WT/COMTD/LDC/30  
28 November 2023  
(23-8041) Page: 1/3 
Sub-Committee on Least -Developed Countries    
 
 
LDC GRADUATION  
 
REPORT BY THE CHAIRPERSON OF THE COMMITTEE ON TRADE AND DEVELOPMENT  TO 
THE GENERAL COUNCIL1 
1.1.  On 24 July 2023, the General Council instructed the Sub -Committee on LDCs (hereinafter 
the Sub-Committee) to examine Annex 2 of the LDC graduation proposal ( WT/GC/W/807/Rev.2 ) 
and to report to the General Council by 30 November 2023 with any recommendations. Accordingly, 
the Sub -Committee beg an its work in September. The first informal  session of the Sub -Committee 
was held on 20 September. Since then, it held four informal sessions (16 October and 8,  20 and 
22 November) . In addition, a  small -group consultation was held on 2 October. I have provided 
updates on this work at the formal session of the Sub -Committee on LDCs on 5 October, at 
the Informal Heads of Delegations  meeting held  on 10 October and at the Senior Officials Meeting 
that took place on 23 -24 October  (WT/GC/259/Rev.1 ).  
1.2.   The LDC Group identified some 17 special and differential treatment (S&D) provisions in 
WTO Agreements and decisions in Annex 2 , to be included as part of smooth transition measures in 
support of LDCs after graduation . Based on requests from Members, these provisions were grouped 
in four main clusters by the LDC Group which was communicated to Members on 9 October 
(ICN/COMTD/LDC/2 ). These clusters covered provisions related to market access, subsidies, 
intellect ual property , dispute settlement understanding, trade facilitation and technical assistance . 
On 16 October Members reached a shared understanding on the sequencing of the clusters to be 
taken up by the Sub -Committee.  
1.3.  All the 17 provisions identified were considered  by the informal sessions of the Sub -Committee 
held in November. The Secretariat made factual presentations on the relevant provisions. Following 
is a succinct summary of the main points raised during the discussions including issues which may 
require further examination with a view to making progress. These points do not purport to be 
exhaustive. It is an attempt to help focus future deliberations on this topic , with a view to finding 
common ground for any recommendations .2  
1.4.  The meeting on 8 Nov ember focused on market access -related elements of Annex 2. In the 
context of the discussion on the enabling clause , it was recogni zed that a number of preferential 
trade arrangements already provide LDC treatment to graduated LDCs  for a certain period. It was 
also noted that access to preferential rules of origin applicable to LDCs depend on whether 
graduated  LDCs would have continued access to unilateral trade preference schemes for LDCs , 
including  certain  conditions such as possibilities of cumulation. It was underlined that supply -side 
constraints have been an overpowering factor for LDCs ' improved participation in services trade. 
Since the LDC Services Waiver Decision provides for automatic termination of preferential treatment  
with respect to LDC services and service providers, a  decision would be required by Members if they 
intend to maintain the LDC preferences  for graduated LDCs.  The linkages between Annex 1 and 
trade-related elements of Annex 2 were referenced , and it was no ted that greater clarity in this 
regard would help identify the scope o n this issue .  
1.5.  The meeting on 20 November considered the provisions related to subsidies, intellectual 
property  (IP), and dispute settlement understanding  (DSU) . In the area of IP, LDC flexibilities under 
the Agreement on Trade -Related Aspects of Intellectual Property Rights (TRIPS) included a general 
 
1 Ambassador José R. Sanchez -Fung (Dominican Republic), the Chairperson of the Committee on Trade 
and Development,  has been chairing the meetings of the Sub -Committee on LDCs since September 2023, 
pending the election of the Chairperson of the Sub -Committee on LDCs.  
2 The report is issued under the Chair's own responsibility.  WT/COMTD/LDC/30  
 
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  transition period (until 1 July 2034), a specific transition period for pharmaceuticals  including related 
flexibili ties (until  1 January 2033) and technology transfer. It was highlighted that Members have 
shown understanding towards graduating LDCs with regard to notification obligations of their IP 
systems after graduation. At the same time, some graduated LDCs submit ted notifications of their 
IP laws and regulations prior to their graduation and some  of the graduating LDCs have IP  rights 
protection in place, especially in the areas of trademarks and copyrights. T here was encouragement 
to graduating LDCs to consider ma king notifications commitment as part of the smooth transition 
mechanism.  Some Members were also interested in examining the challenges and needs of LDCs in 
the area of intellectual property and how longer timeframes for the implementation of the  TRIPS 
Agreement would help them achieve development goals. Members' efforts in implementing Article 
66.2 of the TRIPS Agreement were also recognized. A suggestion was made to have a thematic 
discussion on this topic. 
1.6.  With regard to the subsidies discussion, the LDC Group has sought two flexibilities : relevant 
provisions under the Export Competition  Ministerial  Decision  (WT/MIN(15)/45 ), and flexibilities 
under the Agreement on Subsidies and Countervailing Measures (SCM) . The flexibilities available to 
LDCs and the net -food importing developing countries (NFIDCs)  under the E xport Competition  
Ministerial  Decision  included phasing out of certain agricultural export subsidies by 2030, longer 
repayment terms for the acquisition of basic foodstuffs and flexibility to monetize international food 
aid, including for the purpose of transport and delivery of the food assistance. It was also noted that 
the LDCs and NFIDCs listed in document G/AG/5/Rev.10  would be able to continue to benefit from 
the provisions of Article 9.4 of the Agreement on Agriculture until the end of 2030 . It was reiterated 
that export subsidies to cotton had been phased out in 2017.  
1.7.   With regard to the SCM, the standalone proposal by the LDC Group in the Council for Trade in 
Goods submitted in 2018 was recalled ( G/C/W/752 ). The LDCs sought clarification on whether they 
would be covered under Annex VII (b) if their GNP per capita is below US D1,000 in constant 
1990 dollars at the time of g raduation. It was highlighted t hat the lack of notification s had been a 
challenge to assess the impact of losing access to SCM flexibilities. Members sought clarification on 
the use of the relevant subsidy provisions by LDCs. Several sought clarifications on how a Member 
that left Annex VII (b)  of the SCM Agreement  could be reincluded and the process for phasing out 
export subsidies upon achieving the export competitiveness  threshold . 
1.8.  With regard to the discussion on the provisions under the DSU, it was noted that LDCs so far 
made very limited use of the dispute settlement  system and that no ne of the LDCs had ever been a 
respondent. Some Members also sought clarifications on the provision of Article 24.1 of the DSU and 
the peace clause identified  in paragraph 3 of Annex 2 of the  LDC graduation proposal. Some noted 
that LDCs' request for an exemption from DSU after graduation would set a higher standard than 
the one currently available to LDCs under the DSU.   
1.9.  At the meeting on 22 November, the Sub -Committee considered the provisions related to 
the Trade Facilitation Agreement (TFA) . It was noted that flexibilities available for developing 
countries in the context of the implementation of category B and C provisions would largely  address 
the needs of graduated LDCs. It was also noted that the grace period for the application of DSU with 
respect to the implementation of category B and C commitments would not be available if a Member 
graduates from LDC status , although graduating LD Cs have already self -determined their individual 
implementation timeframes ranging from 2024 to 20 50. Members indicated that the TFA was crafted 
to address the specific needs of developing countries and has built -in provisions to cater to specific 
circumstances.  
1.10.  Members also discussed a provision related to the Agreement on F isheries Subsidies ; some 
indicated that since the Agreement had not entered into force , it would be somewhat  challenging to 
discuss the flexibi lity accorded to the LDCs. Some also noted that it contained a de minimis  
requirement by which most of the LDCs would be covered  with regard to the frequency of notification 
obligations .  
1.11.  The duration of a possible transition period for the provisions identified in Annex 2 was also 
raised by the LDC Group at the 22  November meeting , while some  Members were of the view that 
a discussion on a duration would be premature . WT/COMTD/LDC/30  
 
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  1.12.  During the above meeting s, the Secretariat also highlighted several technical assistance 
activities of relevance to LDCs, including introductory and intermediate trade policy course s for LDCs. 
It was also noted that LDCs were accorded a priority in considering requests for nation al activities 
and internship programmes . At the same time, the Secretariat indicated that a wide range of 
technical assistance would remain available after graduation. It was also noted that the Secretariat 
remained committed in assisting graduating LDCs  with greater integration into the multilateral 
trading system . 
1.13.   In all these discussions, the LDC Group was of the view that the provisions contained in 
Annex 2 were critical policy tools to support their structural transformation towards development , 
and t hat their request sought to extend the existing LDC -specific flexibilities granted by Members 
for a certain period of time after graduation.  The Group  recalled the MC12 outcome document 
(WT/MIN(22)/24 ) which recognized the role that certain measures could play in facilitating a smooth 
and sustainable transition for LDCs after graduation. The application of a peace clause as a 
mechanism for legal coverage for the implementation of the pro posed measures was envisaged  
during the transition period.  
1.14.  A number of Members underlined the need to identify specific challenges in order to provide 
targeted solutions. Members also requested the LDCs to provide more information on what specific 
problems  that graduating LDCs had been encountering in the areas identified in Annex 2, in particular 
TRIPS and SCM, and what individual graduating LDCs plan to do with the requested flexibilities. 
It was acknowledged that more time was required to achieve a share d understanding of different 
dimensions of Annex 2 provisions  on the table and a further mandate from the General Council would 
be required. It was also recalled that the outcome on Annex 1 (WT/L/1172 ) was an important 
achievement ahead of MC13.  
1.15.  Overall, the Sub -Committee had a substantive and constructive discussion. Members engaged 
with willingness to address the challenges faced by the graduating LDCs in implementing WTO rules 
and disciplines. While a lot of progress has been made, I believe mo re time would be required for 
an in-depth examination of the 17 S&D proposals identified in Annex 2  with a view to making any 
recommendations to the General Council . In view of the above, the General Council may consider 
instructing the Sub -Committee to co ntinue the examination of Annex 2 of the LDC graduation 
proposal and provide an appropriate period of time.  The upcoming 13th Ministerial Conference could 
offer an opportunity to take further stock of the progress made , including the possibility of any 
decision to further support the LDCs on the path to graduation.  
 
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