WT/MIN(03)/1
Page 1

World Trade
Organization
WT/MIN(03)/1
13 August 2003
(03-4219)
MINISTERIAL CONFERENCE
Fifth Session
Cancún, 10 - 14 September 2003

report by the director-general to the fifth ministerial conference pursuant to paragraph 43 of the doha ministerial declaration

I.Executive summary......

II.introduction......

III.developments since the fourth Ministerial Conference......

A.Establishment of the LDC Unit in the WTO Secretariat......

B.WTO Work Programme for the LDCs......

IV.Implementation of the Integrated Framework for ldcs

A.Background......

B.Progress to Date on the Implementation of the IF......

C.The Way Forward......

V.Conclusion......

I.Executive summary

  1. The particular challenges faced by least-developed countries (LDCs) are well recognised. Tackling the marginalization and poverty faced by LDCs remains a priority that the international community must address. Ministers would recall the commitments made to assist LDCs in their integration into the multilateral trading system at the WTO Ministerial meetings in Marrakech, Singapore, Geneva, and Doha, and by the international community at the Third United Nations Conference on Least-Developed Countries (LDC-III) in Brussels.
  2. Of the 49 countries designated by the United Nations as LDCs, 30 are WTO Members, a further ten are in the process of accession, and two have Observer Status in the WTO. Together LDCs account for over 20 per cent of the WTO Membership. LDCs therefore have a significant stake and growing role to play in the rules-based multilateral trading system.
  3. To meaningfully integrate LDCs into the multilateral trading system, steps need to be taken across a broad front, both by the LDCs themselves, as well as by the international community. In the context of the WTO, some of the main developments on LDC issues since the Doha Ministerial Conference are:

(i)the establishment of a dedicated LDC Unit within the WTO Secretariat in February 2003, as part of the efforts made to effectively address LDC issues and concerns in the WTO;

(ii)the engagement of LDC Members and Observers in almost all areas of the Doha Development Agenda work programme and negotiations. In this context, WTO Ministers would take note of the negotiating positions and priorities submitted by LDC Trade Ministers in their Dhaka Declaration;

(iii)the adoption of some important Decisions for LDCs, such as the Guidelines on LDCs Accessions, extensions of transition periods for LDCs in the TRIPS area, and the WTO Work Programme for LDCs. Implementing these measures, for instance by concluding the accession negotiations of some LDCs by the Fifth Ministerial Conference, has been a priority for the Membership;

(iv)the enhanced trade-related training and technical assistance delivered to increase LDCs participation in the multilateral trading system and in the ongoing negotiations;[1] and

(v)progress made in the implementation of the Integrated Framework (IF) for LDCs.

  1. LDCs are increasingly active players in the ongoing negotiations and have been engaged in nearly all areas. The importance of sectoral issues, such as the impact of cotton subsidies has also been strongly emphasised by some LDCs at the highest political level. In this regard, H.E.BlaiseCompaoré, the President of Burkina Faso, in his statement to the Trade Negotiations Committee in June 2003, called for the complete phase out of support measures for the production and export of cotton. The increased engagement of LDCs in multilateral trade negotiations is a healthy sign for the system and is greatly welcomed.

II.introduction

  1. In paragraph 43 of the Doha Ministerial Declaration, Ministers requested the Director-General following coordination with Heads of other Agencies, to provide an interim report to the General Council in December 2002 and a full report to the Fifth Ministerial Conference on all issues affecting LDCs. My Interim Report is contained in WT/GC/W/485/Rev.1. My Report to the Fifth Ministerial Conference supplements and updates the Interim Report.
  2. The Doha Development Agenda (DDA) brought development needs and concerns to the forefront of the multilateral trade negotiations. With its potential to raise income, employment and living standards particularly through improved market access opportunities, rule-making and enhanced trade-related technical assistance, the DDA offers a unique opportunity to developing and least-developed countries. Building on these opportunities is now important.
  3. LDCs are active players in the ongoing negotiations and have been engaged in nearly all areas. LDCs have submitted proposals on a wide range of issues including agriculture, non-agricultural market access, services, special and differential treatment, implementation issues, WTO rules, accessions, dispute settlement, TRIPS (including TRIPS and Public Health), technical cooperation and capacity building (including the IF), and Singapore Issues. In preparation for the Fifth Ministerial Conference, LDCs' Trade Ministers have also adopted the Dhaka Declaration[2] setting out the LDCs' negotiating agenda and priorities for Cancún and beyond This active engagement by LDCs in the DDA negotiations is an encouraging development. In this regard, I welcome the useful coordinating role that the informal WTO LDCs' Consultative Group has played in increasing the participation of LDCs in the DDA negotiations.
  4. High profile sectoral issues, such as the impact of cotton subsidies on the export potential of LDCs, have also been effectively raised by some LDCs in the context of the DDA. In this regard, the joint proposal submitted by Benin, Burkina Faso, Chad and Mali for the complete phase-out of support measures for the production and export of cotton has been widely discussed.[3] The Trade Negotiations Committee in June 2003 had the honour of receiving H.E. Blaise Compaoré, President of Burkina Faso, who stressed the strategic nature of cotton for development and poverty reduction efforts in many LDCs.
  5. To complement the efforts made by LDC Members, I have taken several important initiatives to enhance the support and technical assistance that the Secretariat provides. To give more prominence to development concerns and to better service the needs of developing and least-developed countries, the Development Division was reorganised and strengthened. As part of this reorganisation, I created an LDC Unit in the new Development Division. The coordination and delivery of WTO technical assistance and training has also been improved by merging the previous WTO Training Institute and Technical Cooperation Division into a new Institute for Training and Technical Cooperation.
  6. In addition to the reorganisation and strengthening of the Development, Training and Technical Cooperation Divisions, I have given great importance to enhancing our cooperation with other multilateral, regional and bilateral development partners, including inter alia through the IF and specific programmes like the Joint Integrated Technical Assistance Programme (JITAP) for selected African developing and least-developed countries. Given the complexity of the trade integration challenges facing LDCs, a coordinated and coherent approach to technical cooperation and capacity building is required. In this regard, I am pleased to report that at their meeting on 10 July 2003, the IF Heads of Agency welcomed the substantial progress made in the initial phase of the IF and reaffirmed their commitment to improve coordination and to step up assistance on trade-related infrastructure, private sector development and institution-building.[4]
  7. The Fifth WTO Ministerial Conference is a mid-point in the DDA negotiations. Ministers will take stock of progress, take decisions as appropriate and provide political guidance to move the work forward. In the context of LDC issues, I am pleased to report that an "early harvest" of some Decisions and measures has been possible such as the adoption of the WTO Work Programme on LDCs and some decisions in the TRIPS area regarding the extension of transition periods and transfer of technology for LDCs. The General Council has also adopted Guidelines to facilitate and accelerate LDCs' accessions.[5] In this regard, the Working Party on the Accession of Cambodia has concluded its mandate and has agreed that Cambodia's accession will be on the agenda of the Fifth Ministerial Conference for formal adoption by Ministers. The accession of Nepal is also on track. Other LDC accessions must now be accelerated and hopefully completed in the near future.
  8. The subsequent sections of the report provide greater detail on the initiatives taken to advance LDCs trade integration efforts in the WTO. My message remains that while we have made progress, it is important to be mindful of the considerable work ahead. The needs of LDCs are complex and increasing, while our capacity to meet them both financially and in terms of manpower remains limited. I assure you that with the continued support and commitment of the collective WTO membership we will strive to improve our efforts.

III.developments since the fourth Ministerial Conference

A.Establishment of the LDC Unit in the WTO Secretariat

  1. In an effort to more effectively address LDCs issues and concerns, and in response to the specific request made by LDCs, the Development, Training and Technical Cooperation Divisions have been reorganised and strengthened. As part of this reorganisation, an LDC Unit was established within the Development Division of the Secretariat in February 2003.
  2. The LDC Unit is the focal point for all LDC issues within the WTO Secretariat and it liaises with other operational Divisions to address policy matters of interest to LDCs. The Unit is responsible for servicing bodies, such as the Sub-Committee on LDCs and also provides support to informal groups such as the WTO LDCs' Consultative Group and the WTO African Group. The LDC Unit is also responsible for all matters related to the management of the IF within the WTO. It is the Secretariat for the IF and services the Integrated Framework Working Group (IFWG) and Integrated Framework Steering Committee (IFSC). The LDC Unit briefs Senior Management and/or participates directly, on behalf of the WTO Secretariat, in LDC-related meetings, conferences and events. The LDC Unit also participates in IF related meetings upon invitation from LDCs, donors or other agencies. The new Development Division and the LDC Unit are important elements in our overall efforts to ensure that LDC issues and concerns are given the fullest possible treatment within the Organisation.

B.WTO Work Programme for the LDCs

  1. Pursuant to the mandate contained in paragraph 42 of the Doha Ministerial Declaration, the WTO Work Programme for the LDCs was adopted by the Sub-Committee on Least-Developed Countries (hereafter the Sub-Committee) and reported to the General Council in February 2002.[6] The WTO Work Programme for the LDCs is the main platform through which the issues of interest to LDCs are being considered by the Members. Key issues in the Work Programme are: (i) Market Access for LDCs; (ii) Trade-Related Technical Assistance and Capacity Building Initiatives for LDCs; (iii) Providing, as appropriate, support to agencies assisting with the diversification of LDCs' production and export base; (iv) Mainstreaming into the WTO’s work, the trade-related elements of the LDC-III Programme of Action, as relevant to the WTO’s mandate; (v) Participation of LDCs in the Multilateral Trading System; (vi) Accession of LDCs to the WTO; and (vii) Follow-up to WTO Ministerial Decisions/Declarations.
(i)Market Access for LDCs
  1. The Doha Ministerial Declaration launched market access negotiations in goods and services. The mandate from Ministers was mindful of the special needs and interests of the developing and least-developed countries. Ministers committed themselves to the "objective of duty-free, quota-free market access for products originating from LDCs" and to consider "additional measures for progressive improvements in market access for LDCs".[7] Under the Work Programme for LDCs and in the relevant WTO bodies, work on improved market access for LDCs has mainly focussed on these commitments.
  2. Since the Doha Ministerial Conference, I am pleased to report that Australia, Canada and Japan have announced new initiatives according duty-free and quota-free access to all or essentially all LDC exports. To date, a total of 28 WTO Members,[8] including developed, developing, and transition economies have, on an autonomous basis, announced measures to improve market access opportunities for LDCs, and there are ongoing discussions for additional measures to progressively improve access. The Sub-Committee continues to undertake annual monitoring of market access improvements for LDCs.[9]
  3. Market access concerns of LDCs remain prominently on the agenda. The LDCs have circulated proposals on modalities for the negotiations to the relevant WTO bodies. The Dhaka Declaration, includes proposals on simplification and flexibility in rules of origin and standards requirements, moratoriums in the use of contingent trade remedies on LDC exports, and more secure and predictable preferential access. In the negotiations on trade in services, LDCs have sought further market access, especially in modes and sectors that are of export interest to them. Forward movement and conclusion of the market access negotiations on schedule is in the interests of all Members, and particularly for the LDCs. As a result of their more active participation, the working documents in the negotiating groups reflect more significantly the positions and interests of LDCs. For example, in addition to addressing tariff escalation and peaks in products of interest to LDCs, the Chairman's proposed text on modalities for non-agricultural market access seeks to include a deadline to meet the objective of duty and quota free access for LDCs.[10] The Chairman's draft text on modalities for negotiations on agriculture proposes exemptions in reduction commitments and duty and quota free access for all imports from LDCs.[11] Since December 2002, work has advanced in the Special Session of the Council for Trade in Services on the modalities for the special treatment of LDCs.
(ii)Trade-Related Technical Assistance and Capacity Building Initiatives for LDCs[12]
  1. To assist LDCs to meaningfully draw on the benefits of the rules-based trading system and to participate effectively in the ongoing negotiations, the WTO Secretariat continues to give priority attention to capacity building for LDCs. This priority is reflected in the preparation and delivery of assistance as set out in the WTO Annual Technical Assistance Plans[13] and in the New Strategy for WTO Technical Cooperation for Capacity Building, Growth and Integration that was endorsed by Ministers in Doha.[14] I am pleased to report that in the 2003 WTO Annual Technical Assistance Plan, the number of national activities programmed for LDCs has increased to 115, up from 70 in 2002. Approximately 47percent of all national activities in the 2003 Plan are scheduled to be delivered in LDCs. The number of regional activities for LDCs in 2003 is also set to increase to 150, compared to approximately 80 in 2002.
  2. Efforts have also been made to diversify our technical assistance and training activities so as to encourage greater local ownership and transfer of knowledge. Activities for LDCs as reflected in the Annual Technical Assistance Plans include: national/regional seminars, technical missions, workshops, conferences and symposia; setting-up or upgrading the WTO Reference Centres; Geneva Week for Non-Residents; and assistance in the context of the Trade Policy Reviews. In 2003, assistance is also being provided to LDCs through the extension of the WTO Internship Programme to include an intern for the coordinator of the WTO LDCs' Consultative Group. In addition to the national or regional seminars, workshops and trade policy courses, we have increased the intake of LDC officials in the Geneva-based regular Trade Policy Courses and the number of three-week courses organised specifically for LDCs.
  3. It should be noted that the WTO cannot, on its own meet the full complexity of the challenges faced by LDCs. It was in recognition of the need for a broad based programme of trade-related technical assistance and capacity building that the WTO launched with other agencies the IF and JITAP. Following a slow start, the IF is now playing a more effective role in addressing some of the bottlenecks hindering the integration of LDCs into the multilateral trading system. More information on the status of the IF is contained in Section IV of this report. The JITAP has also developed into an important programme for addressing the trade-related capacity constraints of African countries. It has been extended to eight additional African countries, six of which are LDCs. The six LDCs to benefit from Phase II of JITAP are Malawi, Mali, Mauritania, Mozambique, Senegal and Zambia. In addition, Benin, Burkina Faso, Tanzania and Uganda continue to benefit from Phase I of JITAP.[15] In this regard, I should add that the WTO is also collaborating with ITC and UNCTAD to ensure greater synergies between the IF and JITAP.
  4. The large number of technical assistance activities undertaken since Doha represents an important achievement. However, I believe we need to work just as hard, if not more, on improving quality and impact.