. /.  WORLD TRADE  
ORGANIZATION  WT/COMTD/W/128 
21 April 2004  
 
(04-1781) 
Committee on Trade and Development Original:   English 
   
INCLUSION IN THE CTD'S WORK PROGRAMME FOR 2004 
 
THE TREATMENT OF GRADUATING LDCS
1 
 
Communication from Maldives  
 
 
 The following communication, dated 23 March 2004, is being circulated at the request of the Delegation of Maldives.  
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 1. The issue of graduation of Maldives from the UN list of least-developed countries is being 
discussed at the relevant UN bodies. 
2. The economy of Maldives is structurally con centrated, being dependent on tourism and 
fishing, which together account for nearly 40 per cent of the country's GDP.  These two industries 
together employ around 21 per cent (each employin g an almost equal percentage) of the domestic 
labour force. 
3. The narrow economic base makes Maldives very vul nerable to external shocks.  Maldives is 
therefore particularly concerned with the possibl e consequences of its perhaps imminent graduation 
form the UN's LDC status. 
4. Given the present circumstances, graduation is lik ely to affect the Maldives trade as well as 
technical and financial assistance it receives in trade and related areas in the following ways: 
(a) decline of trade preferences (for exampl e, under the EBA initiative canned tuna, over 
95 per cent of which is exported to the EC markets, will immediately lose the benefit of duty-free access and will be subjected to a tariff of over 24 per cent); 
(b) decline of S&D treatment under the WTO Agreements, and therefore increased 
obligations; 
(c) decline of technical assistance by multila teral and regional agencies and bilateral 
sources; 
(d) decline/loss of financial support towards partic ipation in meetings, seminars, etc;  and  
(e) a possible loss of opportunity to benefit from the Integrated Framework. 
5. While graduation, which may be taken as a sign of socio-economic progress, sounds good, 
Maldives is apprehensive of its limited capacity to deal with its possible consequences.  If the country 
                                                     
 
1 This submission has been made without prejudice to our rights to make additional submission on the 
matter or to make appropriate adjustments as may be necessary. WT/COMTD/W/128 
Page 2  
 
it to be graduated without a trajectory for a smooth tr ansition, we may find ourselves sliding back into 
the LDC category. 
6. Unfortunately for Maldives, ther e has been no precedent in the WTO or elsewhere of dealing 
with the question of treatment in terms of a tr ansition mechanism for graduating LDCs.  Graduation 
without such a mechanism to ensure a smoot h transition will affect Maldives adversely. 
7. Taking into account these possible consequences,  the Government of Maldives earnestly 
requests the Committee on Trade and Deve lopment to recommend the following: 
(a) that preference-giving countries provide an appropriate transition mechanism of a 
sustainable period to phase out unilateral tr ade preferences to the appropriate level, 
instead of immediately subjecting a graduating country to face the treatment 
applicable to non-LDC developing countries; 
(b) that the WTO provide a waiver for an y such mechanisms upon a due request; 
(c) that the WTO provide for a gradual reducti on of S&D treatment to the appropriate 
level within a sustainable transition period beginning from the date on which 
graduation becomes effective, instead of immediately subjecting a graduating LDC to 
face the treatment applicable to  non-LDC developing countries; 
(d) that the WTO decide to let a graduating LD C to continue to benefit from technical 
assistance provided by the WTO equally even  after its graduation, and express the 
desire that other agencies and countries do so similarly; 
(e) that the WTO decide to let a graduating LDC benefit from the Integrated Framework 
for a period of ten years from the date on which graduation becomes effective.  (In 
the case of Maldives there have been recen t developments within the Integrated 
Framework on possible work for Maldives.   Graduation would mean among other 
things, a restructuring of the fish canning industry and perhaps the entire fishing industry as well.  This would obviously involve a considerable amount of work, which makes it imperative for the IF work on Maldives to begin sooner rather than 
later.) 
8. Maldives is multiply disadvantaged and handi capped in putting our case across effectively 
because not only have we limited capacity to deal w ith the issue but also because we are non-resident 
in Geneva, and therefore our con cerns often go unvoiced and unheard. 
9. The Government of Maldives looks forward to the Delegations' continued support and 
understanding in its efforts to secure an appropria te mechanism to ensure that not only Maldives but 
any graduating LDC can make a smooth transition to the non-LDC developing country category. 
 
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