RESTRICTED  
  
WT/COMTD/LDC/M/73  
 
13 March 2015  
(15-1461)  Page: 1/16  
Sub-Committee on Least Developed Countries 
Seventy-Third Session    
 
 NOTE ON THE MEETING OF 6 NOVEMBER 2014 
Chairperson: Ambassador Roderick Van Schreven (Netherlands) 
 
A. ADOPTION OF TH E AGENDA .................................................................................... 1  
B. MARKET ACCESS FOR LEAST DEVELOPED CO UNTRIES ............................................. 1  
-  Market Access for Products and Services of Export Interest to Least Developed 
Countries (WT/COMT D/LDC/W/59) ...................................................................................... 1  
-  Preferential Rules of Origin for Least Developed Countries (WT/L/917) – Report by 
the Secretariat on the Annual Review of Develo pments in Preferential Rules of Origin at 
the Committee on Ru les of Origin ....................................................................................... 11 
C. TRADE-RELATED TECHNICAL ASSISTANCE AND CAPACITY-BUILDING 
INITIATIVES FOR LEAST DE VELOPED COUN TRIES ......................................................... 13  
-  Standards and Trade Development Facility (STDF) – Briefing by the STDF 
Secretariat on Recent Activi ties Relating  to LDCs .................................................................. 13 
D. OTHER BUSINESS .................................................................................................. 16  
 
 A. ADOPTION OF THE AGENDA 
1. The Sub-Committee on Least Developed Count ries (Sub-Committee) adopted the draft 
agenda of the meeting contained in document WTO/AIR/4382. 
 
2. The Chairman thanked the Secretariat for its report on the meeting of the Sub-Committee 
held on 30 June 2014, which he considered thorough providing a full account of the discussions.  
 
B. MARKET ACCESS FOR LEAST DEVELOPED COUNTRIES 
- Market Access for Products and Services of Export Interest to Least Developed 
Countries (WT/COMTD/LDC/W/59) 
3. The Chairman recalled that according to the Work Programme for the LDCs the Secretariat 
had been preparing a document every year to facilitate the annual review of market access for 
products originating from LDCs. The 2014 review contained in document WT/COMTD/LDC/W/59, had been circulated to Members two weeks prior to the meeting. It provided an account of trends 
in LDC trade and market access conditions faced by LDC exports. The 2014 review further 
analysed in some detail LDC trade in services. In addition, the Secretariat had included some statistics on non-tariff measures (NTMs) faced by LDC exports. The Chairman gave the floor to the 
Secretariat to introduce the document. 
 4. The representative of the Secretariat, Chief St atistician made a detailed presentation on the 
Note. He said that the main focus was on LDC trade in commercial services, although the most 
recent data available to the Secretariat on merchandise exports had also been integrated into the 
Note.   WT/COMTD/LDC/M/73 
 
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  5. He explained that the main trend observed  in 2013 was that the exports of goods and 
commercial services rebounded by 5% after a decrease in 2012. An overall high value of US$250 billion in exports was reached in 2013. Over the 2000-2013 period, LDC exports had grown by an annual average of nearly 15%, marked ly higher than the 11% average recorded for 
other developing countries. The further deterioration of the balance-of-payment situation caused 
by the 7% increase in 2013 of LDC imports of goods and commercial services was also analysed in the Note.  
 
6. One of the main drivers of export perfor mance for LDCs was the price of primary 
commodities, although average commodity prices  had been declining in 2012 and 2013. While 
petroleum prices had remained at historically high levels in 2012, they had started to fall in 2013. 
On the other hand, the average price of food and beverage, another important part of LDC 
exports, remained stable during 2013. The price of non-food agricultural materials, such as cotton 
increased by 2%. He then explained the quarterly evolution of LDC merchandise exports, stating 
that within the most recent 18 months, total exports of LDCs had positive growth rates for almost 
all quarters. Exports of manufactures increased the most in this period while exports of agricultural products also showed distinct increases in the la st three quarters of 2013. The exports of fuels and 
mining products remained stable, despite stagnating or declining prices, which demonstrated the 
fact that the LDCs were able to increase the volume of their exports.  7. He continued by saying that the structural constraints facing the LDCs had remained as 
before. On average, more than 70% of total me rchandise exports depended only on three main 
products, illustrating the vulnerability of these economies to fluctuations in international trade. The composition of these products varied from LDC-to-LDC. Another feature observed in the structure 
of LDCs was the trend towards diversification in LDC export market destinations. In 2013, LDC 
exports to developing countries increased by 6%, while those to developed countries declined by 1%, reflecting in particular the economic slowdown observed in Europe and reduced imports of 
fuels by the United States (US). Developing countries currently absorbed more than half of LDC 
exports, up from 40% in 2000. The share of developed economies as destination markets for LDC products represented 39% in 2013.   
8. Referring to the area of trade in commercial services, a representative from the Secretariat's 
International Trade Statistics Section noted that LDC participation remained regrettably low in 
2013. LDC exports of commercial services reached US$31.7 billion, accounting for a meagre 0.7% 
of global exports in 2013. On the other hand, LDCs' share in world imports of commercial services 
was 1.7% in 2013, with import value reaching US$73.5 billion. The low participation of LDCs in services exports was due, among other things, to the smaller domestic supply base in the LDCs.  
 
9. She said that in most LDCs, the agricultural se ctor represented more than a quarter of their 
total value-added, while in developed countries this sector accounted for less than 2% value addition. According to Secretariat estimates, the sh are of commercial services in total GDP in LDCs 
averaged 43% in 2011 - significantly less than in higher-income economies (70%) and 
middle-income economies (50%). In terms of the breakdown of activities in the total value-added of services in LDCs, wholesale and retail trade, as well as repairs, were the largest with a 14% 
share followed by transport, storage and communication with a share of 9%. Financial 
intermediation activities represented 3%, which was nearly half of the contribution of this sector in leading financial services exporters. What was wo rth noting was that the contribution of real 
estate, renting and business activities in 2011 was only 8% in LDCs compared to over 27% in the 
European Union (EU).   10. Despite low participation in global exports, it was encouraging to note that LDC commercial 
exports had been growing much more rapidly than  other developing economies and, more rapidly 
than the rest of the world. The annual averag e between 2000 and 2013 fo r LDC exports was 14%. 
In the most recent years, growth was fuelled by LDCs in Asia. Export growth was not as rapid in 
island LDCs, where the services sector had been less diversified. In 2013, computer and 
information services was the most dynamic services sector in LDCs, although exports from this sector were still at a small scale and were concentrated in a few economies. This sector increased 
by 23% in 2013, followed by "other business servic es", which was a basket category that grouped 
all business, professional, and technical services as well as trade-related services. In 2013, transportation services exports continued to gr ow, principally driven by African LDCs whose 
transport receipts increased by 20%. Travel exports came in at a distance with an increase of 10% 
in 2013. Negative export growth was only recorded for personal, cultural and recreational services, WT/COMTD/LDC/M/73 
 
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  which also included audio-visual services, and royalties and licence fees. On structure, the LDC 
commercial exports varied substantially from LDC-to-LDC. For example, travel was the most important LDC export of commercial services, though its importance varied across regions. While travel exports were predominant in island LDCs  (75.1%) and accounted for roughly half of the 
African LDCs' exports (46.8%), their relative contribution was much smaller in Asian LDCs 
(39.4%). Transport exports were particularly important for African LDCs - the share being 29%, which was much bigger than that of the LDCs in As ia (15%), and even lower in island LDCs (10%). 
This contribution was due to Ethiopia and Tanzania which were the leading transportation 
exporters in the LDC Group. The third largest sect or for LDCs was communications – as a result of 
the emergence of Bangladesh and Nepal as exporters of Information and Communication 
Technologies (ICT) services. The share of communication services was lower in African LDCs and 
even lower in island LDCs. The category of "other business services" accounted for only 14% on 
average in LDCs, whereas for the rest of the world it stood at around 27%. The share was particularly low in island LDCs (6%) and in African LDCs (10%), while it was much higher in Asian 
LDCs (22%). In general, the export of higher-skilled services such as finance, insurance, royalty 
and licence fees remained very low; all below 4% as an aggregate contribution to LDCs' total commercial services exports.  
 
11. Travel exports were the most important export sector for LDCs, as a group. WTO estimates, 
based on UNWTO data, found that more than one-third of international tourists to LDCs originated from Africa, while 31% arrived from East Asia and the Pacific. Cambodia's national tourism 
statistics showed an increase in internationa l tourist arrivals between 2000 and 2013, reaching 
four million arrivals in 2013. This had gone hand–in-hand with the rise in travel receipts for the country which had been the largest travel exporter in the LDC Group. WTO estimates also 
indicated that, in 2012, 44% of LDC transport exports were related to international carriage of 
passengers, followed by international freight at 29% while other supporting and auxiliary transportation services accounted for 27%. The modal breakdown of transport showed that air 
transport was the dominant one in 2012 – due to the increasing global participation of Ethiopian 
Airlines. Sea transport accounted for only 9% wh ich was explained by the fact that many LDCs 
were landlocked and that they were not yet well in tegrated into global sea transport services, as 
shown by the UNCTAD's Liner Shipping Connectivit y Index, with the exception of Djibouti and 
Yemen. Telecommunication and mobile telephony in LDCs had grown rapidly over the recent 
years. In 2013, WTO statistics, based on ITU, show ed that 60% of the LDC population had at least 
one subscription to a mobile phone, compared to only 6% in 2005. There were wide differences 
amongst LDCs with respect to access to mobile telephony: from peaks of 134% in Cambodia or 
129% in Mali, to Eritrea where only 6% of the people had a mobile phone. Despite these disparities among individual countries, the fast rise of mobile telephony resulted in a dramatic 
expansion of communication services exports since 2005. LDC communication exports reached 
almost US$2.4 billion in 2013. While mobile telecommunications showed a remarkable increase in 2013, only 9% of LDCs' inhabitants used the Intern et, with the numbers even lower in Africa, at 
7%. There still remained a number of infrastructure constraints, limited international bandwidth 
coupled with high prices, as well as low levels of skills, which were hindering the access of the LDC 
population to internet. Access to internet was a prerequisite for supplying computer services internationally.  
 
12. With regard to foreign direct investment (FDI ), according to the UNCTAD World Investment 
Report, in 2013, global inflows to LDCs rebounded by 14% and reached US$28 billion. FDI inflows 
to LDCs were still relatively small, representing on ly 1.9% of global inflows. Most of the greenfield 
projects targeted the services sectors (utilities su ch as the production of electricity), transport, 
storage, communication, and finance. In terms of origin, investment from developed economies rebounded in 2013 accounting for 64% of total greenfield investments with Japan as the single 
largest investor accounting for 29%, followed by Iceland with 10%. Both of these economies' 
investment was related to electricity production. From developing economies, India, South Africa and Nigeria were the largest contributors to LDC greenfield investments in 2013. India remained 
the largest investor among developing economies, with investment focused on African LDCs in the 
energy sector and communications.   
13. On the issue of market access for LDCs, the Chief Statistician explained that with respect to 
average tariffs applied by developed countries, there was a general decrease in tariffs levied on 
exports from developing countries and LDCs. The main margin of preference that the LDCs had compared to developing countries was in agricu ltural products (around 7%). On textiles and 
clothing, the preference margin was lower, due to the tariff treatment that Asian exporters were WT/COMTD/LDC/M/73 
 
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  receiving in one major preference-granting market. The trends in LDC market access conditions 
indicated that developed countries gave more preference to LDC agricultural products than to clothing products, while developing countries tended  to give more preferences to clothing than to 
agricultural products.  
 
14. The proportion of developed country duty-free im ports from LDCs had been higher than that 
of the developing countries. In 2012, nearly 84%  of LDC exports enjoyed duty-free access in 
developed markets compared to nearly 80% enjoyed by developing countries - though in the case 
of the latter, the duty-free improvements recorded were in general due to elimination of tariffs on 
an MFN basis. However, true preferential duty-f ree access (percentage of exports offered duty-free 
treatment under the GSP-LDC and other preferential schemes as compared to products offered 
duty-free entry under the MFN treatment) had been 54% for LDCs in 2012 while this percentage 
for developing countries was around 20%. This had indicated that more products of LDC export interest had been integrated into developed countries' DFQF schemes.  
 
15. In conclusion, he drew the attention of Members to the new database on NTMs that the 
Secretariat had developed – the Integrated Trade Intelligence Portal (I-TIP). Based on ITIP 
information, it was found that a limited number of NTMs was applied as specific to the LDCs. LDC 
exports were thus conditioned by NTMs that had b een taken on an MFN basis. He noted that NTMs 
had been on the rise since 2008, and some NTMs undertaken on an MFN basis, such as for tobacco, potentially affected the export interests of LDCs.  
 
16. The Chairman sought a few clarifications from the Secretariat, before opening the floor to 
Members. First, with regard to average tariffs le vied by developed countries on LDC products, he 
wished to know whether there was more preferential access for apparel items than for agricultural 
products. Second, with regard to the trend of ma nufacturing exports from LDCs, he enquired the 
reasons behind the steep change in prices of manufactured goods in the short term.  
 
17. The Chief Statistician clarified that the prefer ence margin enjoyed by the LDCs, as a group, 
in developed markets was higher in agriculture (around 7 percentage points) than for apparel 
items (around 1.2 percentage points). On the other hand, statistics from a select group of 
developing countries revealed that the preference margin being enjoyed by LDCs in developing 
country markets was higher in apparel items (more than 8 percentage points) than in agriculture 
(3 percentage points). He then pointed out that there were no good price indices on clothing, 
though prices of such items had been relatively  stable worldwide. The 2008-2009 global economic 
crisis had worked in favour of LDCs predominantly exporting apparel items, such as Bangladesh and Cambodia. The recession in the EU and in the US had driven consumers to change their 
consumption patterns towards a cheaper range of clothing. This was one of the reasons why the 
exports of manufactures from LDCs had been increasi ng despite the crisis. In the case of fuels and 
mineral products, despite the price fall, exports from LDCs remained stable as there had been an increase in the volume.  
 
18. The Chairman opened th e floor for discussion. 
 
19. The representative of Uganda, on behalf of the LDC Group, thanked the Secretariat for its 
comprehensive Note and for the presentation made  at the meeting. The analysis provided every 
year had been very useful in understanding the vari ous factors conditioning LDC trade. In a clinical 
and candid way, the report had yet again highlighted why LDC issues should not be put at the 
periphery of the WTO; on the contrary, they n eeded to be at the heart of the Doha Work 
Programme as advised by Ministers in Doha.   
20. He went on to say that LDCs had continued to remain the weakest and the most vulnerable 
Members of the multilateral trading system. In 2013, the LDC share in world merchandise trade 
was notoriously stuck at 1%, with a staggering deficit of US$60 billion. Prices of primary 
commodities had either stagnated or declined over the past two years. The Note had also 
highlighted LDCs' heavy reliance on a few primary products for export earnings; these accounted for 70% of LDC goods exports. In fact, it was only fuels that had accounted for more than half of 
LDC exports in 2013. There had been a general decline in the share of agricultural and 
m a n u f a c t u r i n g  p r o d u c t s  i n  L D C  e x p o r t s .  I t  w a s  f o r  t h i s  r e a s o n  t h a t  L D C s  h a d  c a l l e d  u p o n  t h e i r  development partners to enhance and strengthen mechanisms on Aid for Trade, so as to strengthen their productive capacity and address supply-side constraints. His delegation had 
observed in a report released by the OECD in 2012 that the trends in Aid-for-Trade resources were WT/COMTD/LDC/M/73 
 
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  not favourable for LDCs. In that year, the LDCs only attracted 24% of the total Aid for Trade, while 
the largest share of around US$31 billion or 58% had been taken by middle-income countries. Out of the top ten recipients of Aid for Trade which co nsumed 50% of total flows, only two were from 
LDCs, while seven were from middle-income countries. In view of this, he called upon Members to 
prioritize the needs and interests of LDCs in their Aid-for-Trade commitments as well as in 
disbursing those commitments.   
21. He went on to say that since LDCs relied on a few export products, it was important that 
they were granted full access to all products of export interest to them. While most of the developed Members currently granted DFQF market access to all LDC products, exceptions remained in some markets. The Bali Decision on DFQF market access had marked a step forward 
in helping LDCs with greater market access. He further noted, with appreciation, the efforts being 
made by developing countries to implement DFQF  schemes for LDCs. Chile had recently adopted a 
generous scheme for LDCs. China, India and Korea were providing a substantial degree of DFQF 
market access to LDC products. He pointed out th at developing countries absorbed 55% of LDC 
merchandise exports in 2013. For instance, China’s imports from LDCs had significantly expanded, from US$4 billion in 2000 to US$59 billion in 2013. He  encouraged all trading partners of LDCs to 
follow the example of these countries. He stressed th at LDCs continued to pursue the fulfilment of 
the Hong Kong Ministerial Mandate, as enunciated in Annex F, with the view to securing DFQF 
market access for all products originating from LDCs in a manner that ensured stability, security and predictability, whilst ensuring that no LDC was left worse off.  
 
22.  He was encouraged to see greater attention in the Note on trade in services in LDCs. He 
recognized the fact that data on services trade was not easily available. In 2013, LDCs had 
accounted for a mere 0.68% of world services exports. The trade balance of commercial services 
of LDCs, as a group, was also widening, with a registered deficit of US$41 billion in 2013. Travel and transport were the two dominant sectors. There was limited diversification, and most of the 
LDCs were net importers of services. He said that the biggest challenge for the LDCs was to 
integrate beneficially into world services trade. It was for this reason that Ministers, with foresight, 
had agreed to work towards the operationalization of the LDC Services Waiver. The Bali Decision on the operationalization of the LDC Services Waiver put forward a process to ultimately help LDCs 
increase their participation in services trade. LDCs regretted that hardly any progress had been 
made ever since the adoption of the LDC Services Waiver at the Eighth WTO Ministerial Conference 
in 2011. He reminded Members that LDCs had submitted their Collective Request in July 2014  
(S/C/W/356). LDCs looked forward to the conven ing of the High-Level Meeting in January 2015, 
where non-LDC Members in a position to do so, we re expected to indicate the sectors and modes 
of supply where they intended to provide prefer ential treatment to LDC services and service 
suppliers. He hoped that such preferences would have commercial value and promote economic 
benefits to the LDCs. Furthermore, he stressed that LDCs welcomed the inclusion of information on NTMs faced by LDC exports in the Secretariat Note. The information was somewhat broad in nature. He requested that more detail be included in future versions of the Note, including on the 
markets where such NTMs were enforced. In co nclusion, he urged Members to comprehend the 
seriousness of the situation in LDCs and afford measures to help LDCs alleviate poverty in their countries. He hoped that Members would build on the decisions taken in favour of the LDCs at the 
Bali Ministerial Conference.  
 23. The representative of Bangladesh supported th e statement made by Uganda, on behalf of 
the LDC Group. He welcomed the Secretariat Note and its additional new elements. His delegation 
expected further elaboration on NTMs in the next report. The data provided in the Note was indicative of the modest progress of LDCs in world trade. He regretted the fact that there had been 
very little qualitative change in the composition of LDC exports. The LDC exports were dominated 
by extractive items such as oil and minerals an d without these items the share of LDCs in world 
trade would be a dismal figure. As a Member of the WTO, his delegation found it useful to see where the LDCs stood and how other Members were advancing, and how the special and 
differential  treatment (S&D) schemes were contributing towards the broad objective of integrating 
LDCs into the global economy. The progress in LDC trade over the past years was far below the expectations from LDC governments. Referring to the point made during the Secretariat's 
presentation on the low supply base in LDCs, especi ally in services trade, he argued that demand 
and opportunity had a critical role in broadening  the supply base. The negative export growth in 
the royalties and licence fees was indicative of the LDCs' inability to benefit from the knowledge economy where the TRIPS Agreement had a seminal role to play. He said that there were 
structural difficulties with the S&D provisions of WTO Agreements. He underlined that the WT/COMTD/LDC/M/73 
 
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  Sub-Committee was the only Committee in the WTO where Members could substantively and 
holistically discuss all issues of importance to LDCs as well as suggest remedial measures so that relevant bodies could take appropriate decisions.  He therefore called upon the Chairman to keep 
this item on the agenda of the next meeting, so that Members could substantively discuss the 
"why" issues as to which were the real impediments or retarding factors for enhancing market 
access for LDC goods and services.  
24. The representative of the European Union thanked the Secretariat for its Note which had 
become a reference document on LDC trade and mark et access conditions, with a wealth of useful 
data and analysis. She welcomed the progress that had been made by LDCs in their efforts to integrate into the world trading system - and the po sitive trends that had been registered in 2013. 
She was encouraged to note that LDC exports of goods and services had rebounded in 2013, 
though the participation of LDCs in global trad e remained marginal even though their share in 
world trade had doubled since 2000. It was also a concern that important discrepancies persisted 
among the LDCs and that the majority of them ha d been experiencing a chronic trade deficit. She 
also noted that LDC trade remained dominated by primary commodities.  Export concentration had been increasing, especially for African LDCs. This situation called for continued efforts to support 
the LDCs. In this regard, she pointed out that the EU had provided full DFQF access to LDCs for all 
products, with the exception of arms and ammunitions. She recalled the explanation provided at  the previous session of the Sub-Committee as to how the EU's new Generalized System of Preferences (GSP), which had been in force since the beginning of 2014, provided more 
opportunities for LDC exports by including less non-LDC beneficiaries and by that countering the 
potential trend of preference erosion. She also welcomed the progress that had been achieved in 
providing DFQF market access by developing countries, though a lot more could still be done, 
including in terms of ensuring transparency and providing data on those preference schemes. In 
this respect, section 3.2 of the Note underlined the continued challenge of compiling statistical indicators on preferential market access undertaken by developing countries due to the scarcity of 
data. Her delegation attached importance to the transparency, reliability and quality of data on 
such preferential schemes as well as to the fulfilment of notification obligations by Members in this regard. She welcomed the expanded section on LDC trade in services and appreciated the Secretariat's efforts in extracting as much data as possible from available sources. It was 
encouraging to note the higher-than-average growth rate in LDC services exports and the 
evidence in certain cases, of how LDCs were ente ring into new services markets. That being said, 
she acknowledged that a lot remained to be done in furthering LDC integration into world services 
trade. 
 25. The representative of Nepal supported the stat ement made by Uganda, on behalf of the LDC 
Group and that of Bangladesh. He thanked the Secretariat for preparing a comprehensive Note on 
market access for products and services of export interest to LDCs, as mandated by paragraph 8 of the revised LDC Work Programme of 2013. He also appreciated the Secretariat presentation. The Note had been informative in providing insights into the market access situation of LDC 
products. The inclusion of new statistics on NTMs, as well as a special focus on LDC trade in 
commercial services, had made the report even more interesting and useful.   
26. He said that market access had been the prime factor for LDCs to introduce their products to 
the international market and integrate their econ omies into the global trading system. Due to 
internal and external constraints, including tariff and non-tariff barriers, LDCs continued to face 
problems in penetrating foreign markets. Acknowledging this reality, the Doha Development 
Agenda in 2001 and the Hong Kong Ministerial Declaration in 2005, among others, had provided due impetus to provide preferential market access to LDCs to enhance their exports. Substantiating earlier Decisions, the Bali Ministerial Decision on DFQF had further called upon 
Members to improve their existing DFQF coverage so as to provide increasingly greater market 
access to LDCs. However, despite political commitment and declarations made in the past, implementation of the Decision on DFQF remained  mixed. On the one hand, most developed and a 
number of developing countries had responded to this Decision positively and had put forward 
concrete steps to implement the DFQF Decisions fully and faithfully. On the other hand, some big economies; which were key trading partners to many of the LDCs, chose to delay the 
implementation of this Decision, linking it to the conclusion of the broader Doha Development 
Agenda. Furthermore, for some GSP schemes, products of export interest to LDCs were not included. Some Members maintained schemes which discriminated amongst the LDCs. This had resulted in low integration of LDCs into the global trading system both in goods and services trade. WT/COMTD/LDC/M/73 
 
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  Hence, expanding the export basket and ensuring unhindered market access for products of 
potential interest remained a key priority agenda for many LDCs.   27. He continued by saying that the report highlighted that LDCs' share in global trade, including 
both merchandise and services trade, was just around 1.23% in 2013. This clearly indicated their 
weak position and low economic integration in world trade. Although the LDC share in world merchandise exports and services trade had doubled, reaching 1.17% and 0.68% in 2013, from 
0.56% and 0.38% in 2000, they were still far behind in terms of accessing international markets 
for the goods and services they produced. He no ted that the LDC exports of goods and commercial 
services had reached US$250 billion in 2013, follo wing an annual average growth of 14.8% over 
2000-2013. However, he was disappointed to note the overall trade deficit of LDCs which had 
widened during this period, from US$53.6 billion in 2012 to US$60.6 billion in 2013. This called for 
full and faithful implementation of DFQF-related Decisions by all WTO Members. It also called for the provision of accelerated and targeted technical and financial support to LDCs to enhance the 
export competitiveness of their products.  
 28. He said that the Note had revealed several interesting trends for further contemplation by 
WTO Members. For example, LDC exports remained highly concentrated on a few products. There 
was heterogeneous export growth among different  groups of LDC exporters. There was also a 
higher reliance of LDCs on primary commodities. All these factors underscored the need for trade diversification, and moving towards high-value pr oducts and services. In terms of market access, 
it was a positive development that developing countries were gradually opening up their markets 
by providing the DFQF facility to LDC products. In this regard, his delegation appreciated the Government of Chile for announcing and implementing a DFQF scheme effective from 
February 2014 in favour of LDCs, covering 99.5% of its tariff lines. He also thanked China, Chile, 
India, Korea and Chinese Taipei, which had made notifications to the Secretariat on their LDC 
DFQF schemes. It was worthwhile to mention that emerging economies were becoming major 
destination markets and that they absorbed almo st 55% of LDC merchandise exports in 2013. His 
delegation appreciated the increasing efforts that had been made by developing countries to expand the coverage of their DFQF schemes in fa vour of LDCs. In order to make the preferences 
meaningful for LDCs, he urged all Members to streamline and further simplify their rules of origin 
conditions for imports from LDCs in line with the Decision made at the Bali Ministerial Conference. 
In spite of some of the achievements and improvements observed, expanding market access still remained the most formidable challenge for LDCs. In addition, addressing supply-side constraints 
and enhancing productive capacities were equally crucial to LDCs. The Secretariat Note was a 
reflection of the fact that LDCs had not yet been  meaningfully integrated into the multilateral 
trading system. Their share in world trade had not significantly increased despite several efforts by 
all. Hence, additional efforts were needed to provide LDCs adequate market opportunities and help 
them reap economic benefits from increased expo rts, which would ultimately contribute to them 
achieving the overarching goal of poverty reductio n and economic growth. He believed that the full 
and timely implementation of DFQF-related Decisions as contained in the Hong Kong Ministerial 
Declaration and further reaffirmed by the Bali Ministerial would help integrate LDCs into the 
multilateral trading system. In view of this, me asures to provide easier and more meaningful 
market access to LDCs needed to be one of the inherent components of the post-Bali Work 
Programme. His delegation stood ready to contribute to preparing the post-Bali Work Programme 
in collaboration with other Members, as mandated by Ministers at the Ninth Ministerial Conference.  
 
29. The representative of the United States thanked the Secretariat for its Note and for the 
presentation made at the meeting. His delegation considered the Note, as well as its earlier 
versions, as providing valuable insights on the export performance of the LDCs. He noted the new information that had been included in this year's version. The Note underlined the importance of 
South-South trade for LDCs as demonstrated by the continued expansion of LDC exports to 
developing countries. It also noted the growing importance of trade in services. Referring to paragraph 2.23 of the Note, he was encouraged by the fact that LDC exports of commercial 
services had been growing more rapi dly than the rest of the world. 
 30. His delegation had concerns about the presentation of some data in the Note, specifically 
with respect to Table 18, concerning tariff treatment of LDC exports in selected developing 
markets in 2012; he noted that columns 3 and 4 of the Table covered the number of dutiable tariff 
lines and the percentage of tariff lines that we re duty free, respectively, in those selected 
developing markets. He also noted that for a num ber of developing markets there were hyphens or WT/COMTD/LDC/M/73 
 
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  dashes in these columns. He wanted the Secretariat to clarify what exactly these hyphens or 
dashes meant.  31. The Chief Statistician clarified that in the particular case of developing markets, data on 
duty-free tariff lines represented work in progre ss. The dashes in Table 18 meant that there was 
no information available on LDC duty scheme. He noted that most of the information provided in the Note was based on notifications made by  Members including data submitted to WTO's 
Integrated Data Base (IDB). He stressed that if Members wanted to improve the quality of the 
statistical services provided by the Secretariat, they needed to improve the notifications as well. 
 32. The representative of the United States said that he had understood from the Secretariat's 
clarification that the dashes meant no information was available. He then pointed out that in 
previous reports such as the 2013 report (WT/COMTD/LDC/W/58), when data was not available for the relevant year, or most recent year, the Secretariat had used data available for previous years. 
The question was why the Secretariat had done that for the 2013 Note but not for the 2014 Note. 
In the latest Note, the dash for India meant th at it did not submit data for 2012 but there was 
data from previous years. In fact, in the 2013 No te, the Secretariat had used data from previous 
years; in Table 19 of that Note the data had indi cated that 3.2% of India's 10,967 dutiable lines 
were duty free for LDCs in 2010. The footnote to that Table explained, as to why 2011 data was not in the table, and stipulated that MFN scheme and import data for 2011 were available for India 
in WTO's IDB though data on the preferential scheme was not submitted by them. The question 
therefore was why in 2013 the market access Note had pointed to IDB data from previous years 
(2010) and yet in 2014 the Note had not done that  and instead used a dash. He wished to know 
why there had been a change in the methodology in preparing such tables. 
 
33. The Chief Statistician stated that when they ha d looked at the data, they had had to make a 
decision in cases where they were using data from previous years and that references to previous 
years did not go too far from the most recent year. The preferential data tended to lose relevance 
if that was not available for most recent years. However, he acknowledged that the point made by the representative of the US had merit. He and his statistical team would look into the matter.   
34. The representative of the United States expres sed appreciation for the hard work that had 
gone into preparing the Secretariat Note. With respect to Annex Table 7, which concerned major 
multilateral non-reciprocal LDC preference schem es undertaken by Members, he pointed out that 
footnote "a" to the Table noted that the Table wa s meant to be non-exhaustive and so would not 
include information on all Members. However, his delegation was of the view that the Table needed to accurately reflect the data on Members that were listed in it. Footnote "b" of the Table 
noted that DFQF coverage was derived from most recent WTO IDB submissions or taken from the 
most recent notifications made by Members. For one Member in the Table, the data provided for 
the DFQF coverage represented a political commitment essentially denoting an intent to do so in the future. This case was different from all of the other Members where the data provided in their 
notifications represented existing coverage at that time or in the past. He clarified that he raised 
this point since the Table, by its very nature, had set out a comparison of DFQF schemes by Members and it was important that such comparisons were made of schemes where the DFQF 
coverage represented the actual ones in that repo rting time. He suggested that in future versions 
of this Note, the Secretariat correct the present methodology employed in preparing the Table. His 
delegation was ready to discuss this issue further with the Secretariat in due course.  
 
35. The representative of the Russian Federation thanked the Secretariat for the report. He 
recalled that his Government had adopted a national GSP scheme with particular emphasis on 
LDCs long before it had started its accession negotiations in the WTO. In the course of the 
accession negotiations, it had not reduced its pr eferential treatment of goods originating from 
LDCs. As a very recently acceded Member, hi s Government was currently implementing its 
accession commitments. It had already notified its GSP scheme and preferential rules of origin to 
the WTO. Moreover, it had convinced its customs union partners to align their GSP schemes with 
the national GSP scheme of the Russian Federati on. Therefore, Russia's customs union partners 
had enlarged their preferences to developing an d least developed countries. His delegation was 
working on possible improvements in methodology that might enable it to further improve the 
DFQF regime for LDCs so as to comply with the WTO Ministerial Decisions.  36. The representative of India thanked the Secretariat for its comprehensive Note. India had 
noted that the LDC export of goods and services gr ew at 5.2% in 2013, which was slightly higher WT/COMTD/LDC/M/73 
 
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  than 4.7% in 2012, reaching an overall high va lue of US$250 billion. The share of LDCs in world 
trade had increased marginally from 1.15% in 2012 to 1.17% in 2013. India had also noted that the growing share of developing economies as markets for LDC exports increased from 40% in 
2000 to 55% in 2013. Among the developing countries, India was the second largest export 
destination for LDCs in 2013. LDC exports to In dia had grown from US$1.2 billion in 2000 to over 
US$14.33 billion in 2013 with an annual percentage  change of around 21% during the period 
2000-2013. India had also noted that according to UNCTAD, in 2013, LDCs' FDI inflows reached 
US$28 billion, up by 14% compared to 2012. However, inflows to LDCs were still relatively small, 
representing only 1.9% of global inflows. His de legation was happy to note that India remained 
the largest investor among developing economies,  with 9% share in Greenfield FDI projects in 
LDCs in 2013. Further, India had also noted that one developed country that wanted to have more 
data on the DFQF scheme of India, had a share of only 3% in greenfield FDI projects in LDCs in 
2013. India was concerned that the growth rate of LDC imports outpaced that of exports, leading 
to an overall trade deficit of US$60.6 billion in 2013, up from US$53.6 billion in 2012. Only seven 
LDCs had posted positive trade balances in 2013, with Angola leading with a surplus of 
US$44 billion. The remaining LDCs had posted negative trade balances in 2013. India was concerned that the share of primary commodities in LDC merchandise exports had increased from 
61% in 2000 to 71% in 2013. Out of 71%, fuels comprised 50%, mining products 10% and 
agricultural products 11%. The overdependence  of LDCs on primary commodities made them 
vulnerable to fluctuations in international prices and trade. It was important that Members continued to take concrete steps to provide better market access to products from LDCs. He 
underlined the importance of expanding export capabilities of LDCs through diversification and 
infrastructure development. In this regard, enha nced market access needed to go hand-in-hand 
with enhanced Aid for Trade and trade capacity building.  
 
37. He went on to express his delegation's surprise at the concern expressed by one developed 
country concerning India's data relating to its DFQF scheme for LDCs while a number of developed 
and developing countries had not even implemented the scheme as per WTO Decisions. He 
clarified that the political commitment undertaken by his authorities to implement the DFQF scheme for LDCs had been put into practice with appropriate customs notifications. He said that as a response to the DFQF Decision adopted by Memb ers at the Hong Kong Ministerial Conference in 
2005, India had operationalized the Duty-Free Tariff Preference (DFTP) Scheme in August 2008. 
The DFTP scheme, which was a unilateral non-reciprocal tariff preference scheme for LDCs, was notified by India under the Transparency Mech anism for Preferential Trade Arrangements in 
September 2011 (WT/COMTD/N/38). In accordance wi th the scheme, the applied custom duties on 
8 5 %  o f  I nd i a ’ s  t o t a l  t a r i f f  l i n e s  w e r e  g r a d u a l l y  e l i m i n a t e d  o v e r  a  p e r i o d  o f f i v e  y e a r s .  T h e  f i r s t tranche of tariff concessions under the scheme had been implemented as per Notification 
No. 96/2008-Customs, dated 13 August 2008. Purs uant to this notification, India had reduced 
customs duty on all products in the duty-free list by 20%. In addition, in respect of the margin of 
preference products, duty concessions in the form  of the average margin of preference over the 
prevailing MFN duty had been provided at 10%. Tariff concessions had been further deepened 
through two notifications in 2010: (i) Notification No. 67/2010 – Customs, dated 8 June 2010, 
reduced customs duty on all products in the duty-free list by 40% and enhanced the average 
margin of preference to 19%; and (ii) Notifica tion No. 95/2010 – Customs, dated 15 September 
2010, further lowered the customs duty on products  in the duty-free List by 60% and increased 
the average margin of preference to 29%. He added that customs Notification 90/2011, dated 
16 September 2011, further lowered the customs duty  on products in the duty-free list by 80% 
and increased the margin of preference to 38%. Customs Notification No. 56/2012, dated 
1 October 2012, lowered the customs duty on pr oducts in the duty-free list by 100% and 
increased the margin of preference to 47.3%. He further noted that regarding the recent expansion of the DFTP scheme, as per Indi an Customs Notification No.08/2014, dated 
1 April 2014, the expanded DFTP scheme provided for an expanded product coverage wherein 
96.4% of total tariff lines (at 6-digit HS code level) had been made duty free for LDCs, and that they would enjoy preferential tariff duties on an additional 2% of the tariff lines. Only 1.6% of 
tariff lines had been retained in the exclusion list. He also wished to inform Members that some 
procedural simplifications were being considered in order to provide more market access to LDC exports. His delegation would shortly notify these new developments under the Transparency 
Mechanism for Preferential Trade Arrangements to the WTO. 
 38. The representative of China thanked the Secretariat for its informative Note. His delegation 
was concerned with the continued marginalization of LDCs in world trade, both in merchandise as 
well as in services. He said that his Government was making all possible efforts to develop a WT/COMTD/LDC/M/73 
 
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  comprehensive trade and investment relationship  with the LDCs. China had been the largest 
trading partner of LDCs for six consecutive ye ars and had comprehensively granted duty-free 
treatment to LDCs on 95% of its tariff lines. Chin a also provided necessary technical assistance to 
enable LDCs to utilize the preferential treatment provided to them. At the same time, China was in 
the process of updating its DFQF scheme notification which would be submitted as soon as it was 
ready. Finally, he called upon the whole Member ship to faithfully implement the Hong Kong 
Ministerial Decision on DFQF market access for LDC products. In conclusion, he expressed his 
delegation's support to the statements made by Uganda on behalf of the LDC Group, Bangladesh, 
Nepal and India.  39. The representative of Canada thanked the Secretariat for its Note. Her delegation noted that 
Annex Table 7 suggested that Canada's GSP scheme for LDCs had expired. It had in fact been 
renewed in 2013, and would be in effect until 2024; thereafter it would be subject to a review and renewal process. 
 
40. The representative of Turkey expressed his dele gation's condolences for the loss of lives in 
some LDCs due to the Ebola virus. He thanked the Secretariat for its comprehensive report and 
analysis which his delegation considered useful. His delegation welcomed the progress made in 
LDC trade, while it regretted the low level of thei r integration into world markets. Turkey had been 
fully supporting the efforts of LDCs to further integrate into world markets; its imports from LDCs amounted to around US$1.5 billion, 93% of wh ich were duty free owing to the autonomous 
preferential treatment it offered to LDCs. His delega tion was also of the view that this amount of 
trade was below the potentials of the LDCs and Tu rkey was ready to work closely with LDCs to 
further develop their bilateral trade in a balanced way. He reiterated the support of his delegation 
to making the necessary contributions to the initiatives taken in international fora in favour of 
LDCs, in particular towards the improvement of market access conditions for LDCs. In conclusion, he underlined the importance of application of provisions with respect to LDCs in the Bali 
Ministerial Declaration, and hoped that further improvement of market access conditions of LDCs 
would be one of the priorities of the post-Bali Work Programme.   41. The Chairman thanked the Chief Statistician and his team for preparing the Note. He noted 
the appreciation expressed as well as enthusiasm shown by Members on the statistics provided in 
the Note, which confirmed that market access issues constituted an important element of the Work Programme for the LDCs. He believed that the analysis of LDC trade and market access conditions 
provided in the Note made an important contribution to Members' efforts to review the different 
factors shaping LDC trade. He noted that the value of LDC exports had been increasing in the recent past, at least in absolute terms, though in  relative terms, LDCs had not gained much; their 
share constituted only a little more than 1% of  world trade. LDCs had been experiencing a 
continuous widening of their trade deficit. Furthe rmore, there had been little qualitative change in 
the composition of LDC exports and in the manner in which LDCs participated in global value chains. In fact, the share of primary commodities in overall LDC exports had only increased in the 
last decade.  
 42. The Chairman went on to highlight that export concentration had been a structural 
characteristic of LDC economies. The exports from  LDCs had remained a story of either primary 
commodities for goods exporters or tourism revenues  for the services exporters. On average, 70% 
of exports of LDC goods depended on three main products. In addition, even if some LDCs were 
exporting manufacturing items, they were mainly exporting apparel items. This revealed the 
vulnerability faced by LDCs in world markets. At the same time, it indicated that the much desired 
diversification had not taken place for the moment. There could be many factors to explain this. Concrete and concerted interventions were needed in strengthening productive and export 
capacity in the LDCs. In the area of market acce ss, a lot of progress had been made over the last 
decade. It was good to note that almost 100% of agricultural products were imported duty-free by 
developed countries. However, certain exceptions remained and DFQF market access had not been 
fully realized in certain markets. The Bali Decision invited Members to seek to improve their 
existing DFQF coverage for LDC products. He hoped that Members would be able to see some more tangible results prior to the next Ministerial Conference.  
 
43. The Chairman pointed out that one particular aspect of this year's Note was its greater 
attention to LDC trade in services. He welcomed the fact that this year's edition contained more 
statistics on LDC services trade than before. Here too, the story of LDC trade seemed to be similar 
to that of goods: the share of LDC commercial se rvices was very small in world exports. It was WT/COMTD/LDC/M/73 
 
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  even lower than their goods share. LDCs remained dependent on a few sectors like tourism or 
transport. He understood that in the context of the implementation of the Bali Decision on the 
operationalization of the LDC Services Waiver, the LDCs had submitted a Collective Request identifying a number of modes and sectors where Members could undertake commitments. He 
hoped Members would be forthcoming with some meaningful offers to the LDCs. The domestic 
services supply base in LDCs had been limited. LD Cs would thus also require support for capacity 
and skill building to better participate in services trade. He suggested that the Sub-Committee 
take note of the document contained in WT/COMTD/LDC/W/59 as well as the statements made at 
the meeting. At the same time, he requested that the Secretariat look into the issues raised at the meeting, particularly relating to statistics on preferences, and consider revising the Note. He would also take up with the Secretariat how to address the point raised at the meeting that there be 
discussion not only on the statistical trends but also on the reasons why the LDCs had been 
performing less than their potentials. In fact, in his view the consideration of the substance of the LDC market access study prepared by the Secretar iat each year required a whole session of the 
Sub-Committee.  
 44. It was so agreed. 
 
- Preferential Rules of Origin for Least Developed Countries (WT/L/917) – Report by the 
Secretariat on the Annual Review of Developm ents in Preferential Rules of Origin at 
the Committee on Rules of Origin 
45. The Chairman recalled that the Bali Ministeria l Conference in 2013 had adopted a Decision 
on preferential rules of origin applicable to the LDCs. As per the Ministerial Decision, the 
Secretariat was to provide the Sub-Committee with a report on the outcome of the annual review 
undertaken by the Committee on Rules of Origin. He understood that the Committee on Rules of 
Origin had met on 30 October 2014. He drew Members' attention to a paper which had been put forward by Uganda, on behalf of the LDC Group, recently in the Committee on Rules of Origin. This 
paper talked about challenges faced by LDCs in complying with preferential rules of origin under 
unilateral preference schemes. The paper gave a clear view of the different possibilities on how rules of origin could be made more flexible and liberal. More importantly, it spoke of a direct correlation between flexible rules of origin and an increase in exports from LDCs. He invited the 
Secretariat to take the floor. 
 46.  The representative of the Secretariat, Ma rket Access Division, began by providing an 
overview of the report. She said that the report was being made pursuant to Paragraph 1.10 of the 
Ministerial Decision contained in WT/L/917 relating to preferential rules of origin for LDCs; in this paragraph, it was stipulated that the "Secretariat shall annually provide the Sub-Committee on 
LDCs with a report on the outcome of the review of developments in preferential rules of origin 
applicable to imports from LDCs". The Committee on Rules of Origin had conducted its first annual review of developments in the area of preferenti al rules of origin for LDCs during its formal 
meeting of 30 October 2014. At that time, the Committee heard a presentation by the Secretariat 
about the WTO database on preferential trade agreements where Members' notifications and 
legislation on preferential rules of origin could be  accessed. The database had been a useful tool to 
access information on, and monitor developments of, existing rules of origin applicable to LDCs. 
During the meeting, the Committee took note of th e new rules of origin associated with the DFQF 
scheme of Chile. This scheme had been notified in G/RO/N/124. In concluding the annual review, 
the Chairman of the Committee on Rules of Origin had reminded all delegations that they should 
notify any new or modified rules of origin applicable to LDCs according to established procedures. 
In addition, the Chairman had invited all Members to develop or build their individual rules of 
origin in accordance with the guidelines contained in the Ministerial Decision.  
47. The representative of Uganda, on behalf of the LDC Group, thanked the Secretariat for its 
report. He underlined that the Bali Ministerial Decision on preferential rules of origin was significant 
because it provided multilateral guidelines to Members as they developed rules of origin for LDC 
products to qualify for preferences. The Decisi on provided a number of elements as well as 
illustrations as to how rules of origin could be useful for LDCs. LDCs had long been arguing for simple and flexible rules of origin. Numerous studies in the past had indicated the point that 
stringent rules of origin associated with preferen ce schemes nullified the intended benefits to the 
LDCs. At the Rules of Origin Committee meeting that had been held on 30 October 2014, LDCs had introduced a submission contained in G/RO/W/148, outlining the challenges they had been facing in complying with rules of origin requirements of preference-granting countries. There had been WT/COMTD/LDC/M/73 
 
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  some tangible progress in certain markets. Canada, for example, had introduced liberal rules of 
origin in 2003 and LDCs had reaped benefits from that reform. The EU had revised its rules of origin for LDCs in 2011, consequent upon which the LDCs had witnessed improvements in the utilization of the Everything But Arms (EBA) scheme.  It was thus evident that rules of origin could 
either hinder or facilitate LDC exports.  
 48. He pointed out that some of the key LDC trad ing partners had not changed their rules of 
origin since they were first adopted way back in the 1970s. Given the dynamic developments 
related to production of goods across countries, where Members saw increasing fragmentation of 
production, particularly with manufacturing, it was imperative that Members revisited their rules of origin that had been adopted long ago. In their submission to the Committee on Rules of Origin, 
LDCs had provided some suggestions for the cons ideration of Members. The central question was 
how to obtain originating status given the industrial base, level of development and productive capacity in the LDCs. There were merits and limitations in every methodology. Drawing on the 
experience from the utilization of preference schemes, he believed that a percentage criterion was 
perhaps better for the LDCs to comply with. In this regard, LDCs in their submission to the Committee on Rules of Origin had proposed a value of materials calculation over a value-added 
calculation. He added that on certain occasions sector-specific rules of origin could also help LDCs 
comply easily with rules of origin requirements. For example, single-stage transformation was allowed in the apparel sector in the EU-EBA scheme, which had proven to be helpful for the LDCs. He encouraged Members to review the LDC submission in the Committee on Rules of Origin. LDCs 
were also working on additional submissions looking at other methodologies to determine 
substantial transformation such as change of tariff classification, or specific processing operation. 
Some of the other issues relating to rules of origin concerned administrative procedures. In this 
area as well, LDCs would seek to identify the best practices. In conclusion, he hoped that Members 
would continue to attach high importance to this issue and take steps to further simplify rules of origin associated with their preferential schemes. 
 
49. The representative of Nepal supported the stat ement made by Uganda, on behalf of the LDC 
Group. He thanked the Secretariat for its report to the Sub-Committee on the annual review on 
preferential rules of origin applicable to imports from LDCs, as mandated by the Bali Ministerial 
Decision. He said that preferential rules of orig in had a significant impact on LDC exports. His 
delegation viewed DFQF market access and preferen tial rules of origin as two equally important 
sides of the same coin: in the absence of one, the utility of the other remained limited. He believed 
that the DFQF market access scheme for LDCs, if accompanied and facilitated by simple and 
transparent rules of origin, could generate meaningful outcomes to LDCs and could enhance their exports in destination markets. The effectiveness of DFQF schemes very much depended on their 
accompanying rules of origin conditions. He noted that different approaches that were being 
applied by different preference-granting count ries, since 1970s, had prevented the LDCs from 
enjoying full benefits from the preferences grante d to them. In his view, complying with different 
methodologies being applied by different preference-granting countries had been found to be 
cumbersome by LDC exporters. Keeping in view all these shortcomings, LDCs had been demanding 
simplified, transparent and export-friendly rules of origin for a long time. In response to the difficulties and challenges faced by LDC exporter s, some countries had generously taken steps to 
further simplify their rules of origin. Canada in 2003 and the EU in 2011 had substantially 
improved their rules of origin, which had eventually helped LDCs to improve the utilization of the preferential schemes granted to them. His delega tion appreciated Members for taking proactive 
steps in this regard. At the same time, he drew Members' attention to the fact that some Members 
were applying the same stringent rules of origin which they had introduced in the 1970s. He believed that the time had come to modify and update such rules of origin conditions, taking into account the difficulties and challenges faced by the LDCs. In this regard, he urged Members to 
closely examine the submission made by the LDCs  at the Committee on Rules of Origin and to 
undertake the necessary steps towards overcoming the barriers that LDCs had been facing. He noted that the Bali Ministerial Decision on preferential rules of origin was the first of its kind in this 
area that provided precise multilateral guidelines for Members to revise and further streamline 
their preferential rules of origin applicable to LDC products. It was his conviction that if all Members stood ready to modify and simplify their pr eferential rules of origin in line with the Bali 
Decision, it could substantially help address challenges faced by producers and suppliers of many 
LDCs. Hence, he called upon all Members to remain committed to modifying their rules of origin in accordance with the Bali Decision to enable LDCs to meaningfully utilize the preferences granted to them.  
 WT/COMTD/LDC/M/73 
 
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  50. The representative of the United States thanked the Secretariat for the report. He noted that 
some of the words that were sometimes used in  characterizing the Bali Decisions could be 
interpreted in a way that was not necessarily cons istent with the actual obligations that were 
negotiated and that formed part of those Decisions.  The Bali Decision on preferential rules of origin 
applicable for LDCs was a case in point. That Decision contained guidelines that Members might 
wish to draw upon when developing or building upon their preferential rules of origin applicable to imports of LDCs. He underscored the need for Members to engage as per the terms of each of the 
Bali Decision. His delegation looked forward to the discussions in the Committee on Rules of 
Origin, and in receiving reports in the Sub-Committee from the Committee on Rules of Origin in the future.   
51. The Chairman congratulated the LDC Group for it s submission to the Committee on Rules of 
Origin. He had had a look at that submission and considered it substantive. That submission also 
brought out the fact that rules of origin issues were highly technical and complex, requiring a 
thorough examination of the issues involved, as we ll as a greater understanding of each Member's 
preferential programmes. He encouraged Members to review the LDC submission.   
52.  He believed that it was a commendable achievement at Bali that Members, for the first 
time, had agreed to some guidelines which could be drawn as they formulated their rules of origin for LDCs. The Bali Ministerial Decision also offered some illustrations as to how preferential rules of origin could be made easier for LDCs to comply with. All Members agreed that preferences could 
be effectively utilized if they were accompanied by flexible rules of origin conditions. Some of the 
Members, namely Canada and the EU, had already simplified their rules of origin frameworks for LDCs and evidence proved that those changes had considerably benefitted the LDCs. He 
understood that the LDCs had made a detailed explanation at the Committee on Rules of Origin 
and had also suggested a methodology for Members' consideration. He hoped that there would be continuous exchange of experiences and dialog ue so that Members could better understand the 
challenges faced by the LDCs. The central question was how Members could better design 
LDC-friendly rules of origin and how they could help LDCs meet rules of origin requirements of preference-granting Members. For instance, some reflection was required as to how the evolving disciplines on preferential rules of origin coul d reflect the ongoing phenomenon of global value 
chains and be more trade creating for the LDCs. He  looked forward to receiving next year's report 
on the annual review as per the Bali Ministerial Decision. In the meantime, he encouraged delegations to do their utmost to increase the va lue of the preferences they had been offering to 
the LDCs by undertaking rules of origin measures that facilitated LDC exports. He suggested that 
the Sub-Committee take note of the report made by the Secretariat, as well as the statements made by Members. 
 
53. It was so agreed. 
 
C. TRADE-RELATED TECHNICAL ASSISTANCE AND CAPACITY-BUILDING INITIATIVES 
FOR LEAST DEVELOPED COUNTRIES 
- Standards and Trade Development Facility (STDF) – Briefing by the STDF Secretariat 
on Recent Activities Relating to LDCs 
54. The Chairman noted that the Work Programme for the LDCs mandated the Sub-Committee 
to monitor capacity-building initiatives taken in favour of LDCs to promote information flows and 
coordination. The STDF was a capacity-building initiative to help developing countries enhance 
capacity to comply with international sanitary and phytosanitary (SPS) measures. The 
Sub-Committee had been considering this item on a periodic basis. The last time the item was taken up had been almost two years ago. It was therefore opportune that Members heard an update on the STDF activities relating to LDCs. He gave the floor to the representative of the STDF 
Secretariat. 
 55. The representative of the STDF Secretariat prov ided an update on the work of the STDF in 
relation to LDCs. The STDF, a global partnership was established in 2004 by five core agencies: 
the Food and Agriculture Organization (FAO), the World Organisation for Animal Health (OIE), the World Health Organization (WHO), the World Bank and the WTO.  
 
56. A video on the work of the STDF was shown at  the meeting. The video highlighted some of 
the challenges faced by LDCs in meeting standard  requirements of their export markets and how WT/COMTD/LDC/M/73 
 
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  STDF sought to help LDCs address those challenges. In this regard, Benin's challenges with 
standards in exporting shrimp to the EU, Belize's challenges with exports to the US and the impact 
of the avian influenza in South East Asia were hi ghlighted in the video. After the screening of the 
video, the representative of the STDF Secretariat introduced the STDF's coordination and funding 
activities, including ongoing work on the implementa tion of SPS measures to facilitate safe trade 
and prioritization of SPS investment options for market access. He explained that the STDF had a key role to play in increasing the awareness especially at higher decision-making levels, about the 
importance of investing in SPS capacity. SPS was often considered as very technical. There was 
therefore a bridge needed for better flows of information in the trade and development 
community.   
57. He went on to say that mobilizing additional Aid-for-Trade resources for SPS capacity 
building, strengthening collaboration among a range of providers on SPS assistance and identifying and disseminating good practices were some of the roles of the STDF. It also had a funding 
component for the development and implementation  of projects that promoted compliance with 
international SPS standards and requirements. The STDF was governed by a Policy Committee which decided on policy guidelines and provided policy oversight on the overall direction of the 
Facility. The STDF Working Group which consisted of technical-level representatives who met on a 
bi-annual basis on the margins of the SPS Committee meetings, was responsible, among others, for the preparation of the STDF's work programmes. The STDF had a small Secretariat of five professional staff and one secretary, being housed in the WTO's Agriculture and Commodities 
Division. It was governed by a medium-term strategy and an annual work plan with an annual 
budget of US$5million. There were also important linkages to the WTO SPS Committee, as well as to other initiatives such as the Enhanced Integrated Framework (EIF) and many other external 
programmes. SPS projects were often part of  larger programmes focused on agricultural 
development, private sector development and environmental protection. More recently, the 
momentum created by the Trade Facilitation Agr eement provided an opportunity to improve SPS 
border management. In fact, as part of the coordination effort, the STDF had undertaken some 
thematic work in cross-cutting areas such as on trade facilitation in the context of the SPS Agreement. In particular, on how SPS measures were implemented, in practice, at the border. The focus was on specific countries and specific products, examining issues such as how SPS-related 
trade transaction costs could be reduced. Preliminary research done in this context in Asia and in 
Africa revealed that there were quite a number of  instances of procedural obstacles that existed 
such as complex and lengthy procedures, excessive duplicative requirements, formal and informal 
fees, lack of information and transparency, long waiting times, overlapping jurisdiction and lack of 
coordination amongst various border agencies. Some of these obstacles were also leading to arbitrariness and unpredictability of trading environments. The private sector in developing 
countries viewed this unpredictability as a key issue.  
 58. He said that a guide to prioritize SPS investment options for market access was being 
finalized. The guide was intended to help countries prioritize their needs including through 
cost-benefit analysis. This tool had been implemented in a number of LDCs, especially with support 
from the Common Market for Eastern and Southern Africa (COMESA), the United States Department for Agriculture (USDA) and the United  States Agency for International Development 
(USAID). He informed Members that the STDF was implementing a joint study with the EIF on SPS 
issues covered in the Diagnostic Trade Integration Studies (DTIS).  
59. He spoke of the funding envelope of STDF Trust Fund which was small compared to other 
funds that supported SPS capacity building in developing countries and LDCs. Funds up to normally US$50,000 were available for project preparation grants (PPGs), and funds up to normally a maximum of US$1 million were availa ble for project implementation. Since 2004, the 
STDF had financed 66 PPGs, 46 of which had benefitted the LDCs. In addition, since 2004, the 
STDF had financed 70 projects, out of which 31 had benefitted the LDCs. He pointed out that at present, close to 50% of STDF's project funds were allocated to the LDCs, which meant that the 
STDF had been meeting its target to devote at least 40% of its resources to the LDCs. Some of the 
examples of PPGs the STDF had worked on included the development of a national aflatoxin plan in cooperation with the African Union. It was likely to be a blueprint for many other African countries 
t o  f o l l o w .  I n  N e p a l ,  t h e y  h a d  w o r k e d  o n  p r o j e c t s  relating to ginger exports to India and other 
countries. It was a project developed by the STDF and partly funded by the STDF and the EIF and 
was implemented by the FAO. In Myanmar, there wa s a project focused on food safety practices in 
the oil seed sector. It was to be implemented by the International Trade Centre (ITC). For 
COMESA, there was the "Breaking Barriers Project", which focused on trade facilitation - facilitating WT/COMTD/LDC/M/73 
 
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  safe trade in specific products and reducing the SPS impediments with a view to facilitating 
regional trade. He encouraged Members to review the eligibility criteria on the STDF website, which contained a guidance note for applicants. He also advised that applicants consult with relevant stakeholders in the country or region including both public and private sector. Applications 
to the STDF could be submitted by email in English, French or in Spanish. Requests were 
considered twice a year in the STDF Working Grou ps. The next deadline for submission of funding 
proposals was 28 December 2014.  
 
60. The representative of Uganda, on behalf of the LDC Group, thanked the representative of 
the Secretariat of the STDF for his report. STDF was among the few initiatives offering 
capacity-building support that had yielded tangible benefits for several LDCs which had sought 
support towards the implementation of SPS measures with a view to facilitating trade. The support 
which included advice, studies and financing for project development had assisted many LDCs in articulating their SPS needs and in the development of technically sound and sustainable project 
proposals. He noted, with satisfaction, that 75% of the overall budget for PPGs was allocated to 
the LDCs and other low-income countries. He welcomed the support extended to LDCs such as Sudan, Senegal, Nepal and Myanmar in this respect. He also welcomed the efforts aimed at 
assisting LDCs to implement SPS measures in a way that facilitated safe trade. The partnership 
that had been created between the STDF and the EI F, including the initiatives taken to prepare a 
joint study that analysed the coverage of SP S issues in DTISs, was considered useful.  
 
61. He noted the continued SPS work in revising and finalizing the guide to assist countries to 
prioritize investment options for market access, based on multi-criteria decision analysis. The rolling out of this work beyond the pilot countries would greatly assist LDCs in view of their limited 
human, institutional and financial resources. He looked forward to the STDF's continued support 
towards assisting the LDCs in consolidating their capacity in the area of SPS, as it was an area that was increasingly becoming a challenge in terms of market entry requirements. He said that SPS 
measures, though legitimate, posed major market entry challenges to a number of LDCs, as these 
measures being science-based, required huge investme nt in resources. He also looked forward to 
the continued focus on LDCs and other low-income countries in terms of the funding priority from 
STDF. He hoped that a number of LDCs could submit project proposals for funding by the 
December 2014 deadline. He reminded Members that in October, the EIF had undergone a 
comprehensive evaluation, the object an d purpose of which was to determine, inter alia , whether it 
could be continued beyond its 2015 deadline. The report had reaffirmed the relevance of the EIF to 
LDCs. It also highlighted the difficulty in addressing a funding gap of approximately US$50 million. 
He urged development partners to deliver the re quisite funds on time and to work towards a 
timely extension of the EIF programme. At the same time, he acknowledged the generous support 
from the EIF donors which had made the EIF an important vehicle for trade capacity building in the 
LDCs.  62. The representative of Nepal thanked the STDF Secretariat for sharing information on the 
STDF activities pertaining to the LDCs. He was happy to note that Nepal had been one of the 
beneficiaries of the STDF in improving the quality of its ginger product which was one of their major export items. Both the EIF and the STDF were working to provide support to the LDCs, 
although the focus of the STDF was exclusively on SPS capacity building. His delegation wished to 
know if there were any mechanisms that had been  developed to ensure that the support to LDCs 
from the STDF did not overlap that from the EIF. In particular, he asked if there were any 
institutional mechanisms and procedures to ensure complementarity and synergy of projects and 
programmes.  63. The representative of the STDF Secretariat noted that the STDF did not focus exclusively on 
the LDCs, though at least 40% of its project f unds should benefit LDCs. At the same time, the 
scope of the STDF was limited as it focused on a very specific area of SPS, which was of high importance for many developing countries, especially economies that were predominantly 
agro-based. When applications were received from developing countries, the STDF conducted a 
review of those applications, part of which was the question of how the project would complement 
or build on the existing initiatives. The review of LDC applications included progress made by the 
LDCs in addressing SPS matters in the context of the EIF implementation. In this regard, the STDF 
had been providing comments on the SPS componen ts of the DTISs. Given that the pool of 
resources under the EIF was larger than that of the STDF, the EIF mechanism was seen as a potential source of funding for STDF projects. Nepal was a good example of this synergy. 
 WT/COMTD/LDC/M/73 
 
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  64. The Chairman thanked the representative of the STDF Secretariat for his presentation. He 
was happy to note that while the objective of the STDF was to ensure allocating 40% of its project 
funds to the LDCs, in practice, the STDF was spen ding 50% of its resources on LDC projects. He 
encouraged the STDF to go further in that direction and keep it as much focused so as to support 
projects from LDCs. He suggested that the Sub-Committee take note of the briefing made by the 
STDF Secretariat as well as the statements made.  
65. It was so agreed. 
 
D. OTHER BUSINESS 
66. The Chairman reiterated the importance of the Sub-Committee in examining the issues of 
interest to LDCs in the multilateral trading system. An enhanced policy dialogue in the 
Sub-Committee could advance LDC interests in the work of the WTO. He would work towards a more active dialogue on LDC issues in the Sub-Committee in future. He informed Members that 
the next meeting of the Sub-Committee was tentatively scheduled for the first quarter of 2015. 
The exact date would be communicated in due co urse. He thanked the Coordinator of the LDC 
Group at expert level, Mr. Michael Wamai, for his contributions to the deliberations of the 
Sub-Committee. 
 67. In the absence of any other business, the meeting was adjourned. 
 
 
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