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WTO to facilitate graduation of LDCs

WTO to facilitate graduation of LDCs

The 13th World Trade Organization Ministerial Conference (MC13) has concluded, issuing the Abu Dhabi declaration, which sets out a forward-looking reform agenda for the organization. The conference also took a number of decisions, including renewing the commitment to have a fully and well-functioning dispute settlement system by 2024.

The ministerial meeting decided to improve the use of the special and differential treatment provisions for developing and least developed countries (LDCs). As scores of LDCs are graduating, they are demanding a smooth and sustainable transition. 

“Recalling that, at our 12th session, we recognized the role that certain measures in the WTO can play to facilitate smooth and sustainable transition for members after their graduation from the LDC category, we welcome the decision adopted by the General Council in 2023,” the declaration states.

The general council decided to encourage those members that graduate or remove countries from unilateral tariff or duty-free and quote-free preferences programs reserved for LDCs based on their being graduated from the UN list of LDCS. It also decided to provide a smooth and sustainable transition period for withdrawal of such preferences after the entry into force of a decision of the UN to graduate a country from the LDC category.

The member-states adopted the Abu Dhabi Ministerial Declaration, where they expressed commitment to preserving and strengthening the ability of the multilateral trading system, with the WTO at its core, to respond to current trade challenges. The  declaration underlines the centrality of the development dimension in the work of the WTO, recognizing the role that the multilateral trading system can play in contributing toward the achievement of the UN 2030 Agenda and its Sustainable Development Goals. It also recognized the contribution of women’s economic empowerment and women’s participation in trade to economic growth and sustainable development.

The member-states recognized the role and importance of services to the global economy, as it generates more than two-thirds of global economic output and accounts for over half of all jobs. They encouraged the relevant WTO bodies to continue their work to review and build on all the lessons learned during the Covid-19 pandemic and to build effective solutions in case of future pandemics in an expeditious manner. 

Nepal is graduating from LDC in 2026. But there are fears that the country’s economy will suffer if it loses the preferential treatment from the international community post-graduation. While major countries have pledged to support the countries who face graduation problems, Nepal still needs to come up with a strategic roadmap. 

Speaking with ApEx, Li Chenggang, permanent representative to WTO, said: “With an increasing number of LDCs’ meeting the criteria of graduation and 19 out of 35 WTO LDC member of on their path toward graduation, it is imperative than ever to explore pathways as the WTO to facilitate the smooth transition.”

He further said China supports the smooth transition of graduated LDCs supporting measures such as extending preferential trade arrangements for market access. “This means, after LDCs graduation, China still provides zero tariff treatment for 98 percent tariff lines of products originating from LDCs for another three years,” he added.