RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/SE/M/7 
16 July 2004 
 
 (04-3049) 
Committee on Trade and Development 
Seventh Dedicated Session  
 
  
NOTE ON THE MEETING OF 12 MAY 2004 
 
Chairman:  H. E. Mr. Trevor Clarke (Barbados) 
 
Subjects discussed
: 
 
A. ADOPTION OF THE AGENDA ........................................................................................................1  
B. WORK PROGRAMME ON SMALL ECONOMIES .............................................................................1  
(i) Submission by Bolivia, Mongolia and Paraguay (WT/COMTD/SE/W/10) ................................1  
(ii) Submission by Barbados, Fiji, Mauritius,  Papua New Guinea, Solomon Islands and 
Trinidad and Tobago (WT/COMTD/SE/W/11) ...........................................................................3  
  
A. A
DOPTION OF THE AGENDA  
1. The draft agenda for the meeting as contained in Airgram WTO/AIR/2303/REV.1 of 
6 May 2004 was adopted . 
B. WORK PROGRAMME ON SMALL ECONOMIES  
2. The Chairman  said this item was discussed at the last meeting of the Dedicated Session on 
17 October 2003.  He said since then two new submissions had been received.  He asked the 
representative of Paraguay to introduce his propos al in document WT/COMTD/SE/W/10 on behalf of 
Bolivia, Mongolia and Paraguay. 
(i) Submission by Bolivia, Mongolia and Paraguay (WT/COMTD/SE/W/10) 
3. The representative of Paraguay  said his country, Bolivia and Mongolia had submitted a 
document which sets out proposals that have emerged in the course of various discussions held among 
land-locked developing countries in the WTO.  The proposal is designed to contribute to the debate 
and to fulfill the mandate in paragraph 35 of the D oha Ministerial Declaration, namely to prepare a 
WTO Work Programme on Small Economies.  He explained that he did not wish to repeat what his delegation had said on past occasions regarding th e terms of the Almaty Ministerial Declaration and 
the statement made in Cancún by the Ministers of land-locked developing countries concerning the 
need to address in the WTO the particular diffic ulties facing land-locked developing countries.  He 
referred to the latest high-level meeting of the United Nations Economic and Social Council on 
26 April 2004 and quoted from the report as fo llows:  "At key multilateral forums in the last 12 
months, the international community has emphasized  the political will that is required for the rapid 
implementation of actions agreed to in the [Monterrey] Consensus... in this regard, the 
marginalization of the least-developed countries, land-locked countries and small economies in world 
trade underscores the importance of addressing their particular needs".  He said land-locked 
developing countries wished to make the following specific proposals for inclusion in the Programme on Small Economies.  On market access, it was nece ssary to provide tariff-f ree and quota-free access 
for all exports of goods and services originating from small economies.  The vital importance of WT/COMTD/SE/M/7 
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market access has been amply recognized as a sine qua non  condition for a country's development.  In 
the United Nations framework, 16 of the 31 land-l ocked developing countries are least-developed 
countries and almost all of the remainder are close to that threshold.  He said all of them stand on the 
sidelines of the multilateral trading system and that  poverty affects more than 50 per cent of their 
respective populations.  Furthermore, 10 per cent of  the overall population of developing countries, 
i.e. 350 million people, lived in land-locked countri es, and that the implementation of this proposal 
would be of unquestionable benefit for these millions  of individuals.  Facilitating imports of products 
from small economies, and in particular from those without seaports, is an obligation that has been 
emphasized, directly or indirectly, at a number of international forums.  The Almaty Ministerial 
Declaration, the Millennium Su mmit, the Monterrey Consensus and UNCTAD meetings have 
expressly referred to this issue.  He added that leading trade partners in the WTO have also stressed 
the point on various occasions in referring to the aspe cts of special and differential treatment, which is 
included in the Doha Development Agenda.   
4. He remarked that the submission proposes gr anting tariff-free and quota-free access for all 
products from small economies to all developed and developing country markets.  This is a measure 
aimed at integrating small economies  into global trade as a key prere quisite for their development and 
a primary objective for the achievement of worl d peace.  He explained that since many small 
economy WTO Members are still dependent on export s of a narrow range of primary commodities, it 
is also necessary to adopt measures that will help them escape from that dependent situation, which is 
synonymous with high vulnerability.  The adoptio n of the WTO Programme for Small Economies 
provides the opportunity to do so.  The proposal calls for reserving for small economies a minimum percentage of the product tariff quotas on the sche dules of WTO Members, and that according to the 
WTO documents, 37 Members have scheduled commitments in respect of a total of 1,371 tariff 
quotas.  He added that the land-locked developing countries, as well as many small economies, do not 
participate in this mode of trade in the WTO.  Pa raguay and others believed that reserving a minimum 
percentage so as to enable developing countries with small economies to participate in trade under a 
specific heading will not only fac ilitate diversification of their e xport markets but will also boost 
investment and create new opportunities for more effective integration in the multilateral trading system, which is one of the fundamental objectives of the WTO.  A series of simple disciplines for 
quota administration that would be manageable for these countries will also complement the 
endeavours of WTO Members to extend the benefits of tariff quotas to smaller economies.  He added 
that the increasingly rapid expansi on of trade as a result of market liberalization measures has yielded 
genuine benefits in terms of global economic grow th.  According to a World Bank study, opening up 
to foreign trade leads to greater income for poorer countries and raises their gross domestic product.  
On the other hand, countries with increased exports of manufactured goods are faced with non-tariff 
barriers, primarily sanitary and phytosanitary measures  and technical barriers to trade.  He explained 
that it was difficult for developing countries to overco me such barriers and that in the case of small 
economies, the obstacles were almost insurmountable.  This is why in many cases the allocation of 
quotas or the granting of duty exemptions fails to  generate any trade flow, precisely because small 
economies lack the technical capacity to meet the SPS and TBT requirements.   
5. He said the proposal is aimed at ensuring that small economies receive the technical 
assistance required for them to attain the level of knowledge and build up the technical infrastructure 
they need to benefit from any trade opportunities that may open up for them.  On the basis of this 
proposal, Members could help small economies in need of technical and financial assistance to conduct trade operations.  He emphasized that in a globalized world where everything is measured 
according to the level of productivity and competitive ness in international markets, it is indispensable 
to provide small economies with the tools required to increase the efficiency of their production 
systems.  Although there are other international bodies directly responsible for such matters, the 
support that small economies can receive in the WTO will have a crucial impact when it comes to 
channelling existing resources.  He added that the small economies value the Integrated Framework 
for least-developed countries, and he hoped that a si milar framework would be established to address 
the specific needs of small economies and that consid eration would be given, at the appropriate time,  WT/COMTD/SE/M/7 
 Page 3 
 
 
to warrant an extension of the Integrated Fr amework for least-developed countries for other 
economies as well.  In the area of accessions, he reiterated the recommendation made by Ministers in 
Doha to adopt simplified procedures to facilita te and speed up the accession of small economies 
(several of which are land-locked).  He explained that he tried to summarize the reasons and basis for 
the document that is now before the CTD and there are certainly other reasons and arguments, but that 
some Members may perhaps raise objections to the proposals.  These would be given careful 
consideration, but he asked Members to bear in mind  that however high the cost of trade may be for 
them, various technical studies have shown the cost to land-locked countries is at least 20 per cent – 
and in some cases as much as 60 per cent – higher.  This is a legitimate reason for requesting 
differential treatment.   
(ii) Submission by Barbados, Fiji, Mauritius, Papua New Guinea, Solomon Islands and 
Trinidad and Tobago (WT/COMTD/SE/W/11) 
6. The representative of Mauritius  said the proposal introduced by Paraguay contains seven 
elements which are not new but which serve as complements to those set out already in document 
WT/COMTD/SE/W/3.  The latter was tabled on 28 Ju ne 2002 and was discussed a few days later on 
1 July.  He viewed the contribution from Paragua y and other small, vulnerable and land-locked 
countries as a further refinement of past propos als and hoped the Dedicated Session would take note 
of these elaborations.   
7. The proposal WT/COMTD/SE/W/11 – a joint proposal by Barbados, Fiji, Mauritius, 
Papua New Guinea, Solomon Islands and Trinidad and Tobago – was in response to the last meeting 
of the Dedicated Session when the proponents were as ked to elaborate on past proposals.  The paper 
does not attempt to refine all the past seven proposals at once but focuses on three proposals in 
particular.  The others will be examined duri ng future meetings of the Dedicated Session.   
8. The proposal focuses on preferences, subsidies and market access.  He explained that the 
section  on preferences had been divided into two ca tegories:  the first was trade preferences and the 
second concerned investment preferences.  Trad e preferences are recognized as an established 
mechanism for promoting development.  Small and vulnerable economies have a limited range of exports and do not distort international trade in any way because their share of trade is so 
insignificant.  Furthermore, small economies have always depended on these existing market access arrangements for their stability, growth, export earnings and food security.  The elimination of these 
preferences will bring uncertainty for market acce ss and will increase existing vulnerabilities.  He 
added that this is not the purpose of the WTO and that with the disappearance of these preferential 
access arrangements and corresponding waivers vul nerabilities will be compounded.  Since waivers 
do not provide stability and predictability, preferen ces should be grandfathere d.  The African Group 
had already made such a proposal in the Negotiating Group on Agriculture and his Government and 
others were fully aware of the efforts undertak en by the Bretton Woods Institutions to provide 
assistance.  Their efforts should be seen as complementary solutions to what is going to be decided in the WTO.  A trade issue needs a trade solution.  Therefore, the proponents welcomed the IMF and 
World Bank offers to grant small and vulnerable developing economies concessionary financing 
within the time-frame of the Doha Round and es pecially the Trade Integration Mechanism (TIM) 
which the IMF hopes to deliver in due course.  In rega rd to investment preferences, he said investment 
flows do not accrue to small and vulnerable economies because of their small markets.  Therefore, the 
Committee should come up with measures to facilita te investment flows into the small economies 
through, for example, long term preferential investment  facilities.  This should  be developed with the 
help of the CTD and appropriate regional or multila teral financial institutions.  He suggested that 
WTO Members create the appropriate incentives and flexibilities for investment in small and 
vulnerable economies.  The proposal WT/COMTD/SE/W/11 concerns the subject of subsidies already 
addressed in WT/COMTD/SE/W/3.  He  added that it is widely recognized that subsidies can play an 
important role in the economic development program mes of developing country Members.  While the 
Agreement on  Subsidies and Countervailing Measur es contains some flexibilities for developing WT/COMTD/SE/M/7 
Page 4  
 
countries, such flexibilities do not cater to the needs of small, and vulnerable economies and they do 
not help to address the inherent cost disadvantages and resource constraints.  Since current WTO rules 
which provide some fiscal incentives are going to be phased out, he said the proposal under the 
chapter "Exemption from Export Subsidies" states that paragraph 3.1(a) of Article III of the 
Agreement on Subsidies and Countervailing Measures should not apply to small economies.  It is 
proposed that Annex VII should be revisited to in clude small and vulnerable countries like Barbados, 
Fiji, Mauritius, Papua New Guinea, Solomon Islands, Trinidad and T obago and others.  He said the 
Annex should include small and vulnerable economies so that they can benefit.   
9. Concerning the re-activation of non-actionable subsidies, the proponents suggested that the 
provisions of Part IV of the Subsidies and Countervailing Measures Agreement should be reactivated and that sub-paragraph 8.1 be included in favour of small economies.  He said it could read as 
follows:  "Subsidies which are specific within the meaning of Article II and which meet all the 
conditions provided for in paragraph 2(a), 2(b) or 2(c) and applied by the following Members:  
Barbados, Fiji, Mauritius, Papua New Guinea, So lomon Islands and Trinidad and Tobago".   
10. In regard to the current negotiations on agricu lture and non-agricultural market access, he 
recalled that the proponents had already submitted spec ific proposals.  He said contributions that the 
proponents will have to make in the areas of agri culture and non-agricultural market access will have 
to be commensurate with their capacity.  This capacity is limited by inherent constraints and 
vulnerabilities.  The latest proposal was a response to the Committee to elaborate on the proposals 
already tabled in June and July 2002.  He added that the proponents would come back with further 
elaborations on other issues already tabled.  
11. The representative of Bolivia
 recalled that in November 2001, Ministers had agreed on a 
Work Programme incorporating the in terests of all Members on issues related to implementation, the 
negotiating areas making up the "single undertaking" and a special paragraph, namely on "small 
economies".  He said two decades had passed sin ce Bolivia undertook a programme of liberalization 
measures and opened its borders to trade while elim inating non-tariff barriers and embarking on an 
open and integrated regionalism based on multilatera l provisions.  These measures resulted in high 
social costs but have not reduced the incidence of poverty which, according to 2002 statistics, affects 
64 per cent of the population.   
12. He said Bolivia has not seen an increase in it s exports which currently  represent barely one 
per cent of the total for South America.1  Exports previously consisted solely of mineral products, but 
now include soya bean by-products, as the main manufactured products, and primary products, which 
still account for a large share of national income.  Bo livia has a chronic trade deficit and he explained 
that applied tariff levels are low and the tariff re ductions have affected the annual fiscal revenue.   
13. He explained that a country's export capacity basically depended on its productive 
development.  In the case of Bolivia, in spite of  its trade reforms, the country has not succeeded in 
developing a competitive export supply which would enable it to gain access to new markets and, in many cases, to position itself to achieve sustai ned growth in its traditional export markets.   
14. Developing countries with no direct access to a sea coast from which to transport their limited 
production are even more vulnerable.  He said that any tariff reductions and/or elimination from 
which Bolivia could benefit turns out to be an artific ial advantage in percentage terms, compared with 
the high costs of transport from the production area to the nearest sea port.   
15. Numerous studies have shown a correlation between  the lack of sovereign access to the sea, 
export levels and growth and show that, in the case of Bolivia, its land-locked status means an 
additional cost of 40 to 60 per cent  in the transported value of the g oods, which is reflected in both 
                                                     
 
1 Andean Development Corporation (CAF) Annual Report 2002.  WT/COMTD/SE/M/7 
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their end price and the delivery time.  Because of such a trade handicap, countries like Bolivia deserve 
to have recourse to differential treatment in orde r to be able to compete on an equal footing.   
16. This unfortunate geographic reality had prompted the development of concrete suggestions 
designed to strengthen and reinforce the "work pr ogramme" in areas which are crucial to increasing 
participation in international trade.  The vulnerabilit y of small economies is the result of a number of 
adverse factors, which often give rise to situations beyond the reach of political will and the very 
management of the national economy.  In the WTO, major trading partners are now more aware of the 
specific circumstances and needs of small, land-locked economies.  Furthermore, he referred to a 
recent Appellate Body ruling in the case European Communities - Conditions for the granting of tariff 
preferences to developing countries - set a precedent in jurisprudence by interpreting that developing 
countries may mean less than all developing countries .   
17. He said that since the participation of small economies in world trade is insignificant, granting 
all their exports of goods and services tariff-free and quota-free access would prove an effective way 
of applying the principle of differential treatment.  At the same time, and in the full knowledge that 
trade liberalization may involve several stages, he co nsidered that the administration of existing tariff 
quotas should afford real market access opportun ities to exports from small economies, which may 
also necessitate working together to implement the appropriate technical assistance.  These and other 
measures would contribute to the development of production chains, thereby boosting trade and 
reducing the levels of vulnerability and poverty currently suffered by Bolivia.   
18. The representative of Mongolia  said the land-locked countries had come up with the paper 
WT/COMTD/SE/W/10 to raise awareness of the diff iculties for certain Members.  Being land-locked 
represents a permanent cost disadvantage and that is  why he was asking for an elimination of tariffs 
and was requesting quota-free privileges.  He welcomed the recent proposal announced by the 
European Communities which would help the weakest and the poorest Members or the 
least-developed countries and encouraged other Member s to do the same.  He stated that land-locked 
countries never graduated but least-developed countries  could.  He referred to the Maldives and the 
discussion of its graduation from LDC status as being a new situation for the WTO.  As the representative from the Maldives explained, a tran sitional period would be needed for the Maldives 
after graduation.  He said that WTO Members would have to clarify what to do with those countries 
that graduate from LDC status and that the work  programme on small economies could also look at 
some of these aspects.  In regard to land-locked countries, the focus should be on small economies 
like Mongolia and not large land-locked countries.  In addition to tariffs, land-locked countries face 
other problems linked to a dependency on the tran sit countries.  They have to negotiate with 
neighbours to have access to transit facilities.  They al so have the associated infrastructure costs.  He 
said the proposal made by Maur itius on behalf of a number of small economies is in line with 
proposals made by a few land-locked developing countries.  Positions of both have to be considered 
when moving ahead with the negotiations.   
19. As one of the co-sponsors of COMTD/SE/WT/W/11, the representative of Barbados
 
supported the statement made by Mauritius.  She said the proposals contained in 
WT/COMTD/SE/W/11 were an elaboration of  some of the key proposals raised in 
WT/COMTD/SE/W/3.  She hoped they would help move discussions closer to the objective of 
framing and adopting concrete measures to facilitate  the full and beneficial integration of small and 
vulnerable economies into the multilateral trading system and to fulfilling the mandate on small 
economies of the Doha Ministerial Declaration.  She welcomed the proposals contained in the new submission and said they should be considered in the context of the parameters of the Doha 
Ministerial Declaration's mandate contained in paragr aph 35.  These proposals must be seen as being 
applicable to countries which share attributes of being small in economic size and which have 
inherent vulnerabilities because of their "smallness".   WT/COMTD/SE/M/7 
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20. The representative of Guyana
 welcomed the two proposals presented by Paraguay and 
Mauritius.  Trade preferences are of great importance  to Guyana and he wished to urge Members to 
examine the proposals in WT/COMTD/SE/W/11 and ev entually incorporate th em into the multilateral 
trading system.   
21. The representative of  Jamaica  supported WT/COMTD/SE/W/11 as an elaboration of the 
proposals submitted to the CTD in 2002.  The refinement and clar ification of several concerns 
provided Members with a better understanding of  the specific difficu lties faced by small and 
vulnerable economies and the possible means and measures which can be implemented to address 
these situations.  She also welcomed the new proposal WT/COMTD/SE/W/10.   
22. The representative of Zimbabwe  said that as a land-locked country, she supported the 
proposal contained in WT/COMTD/SE/W/10 and those in the proposal WT/COMTD/SE/W/11 
presented by Mauritius.  Land-locked countries require special attention and also special and 
differential treatment.   
23. The representative of the Solomon Islands  said there are serious challenges facing small 
economies.  There is a lot that the WTO Membership can and should do to assist with meeting the challenges which are not of their own making.  He supported the paper by Mauritius which identified 
some of these challenges.   
24. The representative of Suriname
 said she supported the proposal contained in 
WT/COMTD/SE/W/11 on small economies and urged that the Work Programme on small economies 
should continue to focus on specific issues of concern.  She also welcomed the paper 
WT/COMTD/SE/W/10.   
25. The representative of Fiji  also expressed support for the proposals contained in 
WT/COMTD/SE/W/11.  While the full list of issues has not been addressed yet in the proposal, the 
proposal does contain elements which represent priori ty items for the proponents.  She also supported 
proposal WT/COMTD/SE/W/10 from Paraguay.  Th e two proposals emphasize the vulnerabilities and 
identify the challenges faced by land-l ocked and sea-locked countries.   
26. The representative of Grenada  thanked Paraguay for its proposa l and said it helped to address 
some of the vulnerabilities Paraguay and other countries  face.  He said the issues raised were also 
reflected in other proposals and concerns already stated by Grenada and CARICOM.  He thanked the 
authors of WT/COMTD/SE/W/11 and said his delegation would like to make some additions which 
would help with the general interpretation of the pr oposal.  Grenada was particularly interested in 
investment incentives especially since as a member of CARICOM, such incenti ves will be part of the 
CARICOM single market on 1 January 2005.  He asked other Members for their support with the 
measures to help them overcome structural disadva ntages.  He said his delegation viewed subsidies 
similarly and that fiscal incentives have been used throughout the region to stimulate non-agricultural 
and agricultural manufacturing.  They are export incen tive measures and he said he was pleased to see 
that they formed part of the submission.  Market access questions and further concessions in this area 
on the basis of less than full reciprocity should al so be taken into account as stated in previous 
proposals.   
27. The representatives of Saint Vincent and the Grenadines  and Malawi  welcomed the proposals.   
28. The representative of Sri Lanka  said that while he understood and even shared the concerns of 
small developing countries, the process of providing concessions for one group of countries should 
not by any means further marginalize another group of  small developing countries.  Sri Lanka is one 
of those small countries which has been left out of enhanced preferential arrangements to smaller 
developing countries by major markets.  Furthermor e, Sri Lanka depends on textiles and clothing for 
more than 50 per cent of its export earnings.  Un like many of its competitors, Sri Lanka does not  WT/COMTD/SE/M/7 
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receive any preferential market access in its main markets.  Even where there is preferential access, 
the utilization rate is extremely lim ited because of strict rules of origin requirements.  It is difficult for 
Sri Lanka to justify the preservation of tariff preferences only for the present beneficiaries.  He said if 
it is agreed to preserve such preferences, that w ould mean that these products would not be subject to 
any tariff reduction negotia tions.  If that happens,  negotiations in such areas as non-agricultural 
market access would become meaningless because 50 per cent of Sri Lanka's exports which presently 
face peak tariffs would be excluded.  Therefore, th e concerns of all small, developing countries should 
be taken into account.   
29. The representative of the Dominican Republic  said his economy has all the characteristics 
which are described in WT/COMTD/SE/W/3.  External factors such as the recent financial crisis have increased the Dominican Republic's vulnerability a nd caused decreases in the national budget and in 
gross domestic product.  More instituti onal strengthening is now required.   
30. The representative of Saint Kitts and Nevis
 supported the two new proposals 
WT/COMTD/SE/W/10 and WT/COMTD/SE/W/11, and ag reed with the statement made by Grenada 
about the concerns expressed on  investment.  The proposals can do much to address the 
vulnerabilities of small economies.   
31. The representative of Saint Lucia  said WT/COMTD/SE/W/11 and WT/COMTD/SE/W/10 
was a further step towards elaborating proposals for the full integration of small economies into the 
multilateral trading system.  His delegation also shared the views expressed by Grenada.   
32. The representative of Papua New Guinea  said issues contained in WT/COMTD/SE/W/10 and 
WT/COMTD/SE/W/11 were not the only ones affec ting small economies and that others would be 
submitted soon.  She requested that other trading pa rtners support her delegation's request so that 
Papua New Guinea could be an effective partner in the trading system.  She explained that the 
Dedicated Session provided a unique forum to di scuss issues related to small economies.   
33. The representative of Belize  also supported WT/COMTD/SE/W/11 and was particularly 
interested in hearing reactions to the proposals contained therein.   
34. The representative of Sao Tome and Principe  expressed support for the two new proposals 
presented by Mauritius and Paraguay and encouraged more fruitful discussion which would lead to 
concrete measures for small economies.   
35. The representative of Canada  said she had extensive comments on each of the proposals but 
that she would summarize these into general comments .  Canada is fully supportive of the efforts of 
small economies to address their specific concerns.  Most of the proposals discussed provided more 
definition to proposals put forth in WT/COMTD/SE/3 several years ago.  However, the two proposals effectively serve to request the creation of a sub-ca tegory of WTO Members and this is not consistent 
with paragraph 35 of the Doha Ministerial Declar ation in that the paragr aph explicitly states the 
intention of not creating a sub-category of WTO Me mbers.  She said that while Canada does not 
support the creation of a separate category of sm all economies, her Government believes there are a 
wide range of existing provisions which can address the particular needs of small economies.  In the 
various negotiating areas, Canada and others are cogni zant of the different capacities, constraints and 
challenges faced by countries participating in these negotiations.  These differ ences will be considered 
in the negotiations.  She said market access issues are addressed in the proposal 
WT/COMTD/SE/W/10.  She added that the WTO only recognizes that the least-developed countries 
constitute a distinct category but does not provide th is distinction to small economies.  In regard to 
WT/COMTD/SE/W/11 and its paragraph "C", Canada could accept the last sentence which states:  
"The contribution to be made by the small economies  in the area of market access in Agriculture and 
NAMA will be commensurate with their capacity whic h is limited by their inherent constraints and WT/COMTD/SE/M/7 
Page 8  
 
vulnerabilities".  Canada recognized the need for flexibility in its expectations of the developing 
countries in the DDA Round.   
36. As regards WT/COMTD/SE/W/10, there were many references to increased technical 
assistance and to using technical assistance to as sist small, land-locked economies.  Canada fully 
supports using the WTO Global Trust Fund to benefit small economies and endorses using such funds 
for small economies.  As regards the market access negotiations, she said Canada would like to have 
these discussions take place in the NAMA and agri cultural context rather than in this Dedicated 
Session of the CTD.  Concerning accessions, WTO Members already take into account the situation 
and characteristics of each acceding state or cust oms territory.  In addition to comments made on the 
WT/COMTD/SE/W/11, the representative of Canada said that as far as preferences and grandfathering,  Canada presumes that the existing arrangements would in Canada's case include the 
GPT (General Tariff Preferences), the "CARIBCAN" and the LDC tariffs.  She explained that Canada 
did not see the need to go beyond the existing waivers for these tariffs and does not support 
grandfathering.  However, Canada has extended its GPT and LDC schemes for an additional 10 years, 
until 30 June 2014.  Mongolia has been added to th e Canada's GPT scheme as a beneficiary.   
37. With regard to trade preference erosion, Canada  maintained that this is not specific to small 
economies.  Solutions to this issue should be sought in other negotiating fora.  Canada is grateful for 
international agency assistance such as the Intern ational Monetary Fund which is looking seriously at 
this issue and has supported and encouraged such a ssistance.  As concerns investment preferences, 
she asked what the proponents of  the paper see as examples of incentives and flexibilities for 
investment in small economies.  She thought it wo uld be helpful if examples were put forward to 
further the discussion.  She also asked proponents to comment on the prospective role of policy 
instruments, including investment protection and ot her treaties.  As concer ns the two proposals on 
subsidies, she explained that the Doha Minist erial Declaration indica tes that pursuant to 
paragraph 12(b), commitments related to the provisions on the Agreement on Subsidies and 
Countervailing Measures are to be dealt with in the Negotiating Group on Rules.  And pursuant to paragraph 51, Canada thinks it useful to identify and debate development aspects of the subsidies negotiations in the CTD to convey messages to the rules negotiating group.  Pursuant to paragraph 35, 
Canada maintains its stance of not wishing to  create a sub-category of WTO Members.   
38. The representative of Australia
 welcomed the elaboration of the two new proposals but that 
she shared a number of the concerns similar to thos e expressed by Canada, in particular in regard to 
the creation of a new sub-category of WTO Members.  She emphasized that it was also important to avoid duplication of existing work and that issues should be dealt with in a manner that is consistent with the Doha Ministerial Declara tion, for example the subsidies proposal mentioned by Canada in 
the WT/COMTD/SE/W/11 proposal.  Australia continues to reflect on a number of proposals that have been presented.  There are many different view s on such issues as preferences and there are also 
various actors involved in dealing with these issues.  Australia is also not supportive of the grandfathering provisions.  In the broader negoti ating context, there are now new proposals on the 
table which are the subject of high  level discussions, and these may have some interface with the 
issues being discussed.  Australia is interested in  further discussion of these issues in the Dedicated 
Session and other appropriate fora.  Her delegation was looking forward to the elaboration of other 
issues in due course.   
39. The representative of Japan
 said his delegation acknowledge d the difficulties small economies 
face with fully integrating into th e multilateral trading system.  He  recalled that in 2003 there was 
intensive discussion to identify what the specific difficulties were for small economies and what could 
be done to deal with the difficu lties.  Even though no conclusion ha d been reached, the discussion had 
been constructive.  While his delegation was r eady to continue working on small economies, Japan 
was somewhat cautious about taking up new elements.  He asked whether or not the proposal 
presented by Paraguay, Bolivia and Mongolia desc ribed elements which are unique to land-locked 
countries or whether these proposals can be applied to small economies as a whole.  He explained that  WT/COMTD/SE/M/7 
 Page 9 
 
 
Japan was not in a position at this stage to examine the details of the proposal but sought some 
clarification on WT/COMTD/SE/W/10.  He was aw are of the difficulties facing the land-locked 
countries and that Japan was ready to provide assistan ce on a bilateral basis.  But Japan questioned the 
inclusion in the proposal of paragraph 5 which he thought deals with supply-side constraints.  He 
stated that this cannot be dealt with in the WTO and he wondered how this issue will be handled in 
the WTO.  With regard to WT/COMTD/SE/W/11, hi s delegation was still examining the proposal.  
He questioned why the proposals put forward were speci fically relevant to small economies.  He said 
his delegation was ready to continue the work but wanted to do so in a more focused way.   
40. The representatives of the European Communities  said his delegation was still examining the 
proposals but that the EC was strongly committed to the mandate of paragraph 35 of the Doha Ministerial Declaration and to  finding responses to the particular needs of small and vulnerable 
economies and to support their integration into the multilateral trading system.  In regard to 
WT/COMTD/SE/W/10, his delegation, like Japan, questioned whether the proposals were meant to 
address issues of concern to all small economies or  only to those which are land-locked.  He asked 
whether being land-locked automatically constituted vulnerability or whether it constituted "smallness" or whether there are other factors beyo nd the geographic factors which need to be taken 
into account.  In regard to the specific proposals in WT/COMTD/SE/W/10, he asked about market 
access and the coverage of services.  He could understand the concept of duty-free, tariff-free and 
quota-free for goods, something which the EC had proposed in the various negotiating groups in 
relation to imports from least-developed countries, bu t wondered how this migh t pertain to services.  
On points 2, 4 and 5 – all of which involve aspects of technical assistance, he asked whether these were specific questions for small economies or developing economies as well, because they too face similar problems in terms of diversification or co mpliance with Sanitary and Phytosanitary Measures 
and Technical Barriers to Trade.  He asked where the constraints were on small economies and now 
these proposals were intended to address them and about the existing instruments in terms of 
developmental support – not only WTO support but also the support of bilateral donors and other 
agencies.  He wondered where such instruments are failing to find an appropriate response to these 
needs.  In regard to the supply-side issue mentioned by Japan, he thought that this is not something that the WTO technical assistance programme is well placed to address.  He referred to point six of 
WT/COMTD/SE/W/10 on the Integrated Framework, which states that the vast majority of small 
economies are at stages of development identical to  those of current beneficiaries of the Integrated 
Framework.  His delegation would like further elaboration especially since the "IF" is a programme for the least-developed countries.  It does not cover all of them, only some of them, but the LDCs are all eligible.  With regard to what the proposal ment ions on accession matters, he shared the views of 
Canada in so far as accessions to the WTO essentiall y follow a course that is specific to the candidate 
country and that the process and cour se of negotiations tend to reflect the specific situation of a given 
applicant country.  He supported the guidelines for LDC accessions but that this proposal as drafted 
covers not only LDCs but also small and vulnerab le economies, land-locked countries and transit 
countries, which is quite a broad group of potential countries.  He thought that this may be slightly 
outside of the context of the framework for the Dedi cated Session which is to focus on the particular 
needs of the small and vulnerable economies.  In regard to WT/COMTD/SE/W/11, the EC had 
participated actively in a series of informal cons ultations over the past months with some of the 
proponents for actions on small economies.  It was a useful and helpful process for deepening 
understanding of what the particular constraints are that the proposals are intended to address.  His 
delegation welcomed the new paper and the further elaboration provided to three areas and awaited 
other proposals.  On the question of preferences, he  thought this was a matter under negotiation in the 
negotiating groups on agriculture and on non-agricultural market access.  But there may be other 
horizontal questions which his delegation might want to  consider in light of the evolution of work in 
these other two contexts.  He wondered what wa s envisaged by the term "grandfathered" and 
questioned whether this was a purely legal device which would essentially equate to an open-ended 
waiver for preferential arrangements which are in  place or whether it is also intended to cover 
grandfathering the margins of preference which w ould have implications for MFN liberalization on 
some products subject to preferences.  He thought that preference erosion wa s an important issue and WT/COMTD/SE/M/7 
Page 10  
 
that some of the Bretton Woods institutions are making efforts in this area.  The IMF, for example, 
had begun its Trade Integration Mechanism (TIM), a recent initiative from the Fund.  As concerned 
the subsidy element of WT/COMTD/SE/W/11, this was an issue which had already been addressed 
earlier in proposal WT/COMTD/SE/W/3.  Some of  the same elements which were part of the 
discussions then remain relevant.  In regard to market access issues mentioned in paragraph 10 in 
proposal WT/COMTD/SE/W/11 - mainly that lib eralization commitments made by small and 
vulnerable economies should in fact be commensura te with their capacity and ability to engage - he 
said European Communities officials had made a rece nt announcement in a letter in this regard.  The 
letter and its ideas will be under discussion and re mains an important political context for the WTO 
work and the contribution of the Communities to this particular exercise in the Dedicated Session.   
41. The representative of Chile
 thanked the proponents of the two new proposals for their 
submissions and said her delegation understood the problems related to small economies and in 
particular to land-locked countries.  However, her delegation was concerne d about the creation of a 
sub-category of countries, something which paragra ph 35 says should be avoided.  She asked about 
the proposal WT/COMTD/SE/W/10 and wondered about those proposals which require technical assistance in areas which go beyond the WTO's scope.  In regard to proposal WT/COMTD/SE/W/11 and investment preferences, she asked what was meant by the development of long-term preferential 
investment facilities.  Her delegation wondered what  exactly is being requested.  With regard to 
subsidies, this issue was dealt with in the negotiati ons on rules.  Her delegation was not clear on what 
was meant by the re-activation of non-actionable subsidies.  She said the way the proposal is written, 
it appears that what is being requested is the re- activation of these subsidies.  She asked if these 
subsidies were automatically re-activated, would that then apply to these countries backing the 
proposal.  This proposal went beyond the mere re-activation of non-actionable subsidies and she 
asked if the proponents were lookin g for something more specific.   
42. The representative of Costa Rica
 said in regard to WT/COMTD/SE/W/10, that Costa Rica 
shared the views expressed by the representative of Chile.  In regard to WT/COMTD/SE/W/11, his 
delegation was concerned about the in itiatives to perpetuate preference s.  He questioned whether the 
proponents of the proposal had looked at paragraph 3 of the Enabling Clause which states that tariff 
preferences should not constitute a barrier to th e principle of most favoured nation treatment.  
Costa Rica is a beneficiary of these preferences but thought it was not appropriate to perpetuate these 
preferences, much less compensate one Member in  the course of multilateral trade liberalization.  
Questions raised by the European Communities conc erning preferential treatment and grandfathering 
were relevant and his delegation would like to know whether this is to cover trade preference erosion 
and what implications the liberalization of market s would have for the disadvantaged.  Costa Rica 
firmly believes that the principle of the Enabling Clause must be respected.  There should also be a 
focus on the process of liberalization.  Preference  erosion should be looked at from the perspective of 
the Bretton Woods institutions as the EC had mentioned in regard to the IMF's TIM programme.  For 
Costa Rica, tariff preferences hide a development problem that has yet to be resolved.  These 
proposals would contribute to a further perpetuation.   
43. The representative of the United States  said in regard to the proposals contained in 
WT/COMTD/SE/W/10 that her delegation shared the views of others who spoke before.  She noted 
that it would be helpful to understand the distinction, if any, being made in WT/COMTD/SE/W/10 
between land-locked, small economie s and the notion of small economies that are not land-locked.  
She would also be interested in knowing more about the distinction between land-locked small 
economies and land-locked LDCs.  Her delega tion believed that land-locked Members are 
overlooking some potential areas that might serve th eir interests such as customs and border issues 
and trade facilitation.  The United St ates agreed with those delegations  which refer to paragraph 35 of 
the Doha Ministerial Declaration about not creating a sub-category of Members.  She questioned 
whether the notion of land-locked was a sub, sub-ca tegory being offered and looked forward to any 
response that the proponents of WT/COMTD/SE/W/10 could put forward to further the discussion.  
The Secretariat could prepare a short list of recent research on the situation of land-locked countries.   WT/COMTD/SE/M/7 
 Page 11 
 
 
In regard to WT/COMTD/SE/W/11, she welcomed the further refinements of past proposals as a way 
to further discussion and looked forward to focusing  the discussion and framing pragmatic responses.  
Where small economies can articulate their unique challenges, she thought a more productive 
discussion could take place.  Her delegation will study the proposals in more detail.  In some 
preliminary remarks on the paper, she noted that the pr oposal touched on topics that have been raised 
before, such as preferences and subsidies as well as issues of operational costs for a limited range of 
exports due to preferential arra ngements and the challenge of maintaining competitiveness.  She 
welcomed the fact that the paper further elaborated  concepts that the proponents have identified in 
WT/COMTD/W/3.  The Dedicated Session should – as a way forward - work with the rules 
negotiating group and with other WTO bodies in order to deepen discussion of the proposals, for example in the area of subsidies.  She appreciated the effort that went into the paper and her delegation is now reviewing the proposal.   
44. The representative of Thailand
 thanked the proponents for their proposals and said her 
delegation sympathized with their problems.  Th ailand was still examining the proposals and she 
explained that it might be helpful if these propos als were discussed in the relevant forum.  She 
recalled the mandate of the Doha Ministerial Declaration and that the work on small economies should not create a new sub-category of Members.   
45. The representative of Malaysia
 also welcomed the new proposals.  She said her delegation 
shared the sentiments expresse d by Thailand and that her Gove rnment was still examining the 
proposals.  Her Government recognized the serious problems and vulnerabilities of small economies 
but was concerned about having sub-categories in the WTO.  She said work should follow according to the mandate.   
46. The representative of India
 said his delegation also welcomed the proposals.  However, more 
time was needed to examine and review the proposals and that he would like to discuss them in more 
detail in subsequent meetings.  His delegation concur red with others in that the Dedicated Session had 
to operate under paragraph 35 of th e Doha Ministerial Declaration.   
47. The representative of Korea  welcomed the proposals and said he understood the concerns of 
the proponents.  However, paragraph 35 of the Doha  Ministerial Declaration states that it is not the 
aim to create a sub-category of WTO Members.  It was still not clear whether some proposals are 
targeted at all land-locked developing countrie s or small economies or some other developing 
countries.  Some proposals would be better addressed in other WTO fora, as already stated by Japan 
and the European Communities.  He explained that  some of the proposals run the risk of going 
beyond work taking place in other negotiating group s and that attention should be paid to trade 
preferences which are granted voluntarily.   
48. The representative of China  welcomed the two new proposals.  As a developing country, 
China attached great importance to the vulnerab ility of small economies.  He said the mandate 
provides that the concerns of small economies shoul d be addressed effectively  but without creating a 
sub-category of WTO Members.  Given the complexity of the subsidy issue, his delegation agreed with Canada that this should be discussed in the negotiating group on rules.  He thought the Dedicated 
Session should examine the developmental aspects, for example, of some horizontal issues.   
49. The representative of Mauritius
 thanked the delegations for th eir comments and said that 
concerns and requests for clarification in regard  to proposal WT/COMTD/SE/W/11 had been noted.  
He wanted to reassure all delegations that it wa s not the intention of the proposal to create any 
sub-category of Members and that the proponents will keep to what is mandated in paragraph 35.  As 
a possible way forward, the Chairman could organize a series of informal consultations where 
Members can clarify elements of what has been discussed so far.   WT/COMTD/SE/M/7 
Page 12  
 
50. The representative of Paraguay
 said the proposals made by the land-locked countries do not 
just address the case of these specific countries, but are also a contribution to the discussion on how to 
implement paragraph 35 of the Doha Ministerial Declaration.  Land-locked countries are generally 
small economies.  Furthermore, work on land-locked  countries is not only being carried out at the 
WTO but at other fora as well, for example as in the Almaty Plan of Action where Ministers met to 
discuss difficulties faced by land-lo cked countries.  One important as pect deals with trade and with 
transportation services to reach seaports and inte rnational destinations.  In regard to technical 
assistance, his delegation believed th at not all matters of technical a ssistance had to be covered by the 
WTO.  But a statement from the WTO on this matte r would be of great help in attracting more 
technical assistance resources from other organi zations.  Land-locked count ries are particularly 
vulnerable and that only six out of 31 land-locked countries have an annual per capita income above $1,000.  Another 20 have incomes of less than $500  per capita and are least- developed countries, and 
only one of them has an income of $3,000 per annum.  All of them are small economies with scarce 
resources.  The request for technical assistance progra mmes in favour of LDCs could be extended to 
certain countries in specific cases.  He wanted to emphasize that his delegation did not wish to create 
a sub-category of WTO Members and that he agreed  with the mandate.  However, in order to 
implement the Doha Ministerial Declaration mandate,  a degree of flexibility was needed to address 
the vulnerabilities of some countries, includi ng some of the land-locked countries.   
51. The Chairman
 said he would reflect on what was said during the Dedicated Session in his 
report to the General Council.  He urged the propone nts to continue refining their proposals and called 
on Mauritius and others to come forward with the elaboration of other areas.  In spite of the 
considerable efforts already made in the Dedicated  Session since 2002, delegations are still talking 
about consultations, refinements and clarifications .  He said the way ahead will still require more 
patience but that he would continue with his consultations to help the process move forward.  
52. The meeting was adjourned .  
 
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