RESTRICTED
WORLD TRADE WT/COMTD/LLDC/1
8November 1995
ORGANIZATION(95-3445)
Sub-Committee onLeast-Developed Countries
First Meeting
17October 1995
NOTE ONTHE PROCEEDINGS OFTHE FIRST MEETING
Prepared bytheSecretariat
1. TheFirstMeeting oftheSub-Committee onLeast-Developed countries washeldon17October
1995 under theChairmanship ofMissAnne Stoddart (United Kingdom). Proposing theadoption of
theagenda inWTO/AIR/166 shesaidthatunder ItemB(Organization ofWork), theSub-Committee
would needtoadopt therules ofprocedure andtheDraft Programme ofWork. Sheindicated that
Members andObservers would begiven theopportunity tomake statements under thisitemofthe
agenda. Itwasagreed thatthedelegate ofNorway would make astatement under theitemOther
business. TheAgenda wasadopted.
2. TheDeputy Director-General, Mr.Jesús Seade, inanopening statement pledged thefull
commitment oftheWTO toimplementing theprovisions infavour ofleast-developed countries (LLDCs)
intheMinisterial Decisions. TheWTO would keepunder regular review theimpact oftheresults
oftheUruguay Round onLLDCs, andplayanactive roleinformulating appropriate policy responses
totheirspecial problems andneeds. Theverysmall share ofLLDCs inworld trade leftthem onthe
fringes ofthemultilateral trading system. Market access, measured bytariff cutsresulting fromthe
Uruguay Round onproducts ofexport interest toLLDCs, werelessthanglobal averages. Members
oftheSub-Committee musthesaid,highlight policy initiatives thatwereneeded toincrease thetrade
ofLLDCs. Hesaidthewidening anddeepening ofpreferences under theGeneralized System of
Preferences (GSP) andtheelimination tariff escalation would leadtoanexpansion ofexports and
diversification intohigher value-added products; countries which didnotgrant preferences toexports
ofLLDCs could beencouraged todoso.TheSub-Committee could urgethatinappropriate resort
tocontingent protection measures against LLDC exports beavoided. Itcould alsoconsider measures
which could strengthen theefficiency andcompetitiveness ofinfant service sectors inLLDCs, and
facilitate easyandswift access byLLDCs toinformation networks anddistribution channels andto
technology.
3. HesaidtheWTO gavehighpriority totheneedofLLDCs fortechnical assistance. Such
assistance hadincluded technical missions toassist inthepreparation ofUruguay Round commitments
inthegoods andservices sectors; seminars ontheimplications oftheUruguay Round package and
ontheWTO legalframework; technical assistance toindividual countries toevaluate Uruguay Round
benefits; theprovision ofdataandtradeinformation onnewopportunities forexports andGATT/WTO
trade policy courses forparticipants fromLLDC countries. Looking tothefuture, Deputy Director-
General saidtheWTO would improve coordination withother international organizations; andas
evidence ofthenewspirit ofcooperation, representatives oftwosuchorganizations, theInternational
Trade Centre (ITC) andUnited Nations Conference onTrade andDevelopment (UNCTAD) would
address theSub-Committee.WT/COMTD/LLDC/1
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4. TheDeputy Director-General thanked theEUforfunds which would finance aseries ofsub-
regional seminars forAfrican, Caribbean andPacific (ACP) countries. Healsothanked Norway for
setting upaTrust Fund which would beusedtofinance newtechnical assistance programmes forthe
benefit ofLLDCs. Heurged Sub-Committee members tosupport WTO initiatives, implement measures
toreduce barriers totrade ofLLDCs andtotakebilateral initiatives inmultilateral organisations to
encourage theprovision offinances needed byLLDCs toadjust tothenewtrading environment.
5. TheDeputy Director-General stressed theimportance ofLLDCs adopting policies which would
generate jobsandfight inflation. Heencouraged them tofollow open-market policies andreject
protectionism. Alluding tothefactthattheproblems ofLLDCs werehighontheinternational agenda,
hecalled foractive participation ofallMembers intheWork oftheSub-Committee andinvited written
suggestions from them onitsfuture work.
6. Therepresentative ofUNCTAD pledged thefullcommitment ofhisorganisation tothework
oftheSub-Committee. Henoted thattheProgramme ofAction FortheLLDCs forthe1990s had
designated UNCTAD asthefocal point intheUNsystem forthefollow up,review andmonitoring
ofprogress,andsaidthatnotwithstandingexpectationswhenthisprogrammewaslaunched,theeconomic
andsocial performance ofLLDCs haddeclined. Their export trade which wascharacterised bya
highconcentration ofprimary commodities faced amuch higher degree ofcompetition andhaddeclined;
garments were among thefewmanufactures exported byLLDCs. Astheyfaced newchallenges in
achanging global environment, theyneeded added international support.
7. Thetechnical cooperation activities ofUNCTAD, hesaid,focused ontheintegration ofthese
countriesintotheinternationaltradingsystembyimprovingpolicydesignanddevelopment,strengthening
negotiating capacities, assisting institution building andimproving human resources. Technical
cooperation wasdelivered mainly through UNCTAD 'sTrade Efficiency Programme (TheTrade Point
Global Network), theCustoms Computerized Programme -Automated System forCustoms Data
(ASYCUDA), theDatabase onTrade Control Measures disseminated through TRAINS (Trade Analysis
andInformation System; andatraining programme TRAINSFORTRADE; andspecific trade related
technical assistance projects.
8. TheLLDCs 1995Report published byUNCTAD included analytical work: onissues oftrade
liberalization andeconomic performance inLLDCs; ontheinternational trading environment inwhich
LLDCs havetocompete; ontheimplications forLLDCs oftheFinal ActofUruguay Round; on
improvements intheGSP; and,ontheimpact ofdevaluation intheFranc zone(aninitial assessment).
Thisreport andareport analyzing trade diversification inanumber ofAfrican andAsian countries
werebackground documents fortheHigh-Level Intergovernmental Meeting onMid-Term Review of
theImplementation oftheProgramme ofAction fortheLeast Developed Countries forthe1990s (New
York, 26September -6October). Thismeeting hadcalled forconcrete action ontheMarrakesh
commitments totheLLDCs andnetfood-importing countries andasked thatanalytical work and
technical assistance provided byUNCTAD be"refocused andadjusted andwherever intensified to
takeadvantage ofthenewtrading environment created bytheconclusion oftheUruguay Round".
Ithadalsoidentified priority areas fortechnical assistance:
(i) enhancing institutional andhuman capacities tocomply withthenewobligations arising
fromWTO membership orassist LLDCs toaccede totheWTO aswellastoformulate
andimplement future policy;
(ii) developing andstrengthening supply capabilities oftradeable goods andservices and
thecompetitiveness ofenterprises;WT/COMTD/LLDC/1
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(iii) improving themicro-economic trading environment andexpanding theuseofnew
communication technologies intheservice oftrade through UNCTAD 's"trade
efficiency" programme;
(iv) enhancing thecapability tomake fulluseofGSPschemes;
(v) supporting commodity diversification andmarketing efforts;
(vi) expanding thetrading andinvestment opportunities ofLLDCs, inparticular, by
identifying newtrading opportunities which could bedone, interalia,through import
promotion agencies conducive toattract foreign investment, andthrough advice and
technical support".
9. AnAdHocWorking Group hadmetinOctober toconsider the"Trading Opportunities inthe
New International Trading Context" forLLDCs. Theforthcoming 22nd Session oftheSpecial
Committee onPreferences would consider areas forimprovements inGSPschemes forLLDCs.
Referring toaprogramme undertaken jointly byUNCTAD, ITC, andWTO, hereiterated their
commitment tostrengthen cooperation andavoid duplication.
10. Arepresentative oftheITCreferred totheirlongexperience withtheparticular problems
andconstraints faced byLLDCs. Technical assistance intrade promotion andimport rationalization
carried outbytheITCwere severely handicapped duetothediminishing flowoffunds. TheITC
hadidentified LLDCs asmain target beneficiaries; andpriorities were defined onthebasis oftheir
needs. Theyworked mostofthetimewiththebusiness sector atenterprise levelanddealtwithpractical
issues ofinternational trade.
11. Theinnovative methodologies developed byITCtopromote south/south tradeandintra-regional
tradeweredirectly relevant toLLDCs. Theconclusion ofUruguay Round, thecontinuing liberalization
oftrade, thedevelopment ofnewtelecommunication techniques, thegrowing importance offoreign
direct investment, theadoption byLLDCs ofpolicies toencourage growth andtrade diversification,
hadalltransformed theworld trading environment andincreased theimportance ofITC'srolein
providingnecessaryassistancetoLLDCs.TheITCbelievedthattheirpracticaldemanddrivenapproach
totechnical cooperation enabled export enterprises inLLDCs tobuild capacities andtakeadvantage
oftheenabling environment andassisted governments toimplement necessary policy reforms. Italso
enabled LLDCs toidentify andtakeadvantage ofnewtrading opportunities. TheITCworked closely
withWTO andUNCTAD toincrease theawareness ofLLDCs ofthepost-Uruguay Round trading
environmentanditwouldcontinuetoworkcloselywiththemingettingbestuseoftheavailableresources
fortechnical assistance toLLDCs.
12. Three programmes hadbeeninitiated byITCforbenefit ofLLDCs. Aprogramme aimed
atthediversification ofLLDC exports tomeetnewopportunities arising fromthegrowing importance
ofintermediary products ininternational trade, andfromthetendency forproduction processes tobe
relocated inmore competitive areas; aprogramme thatidentified newopportunities forLLDCs from
thedevelopment ofsouth/south trade andintra-regional trade; aprogramme incooperation with
UNCTAD, forandonLLDCs, offering service andmarket information through acentral trade
information facility andfordeveloped country importers offering information onLLDC export
capacities. Inaddition, theITChasundertaken integrated country specific programmes intrade
promotion andimport rationalization inresponse torequests fromLLDCs. Noting theneedofLLDCs
tobuildnecessarycapacitiesandoffsetsupplyconstraints,hestressedtheimportanceofadequatefunding
overlonger periods oftime.WT/COMTD/LLDC/1
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13. TheDirector oftheTechnical Cooperation andTraining Division gavedetailed information
onongoing andfuture technical assistance programmes forLLDCs andunderlined thehighpriority
given totheirneeds. Inthepast, assistance hadrelated tothree main areas: (i)technical missions
during theconcluding phases oftheUruguay Round, tohelpcountries prepare individual schedules
ongoods andservices, (ii)dataandtrade information, including tariff evaluation ofUruguay Round
results forexports ofinterest toLLDCs, and(iii)workshops andseminars incapitals tofacilitate
participation intheWTO system. Priority hasalways beengiven toLLDC participation intraining
courses.
14. Looking tothefuture hesaidprogrammes oftechnical assistance forAfrica would becarried
outjointly withITCandUNCTAD. Aseries ofsub-regional seminars financed bytheEU,wereplanned
forACP countries, which included many LLDCs. Thefunding made available byNorway would
bedevotedmainlytoactivitiesrelatedtotraining,institutionandcapacitybuilding,researchandanalysis,
theutilization ofinformation technology; theimplementation ofWTO disciplines andobligations,
therevision oflegislation, theneedforassistance regarding notification requirements, adjustment to
harmonized system inschedules, accession, integrated database (IDB) andharmonized system, aswell
asagriculture andtrade-related aspects ofintellectual property rights (TRIPS). Inaddition, asamajor
extension ofthetechnical assistance carried outsofar,trade policy courses would beorganized in
various regions; studies, incooperation withother organizations, were alsoenvisaged forproducts
ofspecific interest toindividual countries.
15. TheSub-Committee decided thatitsrulesofprocedure would follow mutatis mutandis therules
ofprocedure oftheCommittee onTrade andDevelopment (WT/COMTD/W/3). Withrespect tothe
frequency ofmeetings, itwasagreed thatprovision would bemade forholding twomeetings ayear,
itbeing understood thattheSub-Committee would meetmore frequently when necessary.
16. TheSub-Committee agreed thatitwould report regularly totheCommittee onTrade and
Development.
17. TheSub-Committee further agreed thatunder Rule33ondecision-making, intheevent of
alackofconsensus intheSub-Committee thematter would berelayed totheCommittee onTrade
andDevelopment, which inturnwould transmit thematter totheGeneral Council, ifitwasunable
toarrive ataconsensus.
18. Therepresentative ofBangladesh, speaking onbehalf ofleast-developed countries, noted the
increasing marginalization ofLLDCs inworld trade. RealGDPgrowth ratehaddeclined inthe1990s.
Theshare ofLLDC exports haddeclined to0.3percentin1993 compared to0.6percentin1980s.
AHighLevel Intergovernmental meeting heldinNewYork recently hadconsidered theexternal trade
andinvestment prospects forLLDCs andtheimplications forLLDCs oftheFinal ActoftheUruguay
Round; ithadrecognized theliberalization efforts undertaken byLLDCs despite many structural
constraints. Hereminded theSub-Committee ofthecommitment oftheinternational community to
assist LLDCs financially andtechnically, andtoaseries ofsupportive measures tohelpdiversify trade
andpromote exports. These measures called fortheimprovement ofGSP schemes; thefull
implementation ofdecisions intheFinal ActoftheUruguay Round onspecial anddifferential treatment
forLLDC andnetfood-importing countries; theprovision ofa"safety net"tohelpLLDCs copewith
anyadverse effects flowing fromtheimplementation oftheUruguay Round agreements; theexemption
ofLLDCs fromanti-dumping, countervailing andsafeguard measures; theexemption ofLLDCs from
allrestrictions inthetextile andclothing sector during thetransitional period; andpriority tomovement
oflabour from LLDCs.
19. Referring toarecent UNCTAD study, hesaidthecombined trade deficit ofLLDCs could
deteriorate bybetween $300and$600million peryearandby$3billion infiveyears time. UNCTADWT/COMTD/LLDC/1
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hesaidwasengaged inverysubstantial work ontheneeds andproblems ofLLDCs andherequested
theWTO 'scooperation insuchwork. Inconclusion, hesaidthatthetremendous work before the
Sub-Committee required thecooperation andparticipation ofmajor trading partners, andhelooked
tomembers oftheSub-Committee totakethelead.
20. Therepresentative ofZambia, saidtheestablishment oftheSub-Committee showed the
commitment oftheinternational community inreversing themarginalization ofLLDCs intheglobal
economy. TheUnited Nations Secretary-General, when heopened therecent High-Level
Intergovernmental Meeting inNewYork, hadsaidthatthedriving force fordevelopment mustcome
fromwithin eachcountry, andheagreed withhim. Even though LLDCs hadrejected inward looking
policies andaccepted tradeasanengine ofgrowth, structural weaknesses intheireconomies prevented
them from taking advantage ofnewtrade opportunities.
21. Theexternal debtofAfrican LLDCs in1993stood at$96.7 billion andtheratiooftotaldebt
toGNP was130percent; innominal terms theratiooftotaldebts toexports ofgoods andservices
worsened from389percentin1985to565percentin1993. Thedebtproblem prevented themfrom
investing innewtechnology toincrease theproduction ofgoods andservices forexport, thusgenerally
undermining theirefforts tostrengthen supply capacities andperpetuating thecycle ofpoverty. He
askedtheSub-Committeetoconsiderspecificmeasurestopromotetheexpansionoftradeandinvestment
opportunities forLLDCs.
22. Most LLDCs hesaidwere netfood-importing countries. Arecent Food andAgriculture
Organization oftheUnited Nations (FAO) report hadshowed thatthecereal import billsoflow-income
food-deficit countries would goupfrom$12billion in1994/95 toabout $15billion in1995/96. The
Sub-Committee, hesaidshould takealeadership roleinworking outhowtogiveeffect tothedecision
onnetfood-importing countries.
23. TheSub-Committee, hesaid,should alsobeasource ofnewideas; itshould promote and
safeguard theinterests ofLLDCs andtoensure thatnonewbarriers wereerected totheirtrade. He
looked forward toworking withtheirtrading partners toachieve these goals.
24. Therepresentative ofNorway, welcoming theestablishment oftheSub-Committee, underlined
theimportance hiscountry attached totheissues withwhich itwasdealing. Asithadalways done,
Norway would continue togivespecial attention tothesituation oftheLLDCs andplayanactive role
inthework oftheSub-Committee. Therecent High Level meeting while noting thedeclining share
ofLLDCs totaltrade hadnoted thatinthelongrun,theincreased transparency oftrade regimes and
reduction oftradebarriers thatresulted fromtheUruguay Round agreements would provide, increased
opportunities forLLDCs. Norway believed thatforthere tobeatruly multilateral framework for
international trade, theWTO system mustbeoneinwhich theLLDCs alsoparticipated; andonefrom
which theyalsobenefited.
25. Agreeing thatthedraftwork programme covered thetasks entrusted totheSub-Committee,
hesought clarification ontheroleoftheSub-Committee inthereviews relating toLLDCs required
bytheMinisterial Decision onMeasures inFavour ofLeast-Developed Countries, andinthefollow-up
action totheMinisterial Decision onPossible Negative Effects oftheReform Programme onLeast-
Developed andNetFood-Importing Countries intheCommittee Agriculture. Theobligations placed
onMembers bythese twodecisions wereimportant topreserve thetrustofdeveloping countries and
least-developed countries intheWTO system. Looking forward tosubstantial work, hecalled onthe
Sub-Committee toconsider whatitwould wishtoachieve bythetimeoftheSingapore Ministerial
Conference.WT/COMTD/LLDC/1
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26. TheChairman saiditwastheroleoftheSub-Committee toreview theprovisions forLLDCs
Ministerial Decisions; andtoreport totheCommittee onTrade andDevelopment. Asregards tothe
review called forbytheMinisterial Decision onthePossible Negative Effects oftheReform Programme
onLeast-Developed andNetFood-Importing Countries, shethought thatinaddition totheCommittee
onAgriculture, thisSub-Committee andtheCommittee onTrade andDevelopment hadarole.
27. Therepresentative ofArgentina saidtheMinisterial Decision onthePossible Negative Effects
oftheReform Programme onLeast-Developed andNetFood-Importing Countries refers onlytothe
Ministerial Conference andtheCommittee onAgriculture. Hesaidverylongdiscussions inforums
thatoverlap eachother would dilute theurgency oftheseimportant issues andasked theSub-Committee
toconcentrate ondrawing uprealistic andconcrete proposals dealing withtheveryurgent issues set
forth intheinterventions byBangladesh, Zambia andUNCTAD.
28. TherepresentativeoftheEuropeanCommunitiesreiteratedtheimportanceitplacedonprovisions
intheMinisterial Decisions relating toleast-developed countries, andtotheworkoftheSub-Committee.
Heemphasized theneedtoliaisewiththeChairman oftheCommittee onAgriculture, whose Committee
wasalready considering theissue, pursuant totheroleassigned toitintheMinisterial Decision on
thePossible Negative Effects oftheReform Programme onLeast-Developed andNetFood-Importing
Countries.
29. TherepresentativeofMalaysia,speakingonbehalfofASEANcountries,welcomedtheattention
being given toissues concerning thedevelopment objectives ofleast-developed countries. Theylooked
forward toanhonest implementation ofthecommitments toLLDCs whether inthecontext ofthework
ofthisSub-Committee orinthecontext oftheimplementation ofother Uruguay Round commitments.
Heassured therepresentatives ofBangladesh, Zambia andUNCTAD, thatASEAN would playa
constructive roleinthisSub-Committee andinallotherfora. ASEAN appreciated theefforts ofNorway
andtheircommitment tohelptheWTO initsquest tointegrate LLDCs intotheglobal economy.
30. Speaking onbehalf ofMalaysia, hesaidtheyhadamodest technical cooperation programme
aimed atgiving assistance incapacity building intheareaofdevelopment administration. Trainees
from least-developed countries andthePacific Island countries hadusedtheirprogrammes andthey
hoped toincrease assistance toLLDCs inthefuture. Hecalled onfellow members ofASEAN totake
similar action toaidLLDCs.
31. Therepresentative ofAustralia tooknoteoftheinterventions byBangladesh, Zambia andthe
representatives ofUNCTAD, ITCandWTO andpromised toplayanactive roleinthework ofSub-
Committee. Shesaidsheshared Argentina 'sconcern regarding thepossible negative effects of
discussions ofimportant issues invarious fora.
32. Therepresentative ofEgypt supported thedraftprogramme andlooked forward toanactive
roleinhelping toincrease participation ofLLDCs inthetrading system. Hesaidtheissues before
theSub-Committee wereurgent andwhile hewasnotoverly concerned withthedanger ofoverlapping
discussions, heagreed withtherepresentative oftheEuropean Communities ontheneedforcoordination
withtheCommittee onAgriculture.
33. TheChairman saidwhile sheshared theconcerns regarding overlapping discussions invarious
fora,shewascertain there wasarolefortheSub-Committee. Sheassured members thatshewould
liaise withtheChairman oftheCommittee onAgriculture onthework theyweredoing sounnecessary
duplicationcouldbeavoided.ShedidnotthinktheSub-Committeecouldtieitselftoaspecifictimeframe
forreporting totheCommittee onTrade andDevelopment.
34. TheSub-Committee adopted theDraft Work Programme.WT/COMTD/LLDC/1
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35. Therepresentative ofNorway announced aninitial contribution of$2.5million toestablish
afundwithin theWTO toassist poorer andleast-developed countries, particularly those inAfrica to
participate more actively andeffectively intheWTO. Hesaiditwasaresponse totheDecision by
Ministers atMarrakesh that"theleast-developed countries shallbeaccorded substantially increased
technical assistance inthedevelopment, strengthening anddiversification oftheirproduction andexport
baseincluding those ofservices, aswellastrade promotion, toenable them tomaximize thebenefits
fromliberalized access tomarkets". HesaidtheWTO should work incollaboration withtheUNCTAD
andITCtomake themostefficient useofresources. Hefurther stated thatitwasamajor challenge
toensure thatLLDCs could, alongside other Members, playanactive partintheWTO andtake
advantage ofthemany opportunities offered bytheUruguay Round agreements. Encouraging other
Members tofollow Norway 'sexample, hesaidNorway wasindialogue withtheSecretariat toensure
thattheWTO would incollaboration withUNCTAD andITCmake themostefficient useofresources.
Helooked forward toreceiving more information inwriting ontheideas presented bytheDirector
oftheTechnical Cooperation andTraining Division. Inresponse totheassurance sought bythe
representative ofBangladesh thatthefundwould beusedexclusively forthebenefit ofLLDCs, he
would, afterconsulting hiscapital, make astatement inwriting tomembers oftheSub-Committee
through theWTO Secretariat.
36. Itwasagreed thattheSecond Meeting oftheSub-Committee should takeplace on27February
1996.
37. TheChairman requested members tocommunicate inwriting totheSecretariat theirpriorities
inregard tothework programme. Inthelightofsuchcommunications andthediscussions attoday's
meeting, shewould consult withdelegations onanappropriate agenda forthenextmeeting andthe
preparatory work thatcould beundertaken bytheWTO Secretariat.