LDCs may enjoy trade benefits for three years after graduation

ASJADUL KIBRIA, from Abu Dhabi | Tuesday, 27 February 2024

Retaining privileges after LDC graduation gets into focus as commerce ministers and senior trade officials of the World Trade Organisation (WTO) countries start hectic negations on the rules of trade, amid geopolitical tensions raging around.
The four-day 13th Ministerial Conference (MC13) of the WTO is taking place in Abu Dhabi, the United Arab Emirates (UAE), with participation of its 164 member-countries to update rules on various issues of global trade in a fast-changing economic ecosystem.
Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Chairman of Abu Dhabi Executive Council, attended as distinguished guest and witnessed the opening session of the high-level conference on Monday morning at Abu Dhabi National Exhibition Centre (ADNEC).
Ngozi Okonjo-Iweala, Director-General of the WTO, delivered her inaugural statement at the session. Dr Thani bin Ahmed Al Zeyoudi, UAE's Minister of State for Foreign Trade and chair the conference, also spoke.
The inaugural session endorsed the accession of the east African country Comoros and Asia's Timor-Leste or East Timor to the World Trade Organisation as two new members of the global trade body. After some more formalities, however, these two countries will be officially listed as WTO members.
Although almost all the spadework has already been done, these four days, February 26-29, are crucial for finalising the deals provided how the trade ministers will be able to reach the requisite concessions.
An eight-member Bangladesh delegation headed by Ahasanul Islam Titu, State Minister for Commerce, is participating in the conference. Bangladesh-now on the cusp of graduating out of the poor-country club-is actively working to push the agenda of the Least Developed Countries (LDCs).
Talking to journalists after the opening session, Mr Ahasanul Islam said LDCs are likely to get at least three years' extension of various trade benefits and supports once they graduate from the category.
"We are hopeful that the final decisions of the ministerial will incorporate the extension of these benefits," he added.
The LDCs have sought continuity of duty-free, quota-free market access, waiver in the intellectual property rights and other trade-support measures for at least six years after the graduation.
In his written statement, the state minister said: "We sincerely hope that Members will make a decision in favour of a transitional arrangement regarding LDC-specific provisions for the LDCs after graduation."
Bangladesh, Lao PDR and Nepal are set to step out of the United Nations-defined LDC category by the end of 2026. Twelve more LDCs are also at difference stages of process in graduation. Currently, there are 45 LDCs, and 35 are WTO members. After the joining of Comoros and Timor-Leste, the number will be 37.
Once graduated, as per the existing WTO rules, the countries will no more be eligible to avail the various trade benefits and international supports save a few ones only for a few years.
Prof Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD), told the FE writer that the MC12 or the last ministerial conference of the WTO had urged the member-countries to support initiatives towards smooth and sustainable graduation of the LDCs.
"In October last, General Council of the WTO also adopted a decision on the extension of support measures for graduating LDCs and urged members to continue preferential market access to these countries for a time-bound manner," he added.
"But no time has been set yet and MC13 should come up with a more definitive commitment, not just the best endeavour. Moreover, the October proposal also did not mention the other international support measures."
The economist is of the view that in agriculture negotiation, Bangladesh may support India's position on the 'peace clause' that calls for considering the subsidies for government procurement as 'green subsidies' which is a permanent feature of the Agreement on Agriculture.
India, along with some other developing countries, has been pushing for an outcome on public stockholding for food security purposes. The G33 countries in a statement Sunday underscored the right to the Special Safeguard Mechanism (SSM) as an important tool against major import surges or sudden price declines of agricultural produce on the international market.
With regard to e-commerce moratorium, Dr Mustafiz points out that Bangladesh has both offensive and defensive interests. "We have high export potential and so we may support the continuation of the moratorium, meaning no tariff on electronic transactions for the time being."
Since 1998, WTO members have periodically agreed to extend the moratorium on the imposition of customs duties on electronic transmissions. He, however, adds that India and China and some other powerful developing countries are demanding an end to the moratorium in fear of revenue loss.
The Bangladesh state minister for commerce in his written presentation, however, stressed clarity in definition and scope of e-commerce. "Bangladesh is in favour of e-commerce moratorium on a temporary basis," he said.
"Before further extension of the moratorium for a longer time, the economic loss of importing members should be taken into consideration."
Ahasanul Islam also said that, as a graduating LDC, Bangladesh would like to, particularly, remind all that the Doha programme of Action adopted at the LDC-5 Summit in March 2023 bears 'a pledge to help the graduating LDCs towards smooth and sustainable graduation' and 'support their smooth transition plans.'
The topmost decision-making body of the WTO is the Ministerial Conference, which generally meets every two years. The first conference was held in Singapore in 1996. Since then, eleven more such conferences had taken place in Geneva (four conferences), Seattle, Doha, Cancun, Hong Kong, Bali, Nairobi and Buenos Aires in last 14 years.

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[The writer is in Abu Dhabi at the invitation of the Secretariat of the World Trade Organization (WTO) and Friedrich-Ebert-Stiftung (FES), Geneva.]