RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/W/137
26 January 1999
(99-0289)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
General Council Discussion on the Follow-up to the High Level Meeting
on Integrated Initiatives for Least-Developed Countries' Trade Development
14 and 16 December 1998
Communication from Egypt
The following statement made by Egypt on behalf of the African Group at the Informal
Intersessional General Council meeting on 14 December 1998 is being circulated at the request of that
delegation.
_______________
The African Group believes that despite some improvements in a few cases, the developments
that have taken place in LDCs over the past few years  have been a source of deep concern. Theoverall improvement in the economic performance of LDCs is not strong enough to arrest the threat of
marginalization they face or reverse the decline of their contribution to the world economy and their
share in international trade. The relative share of LDCs in world production and trade has not only
remained insignificant but is also declining.
Even the sustainability of improved economic performance is questionable given the
continued vulnerability of LDCs to external shocks, particularly adverse weather conditions and sharpfluctuation in the prices of their exports. The limited progress in export diversification makes LDCs
especially vulnerable to the fluctuations and decline in world commodity prices and weather
conditions leading to the deterioration of terms of trade to  the detriment of developing countries and
in particular LDCs.
For LDCs, two-thirds of which are in Africa, strengthening their capacity to effectively
participate in the multilateral trading system requires a genuine and strong political will and a set of
concrete measures and commitments by the international community in the following areas:
(1) Supply side constraints that hinder the ability of LDCs to diversify their production and
exports, and prevent them from benefiting from existing trade preferences schemes, should be
addressed through increased ODA, debt cancellation,  technical assistance and capacity building, and
technology transfer. These are means that would complement their own reform policies and efforts
that are underway.
The severe shortage of external finance in LDCs, as a result of declining ODA and negligible
FDI flows, has to be seen against the background of a very bleak debt problem. In 1996, the combined
external debt of the 48 LDCs stood at 134 billion dollars, almost 90% of their combined GDP. The
HIPC initiative should be made more flexible to enable more countries, particularly LDCs, to benefit
from this initiative.WT/GC/W/137
Page 2
As for financial assistance, in 1996, ODA flows to LDCs fell to 0.05% of the total GNP of the
donor countries in the OECD Development Assistance Committee down from 0.06% in the previous
year. ODA dropped further to its lowest level in 1997 to around 0.025% of the GDP of the donor
countries. A few countries, including the Nordic countries, met the UN target for official assistance to
LDCs.
Although private investment flows could not replace ODA, LDCs received only 1.5% of FDI
flows to developing countries in 1997. As a percentage of total inflows worldwide, their share was
only 0.5%. It should be noted also that a large share of these flows went into capital intensive oil and
mining-related activities in a few LDCs.
The decline in resource transfers to LDCs is bound to constrain the development prospects of
their economies and should therefore be reversed.
(2) In the meeting of the General Council in October 1998 we raised the difficulties facing
developing countries in general in the process of implementation of the URAs. The situation is
compounded in the case of LDCs. The 1998 UNCTAD's Report on the LDCs rightly emphasizes thefact that LDCs have experienced difficulties in implementing the URAs. Some of these difficulties
are:
(a) Substantive obligations and notification requirements present major difficulties to LDCs
particularly in light of their weak institutional infrastructure and under staffed civil services.
(b) Establishing national institutions mandated by certain agreements represent a burden on the
financial and administrative resources of LDCs.
(c) In some cases LDCs were unable to benefit from the transitional period in TRIMs due to the
lack of institutional capacity. This emphasizes the fact that LDCs are not benefiting fully from
their rights under various WTO agreements.
(d) Difficulties associated with the coherence between their WTO obligations and the reform
programs undertaken with the international financial institutions.
In addition, the manner in which other WTO members implement various agreements, such as
TBT, SPS, among others, may have an adverse effect on the export interests of LDCs.
LDCs must be assisted in overcoming the problems associated with the implementation of
URAs. Adequate technical assistance must be expanded. Special and differential provisions in favour
of LDCs must also be fully implemented. Furthe rmore, LDCs should be adequately assisted to
prepare for future negotiations.
(3) The accession process imposes heavy burdens on the limited human and institutional capacity
of acceding LDCs. Their human and institutional infrastructure must be strengthened to enable them
to deal with these challenges. The process of accession for LDCs must be expedited and their terms ofaccession must ensure that they have comparable rights and obligations similar to those of current
LDC members.
It is out of the recognition of the devastating situation in LDCs and the necessity to deal with
their difficulties in a coherent and comprehensive manner that it was decided in Singapore to convenethe HLM on LDCs. The HLM addressed trade-related problems and challenges facing LDCs focusing
on market access issues and supply side constraints.WT/GC/W/137
Page 3
Preferential market access offers in favour of LDCs have been made during the Meeting. The
contribution of developing countries in these offers is noteworthy. Supply side constraints were
addressed in the thematic roundtables on institutional capacity and on investment.
The Meeting endorsed an Integrated Framework for Trade-Related Technical Assistance to
LDCs, bringing together the related activities of the six concerned intergovernmental organizations.
The Meeting also convened twelve country-specific roundtables for trade-related technical assistance
needs assessment, and preparing integrated responses to these needs by the six organizations.
Since the Meeting and up to the end of November 1998, the following steps have been
achieved :
(a) Forty out of 48 LDCs have submitted needs assessment, and the six organizations concerned
have drawn up their integrated responses for 39 with one still pending.
(b) An Administrative Unit has been set up at the ITC to service the Inter-Agency Working
Group and handle the daily work of the Integrated Framework. However, the unit is not yetfully operational.
(c) Fifteen LDCs are at various stages in the process of organizing trade-related round-table
meetings. The first of such meetings was held in Uganda earlier this month and five other
meetings are planned during the first half of 1999.
However, many LDCs have indicated that they were unclear about the mechanism which
would coordinate and drive the activities under the integrated framework. It is felt that a coherent
assistance program did not seem to have evolved from the process. Clearly, the implementation of the
results of the High Level Meeting is taking place at a slow pace, and the high expectations and hopesthat accompanied the convening of the Meeting did not materialize into concrete measures.
It is also not clear whether all the market access pledges announced during the Meeting have
been implemented in full or not. Furthermore, some of the most important exports for LDCs  continue
to face barriers in major markets including in the form of significant tariff escalation and tariff peaks.
It is therefore our belief that there remains substantial scope for further improvements in market
access for products of export interest to LDCs.
On the other hand, continuing deficiencies and difficulties in the supply side in the LDCs
remain a major constraint on their ability to utiliz e and benefit from the MTS as well as from existing
trade preference schemes.
The credibility and long term viability of the MTS depends on the effective participation by
all countries in the design and management of the system. The integration of LDCs should be one of
the foremost priorities of the WTO.
The African Group believes that the implementation of the results of the High Level Meeting
must be accelerated and complementary effort should be undertaken through :
(a) In relation to market access, we believe that the market access pledges that are not yet
implemented should be implemented expeditiously. The transparency of these schemes
should be enhanced and technical assistance should be provided to ensure that effectiveutilization is achieved. We would like to request the Secretariat to analyze the extent and
scope of trading opportunities that may be provided as a result of these offers.WT/GC/W/137
Page 4
(b) The ultimate objective in relation to market access should remain the implementation of the
proposal that was made by the Director General in 1996 for the elimination of all market
access barriers to exports of LDCs as soon as possible.
(c) In relation to technical assistance, a more effective coordinating mechanism should be in
place to provide some coherence and address the unclarity faced by LDCs. Periodical
evaluation of the coherence among the six organizations concerned with the implementation
of the Integrated Framework should be undertaken. Furthermore, the administrative unit
should become fully operational as soon as possible.
(d) Additional financial resources should be mobilized to implement the activities identified in
the needs assessment.
(e) We believe that the Subcommittee on LDCs should closely monitor and evaluate the
implementation of the requirements in the needs assessment by establishing benchmarks to
examine the effectiveness and impact of the technical assistance that is provided.
(f) Finally, the particular difficulties facing LDCs in implementing the URAs should be
adequately addressed. Assistance should also be provided to help LDCs to prepare for future
negotiations.
To conclude, the African Group is convinced that the formidable challenges facing the LDCs
and impeding their integration in the world economy can only be overcome if there is true political
will to achieve this objective.
__________