RESTRICTED  
  
WT/COMTD/SE/M/28  
 
8 January 2015  
(15-0125)  Page: 1/6  
Committee on Trade and Development 
Twenty-Eighth Dedicated Session    
 
 NOTE ON THE MEETING OF 27 NOVEMBER 2014 
Chairperson: H.E. Mr Pierre Claver Ndayiragije (Burundi) 
 
A. ADOPTION OF TH E AGENDA .................................................................................... 1  
B. FOLLOW-UP TO THE MINISTERIAL DECISION ON SMALL ECONOMIES 
TAKEN AT THE WTO'S NINTH MINISTER IAL CONFERENCE (WT/MIN(13)/33 - 
WT/L/908) ..................................................................................................................... . 1 
-  Outline of proposed research on the challenges and opportunities experienced by 
small economies when linking into global value chains in goods and services 
(WT/COMTD/SE/W/ 30/Rev.1) ............................................................................................. 1  
C. OTHER BUSINESS .................................................................................................... 6  
  
 A. ADOPTION OF THE AGENDA 
1. The draft agenda as contained in document WTO/AIR/4390/Rev.1 of 25 November 2014 was 
adopted. 
B. FOLLOW-UP TO THE MINISTERIAL DECISION ON SMALL ECONOMIES TAKEN AT 
 THE WTO'S NINTH MINISTERIAL CONFERENCE (WT/MIN(13)/33 - WT/L/908)  
- Outline of proposed research on the ch allenges and opportunities experienced by 
small economies when linking into global value chains in goods and services (WT/COMTD/SE/W/30/Rev.1)  
2. The Chairman recalled that Ministers at the Ninth Ministerial Conference (MC9) in Bali 
instructed the WTO Secretariat to provide relevant information and factual analysis for discussion 
among Members in the Committee on Trade and Development's (CTD) Dedicated Session on 
item "K" of its work programme and, in particular , the challenges and opportunities experienced by 
small economies when linking into global value chains (GVCs) in trade in goods and services. 
3. He said that at their last meeting on 10 Octo ber 2014, the proponents of Small, Vulnerable 
Economies (SVEs) had begun discussing their priori ties for 2014 and the follow-up activities to the 
Bali Decision. They had also begun identifying relevant issues and areas of possible research and 
analysis concerning the challenges and opportunities experienced by small economies when linking into GVCs in trade in goods and services. 
4. He recalled that an outline had been prepared by the Secretariat and the proponents of SVEs 
and had been circulated as WT/COMTD/SE/W/30. Members were given until 24 October 2014 to make comments and five Members did so, including Australia, the European Union (EU), India, 
Japan, and the United States (US). He adde d that the comments and suggestions of these 
Members were then incorporated into a new revision circulated in document WT/COMTD/SE/W/30/Rev.1.  
 WT/COMTD/SE/M/28 
 
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  5. The Chair hoped that Members could agree to the revised outline which, he added, reflected 
the general areas of research which would be addressed in greater detail in the report. He said that he was sure that the many different views ex pressed by Members so far would be reflected in 
the Secretariat's research. He further added that all comments made during the present meeting 
would be reflected in full in the minutes of the meeting and be part of the Secretariat's research.   
6. The representative of Guatemala, on behalf of the SVEs, thanked the delegations of 
Australia, the EU, India, Japan and the US for their comments on the initial outline. In the views of 
the SVEs, all comments had been accommodated in the new outline circulated in document 
WT/COMTD/SE/W/30/Rev.1. She said that the outline was to be used as the basis for the study which the Secretariat was to undertake in accordance with the Ministerial Decision on the Work Programme on Small Economies adopted at the MC9.  She said the SVEs were encouraged with the 
progress being made on the other Bali issues and hoped that work in regard to small economies 
would not be the exception. She said the SVEs, the Secretariat and Members had worked very hard on the outline and that substantive research had yet to begin. This was why the SVEs 
encouraged Members to adopt the outline and have the Secretariat begin its research.     
7. The representative of Saint Lucia, speaki ng on behalf of the Caribbean Community 
(CARICOM) delegations in Geneva, recalled that paragraph 35 of the Doha Ministerial Declaration 
established a Work Programme on Small Economies with the objective of framing responses to the 
trade-related issues identified for the fuller integration of SVEs into the multilateral trading system. She added that the Bali Ministerial Declaration mandated that the CTD in Dedicated Session undertake a study on the challenges and opportunities experienced by small economies 
when linking into GVCs. She said that generally speaking, SVEs were Members that account for 
less than 1% of world trade and that WTO Members recognized that these economies face specific 
challenges due to their small size and the distance that separates them from their key trading 
partners. It is in this context that the study portends important benefits to SVEs. She added that 
considerable amount of time had been spent in the course of the year in finalizing the outline for 
the study. She hoped that the renewed spirit of enthusiasm would lead to progress on a 
meaningful outline which would address the challeng es and opportunities that SVEs faced in linking 
into GVCs. She added that CARICOM called on Members to arrive at the required consensus so that the Secretariat could undertake the study as mandated by Ministers in Bali.  
8. The representative of India recalled that at the previous Dedicated Session of the CTD in 
October, the Secretariat had circulated an outline of proposed research on the challenges and 
opportunities experienced by small economies when  linking into GVCs in goods and services. He 
said that some Members, including India, gave their comments for inclusion in the draft outline 
report. He added that out of the five suggestions  made by India, only two suggestions, one on 
"Governance of GVCs" and a second on the "Asymme trical impact of trade policy measures on 
firms integrated in GVCs and those outside them" had been included in the revised outline. He 
added that his delegation would also like the other suggestions made by his delegation included in 
the outline of proposed research. The first concerned detail on the current scenario regarding the distribution of gains from GVCs. He said that according to some studies, a key question for developing-country firms seeking to integrate into GVCs concerned how incomes were distributed 
among different players along a specific GVC. He said that it was generally recognized that 
activities which generate most of the incomes fr om GVCs are those that precede and succeed the 
manufacturing stage of GVCs. In other words, most of the income in a GVC is concentrated in 
activities such as research and development, produc t design, logistics, sales, advertising, branding 
and after-sales activities, etc. He said the manufacturing stage of a GVC contributed perhaps the least value to the total income of the GVC. 
9. The second suggestion was in regard to why developing countries were locked in at the low, 
end-value addition of GVCs. He said that according to some studies, a key issue for developing-country producers, including those SVEs which were integrated into GVCs, was functional upgrading. This referred to firms in  developing countries performing value-added 
activities instead of just being restricted to undertaking manufacturing activities in a GVC. He 
explained that this issue was important as it was generally acknowledged that manufacturing activities generated the least income compared to other tasks in a GVC. He believed that 
functional upgrading, however, could take place in  intermediary functions and could play a role in 
the collection, category management, packaging and sales of products. He wished to bring to the notice of Members that the revised draft (WT/COMTD/SE/W/30/Rev.1) circulated by the 
Secretariat had some glaring omissions of some important issues which had been part of the initial WT/COMTD/SE/M/28 
 
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  draft outline circulated by the Secretariat. The issues which were omitted, in his view, were not 
only important to the integration of SVEs into GVCs, but were also important to other developing countries, including least developed countries. He said the sentences which were omitted from the final revised draft and which his delegation considered important and which should be included in 
the proposed research were the following: under se ction 2 of the original draft, "Opportunities and 
Challenges for Small Economies Joining GVCs", paragraph 2.2 included a reference to "other obstacles involving technology transfer and the creation of domestic linkages" which, he said, had 
been deleted. In paragraph 2.3, he said mention should be made that "recent research and 
analysis of the operation of GVCs by academic institutions, inter-governmental organizations and think tanks, in particular those from developing countries, will be included and discussed in the paper". Under section 4, "The Role of FDI in GVCs", in paragraph 4.1, he explained that the 
revised outline omitted the phrase "from UNCTAD" and that it should be included.  
10. In addition, he said his delegation wished to see details on the outsourcing and offshoring by 
Multinational enterprises (MNEs). For example, he  said the sentence which had been deleted was 
important. He said that MNEs were drivers of GVCs in terms of production, organization and 
innovation. They were the ones which decided to outsource production to independent suppliers or to produce in-house. He added that by analysing as much data as possible, it was important to 
identify how many tasks had either been outsourced or offshored and determine the level of 
value-added for SVEs, as well as the technological component of the outsourcing/offshoring. 
11. In regard to section 5, "Challenges and Opportunities for SMEs", he said that in 
paragraph 5.2 it would be useful to include case studies of both the successful and the attempted, 
but unsuccessful, experiences of SMEs with GVCs. In paragraph 5.3, he said the paragraph had 
been deleted. His delegation considered it important. He said the paragraph in the previous outline stated: "The section will also compare small economies with other developing countries and 
emphasize their shared or divergent experiences with gaining access to specific stages of 
production that are offshored. It should also look at those economic sectors where employment 
has been created, technology transfer achieved and domestic linkages fostered. Evidence on the 
size and duration of either positive or negative spill-over effects from MNEs in the context of GVCs 
will be collected and assessed. Small economies w ill be encouraged to supplement this research 
with national case stories". 
12. He said that under section 6, "The Role of Logistics and Trade Facilitation", his delegation 
considered two sentences as important. The first was in paragraph 6.1: "Many small economies 
are islands or far from their major markets, and th at this represented a major challenge, especially 
as concerns costs linked to transportation"; the second sentence concerned the "need for capacity 
building, technological development and adequate infrastructure and factors affecting 
transportation costs such as shipment and ICT infrastructure, logistics services and customs procedures". Furthermore, he said that under sect ion 7, the heading of the section had changed to 
"Trade Policy Experiences" from the earlier version, "Implications for Trade Policy (Holistic 
Approach to GVCs)". He said his delegation deemed the initial heading to be more appropriate. He added that in the initial outline, there were three paragraphs which, in the revised draft, had been reduced to only two sentences. His delegation felt that the wording proposed in this section in the 
initial outline was more appropriate as it took a more holistic approach to GVCs with regard to 
implications for trade policy. He then read out in full paragraph 7.1 of the previous outline: "Besides trade policy, policies related to education, innovation and industrial development (in 
particular technology transfer and linkage creation) are considered critically important. This section 
will discuss trade policy issues including Aid for Trade and necessary regulatory changes that facilitate both entry and upgrading in the context of GVCs. For instance, some recent regional 
trade agreements included so-called 'deep' provisions in areas such as competition policy, 
investment, behind-the-border regulations and non- tariff measures which could add to the level of 
compliance required by small economies. This section will examine the impact of such provisions on developing countries, and especially on small economies. Furthermore, the said there was a 
blurring of linkages between goods and services in  GVCs which may require a holistic approach to 
trade policy and data collection and an examination of the implications of this for trade policy. This helps ensure that such linkages support the cr eation of domestic value-added and encourage 
access to the wider economy. This can facilitate the building of productive capacities in domestic 
firms".  
13. The representative of India urged the Chair to ensure that his delegation's concerns were 
reported word for word in the minutes of the meet ing, and, as requested by the coordinator of the WT/COMTD/SE/M/28 
 
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  SVEs, he said that if the Committee could ensure that all the issues raised by Members would 
become part of the final report, then he could agree to accept the outline. 
14. The representative of the United States said th at after listening to th e previous intervention, 
he thought it was useful to remember that this was a paper which was called for by the small 
economies. He said that it appeared that India had its own paper in mind and he encouraged the 
Indian delegation to submit a proposal to that effect. He said his delegation took note that the small economies were in a position to agree to WT/COMTD/SE/W/30/Rev.1 and that the US would 
be happy to join the consensus. He thanked all those involved in arriving at the new outline and 
the hard work which Saint Lucia and Guatemala had alluded to and wished to express his delegation's appreciation for that work and constructive spirit. He added that a number of comments made by India concerned sentences which lacked consensus amongst Members. He said 
he knew very well that some of the suggestions which the US had made were things on which 
Members would not be able to reach consensus. This was part of the give and take nature of what Members do in trying to come up with a document that all Members could accept. He said a 
number of the comments made by India included conclusory or very argumentative statements 
that he felt would not be appropriate in terms of an outline for research. He said his delegation had faith in the Secretariat to conduct objective and neutral and thorough research and that the 
revised outline provided a good basis for that work to begin. He added that his delegation would 
have concerns with issues which India had raised at the beginning, such as the phrase "why are some locked at a certain end of GVCs". In his view, this statement contained a judgement, 
preceded any analysis and was not appropriate. He added that a focus on the distribution of gains 
would change the focus of the report from oppo rtunities and challenges to more of a screed 
against GVCs as a structure. He added that this had never been his sense of what the purpose of 
the paper was about or the discussions which the Dedicated Session had held in the run up to the 
Bali Conference. He believed the document was now very consistent with what he had been 
hearing from the small economies in the run up to Bali and was a paper that, once the research was completed, was going to be something interesting which would lead to a very thoughtful and 
useful discussion among Members. 
15. The representative of Japan said he wanted to express his appreciation to the proponents of 
small economies as well as to the WTO Secretariat for preparing the proposed outline on the 
challenges and opportunities experienced by small economies when linking into GVCs. He said his 
delegation welcomed this research as a tangible output from the Bali Ministerial Decision on the 
Work Programme on Small Economies and was ready to join the consensus in the hopes that the research would assist the small economies to identify the opportunities and challenges they face 
when trying to integrate into GVCs. He also hoped that this research would become a good 
platform to share the best practices and lessons learned from other Members who faced similar challenges. He also hoped that the report would not lose its main focus since the outline covered a 
set of diverse topics. He said he looked forward to the report which would address the specific 
challenges of small economies participating in the multilateral trading system and that Japan stood ready for a fruitful discussion in the future.    
16. The representative of the European Union wished to thank the SVEs for their openness to 
the comments which had been submitted, as well as to the Secretariat for balancing the comments 
in a new revision. She added that the EU was amongst those delegations which had submitted 
comments on the first draft. She said that her delegation's concern was that the first draft tended 
to contain various assumptions and drew foregone conclusions. These concerns had now been 
addressed and she thought the outline was now a much more solid basis for carrying out the 
research. Her delegation was happy with the draft and ready to move into the work phase quickly, 
as Guatemala had suggested. She said that as wi th any research, the EU saw three phases of 
work: the first was the outline of the research phase when questions were formulated; the second concerned the action phase of the research wher e results were presented; and the third was a 
time for discussion and an exchange. That would also be the time for Members to voice their 
opinions on the questions which relate to the integration into value chains. She said all Members 
had opinions about this topic and that it would be interesting to compare the different views. 
17. The representative of Ecuador said that almost a year had gone by since the Bali Decision on 
the Work Programme. He wished to reiterate the position put forward by Saint Lucia concerning 
the needs faced by SVEs and emphasized the need to consider the situation not only within the framework of the Dedicated Session, but also as something which was cross-cutting for the 
development of the WTO's work, especially when Members were starting to develop the post-Bali WT/COMTD/SE/M/28 
 
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  Work Programme. He said that it was only in this way that Members would be able to efficiently 
meet the developmental objectives, a part and pa rcel of the mandate of this Organization.   
18. The representative of Mexico said he wished to thank the Secretariat for drafting this 
document and the Members which had offered comments. His delegation considered that the 
outline constituted a good working basis for discussions and for Members to meet the Bali 
mandate. He said he understood the concerns that had been raised, but said that if Members were trying to arrive at perfection then, unfortunately , the Members would not be able to arrive at a 
consensus. He reminded Members that the countri es which were to benefit from the study were 
the same ones which were calling for it to go ahead. He fully supported the requests by the SVEs that the study be completed very soon.  
19. The representative of Australia said he wished to thank those involved with the preparation 
of the outline and that he was grateful that Australia's comments had been reflected. He said he 
had full faith in the Secretariat to deliver research that accurately answered the questions posed and looked forward to seeing the final report.  
20. The representative of Dominica also wished to thank the Secretariat for work on the two 
drafts of the outline and those Members who had submitted comments on the first draft. He said 
the comments had been taken into account to a large extent. He said his delegation and the 
Organization of Eastern Caribbean States associated themselves with the statement made by 
Guatemala on behalf of the SVEs. He wished to highlight one thing, however, which he thought was important. He wished to recall that paragraph 35 of the Doha mandate, which had been re-affirmed in paragraph 41 of the Hong Kong Ministerial Declaration and in subsequent decisions 
by Ministers, stated that the objective of the work programme was to frame responses to the 
trade-related issues identified for the further integration of SVEs into the multilateral trading system. He wished to emphasize that it was the SVEs which were the targets and the beneficiaries 
of the Work Programme on Small Economies. He explained that he was making this point because 
in the first draft of the outline there had been  references to SVEs. However, some of the 
comments received from Members since then, included the recommendation that the word 
"vulnerable" be removed and that references should only be made to small economies. He said 
that given the comments heard so far, it was important to remember the mandate of the Work Programme on Small Economies. He said the wording of the Bali Decision was still within the context of the original mandate on the Work Programme on Small Economies and this was to 
address the issues and interests of SVEs. In his view, the term "small, vulnerable economy" was 
not something that was outside the context of the mandate given by Ministers. He said that although his delegation would have liked to see the word "vulnerable" in the revised outline, he 
would like to record that the focus of the study, while looking at a broader context and taking into 
account studies on all issues of interest to developing countries, was to examine opportunities and challenges and that the objective of the work programme was to address the issues of SVEs.  
21. He said that one suggestion that his delegation  had was to place in the title of the document 
"Work Programme on Small economies" a footnote that stated the objective of this work programme and to make a clear reference to paragraph 35 of the Doha Declaration.  
22. The representative of Guatemala said that in  regard to the suggestion put forward, her 
delegation agreed with the conclusion that it was very important for Members to underscore the 
fact that the specific study for small and vulnerable economies was especially for these countries and that the study should focus on the facts and realities. Furthermore, the conclusions would be 
specific to SVEs. She wished to thank all the Members which had put forth comments. She said the 
SVEs had worked together in an arduous fashion as a group in order to formulate an outline that would be all encompassing and sufficiently general so that the Secretariat could then have a 
possibility to focus on some of the themes whic h the SVEs considered to be very important. She 
explained that it was the hope of the SVEs th at the document which was being discussed would 
receive the approval of the majority. This was a document which focused on the goals that interested SVEs and she thought that the document  should be approved at the current meeting. 
She added that the outline addressed specific comments and that it would be possible to go into 
more depth, once the Secretariat had carried  out the study and after discussions amongst 
Members. She called, therefore, for the outline to be approved at the current meeting. 
23. The representative of El Salvador wished to thank the Secretariat for the work it had carried 
out and also the various Members that had made comments. She considered that these comments WT/COMTD/SE/M/28 
 
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  had been taken into account in the new version and could be approved so that the Secretariat 
could embark on its work. Furthermore, she said that through the approval of the document, Members would be complying with the Ministerial Decision on the Work Programme for SVEs adopted at the MC9. She endorsed the statement made by Guatemala on behalf of the group of 
SVEs and also the comments made by Dominica.  
24. The representative of the United States wished to respond to the statement made by 
Dominica. He recalled that all this work on small economies was within the Work Programme on 
Small Economies. He said that even though he was not present when the wording for the work 
programme was being negotiated, the wording was arrived at by consensus. He said he was not in a position to support changes to the outline which would prejudice the position of some Members with respect to the previously reached consensus. He said he was aware that the language has 
always referred to Work Programme on Small Economies and that is why he used that phrase in 
his intervention. 
25. The representative of Dominica wished to restate that his intervention was not about the 
title of the Work Programme on Small Economies but about the objectives of the work programme 
which was also agreed by consensus and that it was clear in the text of paragraph 35 of the Doha Ministerial Declaration. 
26. The Chairman thanked Members for their inte rventions and indicated that the Committee 
had taken note of them. He said comments would be reflected in full in the minutes of the meeting 
and would be included in the research. He invited the Committee to agree to the revised outline.  
27. The Committee agreed to the revised outline.  
C. OTHER BUSINESS 
28. No matter was raised under "Other Business". 
29. The meeting was adjourned. 
 
 
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