RESTRICTED  
  
WT/BFA/W/466  
 
2 November  2018 
(18-6862) Page: 1/1 
Committee on Budget, Finance and Administration    
 
 
LDC GRADUATION – EXTRA-BUDGETARY SUPPORT FR OM THE E NHANCED  
INTEGRATE D FRAMEWORK (EIF)  
1.1.  Graduation from LDC status is becoming increasingly important since 121 LDCs (out of a total 
of 47) are in the graduation pipeline. The United Nations has invited the international organizations, 
including WTO, to consider extending appropriate help to the graduating LDCs to ensure smooth 
transition (UN document A/RES/67/221) . At the Eleventh WTO Ministerial Conference , the LDC Trade 
Ministers called upon development and trading partners to take positive actions for LDCs on 
graduation (WT/MIN(17)/40).  
1.2.  Graduating LDCs will face certain challenges, since they will no longer be eligible for the benefits 
associated with LDC status (e.g. preferences, S&D provisions for LDCs). In recent months, the LDC 
Group has made repeated requests for the WTO to support the graduating LDCs. The latest request 
was made at the meeting of the Sub -Committee on LDCs that took place on 30 October 2018 at 
which the LDC Coordinator (Central African Republic) sought technical assistance from the WTO to 
better understand the implications of graduation so that the LDCs could be better prepared to face 
the associated challenges.   
1.3.  The WTO, therefore, proposes to undertake a project, with the assistance of the EIF, to address 
the trade -related implications of graduation from LDC status. The objective of this work would be to 
comprehensively examine the trade -related implications of LDC graduation, especially in the context 
of relevant WTO Agreements , including preference erosion . This would help Governments of 
graduating LDCs to be better prepared for the challenges associated with graduation from LDC 
status.   
1.4.  The EIF, which will be funding the project, is the only global mechanism dedicated to support 
the LDCs. The unique structure of the EIF Programme, especially access to in -country EIF 
stakeholders, would reinforce the synergy that the WTO has with the EIF i n improving the trade 
capacity of LDCs.   
1.5.  The estimated project cost would be around Swiss Francs/US$300,0002. The funds will be used 
for carrying out in -depth analytical research, hiring of consultants to carry out econometric and 
modelling based studies,  organizing regional and national workshops, and for other administrative 
and logistical costs related to the project. All relevant UN agencies will be consulted and co -opted to 
contribute to this work, so that their respective expertise can be utilised.  
1.6.  The WTO normally charges a 13% overhead fee on expenditures incurred by trust funds. 
However, given the special relationship between the EIF and the WTO, and because the WTO already 
receives an administrative charge on the EIF funds  as well as rent for hous ing the EIF Executive 
Secretariat , the Deputy Director -General in charge of Finance, in accordance with Financial rule 1.73, 
has authorized the overhead fee of 7% for the purposes of this project.  
1.7.  This Note is submitted for information of the Committee on  Budget, Finance and Administration, 
which is required to take note of it.  
__________  
                                                
1 Angola, Bangladesh, Bhutan, Kiribati, Lao PDR, Myanmar, Nepal, Sao Tome and Principe, Solomon 
Islands, Timor -Leste, Tuvalu and Vanuatu.  
2 Subject to approval by the EIF Board.  
3 Financial Rule 1.7 "No approach shall be made either outside the WTO or withi n the WTO with a view 
to obtaining funds or resources, or exemptions from existing financial regulations, rules or provisions of the 
WTO, except with the prior written authorization of the Director -General, the Deputy Director -General in 
charge of Finance or the Director of Administration and General Services Division".