RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/LDC/M/36 
14 April 2004 
 (04-1656) 
Sub-Committee on Least-Developed Countries 
Thirty-Sixth Session  
 
 
 
NOTE ON THE MEETING OF 9 MARCH 2004 
 
Chairperson:  Ambassador Johan Mo lander (Sweden) for items A-B 
 and Ambassador Ian de Jong (Netherlands) for items C-D  
 
 
Subjects discussed : 
 
A. ADOPTION OF THE AGENDA ........................................................................................................1  
B. CHAIRMANSHIP OF THE SUB-COMMITTEE ..................................................................................1  
C. WTO  WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES ..............................................2  
(i) Accession of LDCs .............................................................................................................. ........2  
(ii) Market Access  for LDCs ......................................................................................................... ....4 
(iii) Support, as appropriate, to  agencies assisting with the diversification of LDCs' 
production and export base ..................................................................................................... ...7 
(iv) Trade-related Technical Assistance for LDCs..........................................................................10  
D. OTHER BUSINESS ......................................................................................................................12  
 
 A. A
DOPTION OF THE AGENDA  
1. The Sub-Committee adopted  the proposed agenda contained in document WTO/AIR/2250. 
 
B. CHAIRMANSHIP OF THE SUB-COMMITTEE  
2. The outgoing Chairman , Ambassador Molander of Sweden, recalled that consultations had 
been held to select the new Chair for the Sub-Committee.  At the 48th Session of the Committee on 
Trade and Development, H.E. Mr. Ian M. de Jong, Ambassador of the Netherlands, was elected Chair 
of the Sub-Committee.  He said that Ambassador de  Jong had vast diplomatic experience.  He had 
been the Deputy Permanent Representative of the Netherlands to the Eu ropean Communities in 
Brussels before taking up his post as Ambassador and Permanent Representative in Geneva.  He had 
previously served as Minister Plenipotentiary at the Netherlands Embassy in Bonn.  He had served in several other capitals including, Washington, Kharto um, and Beirut and had been stationed with the 
Permanent Mission of the Netherlands in Geneva  from 1977 to 1981.  He had also served as an 
Executive Director of the Inter-American Investment  Corporation in Washington.  The Chairman was 
convinced that Ambassador de Jong's vast experience would be a valuable asset to the work of the 
Sub-Committee.  Moreover, the Netherlands and Swed en both had strong policies in support of issues 
on development and cooperation, pa rticularly the development of the LDCs.  He invited Ambassador 
de Jong to chair the 36
th Session of the Sub-Committee. WT/COMTD/LDC/M/36 
Page 2  
 
 3. The incoming Chairman
, Ambassador de Jong, thanked the outgoing Chair for his 
contribution to the work of the Sub-Committee, in pa rticular for his active role in the adoption of the 
Guidelines for LDCs' Accession.   
4. The representative of Bangladesh , on behalf of the LDC Group in the WTO, welcomed the 
new Chairman.  The Chairman came from a country that had always strongly supported the least-
developed countries.  Ambassador Molander was a tr ue friend of the LDCs and had carried out his 
responsibilities with utmost sincerity and dedicati on.  He had been through a period of intense 
activities in the Sub-Committee.  It was during hi s Chairmanship that th e LDC Unit in the WTO 
Secretariat was re-established, providing a focal point for the LDCs.  During his Chairmanship, a 
number of studies had been presented, including one on market access.  Ambassador Molander's 
period as the Chair would be particularly remembered by the acceding LDCs for his pioneering work 
on the Guidelines for LDCs' Accession.  By organizing the seminar on accession of LDCs, Ambassador Molander had expressed, at an early date , his determination to facilitate their accession.  
It was only due to his relentless efforts and total commitment that the Accession Guidelines could be 
established.  His task was not enviable as he had had to overcome concerns by some countries on the 
contents of the Guidelines.  The LDCs were alre ady reaping the benefits of Ambassador Molander's 
contribution.  The Guidelines had facilitated the ac cession processes of Cambodia and Nepal, the first 
two LDCs to join the WTO after its establishmen t in 1995.  The LDCs remained indebted to 
Ambassador Molander who would c ontinue to remain amongst the LD Cs as Sweden's chief negotiator 
for UNCTAD XI.  His presence in UNCTAD would be a source of encouragement for the LDC Group.   
5. The representative of Nepal
 associated himself with the statement made by Bangladesh on 
behalf of the LDCs.  He welcomed the new Chairm an whose country had rema ined committed to the 
cause of LDCs.  He noted that the Chairman had ser ved in an LDC country in the past and was sure 
that his experience would help promote the cause of LDCs in the WTO.  He thanked the outgoing Chairman for his dedication and professionalism.  During his tenure, a number of important results 
had been achieved, one of them being the Gu idelines on Accessions which had helped Nepal's 
accession negotiations.   
 
C. WTO
 WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES  
6. The Chairman  said that he intended to build on past work and to focus attention on four 
important elements of the Work Programme, namely:  accession of LDCs;  market access for LDCs;  
providing, as appropriate, support to agencies assi sting with the diversification of the LDCs' 
production and export-base and trad e-related technical assistance and capacity-building initiatives for 
LDCs.   
(i) Accession of LDCs 
7. On the accession of LDCs, the Chairman  recalled that in line with the Doha Ministerial 
Declaration and the LDC Work Programme, positive st eps had been taken with the adoption of the 
Guidelines on the Accession of LDCs in Decem ber 2002 to facilitate and accelerate LDCs' 
accessions.  As highlighted by the Director-General in his status report to the Cancún Ministerial Conference, steps had been taken to implement th e Guidelines.  A result of those efforts was the 
adoption of Cambodia's and Nepal's accession pack ages by Ministers at the Fifth Ministerial 
Conference in Cancún.  Apart from Cambodia and Nepa l, there were eight other LDCs at different 
stages in their WTO accession process .  Work remained to be done to advance or conclude their 
accession negotiations.  To facilitate discussion at the meeting, the Secretariat had updated the 
document describing the "State-of-Play" of LD Cs' accessions which had been circulated as 
JOB(04)/3.    WT/COMTD/LDC/M/36 
 Page 3 
 
 
 8. The representative of Bangladesh  thanked the Secretariat for its progress report on LDCs' 
accession.  It was a happy occasion for LDCs when, at Cancún, the WTO Members approved the accession package of Cambodia and Nepal.  His de legation was delighted that Nepal and Cambodia 
would be able to join as soon as their ratifica tion processes were completed.  The LDC Group was 
eagerly waiting to see both Nepal and Cambodia as full Members of the WTO.  He said that they were 
happy to note that the accession processes of Samo a and Vanuatu had reached advanced stages.  
Making progress in the accession process was not an easy task given the technical and financial constraints of LDCs, as well as not having represen tation in Geneva.  He hoped that the Working 
Parties for both Samoa and Vanuatu would be able to  complete their mandate by the end of the year.  
An increasing number of LDCs as Members would not  only strengthen the WTO and the multilateral 
trading system but would also strengthen the ability  of LDCs to participate meaningfully in the 
negotiations.  He said that consid erable synergy could be derived from working together and sharing 
responsibilities.  Several LDCs, including Sudan and Bhutan, had applied for membership quite some 
time ago.  Their accession process should be accelerated .  It was encouraging, yet challenging, that 
first Working Party meetings of many acceding  LDCs  would be held in 2004.  The accession process 
was lengthy, complex and arduous.  The extent to which progress could be made would depend on the 
commitments asked from Members, and whether they  would be realistic a nd practicable.  He hoped 
that, as the accession process continued, the WTO Me mbers would adhere to the Guidelines on LDCs' 
Accessions in letter and spirit.  In conclusion, he called upon the Secretariat and the development 
partners to provide enhanced technical assistance to acceding LDCs so that they could complete their 
accession processes as soon as possible. 
9. The representative of Ethiopia
 said that his country was advancing its work on the 
memorandum on its foreign trade regime.  The G overnment of Ethiopia, in collaboration with 
UNCTAD, had organized a national workshop on th e draft memorandum and on the sensitization of 
stakeholders on the WTO Agreements and on the WT O accession process.  The workshop was held in 
Addis Ababa from 26 to 29 January 2004.  Ethiopia was doing its best to accomplish the remaining 
tasks and to submit the memorandum as soon as possi ble to the WTO.  He said that the accession 
process was complex and costly, particularly for LD Cs, due to their limited human and institutional 
capacity.  The decision to accelerate and facilitate  the LDCs' accession to the WTO was a welcome 
decision which set out the obligations of both the acceding countries and the Member countries, including the commitment to give technical assist ance at all stages of the accession process.  He 
continued by saying that there were concerns that the decision was not being implemented fully.  It 
was incumbent upon WTO Members to give credibility by  upholding the decision in letter and spirit.   
10. The Chairman
 said that with regard to the LDCs in  the process of acceding to the WTO, he 
counted on the continued support of Members to activate as quickly as feasible the LDCs' accessions 
which were still at their initial stages of negotiati ons and to conclude othe r LDCs' accessions which 
were at a more advanced stage.   
11. The representative of the United States  said that her delegation had noted a fair amount of 
activity in the accession process.  Her delegation was pleased to have participated in work of the 
Working Party on the Accession of Sudan which was moving forward well.  She noted that a number 
of the acceding countries were advancing well in their capitals.  Cape Verde had shown good 
initiative in moving the process forward.  She said th at Members could try to advance discussion on 
where individual accession processes were and what  could be done to help other countries move 
forward.  There should be a dialogue among the acceding countries as well as with WTO Members 
who were trying to help in the process.  She said th at her delegation would be pleased if several of the 
accessions could be concluded and others advanced in 2004.  
12. The representative of Canada  said that three of the countries in the initial stages of accession 
were benefiting from the Integrated  Framework (IF) namely Ethiopia , Lao P.D.R and Yemen.  Three 
others were not yet benefiting from the IF namely , Sudan, Bhutan and Cape Verde, yet they had WT/COMTD/LDC/M/36 
Page 4  
 
 technical assistance needs.  At an informal meeting on technical assistance, one delegation had 
requested a list of technical assistance of particular relevance to acceding countries.  It might be useful 
to have a discussion on the type of assistance required.   This would help bilateral donors in designing 
and providing meaningful assistance.  The Sub- Committee could assist by mobilizing technical 
assistance for acceding LDCs.   
13. The Chairman
 said that he would discuss with the Secretariat on how to move forward on the 
issue of technical assistance for acceding LDCs.  He sai d that this issue could be discussed further at 
the next meeting of the Sub-Committee.  He asked th e Secretariat to prepare a short note to facilitate 
discussion at the next meeting. The importance of technical assistance and capacity building at all 
stages of the accession process was well known and should be fully supported.  The Sub-Committee 
would continue to monitor the accession of  LDCs at its future meetings.   
14. The Chairman proposed that the Sub-Committee take note  of the Secretariat note, as well as 
the statements and suggestions made. 
15. It was so agreed .  
(ii) Market Access for LDCs 
16. The Chairman  recognized that several Members, on an autonomous basis, had accorded 
preferential market access to LDCs in their markets.   That was in line with paragraph 42 of the Doha 
Declaration, where Ministers committed themselves to the objective of "duty-free and quota-free 
market access" for LDCs and agreed "to consider  additional measures for progressive improvements 
in market access for LDCs".  He was also pleased to note that several Members had notified new or 
modified measures affecting market access for LDCs.  In that context, he drew Members' attention to 
the notification by Australia  contained in document WT/COMTD/N/18.  At its 48th Session, the 
Committee on Trade and Development (CTD) had agr eed to refer Australia's notification to the 
Sub-Committee for substantial c onsideration and reporting back. 
17. The representative of Australia  said that she would build on some of the brief comments made 
by her delegation at the 48th Session of the CTD.  At the CTD, Australia had notified the duty- and 
quota-free entry which Australia had extended to  imports from countries designated by the 
United Nations as least-developed countries which included East Timor.  The legislation came into effect on 1 July 2003.  The notification and accompanying documentation were included in the 
documents provided for the meeting.  The new arrangements stemmed from the Australian Prime 
Minister's announcement in October 2002 at the As ia Pacific Economic Cooperation (APEC) Leaders 
Meeting in Los Cabos.  At the time of the announc ement, Australia had informed the CTD of the 
initiative.  A solid summary of key points of the le gislation were included in the documentation, in 
particular, paragraph 3 of the notification.  The initiative was comprehensive and unqualified.  It did 
not exclude sensitive sectors and did not provide phasing-in arrangements.  She said the Customs 
Amendment Act, included in the notification, provided the definition of qualifying area for manufactured goods and the 25 per cent non-LDC developing country cap.  The Australian Customs 
Notice outlined the rules for determining whether goods originated in an LDC, as well as the evidence 
of origin requirements.  She would be happy to provide responses to Members both bilaterally and at 
the next meeting of the Sub-Committee.   
18. The Chairman
 said that Australia's initiative to grant duty- and quota-free access to LDC 
products was a welcome initiative.  He hoped that it would assist the further integration of the LDCs 
into the multilateral trading system.   
19. The representative of Bangladesh , on behalf of the LDC Group in the WTO, expressed 
gratitude to the Government of Australia for provi ding duty- and quota-free access to all imports from  WT/COMTD/LDC/M/36 
 Page 5 
 
 
 LDCs.  The comprehensiveness and unqualified nature  of the initiative was commendable.  The new 
measure was accompanied by flexible rules of origin and simplified administrative requirements.  He appreciated the fact that the Customs Tariff Act of  the Government of Australia had already given 
effect to the scheme.  The decision taken by th e Australian authorities clearly demonstrated their 
commitment to the Doha Declaration, where th e Ministers had committed to consider additional 
measures for progressive improvements in market access for LDCs.  He said that meaningful 
integration of LDCs into the trading system requi red efforts by all WTO Members.  The measures 
taken by the Australian Government would encour age other countries to make further improvements 
in their preferential scheme for LDCs, and thereby fu lfil the mandate of the Doha Declaration.  He 
hoped that the opportunities provided through the new initiative would further b oost LDCs' exports to 
Australia and accelerate the economic growth of LDCs.  LDCs were looking forward to greater 
engagement in trade with Australia.  While natio nal authorities were examining the scheme with a 
view of taking full advantage, some additional info rmation was required, mainly, an illustration of the 
application of the local content requirement, and an  explanation of the rules of origin for other 
preference receiving schemes offered by Australia.  The representative of Bangladesh said that their 
understanding was that the goods manufactured by LD Cs would be eligible for preference under other 
schemes if they did not meet the criteria for the rules of origin under the new scheme.  He said that he 
was asking these questions so that they could know the requirements that needed to be fulfilled in 
order to be eligible for the preference.  Canada had offered LDCs a very good package last year and 
exports to Canada had already increased.   
20. The representative of Haiti
 said that most of the barriers ha d been considered by countries 
such as the United States, Canada and the Europ ean Communities which had taken steps to improve 
market access for LDCs.  However, the LDCs were  not able to take the best advantage of the 
opportunities given because they had other problems.  He  said that his delegation would be grateful if 
the Sub-Committee would be able to work in colla boration with other organizations such as the World 
Bank and the International Monetary Fund (IMF) whic h were the organizations that provided advice 
to LDC governments on preparation and implementati on of economic policies.  Even if LDCs were 
given the opportunity to export to different markets,  there were still requirements which LDCs had to 
take into account if they were to benefit from the market access opportunities.  For this they needed 
technical assistance.  He said there was a need to  assess the LDCs' situation in terms of their export 
potential and then decide, in a systematic way, what the LDCs needed to do in order to ensure that, for 
example, their exports met quality standards.  If LDCs were intending to export to the 
European Communities, what were the required cr iteria for quality control and standards?  The 
European Communities granted mark et access benefits but there were a number of conditions and 
requirements that had to be met first.  LDCs did not have the technical nor financial resources to be 
able to meet those requirements and enjoy the ma rket access opportunities offered.  He hoped that 
there would be greater coordination between organi zations that were advising countries on economic 
policies, such as the WTO, in their efforts to a ssist the LDCs to benefit more efficiently and 
effectively from market access initiatives. 
21. The representative of Nepal  said that his delegation was impr essed with Australia's initiative 
because it was comprehensive and unqualified.  The rul es of origin were important in order to make 
sure that the facilities granted could be effectively used by the LDCs.  He hoped that the flexible new 
rules of origin as well as simplified administrative structure would contribute to promoting trade and 
help LDCs integrate into the international tradin g regime.  One of the important factors of the 
effective utilization of the preferential regime was how it could be utilized by Members, and  
especially by LDCs.  There had been a number of studies on the effective utilization rate of 
preferential regimes.  He said that his delegati on would like to see improvements, not only in the 
granting of preferences, but also in the effective u tilization of such preferences by the LDCs.  He said 
that page 9 of the notification, entitled attachment  B and which referred to calculating the rules of 
origin, mentioned the expenditure of the materi als, labour and overheads and the cost of inner WT/COMTD/LDC/M/36 
Page 6  
 
 containers.  He asked for clarification on the definition of the inner container and how it was 
effectively utilized in calculating the rules of origin. 
22. The representative of Senegal
 said that there had been a number of initiatives for LDCs but 
the outcome had been low compared to the potentia l.  Countries were not fully utilizing the initiatives 
and the Sub-Committee should address the reasons for it.  Even if markets were open, many LDC 
exporting enterprises were small medium enterprises (SMEs) which were faced with constraints such 
as financing difficulties, and non-tariff measures.  He said that there should be an analysis of whether 
there was any accompanying mechanism which could he lp in terms of capacity building and training 
as well as in other areas such as financing.  Senega l had had the experience of adapting some of its 
products to specific export markets for the fish eries industry.  The European Communities had 
designed a mechanism that had enabled SMEs to adapt to the quality controls on the European 
Communities market.  He said that the Sub-Committ ee should look at such mechanisms that would 
enable LDCs to fully benefit from the initiatives. 
23. The representative of Tanzania  said that his delegation was hopeful that Australia's initiative 
would encourage other WTO Members to take simi lar measures so as to stimulate and promote the 
participation of LDCs in world trade.  His delega tion would work closely with the relevant authorities 
in the capital to study Australia's notification and provide comments at a later stage.  He hoped that 
Australia and other WTO Members would take meas ures to support LDCs in addressing supply-side 
constraints as well as other obstacles related to produ cts standards and rules of origin that had in the 
past made it difficult for LDCs to take advantage of  similar measures.  He said that LDCs would be 
able to take advantage of Australia's initiative and those of other Members only when supply-side 
constraints were addressed. 
24. The representative of Switzerland  said that Australia's scheme was interesting particularly 
with regard to the rules of orig in.  She requested more information from Australia in order to learn 
from the scheme and maybe enable Switzerland to improve its own scheme.  She said that a more coordinated approach internati onally would be necessary to improve the schemes for LDCs and to 
dampen the effect of preference erosion in the course of MFN tariff reductions.  The initiative was 
interesting as it allowed for 50 per cent input from other LDCs and 25 per cent from other developing 
countries to qualify.  She wondered whether it would not be better to allow for up to 100 per cent 
input from other LDCs.  She asked whether there was a direct shipment rule and how exactly the donor country content was applied.  She also asked  how the verification procedure worked and about 
the administrative cooperation with the exporting country, the precautionary measures against fraud 
and circumventions, if there were any safeguard mechanisms in case of a major increase of imports 
from LDCs, and if so, how they were designed.  The notification stated that sensitive sectors were not excluded from the scheme and that non-manufactured  raw materials and manufactured goods would 
receive duty-free entry.  She asked whether this m eant that all products originating from LDCs were 
duty and quota free.  If not, which categories were excluded? 
25. The representative of the European Communities
 said that his delegation acknowledged and 
appreciated Australia's initiative for LDCs.  Au stralia's initiative set a good example for other 
Members to follow.  Regarding th e issue of information gaps between preferences and administrative 
rules related to the preferences, the European Communities had taken the initiative to establish an 
online database of their preferential schemes.  The online database allowed access not only to 
information on a given tariff rate for a particular product under the GSP, which included as a 
sub-category a scheme for the LDCs, but also the African Caribbean and Pacific Countries' (ACP) 
preferences and other preferential regimes.  It also gave information on the applicable rules of origin 
in order for an exporter to benefit from those pref erences.  He said that the European Communities 
was intending to expand the online service to also  provide information on the relevant regulatory 
requirements such as applicable sanitary and phytosanita ry (SPS) rules.  Part of the rationale for the 
initiative was to try to respond to an informa tion gap in exporting coun tries, including LDCs,  WT/COMTD/LDC/M/36 
 Page 7 
 
 
 regarding available preferences and the required ad ministrative steps.  He said that the issue of 
supply-side constraints was part of a broader issue of technical assistance and the Integrated Framework.  It was a challenge for all, includi ng the donor countries and other agencies who were 
active in the field alongside the WTO, to try to he lp and support LDCs to use the trade preferences 
and other export possibilities available to them.  The issue of supply-side constraints was relevant and 
deserved continued attentio n in the Sub-Committee and other relevant contexts. 
26. The representative of Zambia
 said that market access barriers made it difficult for LDCs to 
utilize the measures given and the WTO membersh ip needed to address these difficulties.  He 
suggested that at the next Sub- Committee, there should be an age nda item, under the broader market 
access item, to discuss market access barriers.  Th ese barriers had been discussed in other fora 
including the United Nations Conference on Trad e and Development (UNCTAD).  The issue of 
supply-side constraints also made it difficult to u tilize the market access initia tives.  The Doha agenda 
focused more on market access and less on how to make use of the market access opportunities.  The 
Integrated Framework partly addressed the issue of supply-side constraints but his delegation was of 
the view that WTO Members should look at the br oader aspect.  Organizations such as UNCTAD, 
International Trade Centre (ITC), United Nations Industrial Development Organization (UNIDO), and 
the World Bank could do better with more financing.  More could also be done at the bilateral level. 
27. The Chairman  said that the issue of supply-side constraints would be discussed at the next 
Sub-Committee.  He suggested that  the representative of Australia should respond to some of the 
questions raised in a letter addressed to the Secretariat for distribution to all Members. 
28. The representative of Australia  said that she may have to ask some delegations to present their 
questions in writing.  Australia would respond in a le tter which could also, if needed, be introduced at 
further meetings of the Sub-Committee. 
29. The Chairman  proposed that the Sub-Committee take note  of the notification by Australia and 
the statements made.  He also proposed that he se nd a letter to the Chairman of the CTD and that the 
record of the discussions at the meeting be sent b ack to the Committee on Trade and Development to 
fulfil the Sub-Committee's  duty of reporting back.  
30. It is was so agreed . 
31. The Chairman  said that before closing the sub-item, he wanted to take the opportunity to urge 
Members, that had not already done so, to notif y changes and improvements in market access for 
LDCs.  This would facilitate the monitoring of improvements in market access as mandated in 
paragraph 7 of the LDC Work Programme.  
(iii) Support, as appropriate, to age ncies assisting with the diversification of LDCs' production 
and export base 
32. The Chairman  recalled that the item on support, as appr opriate, to agencies assisting with the 
diversification of LDCs' production and e xport base was first considered at the 28th Session of the 
Sub-Committee when ITC reported on its work in this area.  He invited the representative of 
UNCTAD, Mrs. Puri, Director of the Division on International Trade in Goods, Services and 
Commodities, to brief Members on UNCTAD's work in that area and if she so wished, to report on 
preparations for UNCTAD XI.   
33. The representative of UNCTAD  said that in addition to work on the diversification of LDCs' 
product and export base, UNCTAD was also involved in work on the other agenda items, mainly 
accession and market access.  UNCTAD was the focal point of the United Nations (UN) system for 
the treatment of commodity sector issues, as they related to trade and development and that LDCs WT/COMTD/LDC/M/36 
Page 8  
 
 were amongst the most commodity dependent countri es.  UNCTAD was committe d to pursue work in 
that area pursuant to its mandates and in the context of its contribution to the attainment of the UN 
Millennium Development Goals.  Paragraph 42 of the Doha Declaration had also recognized that 
support for the diversification of production and export base of LDCs was a requirement for their 
integration into the multilateral trading system.  Ther e was a need to help find a way out of the circle 
of commodity dependence, declining prices and declining revenues, and to help LDCs pursue 
effective trade and development strategies and commodity sector policies.  UNCTAD's work on 
export diversification with LDCs involved horizontal, vertical and geographical diversification of 
both production and trade in their commodity sector s.  UNCTAD provided public policy advice and 
support, helped strategize and restructure sect ors, assessed options of commodity sectors and 
identified areas into which diversification was viable , profitable and made the best contribution to the 
development process.  She said that diversificati on must be viable and yield optimal development 
results.  In terms of geographical coverage, UNCT AD had tried to be as comprehensive as possible 
within their given resources.  Most LDCs and commodity dependent countries had been covered as 
well as countries in Asia, Africa, Central America, Ce ntral Asia and the Pacific Islands.  In terms of 
commodity sectors, UNCTAD had tried to cover all possible commodity sectors - agricultural, 
horticultural, fisheries, minerals and metals.  To the extent possible, UNCTAD had tried to approach 
the issue of diversification in terms of supporting countries to move into dynamic and new sectors of 
world trade where countries concerned had an existing or potential export competitiveness and 
comparative advantage.  UNCTAD's work invol ved research, policy analysis, information 
dissemination, technical cooperation, consensus bu ilding, exchange of experiences through national, 
sub-regional, and regional as well as multilateral wo rkshops, seminars and meetings.  She said that 
UNCTAD was working very closely with national gove rnments and specific ministries.  At the macro 
level, they had been working with enterprises in  trying to raise awareness of opportunities in the 
different sectors, how to overcome constraints and how  to devise strategies at the enterprise level.  
Civil societies and other international organizations were also involved.   
34. She continued by saying that UNCTAD was looking not only at the supply aspect of export 
diversification but also at the competitiveness and ma rket access aspects.  LDCs were often prevented 
from diversifying successfully because of a plethora of market access conditions which ranged from 
product requirements, SPS, technical barriers to trade (TBT) and other barriers set by governments and buyers.  Rules of origin and other behind the bor der barriers needed to be addressed if LDCs were 
to diversify properly.  The Development Account  of the United Nations had financed work on 
supporting diversification including in the LDCs.  The Finnish Government had also funded a project 
on assessing the cost of compliance in LDCs for agri food safety.  The project aimed to identify and 
quantify the compliance costs for agrifood safety measures taken by governments and how the costs 
could  best be met.  LDCs needed capacity-build ing support in the areas of TBT, SPS, institutions, 
and human resources in order to overcome barriers and raise their competitiveness.  She said that in 
the context of the Joint Integrated Technical  Assistance Programme (JITAP), UNCTAD, in 
collaboration with ITC and the WTO, had been prepar ing a tool kit on the issue of diversification and 
how best JITAP countries could pursue successful di versification policies.  With respect to cotton, 
UNCTAD had started a project on improving the sust ainability of cotton production and small scale 
farmers income in the cotton producing and expor ting counties of West and Central Africa.  The 
International Cotton Advisory Committee and the Common Fund for Commodities had been 
supporting the project to help the countries involved improve production and supply of cotton.  
Further work was being planned with a view to assisting the sustainable development and 
diversification of the LDCs' cotton sectors within a value chain approach.  She continued by saying 
that commodity finance was important as no dive rsification policies would be successful unless 
producers in LDCs had access to credit.  UNCT AD had been involved in supporting innovative 
techniques and designing risk finance instruments wh ich had been successfully tried in the field.   
35. The representative of UNCTAD said that market information was another important aspect of 
the diversification paradigm.  UNCTAD was act ively working towards reducing the existing  WT/COMTD/LDC/M/36 
 Page 9 
 
 
 asymmetry with respect to market information,  particularly through its Infocomm website.1  She said 
that opportunities for diversification in mineral commodities should not be neglected.  The demand 
and needs of the LDCs in the area of diversificati on were great and in order to meet the demand, she 
appealed to the donor community for their generous contributions in order to meet the increasing demand of regional, sub-regional and national activities.  UNCTAD's capacity to respond needed to 
be reinforced and adequate resources made availa ble.  An expansion of extra-budgetary resources 
provided for commodity work would enable UNCTAD to fulfil its role in technical cooperation and 
capacity building by ensuring sustained programmes.   She said that the group of Eminent Persons on 
commodities, convened by UNCTAD upon the request of the UN General Assembly had in their report suggested to create an International Export Di versification Fund.  The international community 
needed to dedicate some resources in order to suppor t diversification-related activities, particularly for 
LDCs.   
36. On UNCTAD XI, she said that preparations were underway and that the LDC focus was 
present in a number of areas both in terms of the ag enda and the sub-themes.  One of the sub-themes 
dealt with ensuring development gains from the inte rnational trading system and trade negotiations.  
The document that was in the process of being nego tiated referred both to the commodities issue and 
to the trade and poverty connection.  There was al so a trade and gender connection that emerged from 
the discussions.  In the context of UNCTAD XI, sh e hoped that an International Task Force on 
Commodities could be established.  LDCs in particul ar had been supportive and she appealed to the 
developed and developing  countries to support the initiative which was meant to pull together the 
efforts of all stakeholders.  The Task For ce would include governments, inter-governmental 
organizations, non-governmental orga nizations (NGOs) as well as the business sector.  A number of  
initiatives would be taken and di versification would be one of  the main agenda items.   
37. The representative of Zambia
 said that inviting other organizations such as UNCTAD to the 
Sub-Committee to address issues such as divers ification was very important and should be 
encouraged.  It was important to match market acc ess with supply-side constraints.  The Doha Round 
was putting more emphasis on market access but the WTO had some opportunities to address 
supply-side constraints such as in the area of transf er of technology within the context of the TRIPS 
Agreement.  Unless supply-side issues were a ddressed, the Doha Round risked leaving the LDCs 
behind.  In most cases, the donors present in the WTO were also providing funds to the supply-oriented organizations such as UNCTAD, IT C, and UNIDO.  More money should be given to 
such organizations so they could address supply-side i ssues.  He suggested that in the next meeting of 
the Sub-Committee, the agenda item on support fo r the diversification of LDCs' production and 
export base could be left open.  UNCTAD and othe r supply-side oriented organizations could be 
invited to provide more insight as to the different  ways of addressing the diversification issue.   
38. The representative of Senegal
 thanked the representative of UNCTAD for presenting the 
work being undertaken by UNCTAD.  He sa id that UNCTAD's initiatives in the area of 
diversification and commodities had provided importa nt results and should be  supported financially.  
Regarding UNCTAD's programme on Quality Assura nce and Enhancing Export Competitiveness of 
Tropical Fruits in the African LDCs, Senegal was using less than 50 per cen t of its tropical fruit 
export potential, mainly due to the lack of storage infrastructure and lack of  training.  Continued cooperation between UNCTAD and organizations such as the WTO would ensure that the issues were 
addressed appropriately and would ensure market access for LDCs. 
39. The representative of Rwanda
 asked whether the countries that would benefit from the Export 
Diversification Fund had been identified.  He said that Rwanda was interested in benefiting from the 
Fund and that it was committed to diversification as it was dependent on two commodities, coffee and 
tea.  He said that Rwanda's ongoing concern was to  maximize the quality of coffee and to ensure a 
                                                      
1 www.unctad.org.infocomm WT/COMTD/LDC/M/36 
Page 10  
 
 high level output.  The issue of supply-side cons traints had to be addressed.  He supported the 
comments made by the representative of Zambia an d hoped that the agenda item on diversification 
would remain on the agenda of the next meeting of the Sub-Committee.  
40. The representative of Bangladesh
 said that more than 50 per cent of LDCs' exports depended 
on three or four commodities.  There had been a se cular decline in the price of commodities in the 
past 20 years.  It was vital that the problem was addressed.  He said that even if LDCs diversified, 
given the existing distortions, dive rsification would not be suffici ent to address their problem. He 
asked whether the Diversification Fund meant a di versification within the commodities sector or a 
diversification in the overall context of the economy. 
41. The representative of Canada  said that paragraph 12 of the WTO Work Programme for LDCs 
indicated that the WTO would, as appropriate, supp ort agencies assisting with the diversification of 
LDCs' production and export base.  She asked whethe r the proposed Task Force would also include 
the WTO.  She asked whether the Secretariat coul d provide an indication of work undertaken in 
support of other agencies in the area of diversification. 
42. The representative of Benin  said that diversification from commodities was important 
especially in terms of improving the living condition s of people in developing countries and LDCs.  
He urged bilateral and multilateral parties to support UNCTAD's initiative to enable it to complete the 
tasks it had undertaken.  He said that his delegation fully supported the project on improving the sustainability of cotton and small-scale farmers' income in cotton producing and exporting countries 
of West and Central Africa. 
43. The representative of India
 thanked UNCTAD for its activities to support LDCs in the 
diversification of their production and export b ase. The approach covered all areas and more 
specifically, market access issues, supply-side constr aints, market entry issues, and competitiveness.  
Any strategy for diversification had to be sust ainable and viable and should lead to overall 
developmental benefits to LD Cs. He hoped that Members would support the continuation of 
UNCTAD's activities in that direction.  In para graph 42 of the Doha Ministerial Declaration, 
Ministers had recognized that the integration of LDCs into the multilateral trading system required 
support for the diversification of their production and export base as well as trade-related technical 
assistance and capacity building.  UNCTAD's work was valuable and should be encouraged and 
supported. 
44. The Chairman  suggested that the representative of UN CTAD should respond to the questions 
raised after the report by the Chairman of th e Integrated Framework Steering Committee under the 
agenda item on trade-related technical assistance for LDCs. 
(iv) Trade-related Technical Assistance for LDCs 
45. The Chairman  said that the Work Programme on LDCs  recognized that in monitoring the 
element on trade-related technical assistance, the Sub-Committee would be guided by the work in 
other bodies, namely the Integrated Framewor k Steering Committee (IFSC) and the Integrated 
Framework Working Group (IFWG).  He invited Amb assador Iversen (Denmark), in his capacity as 
Chair of the IFSC, to report on developments. 
46. The representative of Denmark,  in his capacity as Chairman of the IF Steering Committee 
said that the IF Working Group had produced a re vised work programme which had subsequently 
been adopted by the IFSC and circulated to Me mbers of the Sub-Committee as document WT/IFSC/7 
on 17 February 2004.  The Work Programme was a result of the IF evaluation which was mostly 
positive and encouraging.  The evaluation  had  made  a number of suggestions on how to improve the 
functioning of the IF process by ensuring, for example, country ownership.  He said that the IF  WT/COMTD/LDC/M/36 
 Page 11 
 
 
 Working Group and the Steering Committee had also taken measures to expedite the use of Window 
II.  In that respect, he mentioned three light criteria that were put in place, namely:  a ceiling of one million dollars per country (project proposals for funding out of Window II could not go over and 
above US$ one million per country);  the proposals w ould form part of the a pproved Diagnostic Trade 
Integration Study (DTIS) and action matrix as identif ied by the country as a priority with the ultimate 
aim of mainstreaming trade; and the projects had to be approved by the Local Project Approval 
Committee as described in the Annex of the terms of reference for Window II 
(document WT/IFSC/4).  These light criteria had b een forwarded to the United Nations Development 
Programme (UNDP) as Trustee of the IF Trust Fund.   
47. The Chairman
 proposed that the representative of  UNCTAD respond first and then take 
comments on the report of the Integrated Framework.  
48. The representative of UNCTAD  hoped that there would be further opportunities to discuss 
progress on the issue of diversification. She referred to the statement made by the representative of 
Rwanda and clarified that the diversification fund was not yet a reality.  It was a suggestion made by 
the Eminent Persons Group which was set up on the direction of the UN General Assembly, convened 
by UNCTAD and whose main recommendation indicated that there was a need for an international 
export and commodity sector diversification fund.   That fund would focus on developing, among 
other things, the institutional capacity of countri es, stronger producer associations, key infrastructure 
and stimulating investments by providing risk capital or temporary compensation for certain 
infrastructural weaknesses.  She added that Rwa nda could benefit from UNCTAD's services with or 
without the diversification fund.  Regarding the question from the representative of Bangladesh on the 
kind of diversification, she said there was no indication as to the kind of diversification and specified 
that it would also include horizontal diversifica tion. On the importance of cotton raised by the 
representative of Benin, she said that UNCTAD was in the process of executing a project.  Regarding 
the question raised by the representative of Canada  on the Task Force on commodities, she clarified 
that all relevant stakeholders and partners, including the World Bank and the WTO, would be 
involved as appropriate. 
49. The representative of Bangladesh  commented on the report of the Chairman of the IF Steering 
Committee.  He said  that the IF Steering Committ ee had adopted the follow-up actions of the second 
evaluation of the Integrated Framework.  Two c oncepts stood out from an LDC perspective, namely, 
the strengthened country ownership in the DTIS pr ocess as well as the effective follow-up to the 
DTIS.  The IFSC had also adopted three criteria for the operation of Window II which, he hoped, 
would facilitate the implementation of projects identified in the DTIS action matrices.  He hoped that 
the integrity of the terms of reference of Wi ndow II would be maintained while projects under 
Window II were approved.  He said that it was impor tant to address supply-side constraints and added 
that the IF should play an important role in addressing those constraints.  The fact that there were 31 LDCs in different stages of the IF process empha sized the level of commitment by the LDCs.  He 
asked development partners to further contribute to  the IF Trust Fund.  Establishment of Diagnostic 
Trade Integration Studies was pending for several LDCs due to capacity constraints faced by the 
World Bank.  He suggested that other IF agencies c ould take the lead in the preparation of the DTIS 
in order to accelerate that process.   The UNDP had taken the lead role in some countries. 
50. The representative of Switzerland
 proposed that the Diagnostic Trade Integration Studies 
could include a strengthened section on accession, where appropriate.  He proposed that the Sub-
Committee make a recommendation to the CTD or to th e IF Working Group to ensure that the future 
DTISs for acceding LDCs would include an intensiv e assessment of institutional and legislative needs 
related to the accession to the WTO.  With regard  to the WTO technical assistance plan, he was 
pleased to see in the state-of-play document that direct technical assistance was provided by the WTO 
Secretariat to LDCs in accession.  He asked whet her the WTO Secretariat had a set of standard 
technical assistance activities for acceding LDCs.  W as such a system already in place, and if not, WT/COMTD/LDC/M/36 
Page 12  
 
 could the Sub-Committee instruct the Institute fo r Training and Technical Co-operation to develop 
such a tool?  He informed Members that his de legation had conducted an evaluation of a programme 
for acceding LDCs in Central Asia.  His delegation w as happy to share the information with interested 
Members.  
51. The representative of Denmark,
 in his capacity as Chairman of the IFSC, agreed with the 
representative of Bangladesh on the importance of s upply-side constraints and agreed that Window II 
was a contribution to address some of those constrai nts excepting physical infr astructure.  Regarding 
the comments made by the representative of Switzerland,  he looked forward to a continued discussion 
in the Sub-Committee and in the I FSC to address the issues raised.  
52. The Chairman  asked the WTO Secretariat to prepare a paper on supply-side constraints. He 
suggested that the UNCTAD and other organizati ons be invited to the next meeting of the 
Sub-Committee to provide an update of the issues that were discussed.  He also invited other 
delegations that had not commented, to comment on these issues so as to have a discussion geared 
towards the needs of the LDCs.  He would consu lt the Secretariat on ways of incorporating the 
comments by the representative of Switzerland in the agenda of the next session of the 
Sub-Committee.  
53. The Chairman  proposed that the Sub-Committee take note  of discussions held and statements 
made. 
54. It was so agreed . 
 
D. OTHER BUSINESS  
55. The Chairman  proposed that the next meeting be he ld before UNCTAD XI, either end of May 
or early June 2004. 
56. The meeting was adjourned . 
 
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