TWN Info Service on WTO and Trade Issues (Aug12/05)
7 August 2012
Third World Network

WTO General Council adopts new LDC accession guidelines
Published in SUNS #7420 dated 27 July 2012

Geneva, 26 July (Kanaga Raja) -- The General Council of the World Trade Organisation (WTO), at its meeting on 25 July, approved new guidelines for the accession of the Least Developed Countries (LDCs) to the organisation.

The new guidelines, aimed at further strengthening, streamlining, and operationalising the 2002 LDC accession guidelines, were first approved ad referendum at a meeting of the Sub-Committee on LDCs on 29 June, and subsequently sent to the General Council for adoption.

According to some trade diplomats, the new guidelines were negotiated amongst a small number of invited delegations and then brought before the Sub-Committee where it was agreed ad referendum.

According to trade officials, these guidelines are to become an Addendum to the 2002 LDC accession guidelines (for details of the new guidelines, see SUNS #7406 dated 9 July 2012).

The new LDC accession guidelines have however been criticised by civil society groups who said that these guidelines could seriously harm, rather than help, the LDCs in their accession process (see separate article).

Speaking under the agenda item of the report by the Chair of the Trade Negotiations Committee (TNC), South Africa, on the issue of LDC accession, said that while it is fully committed to facilitate the accession of LDCs in the WTO and the international trading system, and will not stand in the way of the adoption of this decision, it wished to express its concern over the high level of commitments (envisaged) from the proposed Benchmarks on Goods for LDCs seeking accession.

"Whilst we respect the fact that this was a negotiated outcome, we wish to place on record our view that LDCs should be accorded the necessary policy space that they require to build their infant industries and advance their economic development," said South Africa.

These guidelines should thus be implemented with this objective in mind and with due regard to the specific development situation and needs of each LDC and not be applied in a "one-size-fits all" approach, stressed South Africa.

In addition, the LDC Guidelines should not prejudice the negotiating rights nor constrain the negotiating space of LDCs, SVEs (Small and Vulnerable Economies) and other developing countries in the current Doha Round negotiations, it added.

According to trade officials, Bolivia, also speaking under the same agenda item, raised questions about the 100% binding and 50% overall average tariffs in agriculture, as well as the 95% binding of non-agricultural tariff lines at an overall average rate of 35% (as outlined in the new guidelines).

According to a trade diplomat, speaking privately to SUNS on this issue, the developed countries want to tout this (the new guidelines) as something that is given to the LDCs, while the developed countries do not want to give anything back in terms of substance.

The trade diplomat noted that many group coordinators such as those of the LDCs and the ACP (African, Caribbean and Pacific) group, did not call meetings of the groups (to discuss the issue fully).

Commenting on the new LDC accession guidelines, the trade diplomat frankly said that it is stupid and of no use, and will constrict the acceding LDCs more.

Another trade diplomat, speaking earlier to SUNS, said that the guidelines are very demanding on the acceding LDCs in terms of tariff bindings in goods and the transition period.

According to trade diplomats, before the draft decision was adopted, the General Council Chair, Ambassador Elin Johansen of Norway, underlined that the decision is without prejudice to the rights and obligations of existing LDC members in line with the decision in favour of the Least Developed Countries contained in Annex F of the Hong Kong Ministerial Declaration (of 2005).

According to trade diplomats, the Chair then proceeded to gavel the decision before calling for statements to be made.

Several delegations spoke on the subject under the agenda item on the accession of the LDCs.

According to trade officials, Haiti, on behalf of the LDCs, said that it is very important that members understand that this will not have any impact on existing WTO LDC members or on their commitments in the Doha Round. Despite some misgivings, Haiti believed that this will make the overall accession process somewhat easier.

Saudi Arabia, on behalf of the Arab Group, welcomed the decision, but said members should look at the means of facilitating accession for developing countries as well.

Colombia said that this will offer an opportunity to integrate LDCs into the multilateral trading system.

Nepal voiced agreement with Haiti's remarks, adding that it is very important that everyone recognize that this agreement is in no way a substitute for an LDC package in the Doha Development Agenda.

Mauritius, agreeing with Haiti, said that this (the LDC accession guidelines) should not apply to existing LDC members.

In other actions, under the agenda item of the accession of Vanuatu to the WTO, trade officials said that the General Council approved Vanuatu's request to re-open the protocol of accession and provide for acceptance by 31 December 2012.

Trade officials said that the Working Party on Vanuatu's accession had wrapped up its work in 2001, but the government had been unable to ratify the package until this year. The WTO deadline was until 31 December 2011.

According to trade officials, later in the day on 25 July, Vanuatu deposited its accession package at the WTO, and will now become a member on 24 August 2012, two days after Russia becomes the 156th member of the WTO.

Under another agenda item, the Chair of the TNC, Pascal Lamy, who is also the Director-General, presented his report to the Council (full details of his report and interventions from delegations will appear in a forthcoming issue of SUNS). +

In addition to the statements above, a group of developing countries noted that this decision was a good basis on which to build and took note of the assurances given by the Chair that the Addendum will be limited to acceding LDCs and would not prejudice the flexibilities of existing WTO members. An LDC noted that the 2002 LDC accession guidelines used original WTO Members as a reference point, but the benchmarks in the new decision are much stricter. The trade diplomat noted the need for more clarification about the market access commitments, transition periods and implications for customs unions with acceding LDCs. He requested that adoption of the Addendum would not prejudice improvements to LDC accession guidelines which his country felt were not fair to acceding LDCs. A developing country agreed that the benchmarks adopted were burdensome and called for a review of the text. Another developing country stated that we need to be clear that if the LDC accession guidelines fail to achieve their objective, we should revisit the issue.