fieldofresponsibility.
20. Therepresentative ofZambia saidhewould liketotakeuptheneedforcoordination between
theWorld Bank, theIMFandtheWTO. While theWTO 'sroleandcompetence might belimited,
hefelttheSub-Committee wasanappropriate forum fordiscussing allaspects oftheproblems ofleast-
developed countries, including theneedforfinancial assistance. Theresults ofthedeliberations could
thenbebrought totheattention oftheappropriate organization using existing channels forcoordination.
TheChairman saidthatshehadinmind justsuchcooperation. Global coherence should mean that
international organizations should reinforce theassistance eachgave. Learning from theexperience
ofothers would helpsettheappropriate priorities.
21. Therepresentative ofZambia thought theSub-Committee should havetwoadditional meetings
sothatissues could bekeptinfocus. Therepresentative ofSwitzerland thought thatinstead ofconvening
formal meetings oftheSub-Committee, informal meetings could beconvened asandwhen necessary
todealwithanyissue thatmight arise. TheChairman saidshewould, when required, beprepared
toorganize more meetings; therules ofprocedure provided forthis. Herconsultations would give
heranindication ifinformal meetings would berequired.WT/COMTD/LLDC/2
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22. Therepresentative ofBangladesh, noting thewillthatexisted tohelpleast-developed countries,
saidthattheWTO could doagreat dealtoassist LLDCs toovercome theirproblems. Forinstance,
itcould facilitate themovement ofnatural persons from least-developed todeveloped countries. It
could urgedeveloped countries toapply thenewrules agreed tointheUruguay Round inaflexible
manner toLLDCs. TheWTO could alsoidentify sectors inwhich least-developed countries enjoyed
acomparative advantage andcoordinate withfinancial assistance from other organizations withthe
viewtostrengthening theircapacity inthese areas. Thiscould yield positive results. TheChairman
saidsheunderstood theconcern oftherepresentative ofBangladesh thatsomething concrete should
bedone, andwasoftheviewthatthemessage wasgetting through.
23. TheChairman thenadjourned themeeting.