WT/GC/W/807/Rev.1  
 
23 September 2022  
(22-7188) Page: 1/6 
General Council  Original: English  
 
TRADE RELATED CHALLENGES OF THE LEAST DEVELOPED COUNTRIES AND WAY 
FORWARD: PROPOSAL FOR A WTO SMOOTH TRANSITION PACKAGE IN FAVOUR OF 
COUNTRIES GRADUATED FROM THE LDC CATEGORY  
COMMUNICATION FROM DJIBOUTI ON BEHALF OF THE LDC GROUP  
Revision  
The following com munication , dated 23 September  2022, is being circulated at the request of the 
delegation of Djibouti on behalf of the LDC Group.  
 
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BACKGROUND  
1.  At the 2021 triennial review of the UN Committee on Development Policy (CDP), 16 LDCs officiall y 
met the two graduation criteria set by the United Nations to leave the least developed country (LDC) 
category, and another 10 met one graduation criterion. Out of these 26 countries, 19 are WTO 
Members and five are in the process of accession.  
2.  While leaving the LDC category represents a major achievement, countries still face significant 
trade and development challenges after graduation and risk falling back into the category. Leaving 
the LDC category also implies losing access to a wide range o f International Support Measures (ISM) 
including trade -related ones, which have contributed to LDCs socio -economic development.  As 
documented by the work of UNCTAD, this is particularly challenging because countries meeting the 
graduation criteria often do  so without having significantly developed their productive capacities or 
made sufficient progress in the structural transformation of their economies.1 The abrupt removal 
of ISM can therefore result in large negative impacts for countries after graduatio n from the LDC 
category. This is particularly true in the current context where LDCs have been hit hard by trade 
downturn triggered by the COVID -19 pandemic. The persistent food and energy crisis resulting from 
the global geopolitical situation have also r eversed much of the development progress achieved so 
far by LDCs, further strengthening the rationale for effective support post -graduation.   
3.  In recognition of this need, the United Nations has adopted the principle of "smooth transition " 
whereby specific support measures for LDCs should be phased out progressively over a period of 
time after graduation to avoid disrupting development progress. Consistent with Paragraph 16 of 
General Assembly resolution A/RES/67/221 adopted on 21 December 2012 WTO Members s hould 
extend to graduated countries existing special and differential treatment measures available to LDCs. 
In addition, the UNCTAD Fifteen Outcome Document, the Bridgetown Covenant (TD/541/Add.2, 
paragraph 48), calls for mitigating and support measures to  ensure a smooth transition for LDCs 
after graduation. More recently, the WTO MC12 outcome document (WT/MIN(22)/24; WT/L/1135 
paragraph 5) acknowledges the particular challenges that graduation presents for LDCs including 
the loss of trade -related internat ional support measures, and recognizes the role that certain 
measures in the WTO can play in facilitating a smooth and sustainable transition after graduation.  
 
1 See "Strategy for graduation with momentum: Bridging pre -graduation and post -graduation 
development processes in the least developed countries ", Policy Brief No . 99, UNCTAD, April 2022, available at  
https://unctad.org/system/files/official -document/presspb2022d7_en.pdf . WT/GC/W/807/Rev.1  
 
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  A WTO SMOOTH TRANSITION PACKAGE IN SUPPORT OF COUNTRIES LEAVING THE LDC 
CATEGORY  
4.  Against this b ackground, the present revised submission proposes the contours of a 
comprehensive and effective smooth transition package in the WTO to support Members when they 
leave the LDC category. In doing so it builds on previous General Council submissions circula ted in 
November 2020 (WT/GC/W/807) and in October 2021 (WT/GC/W/829) as well as the LDC ministerial 
declarations on MC12 of October 2021 (WT/MIN(21)/2).  
5.  A first element of such a package should consist of extending and gradually phasing out unilateral 
trade preferences granted to LDCs over a period of six years corresponding to two triennial reviews 
by the UN CDP, or a period determined by the preference providing Member, after the entry into 
force of a decision of the UN General Assembly to exclude a coun try from the LDC category. Annex  1 
to this submission provides a draft General Council decision to that effect.  
6.  As part of the WTO smooth transition package, the LDC group further proposes the following 
principles to extend treatment to a Member after gra duation from the LDC category:  
i. The special and differential treatment (SDT) measures and exemption listed in Annex  2 
to this submission in accordance with the modalities included therein.  
ii. SDT measures and exemption incorporated in future WTO Agreement, Un derstanding, 
Ministerial, General Council or other relevant Decisions in accordance with modalities 
to be defined in such instruments.  
iii. All LDC -specific technical assistance and capacity building programs and facilities 
provided under the WTO system.  
iv. If a d ecision of the UN General Assembly to exclude a WTO Member from the LDC 
category enters into force during a transition period for LDCs provided under any 
existing or future WTO Agreement, Understanding, Ministerial, General Council or 
other relevant Decisi on, the Member after graduation is entitled to utilize the remaining 
period of delay provided for LDCs.  
7.  The package of support measures referred to in paragraphs 5 and 6 is to apply to all Members 
after graduation from the LDC category.  
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  WT/GC/W/807/Rev.1  
 
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  ANNEX 1  
PROPOSAL FOR A GENERAL COUNCIL DECISION ON DFQF EXTENSION IN FAVOUR OF COUNTRIES 
GRADUATED FROM THE LDC CATEGORY  
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Draft General Council Decision  
 
The General Council,  
Having regard to paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade 
Organization (WTO);  
Recalling the Programme of Action for Least Developed Countries (LDCs) for the Decade 2011 –2020, 
adopted at the Fourth United Nations Conference on the Least Developed Countries, held in Istanbul, 
Turkey in 2011, in which Member States committed to assisting LDCs with an overarching goal of 
enabling half of the LDCs to meet the criteria for graduation by 2020;  
Recalling further UN General Assembly Resolutions 59/209 of 2004 and 67/221 of 2 012 on smooth 
transition inviting LDC trading partners to establish procedures for extending or phasing out 
preferential market access granted to LDCs;  
Taking note  of document WT/GC/W/807 and WT/GC/W/829 circulated by the LDC Group at the 
General Council o n the challenges faced by graduating LDCs;  
Recognizing  the need to establish an effective procedure supporting the smooth transition of LDCs 
towards their new status after graduation, through extending LDC -specific trade -related support 
measures over a re asonable period of time;  
Decides  as follows:  
Unilateral trade preferences  
1. We encourage Members granting unilateral trade preferences to least developed countries, 
through their programmes that determine eligibility based on the listing by the UN of a coun try 
as a Least Developed Country, to have procedures in place to extend and gradually phase out 
their preferential market access scheme over a period of six years, or a period determined by 
the preference providing Member, after the entry into force of a d ecision of the UN General 
Assembly to exclude a country from the LDC category.  
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  WT/GC/W/807/Rev.1  
 
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  ANNEX 2  
LIST OF SPECIAL AND DIFFERENTIAL TREATMENT  PROVISIONS IN WTO AGREEMENTS AND 
DECISIONS TO BE INCLUDED IN A WTO SMOOTH TRANSITION PACKAGE  
A. LDC-SPECIFIC PROVISIONS IN WTO AGREEMENTS  
 
S&DT Provision  Description  Treatment under the WTO smooth 
transition package  
Agreement on Subsidies and Countervailing Measures (SCM)  
Article 27.2(a)  LDCs exemption from prohibition 
of export subsidies.  As requested in the LDC Group 's 
submission WT/GC/W/742 – 
G/C/W/752  
Agreement on Trade -related Aspects of Intellectual Property Rights (TRIPS)  
Article 66.1  
 
Extension of the 
Transition Period for 
LDC Members 
(IP/C/88)  
 
 Implementation of the TRIP S other 
than Articles 3, 4 and 5, extended 
until 1 July 2034, or until the date 
when they cease to be an LDC, 
whichever date is earlier.  Transition period shall be extended for 
a period of [X years] after graduation 
from the LDC category or until the end 
of the final extension period granted to 
LDCs, whichever date is earlier.  
Article 66.2  Developed countries to provide 
Transfer of Technologies (ToT) 
incentives in favor of LDCs.  Provision of ToT  incentives shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Trade Facilitation Agreement  
Article 17  Early warning Mechanism – 
Extension of implementation dates 
for provisions in categories B and 
C Flexibilities provide d for LDCs shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Article 19.2  Shifting between  
categories B and C  Flexibilities provided for LDCs shall be 
extended for a period of [X years] after 
graduation from the LDC category.  
Article 20.2 – 3 Grace Period for Application of the 
Understanding on Rules and 
Procedures Governing the 
Settlement of Disputes  Flexibilities provided for LDCs shall be 
extended for a period of [X years] aft er 
graduation from the LDC category.  
Dispute Settlement Understanding  
Article 24  Special Procedures Involving 
Least -Developed Country Members  Special procedure provided for LDCs 
shall continue to apply for a period of  
[X years]  after graduation from the 
LDC category.  
 
  WT/GC/W/807/Rev.1  
 
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  B. LDC-SPECIFIC DECISIONS TAKEN IN FAVOUR OF LDCS  
 
LDC-Specific Decision  Description  Treatment under the WTO 
smooth transition package  
LDC waivers including transition periods and trade preferences  
Enabling Clause L/4903 of 
28 November 1979, para. 2(d), 
6 and 8  Allows WTO Members to grant LDC 
specific treatment  The right to grant specific 
treatment under the enabling 
clause shall be extend ed to 
countries after graduation from 
the LDC category.  
Preferential Tariff Treatment for 
Least -Developed Countries – 
Decision on Waiver (WT/L/304, 
WT/L/759, and G/C/W/764)  Allows developing countries to 
grant trade preferences to LDCs 
until 30 June 2029  
 Provisions of the waiver shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category or until 
the end of the waiver validity, 
whichever date is earlier.  
Decision in Favour of LDC. 
Annex F Hong Kong Ministerial 
Decision, Duty -Free and Quota -
Free Market Access for LDCs, 
Bali and Nairobi Ministerial 
Decisions on Rules of Origin for 
LDCs (WT/L/919, 
WT/MIN(15)/47 and 
WT/L/917)  Provision of DFQF market  access 
for LDCs and more flexible rules of 
origin  
 DFQF  market access and more 
flexible rules of origin shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category.  
LDC modalities & services 
waiver (TN/S/13, WT/L/847, 
WT/MIN(15)/48 - WT/L/982, 
WT/MIN(13)/43 - WT/L/918)  The decisi on extends the LDC 
Services Waiver until 2030  Provisions of the waiver shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category or until 
the end of the waiver validity, 
whichever date is earlier.  
Cotton Ministerial Decision 
WT/MIN(15)/46 - WT/L/981  DFQF for cotton and related 
products produced and exported by 
LDCs DFQF for cotton and related 
products shall be extended for 
a period of [X years] after 
graduation from the LDC 
category.  
LDC obligations under 
Article  70.8 and Article 70.9 of 
the TRIPS Agreement with 
respect to Pharmaceutical 
Products (WT/L/971) of 
2 December 2015  Exempts LDC  members from the 
application of mailbox 
requirements and exclusive 
marketing rights until 1 January 
2033 or until such a date on which 
they cease to be a LDC member, 
whichever is earlier  Exemption shall be extended 
for a period of [X years] after 
graduati on from the LDC 
category or until the end of the 
final extension period granted 
to LDCs, whichever date is 
earlier.  
Extension of the LDC Transition 
Period under Article 66.1 of the 
TRIPS Agreement  
for certain obligations with 
respect to Pharmaceutical 
Products (IP/C/73)   Exempts LDC members from the 
implementation or application of 
Sections 5 and 7 of Part II of the 
TRIPS Agreement or enforcements 
of rights provided under these 
sections, with respect to 
Pharmaceutical Products, extended 
until 1 January 20 33, or until the 
date when they cease to be an 
LDC, whichever date is earlier  Transition period shall be 
extended for a period of [X 
years] after graduation from 
the LDC category or until the 
end of the final extension 
period granted to LDCs, 
whichever dat e is earlier.  WT/GC/W/807/Rev.1  
 
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  LDC-Specific Decision  Description  Treatment under the WTO 
smooth transition package  
Export Competition Ministerial 
Decision WT/MIN/(15)/45 - 
WT/L/980  Flexibilities under Article 9.4 of the 
Agreement on Agriculture dealing 
with export subsidies extended 
until 2030  Flexibilities shall be extended 
for a period of [X years] after 
graduation from the LDC 
category or until the final 
extension period granted t o 
LDCs, whichever date is earlier.  
Notification obligations  
Domestic support notification 
(G/AG/2)  LDCs to notify every two years  Notification schedule shall 
continue to apply for a period 
of [X years] after graduation 
from the LDC category.  
 
 
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