RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/LDC/M/38 
21 December 2004 
 
 (04-5602) 
Sub-Committee on Least-Developed Countries 
Thirty-Eighth Session  
 
 
NOTE ON THE MEETING OF 29 OCTOBER 2004 
 
Chairperson:  Ambassador Ian de Jong (Netherlands) 
 
Subjects discussed : 
 
A. ADOPTION OF THE AGENDA ........................................................................................................1  
B. WTO  WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES (LDC S) .................................1  
(i) Market Access for LDCs ......................................................................................................... ....1 
(ii) Trade-related Technical Assistance and Capacity-Bui lding Initiatives for LDCs ...................17  
C. OTHER BUSINESS ......................................................................................................................18  
 
 
A. ADOPTION OF THE AGENDA  
1. The Chairman  formally welcomed Cambodia as a full WTO Member.  He said that Cambodia 
became the 148th Member of the WTO on 13 October 2004 and was the second LDC acceded to the 
WTO following Nepal.  He said that 32 LDCs were Members of the WTO which bode well for the 
LDC Members of the WTO and for the multilateral trading system. 
2. The Sub-Committee adopted  the draft agenda contained in document WTO/AIR/2395/Rev.1.   
B. WTO  WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES (LDC S) 
3. The Chairman  said that he would focus on two elements of the Work Programme, namely: 
market access for LDCs and trade-related technica l assistance and capacity-building initiatives for 
LDCs. 
(i) Market Access for LDCs 
- Notification by Switzerland (WT/COMTD/N/7/Add.2) 
 
4. The Chairman  recalled that at the last Session,  the representative of Switzerland had made an 
announcement that they would notify Members of  changes in their GSP in favour of LDCs.  
Accordingly, the delegation of Switzerland had subm itted its notification to the Committee on Trade 
and Development, at its Fiftieth Session.  In a ccordance with established procedure the notification 
had been referred to the Sub-Commi ttee for substantial consideration and reporting back.  He invited 
the representative of Switzerland to introduce the notification. 
5. The representative of Switzerland  said that the notification of his Government  
(WT/COMTD/N/7/Add.2) was a follow-up implementa tion of changes introduced and presented in 
the Sub-Committee in 2002, and was not a fundamenta l change of their GSP.  The current Swiss GSP 
came into force in 1997 and was valid for a period of ten years.  It was valid for all developing 
countries.  In addition, LDCs benefited from additi onal preferences in a number of product groups.  In WT/COMTD/LDC/M/38 
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the overall GSP, developing countries benefited from zero  access on a number of agricultural goods 
and on almost all industrial goods with the exception  of textiles for which there were tariff reductions 
of 50-75 per cent for developing countries.  However, the LDCs had been granted duty-free and 
quota-free access to all industrial products including textiles since 1997. 
6. The representative from Switzerland
 continued by saying that in the year 2001, the 
Government of Switzerland had decided to join ot her countries in providing duty- and quota-free 
access to LDCs on agricultural products in addition to industrial products.  A gradual approach was 
chosen to implement this objective and three stages were defined.  First, in January 2002, remaining 
tariffs in agriculture were reduced by 30 per cent  on average for imports from LDCs (notified in 
WT/COMTD/N/7/Add.1).  Seco nd, remaining tariffs on agricultural products from LDCs were further 
reduced to at least 55-75 per cent of MFN rates in April 2004 (notified in  WT/COMTD/N/7/Add.2).  
Third, the full elimination of all duties and quota s would be decided by parliament in 2006, which 
would also decide on further extension of overa ll GSP framework scheduled to expire in 2007. 
7. The Chairman  commended the initiative of the Gove rnment of Switzerland which gave an 
opportunity for LDCs to enhance their exports.  He understood that the second stage of tariff reduction had been implemented in the agricultural sector for 50 LDCs with effect from 1 April 2004.  He recalled that Members at Doha had committed to  "consider additional measures for progressive 
improvements in market access for LDCs."  He expressed his satisfaction that a number of WTO 
Members had responded to that commitment and had been adopting new or modified measures 
improving market access for LDCs.  He hoped that in itiatives such as the one from Switzerland would 
encourage others to accord progressively improved market access for LDCs. 
8. The Chairman proposed that the Sub-Committee take note
 of the notification by Switzerland.  
9. It was so agreed.  
- Note by the Secretariat (WT/COMTD/LDC/W/35 and TN/MA/S/12)  
 
10. The Chairman  said that paragraph 7 of the LDCs Work Programme mandated an annual 
review of market access for products originating from LDCs.  Pursuant to that, the Secretariat had 
prepared a note (WT/COMTD/LDC/W/35 and TN/M A/S/12) which built on previous Secretariat 
studies.  He invited the Secretariat to introduce the note to the Sub-Committee. 
11. The representative of Zambia , on behalf of LDCs, requested to  introduce the item at the next 
session of the Sub-Committee.  He said that the gr oup of LDCs was not prepared to discuss the item 
and be given an opportunity to study the document for substantive contribution at the next session of 
the Sub-Committee.  
12. The Chairman  proposed that since some delegations we re expecting to see the presentation by 
the Secretariat, the paper might be presented at the meeting, but that further discussion on the item 
would take place at the next session of the Sub-Committee.  
13. The representative of Zambia,  on behalf of the LDCs, agreed to the proposal by the 
Chairman. 
14. The Chairman  invited the Secretariat to present the note to the Sub-Committee. 
15. The representative of the Secretariat  made a PowerPoint presentation on its note on market 
access issues related to products of export interest originating from least-developed countries.  He said 
that the mandate of the study came from paragraph 7 of the WTO Work Programme for LDCs 
(WT/COMTD/LDC/11).  The focus of the study was on tariff measures with a special topic of utilization of preferences.  He said that only a sm all number of LDCs reported to United Nations  WT/COMTD/LDC/M/38 
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COMTRADE Database making it difficult to locate trade of LDCs, and therefore mirror data was 
used as a methodology for the analysis. 
16. He said that since late 1990s the export growth of LDCs exceeded the export growth of the 
rest of the world.  LDCs' export profile was quite  concentrated with one product accounting for more 
than 50 per cent of exports for 25 LDCs.  Petroleum accounted for 42 per cent of total LDCs' exports 
while apparel constituted 24 per cent of total LDCs ' exports under merchandise exports category.  He 
showed that over the last seven-year period from 1995 to 2002, there was a structural change in the 
LDCs' export profile.  There was a substantial increa se of clothing and oil exports while food exports 
declined.  In terms of major markets, the United States and the European Communities together 
accounted for 56 per cent in 2003.  With a pie char t he explained that among developing countries, 
China, Thailand and India together were big markets for LDCs' exports.  He further pointed out that 
developing country markets accounted for more than 50 per cent of 17 LDCs' exports. 
17. He stated that evaluating total market acce ss conditions for LDCs was not easy as that 
condition was defined by a variety of factors such as MFN duties, non-recipro cal schemes, reciprocal 
schemes, conditions of granting access such as eligibility of countries, eligibility of products, 
non-tariff measures etc.  All de veloped countries granted the LDCs some degree of non-reciprocal 
market access.  On preference utilization, he pr esented some characteristic s:  (i) utilization of 
non-reciprocal preferences was less than 100 per cent;  (ii) utilization of non- reciprocal preferences 
varied by product within a scheme;  (iii) utilization of preferences varied across beneficiaries within a 
scheme;  and (iv) utilization of preferences varied within a market for a given LDC.  He highlighted 
recent initiatives to improve market access for LDCs.  In his concluding remarks, he said that there 
had been improvements in market access for LDCs in developed country markets.  However, data 
quality and availability continued to be a hindran ce to the Secretariat to look at the issue. 
18. The Chairman  thanked the representative of the Secretariat for his presentation.  He would 
revert to this item at the next session of the Sub-Committee. 
- Market Access for Least-Developed Countries in the Textiles and Clothing sector after the 
expiry of the ATC - Submission by Tanzania on behalf of Least-Developed Countries (WT/COMTD/LDC/W/36)  
 19. The Chairman
 said that the Group of LDCs had submitted a paper contained in document 
WT/COMTD/LDC/W/36, which outlined their concerns  following the phase-out of quota system with 
the termination of the Agreement on Textiles and Clot hing (ATC) at the end of the year.  He invited 
the representative of Zambia, coordinator of the LDCs, to introduce their submission. 
20. The representative of Zambia (on behalf of the LDCs)  said that the item was an important 
subject for many countries in which many LDCs had a stake.  The Group of LDCs considered the 
Sub-Committee as an appropriate forum to discuss and find a resolution to the problems with the 
phase-out of the ATC.  He said that market access was an important standing item of the WTO Work Programme for LDCs.  
21. He recalled that all quantitative restrictions on imports of textiles and clothing would come to 
an end on 1 January 2005.  With the expiry of the ATC, this sector would be fully integrated into the 
multilateral trading system.  The quota system had gove rned patterns of trade in that sector for many 
years.  It had helped LDCs immensely to develop their clothing industry.  The quota system along 
with preferential market access had played a critical role in the export growth of LDCs. 
22. He continued by saying that the export bases of LDCs were narrow and that most of the LDCs 
depended on two or three manufactured products including textiles and clothing for their export 
earnings.  In certain LDCs, that sector constitute d more than three quarters of total merchandise 
exports.  He expressed concern that elimination of quotas under which the industrialized countries WT/COMTD/LDC/M/38 
Page 4  
 
imported garments and textiles would have serious impact on LDCs.  There were clear indications 
that small suppliers in LDCs would be crowded out by  the large suppliers of the developing countries.  
There would be massive losses of jobs.  He said th at the negative impact would be felt hardest by 
hundreds of thousands of women workers employed in the sector who eventually would loose  their 
jobs as a result of phase-out.  He further said that most of those women had been the primary income 
earners for their families and had been major contributors to the rural economy.  Those job losses 
would therefore have serious poverty implications.   The socio-economic ramifications of transition 
might put enormous strength on budgets of those LDCs.  He sought international support, and 
intervention from the WTO without which most LDCs would not be able to withstand the shock.  In 
view of those concerns, he then outlined the re quest of the Group of the LDCs to the WTO to 
urgently:  (a) identify the problems associated wi th the phase-out of the ATC;  (b) analyze the 
scenario of market access in textiles and clothing sector for LDCs after the expiry of the ATC;  and 
(c) suggest measures to retain the market shares of LDCs, to render the adjustment process in the 
post-ATC period less painful and to ensure a smooth  transition of the integration of the textiles and 
clothing sector into the multilateral trading system  for LDCs while market di sruption is negligible.  
He referred to the WTO Work Programme on LDCs adopted on 13 February 2002 (WT/COMTD/LDC/11) where market access was a standing agenda item.  He stressed the vital 
importance of trade of textiles and clothing for LDCs.  He underscored the need for a plan which 
could avert the imminent threat to market acce ss of textiles and clothing for many LDCs.  He 
concluded by urging, on behalf of LDCs, the Sub-Committee to find a solution to that problem. 
23. The Chairman
 said that the textiles a nd clothing sector would be integrated into the normal 
WTO disciplines from the beginning of next year.  This would present opportunities as well as challenges.  He said that the Council for Trade in Goods (CTG) on 1 October 2004 had an exchange 
of views on post-ATC adjustment issues, where a group of countries including a number of LDCs had 
submitted a paper expressing similar concerns as t hose contained in the paper submitted by the LDCs 
as a group.  The views expressed by Members on the paper submitted at the CTG was mixed.  He 
further said that the Chairman of the CTG was undertaking informal consultations with delegations on 
the way forward on that issue.  
24. The representative of Nepal
 expressed his support to the submission by the Group of LDCs.  
He said that the textiles and clothing sector was important for his delegation because of its strong 
employment dimension, contribution to the economy, and as a major export item.  The 
socio-economic dimensions of the sector needed to  be included in the consideration of the market 
access issues.  The basic manufacturing sector was growing strongly because of the quota regime in 
the last few decades.  He said that several repo rts had pointed out the various implications of the 
post-ATC phase.  The WTO discussion paper also spelt out the adverse impact of the expiry of the 
ATC on textile-dependent poor countries away from th e major markets.   Similarly, other reports from 
the World Bank and the International Monetary Fu nd (IMF) indicated that LDCs and those totally 
dependent on textiles would be crowded out because of structural constraints, sophisticated global 
competition and a race to the bottom.  He said that  the burden of adjustment would be heavier for his 
country, it being an LDC as we ll as a landlocked country.   
25. He further stated that his Government had trie d to diversify the export base and to become 
more competitive over the years.  However, alternatives for them were hardly available to switch from 
one sector to other.  That was the biggest proble m.  He said that many countries had a number of 
sectors to depend upon and could adju st in due course of time to ot her sectors.  LDCs depended upon 
one or two sectors for their economic development, and dislocation in one sector could cause 
complete loss of employment and might lead to de-industrialization.  Its social implications should not 
escape attention as many women and their entire fa mily depended on that sector for their livelihood. 
26. He continued by saying that his delegation was fully committed to the multilateral trading 
regime and its obligations.  While remaining within  the parameters of the commitment to multilateral 
obligations and against the background of a high dependence on textiles of th e economy of LDCs, he  WT/COMTD/LDC/M/38 
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requested that  a detailed analysis be made of impacts on LDCs and immediate, effective and 
comprehensive measures to mitigate the adverse imp act of the expiry of the ATC.  He said that 
adjustment was the rule of the game, which was a continuous process.  However, dislocation of 
textiles was likely to sweep LDCs out of the market .  It was beyond their capacity to address the new 
situation.  He sought support from the WTO Members to face that situation.  The request made to the 
Sub-Committee was to enhance capacity of LDCs for increased trade.  Because of structural 
constraints LDCs needed extra measures to survive the onslaught and fulfil their development, finance 
and trading needs as well as to as sist them in a meaningful integration into the multilateral trading 
regime.  He further said that the presentation by th e Secretariat showed that LDCs exported few items 
such as oil, apparel and food items and - excluding oil - a large number of LDCs depended on export of apparel.  It was a question of viability of thei r economies and the impact was not sectoral.  In a 
development round, WTO Members should be sensitive  to the requests coming from Members at the 
lowest strung of the ladder and make sure that there would be an opportunity for them to survive in 
the new global trading regime. 
27. The representative of Senegal
 said that the coordinator of the LDCs had outlined the different 
problems of LDCs following the expiry of ATC.  He said that many developing countries including LDCs had expressed their apprehension about the upheavals that would take place after the 
integration of the textiles and clothing sector in to the normal WTO regime.  The risks were serious 
with loss of income for the more vulnerable parts of the population, particularly women, loss of 
employment and with less possibilities for diversifica tion.  He said that the problems of LDCs would 
be more severe because of the vulnerable nature of  LDCs' production base and export structure.  The 
chances of adjusting to other types of employment were very slender as LDCs did not have a solid 
and diversified economic base.  He expressed his co ncern that the investment opportunities relating to 
textiles and clothing were also threatened.  He said that at a time when integration of LDCs into the 
world economy was a priority of Members of the WTO, loss of the market shares of LDCs might not 
be ignored.  One of the goals of the Doha Development Agenda was to improve market access of 
LDCs, and not loss of their market share.  He echoed the request to the Sub-Committee to undertake 
the activities suggested by the Group of LDCs, wh ich would help the Membership find appropriate 
solutions within the WTO.  That should enable LDCs to withstand compe tition or make necessary 
adjustments to save their textiles and clothing sector. 
28. The representative of Japan
 welcomed Cambodia as a full WTO Member.  He said that his 
delegation had committed to the early accession of  the delegation of Cambodia and expressed hope 
that the delegation of Cambodia would be able to make useful contributions in various forums in the WTO, including in the Sub-Committee.  He said that his Government did not apply quota under the 
ATC.  He emphasized that all Members accept the fact of the expiry of the Agreement.  He said that 
the issue was being dealt with in the Council for Trade in Goods, and the distinction between the 
discussion in the CTG and in the Sub-Committee on LDCs should be borne in mind.  He further said 
that the discussion in the Sub-Committee should be based on the Work Programme contained in 
document WT/COMTD/LDC/11.  He underlined that the discussion should by no means affect the 
expiry of the ATC.  In that regard , he invited the LDCs to provide a cl arification of their request to the 
WTO Secretariat to suggest measures to retain the market share of LDCs contained in paragraph 13 of 
the submission by the Group of LDCs.  He said that the understanding of his delegation was that 
measures such as the extension of the agreement or introducing any new restrictive polices were not 
included in that request.  He recommended  to invite other international agencies such as the UNDP 
and the ITC, who were engaged in undertaking adap tation measures following the expiry of the ATC, 
to make presentations on supply-side assistance.  Finally, he clarified that tariff peaks and tariff 
escalations were not applied by his Government in the textiles and clothing sector.  The LDCs were 
offered duty-free and quota-free market access for all products in that sector. 
29. The representative of Lesotho
 said that after more than 40 years of import quotas the textiles 
and clothing sector would come under the general rules of the WTO from 1 January 2005.  She 
stressed the vital importance of the textiles and clothing sector to developing and least-developed WT/COMTD/LDC/M/38 
Page 6  
 
countries with strong strategic relationship to employment, income, growth, poverty alleviation and 
development.  That sector was the backbone of their economy accounting for a large percentage of 
foreign earnings.  In her consideration, tangible and meaningful benefits from the multilateral trading 
system could be derived from that sector.  She further went on to say that being labour intensive, that 
sector offered entry-level jobs for unskilled labour, particularly creating jobs for women who had 
previously no income opportunities.   She noted that 90 per cent of  employment in the textile and 
clothing industry of Lesotho were women.  She sa id that her delegation and other LDCs were faced 
with a number of challenges such as erosion of preferential treatment, possibl e retaliation with the use 
of trade remedies such as safeguards, anti-dumping and countervailing duties, imposition of 
requirements of labour and environment standards by global buyers.  She said that most of the LDCs 
were ill-prepared to face competition from more co st-effective suppliers.  She stated that LDCs were 
doing their utmost to increase th eir level of competitiveness.  She referred to a study on the garment 
industries of her country, which revealed that the pr oductive capacity of the sector was in the range of 
25 to 30 per cent.  She said that attempts were being taken to increase the competitive edge in that 
sector, and to bring productive capacity at par with international standards.  Against that background, 
she called for further discussion on the post-adjustment issues, as already done in the CTG, so as to map out a way forward towards overcoming the obstacl es from the integration of the textiles and 
clothing sector into the regular WTO rules. 
30. The representative of Djibouti 
welcomed the delegation of Cambodia as a full WTO Member, 
and hoped that its presence would strengthen the WTO negotiations as a whole and in particular 
promote interests of the LDCs.  He welcomed the initiative of the Gove rnment of Switzerland 
allowing opportunities for greater ex ports from LDCs and hoped that other countries would follow the 
examples of Switzerland.  He stressed that the issue under discussion was urgent and measures would 
have to be taken.  He stated that the very su bsistence of many LDCs de pended on the textiles and 
clothing sector.  It was a matter of life a nd death for many developing countries and the 
Sub-Committee should take requisite measures th at might lead to a solution on the matter.  
31. The representative of Rwanda  welcomed a discussion on the Secretariat's note on market 
access at the next session of the Sub-Committee.  She welcomed the delegation of Cambodia to the 
Sub-Committee.  She thanked the Government of Sw itzerland for the measures  taken for the LDCs.  
Her delegation would seek additional information from the delegation of Switzerland later.  She 
extended her full support to the statement made by the Coordinator of the LDCs.  She said that her 
delegation was not challenging the expiry of the ATC.   In her view, it was an appeal from LDCs for 
measures to mitigate the adverse repercussions on th e economy of LDCs resulting from the expiry of 
the ATC.  She said that adjustment was the rule of  the game;  but adjustment in that sector was far 
more difficult to accomplish given the LDCs' export structure.  That gave little room for manoeuvre.  
She concluded that a considerable investment wa s required before LDCs could make structural 
adjustments in that regard. 
32. The representative of Benin  supported the statement made by the representative of Zambia.  
He said that the submission made by the LDCs clearly outlined the context in which the expiry of the 
ATC would take place and the consequent adverse repercussion on the economy of LDCs.  He said 
that the textiles and clothing sector represented a high share of resources in the LDCs, which were 
vulnerable and poor.  The presentation made by the Secretariat on the earlier agenda item showed that 
textiles and clothing was a vital se ctor for the economies of the LDCs .  He urged that the competent 
bodies in the WTO consider the request made in the submission by the Group of LDCs.  He welcomed the delegation of Cambodia to the WTO.  
33. The Chairman
 said that he had taken note of the appeal by the representative of Benin to 
competent bodies in the WTO to deal with the request made in the submission by the Group of LDCs. 
34. The representative of Uganda  welcomed the delegation of Cambodia to the Sub-Committee 
and hoped that it would reinforce the efforts of LDCs  in the WTO.  He supported the statement of the  WT/COMTD/LDC/M/38 
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Coordinator of the LDCs, which outlined the plight of  LDCs after the quota phase-out.  He said that 
the presentation by the representative of the Secretariat showed clearly that LDCs were dependent on 
few commodities, of which textiles and clothing played a major role .  He shared with the meeting the 
historical evolution of the textile and clothing sector in Uganda.  In 1970 his country had a vibrant 
textiles and clothing sector.  The policies undertaken after the political turnover in 1971 did not 
support the industrial and commercial sector.  He said that his delegation was not an LDC by choice 
or by design.  He went on to state that since 1972 his country became a net importer of all items.  The 
only export items were cotton and coffee and those were  exported in raw forms.  In that process, jobs 
in spinning and trading were lost.  After 1986 hi s Government had been trying to rehabilitate the 
economy, and it was only recently after 2000, that they  had started to avail of the opportunity from the 
African Growth and Opportunity Act (AGOA).  With  the introduction of AGOA, investors came in, 
providing considerable employment for women.  He  said that no sooner had his Government started 
efforts in processing and manufacturing the quota regime came to an end.  He clarified that his 
delegation was not asking for the extension of the quota regime, but to spell out the problems, 
evaluate the impact and to chart out the way forward for the LDCs.  He said that since the 1990s his 
Government had taken measures to diversify expo rt to produce exportable commodities including in 
the textiles sector.  The AGOA had been a big motiva tion.  If measures were not taken by the WTO, 
the current efforts being put in place would prove  useless.  Balance-of-p ayments problems would 
come back with massive unemployment and there would be influx of young graduates into other 
Members.  He said that the request for a study to guide the LDCs on the way forward, which could 
identify measures necessary to mitigate the likely prob lems, was modest.  He reiterated that he did not 
call for an extension of quota regime but called fo r a focussed study to chart the way forward.   
35. The representative of Bangladesh  welcomed the delegation of Cambodia to the 
Sub-Committee.  He said that the price paid by  the delegation of Cambodia for its accession was 
steep.  He looked forward to seeing other LDCs jo ining the WTO on better terms.  He fully endorsed 
the statement made by the representative of Zambia on  behalf of the LDCs.  He said that all the points 
made by that delegation were valid for his delegation.   He said that his delegation's commitment to the 
multilateral trading system was total.  This shared  view was also the reason that more LDCs were 
joining the Organization.  He said that market access was the most fundamental issue within the 
multilateral trading system.  From his delegation's perspective mark et access provided a demand and 
an opportunity for products of LDCs provided there was response from the supply-side.  He said that 
supply-side was a different challenge which needed to  be tackled by individual Members.  He stated 
that preferential market access in the textiles an d clothing sector had provided opportunities and the 
private sector had responded to those opportunities.   He underscored that the WTO had a development 
dimension.  He said that given the importance of trade in development, one could not ignore WTO's 
rules and their impact on developmen t opportunities of LDCs.  Those co nsiderations should be further 
reflected upon before a decision was taken.  Would the WTO be able to examine the problems of 
LDCs and when?  Would it be an ex-post analysis to find out problems of past years or would it be at 
a time when the issues were alive and a reality?  His delegation was looking for that reality - to look at 
the present and trying to understand what would likely happen.  He said that no delegation was asking 
for an extension of the quota system.  He further said that all Members had accepted through their 
commitment to the multilateral trading system that th e quota system would end at the end of the year, 
and from 1 January 2005 all Members would work in a quota-free environment.  He said that if 
national solutions had been found, every Member would have been working on those solutions.  A 
study might reveal whether there we re any solutions within the multila teral trading system to address 
the problems.  His delegation had no pre-conceive d notion of specific solutions that were being 
propagated.  The study would lead to solutions.  
36. He referred to the discussion in the Council for Trade in Goods (CTG) on that subject, and 
said that there was no bar of discussions of the sa me topic in different forums.  In his view, it was 
important that each forum looked at issues from its own perspective.  His delegation was looking at it 
from the perspective of LDCs and the market access problems they were facing and likely to face.  
Therefore, the discussion in the Sub-Committee wo uld be different from the discussion in the CTG WT/COMTD/LDC/M/38 
Page 8  
 
and he hoped that the membership would appreciate that distinction.  He said that discussion of the 
issue without looking at the reality and the problem s of market access would be a useless exercise.  
Furthermore, he underlined that the multilateral trading system provided special and differential 
treatment for Members.  There were provisions in  the multilateral system which took into account the 
problems of developing countries as a whole and there were specific measures for the LDCs.  He 
hoped that within the framework of Special and Di fferential Treatment for LDCs the issue might be 
taken up.  He strongly urged that the WTO Secretar iat, being a neutral impartial body, be asked to 
look at the problems as the Coordinator of LDCs indicated and that after a study was prepared by the 
WTO Secretariat, Members would decide on the next course of action.  
37. The representative of Mozambique
 supported the statement of the Co-ordinator of LDCs, who 
in her view, well articulated the problems to be faced by LDCs as a result of the phase-out of the 
ATC.  She supported the submission made by the group of LDCs.  
38. The representative of China  welcomed the delegation of Cambodia as a full Member to the 
Sub-Committee.  She said that her delegation had made constructive contributions in the accession 
process of both the delegations of Cambodia and Nepal.  She looked forward to work closely with the delegation of Cambodia in the Sub-Committee.  Sh e said that her delegation had always been 
attentive to the concerns of LDCs and had been trying to accommodate needs of the LDCs.  Her 
delegation had provided technical assistance to the LD Cs aimed at poverty alleviation such as through  
establishing food processing factories.  In some African LDCs, her Government had set up projects to 
alleviate AIDS problem, which proved to be useful.  She said that her Government, within the limits 
of its resources, had provided non-reciprocal trade preferences to most of the LDCs. 
39. She continued by saying that the Secretariat paper on market access identified her country as 
the third largest import market for LDCs.  She said  that her Government had assisted many LDCs in 
establishing their textile industries in Asia and in Africa and would continue to do so.  In her view, the 
issue as well as the ideas and proposals contained in the submission by LDCs on the item were no 
different from the one being discussed in the CTG.  She said that the CTG, in addition to its formal meeting on 1 October 2004, had also held informal consultations.  There had been no consensus on that issue including specific proposals for a study and a work programme raised by certain Members 
at the CTG, some of whom were co-sponsors of the paper submitted to the Sub-Committee.  On that 
issue, she sought guidance from the Chair as well as from the Chair of the CTG.  
40. She emphasized that the adjustment issue of the textile and clothing sector should be seen in 
the larger picture along with its possible impact on ot her sectors;  consistency in consideration of the 
issue should be maintained.  Agricultural trade wa s still distorted through huge amounts of subsidies 
and tariff peaks by developed Memb ers and the integration of that se ctor into the multilateral trading 
system would be the central task of the Doha Round.  Like after previous Rounds, the results of this 
Round would cause necessary adjust ments by Members due to new oblig ations of tariff reduction or 
preference erosion or from competition from more  competitive trading partners.  That kind of 
adjustment applied to all industrial goods such as automobiles, television sets, cameras, or textiles and clothing.  She further noted that this would also be the case in agriculture from beef to sugar, to diary 
products, and, in Services, from insurance to banking, to telecommunications and to distributing 
services.  She said that at the informal consultations organized by the Chair of the CTG, several 
delegations pointed out that it was too early to say who would be the winners and losers since textiles 
and clothing trade was a dynamic process and there were variables other than quota.  She explained that the market access barriers of textiles and clothing exporting Members, after quotas were 
eliminated, would be tariff peaks, tariff escalation, "soft power" measures i.e. labour standards, 
environmental standards and security requirements.  She said restrictive preferential rules of origin 
applied by preference-granting countries, aiming at providing protection to their domestic industries, 
was also a barrier for LDCs and her delegation was ready to discuss such market access problems so 
as to achieve meaningful liberalization of textiles and clothing trade in the post-quota era.  That was  WT/COMTD/LDC/M/38 
 Page 9 
 
 
the part of the work that the Members were supposed to do under the WTO Work Programme for 
LDCs. 
41. She went on to say that characterizing a Member  to be a winner or loser in the textiles and 
clothing trade purely in terms of market share after the quota were eliminated would be simplistic.  
Quota elimination would expand the global trade of textiles and clothing substa ntially and therefore a 
decline in market share did not necessarily lead to to tal decrease of the textiles and clothing exports of 
a Member.  Each exporting Member had its advantag e and disadvantage and niche markets in various 
segments of the textiles and clothing sector.  Her de legation might be considered as a winner in some 
categories but losers in other categories.  She shar ed with the Sub-Committee that in 2003, 47 out of 
158 categories of textiles and clothing exported by China to the European Communities and 49 out of 167 categories to the United States actually declined .  The rapid growth witnessed by some categories 
was due to the result of painful adjustment gone through by China's textiles and clothing industries 
over the past few years.  She added that hundreds of outdated factories had been closed down costing 
jobs of hundreds of thousands of textiles workers, mostly middle-age d women.  It was because of the 
painful adjustment that her country became competitive in the world market. 
42. She expressed her delegation's readiness to c onsider the concerns of LDCs regarding the 
possible adjusting difficulties in the post-ATC period and assured her willingness to explore ways and 
means to address those concerns.  She outlined a number of possible ways that Members could 
consider, which were also suggested at the formal and informal consultations in the CTG.  First, 
further relaxation of preferential rules of origin by major importing Members would allow the LDCs 
to fully enjoy the preferential treatment and free LDCs from the conditions of using 100 per cent 
imported yarns or fabrics from the preference granting Members.  Second, full use of the item on 
Coherence in the General Council by highlighting th e needs for technical and financial assistance to 
the LDCs to address supply-side co nstraints and to improve their co mpetitiveness in world markets.  
Third, enhanced technical and financial assistan ce by developed Members to LDCs on a bilateral 
basis and encouragement of the companies of de veloped Members to make  more investment and 
transfer relevant technologies in the textiles a nd clothing sector of the LDCs.  Finally, she 
underscored the importance of increa sed South-South cooperation.  In that regard, her Government 
had made efforts in the past and would continue to  do so.  In concluding, she hoped that through the 
above-mentioned measures Members would be able to address some of the concerns of LDCs and 
would help alleviate their difficulties in adjustment.  As regards the proposal made by the 
representative of Japan inviting the UNDP and the IT C to make presentations relating to supply-side 
constraints, she said that she would refer this new proposal to her Capital for consideration.  
43. The representative of Mauritius
 appreciated and supported the thrust of the submission by 
LDCs, which called for a specific work in the Sub- Committee.  In his view, that was complementary 
to the submission made in the CTG, where his country was a co-sponsor.  He appreciated the 
statement by the Chairman on the process taking pla ce in the CTG.  While agreeing to the remarks by 
the Chairman that views on the matter expressed by Members at the CTG were mixed, he said that there had been wide recognition of the problem.  He underlined the importance of an exchange of 
views on the issue to find solutions.  He appreciated the efforts being made by both developed and 
developing trading partners, including India, Pakistan and  China.  Referring to the suggestions made 
by the representative of China, he said that Members should discuss how those solutions could be 
applied holistically.  He said that  the question of the rolling back of the ATC was not a preoccupation 
among the measures to address the problem.  He f ound the suggestions of recourse to coherence and 
use of work of other institutions useful.  He suggest ed to bring symbiosis of all these suggestions and 
efforts in addressing the problem.  There was an i mminent problem, which had to be fixed.  He hoped 
for an expeditious solution on a consensual basis. 
44. The representative of Cambodia
 expressed his appreciation to the Chairman for the warm 
welcome extended to his delegation.  He also thanked all those Members who had supported the delegation of Cambodia during its accession nego tiations.  He appreciated the statement by the WT/COMTD/LDC/M/38 
Page 10  
 
representative of Zambia, made on behalf of LD Cs.  He hoped to participate actively in the 
deliberations of the proposal made in the submission by the Group of LDCs.  
45. The representative of India
 welcomed the delegation of Cambodia to the WTO and hoped to 
work closely with them in the WTO.  He expres sed his sympathy and concern on the issue under 
consideration.  He noted and appreciated the observa tion made in paragraph 12 of the submission by 
the LDCs that they were committed to the multilater al trading system and were ready to discuss the 
issue within the parameters of the system consistent  with its objectives and principles.  He recalled 
that the integration of the textiles and clothing sect or into normal WTO/GATT disciplines would take 
place from 1 January 2005.  That would be an impo rtant step and would strengthen the credibility of 
the multilateral trading system.  He noted that integra tion of international trade in textiles and clothing 
presented countries with continuing challenges.  That, however, should cause no surprise.  The 
process of trade reform had seldom been free from  the pain of restructuring and adjustment.  He 
further mentioned that the costs of adjustment to  the phasing out of quantitative restrictions in 
international trade in textiles and clothing had be en aggravated by the back-loading of the reform 
process in the major restraining Members.  
46. He said that the imminent end of quantitative re strictions in the textiles and clothing trade had 
triggered a new dynamic in many economies making it difficult to foresee with any certainty what 
shape the global textiles industry would take.  He said that the design and architecture of the textiles 
and garment industry in his own country was undergoing a major transformation.  There had been a 
resource intensive consolidation of fragmented  industry with major new investments.  His 
Government had taken tough reforms in the fiscal duty regime.  With textiles contributing around four per cent of GDP and twenty-one per cent of to tal exports, that process had a vital bearing on 
overall growth of the economy of his country.  He sa id that the textile sector was the second largest 
employer in the economy, following agriculture, accounting for 34 million jobs directly and for 
another 47 millions in allied activities.  Those figures underlined the economic, social and political 
sensitivity of the textiles sector for the Indian economy.  Any uncertaint y over the underlying 
expectations of the emerging regi me of international trade in te xtiles and clothing could cause 
enormous damage to the economy. 
47. He further said that paragraph 3 of the submission by the Group of LDCs underscored the 
importance of preferential schemes and in that cont ext preferential rules of  origin had significant 
importance.  He referred to the Secretariat's no te contained in document WT/COMTD/LDC/W/35 and 
TN/MA/S/12, which highlighted the fact that pro duct eligibility criteria and rules of origin were 
among some of the reasons for low utilization ra tes under various non-reciprocal preferential 
schemes.  He further said that numerous studies including a short essay on "non-reciprocal 
preferences and the multilateral trading system" in the WTO's World Trade Report 2004, had underscored the need for making those rules of or igin requirements easier to enable developing 
Members, in particular LDCs, to use preferences available under such schemes.  He noted from the 
Secretariat's analysis that for LDCs' exports, th e utilization rates remained less than 50 per cent. 
48. He then recalled that there had been no consensus on some of the specific proposals in the 
CTG.  Would the study be merely an academic exerci se or would it suggest specific remedies for the 
difficult transition confronting some countries?  We re the problems to be addressed amenable to 
solutions at the WTO or did the problems call fo r domestic policy adjustment, restructuring, 
diversification etc.?  If the objective was to look for technical and financial assistance to ease the pain 
of adjustment;  would the WTO have a central role to play?  Similar questions and systemic concerns might be raised with the proposal for the developmen t of a programme of work on sectoral basis at the 
WTO as proposed by some Members at the CTG.  He concurred with the delegations of China and 
Mauritius that in some of those areas coherence be tween multilateral institutions might be promoted.  
He also noted the point of supply-side constraints in that regard.  He said that his delegation as a 
developing country could not be unconcerned or unresponsive to the issues that had been raised and his delegation was ready to discuss further with  the concerned Members to obtain a better  WT/COMTD/LDC/M/38 
 Page 11 
 
 
understanding of their problems.  His delegation would be open to all productive and constructive 
suggestions.  He concluded that any such dialogue would have to be conducted on the basis of 
adherence to legal commitments without introducing new distortions or revisiting agreed parameters 
of ongoing negotiations. 
49. The representative of Hong Kong, China,  welcomed the delegation of Cambodia to the WTO.  
He expressed his sympathy to the concerns raised under the item.  He said that like for any other 
sector adjustment in the textile and clothing sector  would entail gains and pains in long and short term 
perspectives.  Adjustment in the clothing sector had been compounded due to artificial distortions 
over 40 years under the Multifibre Arrangement (MFA ) and the ATC, and by the manner in which 
major restraining Members decided to backload their integration programme.  He appreciated that the 
LDCs were ready to discuss the issue within the pa rameters of the multilateral trading system and to 
accept any solution consistent with the objectives and principles of the system.  He felt encouraged by 
the reaffirmation of LDCs that they were not questio ning the expiry of the ATC.  He agreed that any 
potential measures should be within the parameters of the WTO system.  In dealing with the issue, he 
placed equal importance at other components of the wider international system such as the role of  the UNDP, the ITC, the IMF and the World Bank in helping Members with policy coherence and in 
delivering specific programmes assisting countries  with economic transition and adjustment.   
50. He underlined the importance of the ongoing NAMA negotiations to address tariff peaks and 
non-tariff barriers in that sector, which was an unfinished business from the Uruguay Round.  Quotas 
were one of the many factors affecting global trad e in textiles and clothing.  Various studies had 
highlighted that factors such as distance to market , response time, tariff differ entials and preferential 
trade arrangements had an increasingly significant im pact on the global trade in textiles and clothing.  
He further underscored the importance of preferenti al rules of origin, which could alleviate pains in 
the adjustment process.  He substantiated his point  with examples.  He referred to the Secretariat 
presentation of its paper on market access of pro ducts originating from LDCs, which found that 
utilization rates of preferential acce ss under such schemes varied, with some lower than 50 per cent.  
He pointed to the differences in the rules of  origin applied by the United States and the 
European Communities in determining qualificatio n for preferential market access.  While single 
transformation was required under AGOA, schemes by the European Communities required double 
transformation to get access into their markets.  He drew Members' atten tion to a case study on 
Lesotho contained in the WTO World Trade Report 2004 and read out the following excerpts from 
the report:  ''The Rules of Origin requirements for the European Union, however, required a 'double jump' in processing when imported inputs are utilized .  This means the conversion of imported fabric 
into sewn garments would not qualify as a product or iginating from Lesotho.  As a result, Lesotho's 
garment exports do not benefit significantly from pref erential market access into the EU.  In contrast 
to the EU rules of origin, the scheme applied by the United States in the context of AGOA  allows a 
'single jump' in processing.  As a result, Lesotho' s exports of garments to the United States have 
increased dramatically in the past three years."  He said that with the removal of quota that 
discrepancy would become more significant with unna tural distortions to investment and trade.  He 
said that double transformation demanded vertical  integration and hoped that the requirement of 
double transformation would be removed.  He concl uded that the rules of origin might be an area 
where Members might find some possible remedial measures without unduly af fecting the legitimate 
trade of other developing country exporters. 
51. The representative of Pakistan
 welcomed the delegation of Cambodia to the Sub-Committee.  
He underlined the importance of the debate under this agenda item not only for LDCs but also for 
developing Members like Pakistan.  He said that the textiles and clothing sector was vital for the 
growth of the economy of his delegation, which was a poor developing country with a per capita 
income of less than US$500.  He said that textil es accounted for more than 44 per cent of all 
merchandise exports of Pakistan while the figure was 24 per cent for garments thereby making the 
economy heavily dependent on that sector.  That sector, together with cotton production, was the 
largest source of employment and livelihood. WT/COMTD/LDC/M/38 
Page 12  
 
52. He went on to say that his Government had alr eady undertaken adjustment in that sector and 
was still struggling with adjustment problems.  The problem of adjustment was not only a problem for 
LDCs but also for his country.  He said that the integration of the ATC into the normal WTO rules did 
not rule out the uncertainty in that sector.  He looked forward to the phase out of the ATC by the end 
of the year.  In the field of trade, clichés like imperfect competition, perfec t competition, comparative 
advantage had taken a different dimension.  Co mparative advantage had become contingent on 
preferential schemes, rules of origin, safeguard m echanism, determining market access of developing 
countries into larger markets.  It was important to look at the broader perspectives of the organization 
and the multilateral trading system which stood fo r opening up of markets, trade liberalization, 
development, and eradication of poverty.  He expressed concern with the existing rampant trade 
distortions in the system and that any discussion should not create new distortions, which would add to the plight of many developing Members.  He said that the structural impediments would remain for 
LDCs and other developing countries during the adjustment period and might be discussed in the 
coherence debate.  In that regard, he encour aged the World Bank and IMF to come up with 
programmes and recommendations to assist countries  facing such adjustment problems at present or 
in the future.  He supported the observation made by the delegation of Hong Kong, China on preferential rules of origin, which had merits in addressing the problems. 
53. The representative of Myanmar
 supported the statement made by the representatives of 
Zambia, Bangladesh and other Members of the Group of LDCs.  He welcomed the delegation of 
Cambodia as a full WTO Member to the Sub-Committee. 
54. The representative of the European Communities  welcomed the delegation of Cambodia to 
the Sub-Committee.  He thanked the delegation of Zambia and other Members of the Group of LDCs 
for their interventions which had been useful to bett er explain what was envisaged.  He said that it 
was obvious and no delegation had challenged that quot as in place would go at the end of the year, 
and at that point that particular trade policy instru ments would change.  He underlined that some of 
the underlying factors would still exist next year.  First, the European Communities would continue to apply duty-free and quota-free pr eferential treatment to LDCs.  Zero duty for unlimited quantities 
would continue to be applied under both th e Everything But Arms Initiative (EBA) and the 
Cotonou Agreement.  Second, the European Communities would continue to look at possible 
adjustments of its own preferential rules of origin schemes and might work on the suggestions to 
further facilitate regional cumulation alre ady allowed in the existing schemes.  The 
European Communities would work towards a system of supporting sustainable investment and economic activity in LDCs.  As mentioned by some  and as illustrated by the presentation from the 
Secretariat, there was scope for action by other Members of the WTO to increase the level of 
preferences accorded to LDCs.  
55. He continued by saying that the European Communities were the largest provider of overseas 
development assistance and trade-related technical assistance (TRTA) capacity building, and he hoped that this would continue to be the case.  He underscored that individual LDCs needed to work with the Member States of the European Union as well as with other donors to ensure that their 
concerns on adjustment and dive rsification and on broader questio ns of competitiveness of their 
industrial or agricultural sectors were incorporated into the national development strategies and into 
TRTA programmes.  He said that negotiations we re under way between the EC and members of the 
ACP on a sub-regional basis where regional inte gration might also help as part of a broader 
development strategy.  He recogniz ed the concerns of LDCs with th e termination of the quota system 
at the end of the year.  He acknowledged the co ncerns expressed at the CTG of other non-LDC 
smaller exporters in that regard.  He agreed with the Chairman that a certain degree of coherence 
would need to be applied in the treatment of th e matter in the CTG and in  the Sub-Committee.  His 
delegation was broadly sympathetic to the suggesti ons made by the LDCs for a study.  But it was 
evident from the discussion that a consensus on that was not possible and felt that further work was 
required including defining the precise scope and contents of any work under the WTO.  In his 
perspective, a study might be useful for LDCs them selves in helping them further develop their own  WT/COMTD/LDC/M/38 
 Page 13 
 
 
adjustment strategies.  He said that any suggestions that might emanate from the Secretariat in terms 
of actions or measures should remain within the legal scope of the WTO agreements and the ongoing 
Doha Development Agenda (DDA) negotiations.  He recognized the case of coherence and agreed 
with the delegation of Japan to involve other organizations such as  the World Bank, the IMF and the 
UNDP in assessing the effects of the end of the quota system.  He referred to the recent General 
Council meeting on Coherence with the IMF and the World Bank and said that the WTO needed to 
integrate such coherence into its regular work.  
56. The representative of Turkey  welcomed the delegatio n of Cambodia to the WTO.  Turning to 
the agenda item at hand, he said that the issue was genuine.  There were many countries including 
LDCs, land-locked countries, small economies, vulner able economies, as well as developing countries 
that would have real concerns in the post-ATC period.  While he understood that the discussion under 
the Work Programme of LDCs highlighted the LDCs' perspective, the issue was also under 
consideration at the CTG in a more general context.  The time had come to find solutions and concrete 
proposals wherever the discussions took place.  He referred to the suggestion made by the delegation 
of Bangladesh that a study by the WTO Secretariat could be a starting point in that regard.  He suggested that the study might also look at issues re lated to rules of origin.  He emphasized the broad 
nature of the issue and urged a contribution by all WTO Members to find broad-based solutions.  
57. The representative of the United States
 welcomed the delegation of Cambodia and hoped that 
it would be actively engaged in th e Sub-Committee.  She expressed he r appreciation to the Secretariat 
for the study on market access, which had some interesting findings.  She looked forward to 
discussing the study at great depth with all participants in the next session. 
58. She expressed her satisfaction that Members were  underscoring the importance of elimination 
of the quotas.  That, she said, was important historically for the institution as well as for the global 
economic activity.  She said that the economy of  her country had gone through a significant and 
painful transition with the ultimate goal of being able  to face a situation without quotas in the textiles 
and clothing sector.  Her delegation had observed  substantial shifts in pro duction patterns through the 
third stage of the integration proc ess and a sharp drop of exports from many smaller economies.  Her 
delegation was willing to study the problems and to work out any practical solutions which were 
consistent with the institution's goals.  She note d that there were questions raised on how the study 
would be done, and more reflection was required on content and focus of such a study.  She urged for 
a rapid action including interim work to find a solution before the next session of the Sub-Committee.  
She supported the views on coherence and its importance;  in that context she welcomed the idea of inviting the ITC and the UNDP.  She suggested to also invite the World Bank and the IMF which 
worked on the matter and had come up with ideas to he lp in the transition process.  She said that her 
delegation had worked hard to ensure that those institutions were mindful of the impending change. 
59. She continued by saying that her Government  had been helping Members to anticipate the 
changes that were coming at the end of the year and would continue to help Members with that transition.  Her Government had participated in the Regional Conference held in September in 
Lesotho.  She said that her Government  had extensive bilateral aid programme s to assist small 
economies in understanding the impact of the phase-out of quotas and analyze options.  She hoped to 
share any useful information from those programmes as the results of those activities were assessed . 
In her view, large apparel exporting countries ha d a shared responsibility to assist developing 
countries in the transition.  She expressed her sa tisfaction with concrete ideas advanced by the 
delegations from China and India. She said more analysis might be done in the preferential programmes and large developing countries might do  more in providing preferential access to LDCs 
in the textiles area.  She also said that solutio ns might be found in the context of the NAMA 
negotiations to help ease the transition while not un dermining liberalization.  More work was required 
to assist LDCs taking advantage of the existing pr eferential programmes.  She said that many LDCs 
did not request the preferences to which they had a right.  She referred to the differences across countries in their utilization of preferences, as poin ted out in the Secretariat' s presentation.  Finally, WT/COMTD/LDC/M/38 
Page 14  
 
she emphasized the importance to address the prob lem in a WTO-consistent way with engagement of 
all Members and hoped for an expeditious solution. 
60. The representative of Brazil
 welcomed the delegation of Cambodia to the Sub-Committee.  
He said that with regard to the proposal of a st udy, the concern of his delegation was of systemic 
nature.  The problem in a specific sector should not be dealt with by the WTO in a study, particularly 
in the textiles sector, which had been discriminated for many decades.  Members had to face the 
challenges of liberalization, which involved differen t sectors at the same time.  Textiles issues should 
not be singled out.  Winners in one sector could be losers in another sector and vice versa.  Besides, 
his delegation failed to perceive th e value added of another study on textiles where many data were 
already available.  Different factors interfered in trad e.  Many of those factors could not be captured in 
a general equilibrium model.  Therefore, simulati on and speculation of what might happen would not 
add value.  Instead, he suggested to focus on so lutions.  Among the solutions, he highlighted the case 
of coherence, preferential rules of origin and the issue of market access - the major point of concern of 
LDCs.  In that regard, he recalled the improved opportunities from improved South-South trade.  The 
Global System of Trade Preferences Among Deve loping Countries (GSTP) had launched a new round 
of negotiations and might present a way to approach th e erosion of preferences.  He said that in the 
GSTP, LDCs might benefit from non-reciprocal prefer ences.  This issue, in his view, deserved more 
attention. 
61. The representative of Costa Rica  welcomed the delegation of Cambodia to the 
Sub-Committee.  He said that his delegation was not opposed to the discussion of the issue in the 
Sub-Committee.  He, however, underlined the point th at the same subject was being discussed in the 
CTG and urged to avoid duplication of work.  It was important to work with Bretton Woods 
Institutions on the matter to ensure consistency an d coherence.  He concluded by saying that the 
discussion of the issue and future action, if taken, should conform to the WTO rules. 
62. The representative of Mauritania  fully supported the statement made by the representative of 
Zambia on behalf of the LDCs an d welcomed the delegation of Ca mbodia as a full Member to the 
WTO.  
63. The representative of Angola  welcomed the delegation of Cambodia to the WTO.  He 
supported the submission by the Group of LDCs.  He said that measures by the WTO as suggested in 
that submission would reduce negative consequences for LDCs following the phase-out of the ATC.  
The recognized vulnerability of the LDCs in the multilateral trading system should be taken into 
account. 
64. The Chairman  said that the meeting had had a good exchange of views on the submission by 
the LDCs contained in document WT/COMTD/LDC/W/36.  The discussion had helped the 
Membership to understand the LDCs' concerns bett er.  He drew the attention of Members to the 
strong appeal from the LDCs to the Sub-Committee to come up with a solution to their imminent 
problems following the expiry of the ATC.  The LD Cs were of the view that a solution for their 
concerns could be found under the market access item of the Work Programme for LDCs.  The Chairman expressed satisfaction about the construc tive nature of the discussions.  Members had 
recognized the critical adjustment challenges th at many LDCs would face in the post-ATC 
environment.  A number of delegations had underlin ed the need for an expeditious solution to the 
concerns of LDCs.  He emphasized that the LDCs Group was not asking for extension of the ATC.  Several Members had appreciated the readiness of LDCs to find solution s within the parameters of the 
multilateral trading system.  He recognized that there was a lot of sympathy for the idea to request the 
Secretariat to undertake a study.  He also referred  to a number of suggestions made, such as engage in 
work on preferential rules of origin, strengthen a nd use the coherence mandate, enhance South-South 
cooperation etc.  He proposed to meet with the Chairman of the CTG to discuss the scope and 
contents of a study that would also draw on work done in other agencies.  The proposal of such a study would be presented in due course.  He appealed for cooperation from Members.  WT/COMTD/LDC/M/38 
 Page 15 
 
 
65. The representative of China  said that it was beyond her present mandate to agree to the 
proposal by the Chairman.  There was no consensus in the CTG regarding the proposal for a study.  
The item before the Sub-Committee was no different from that in the CTG.  The co-sponsors of the 
submission in the CTG involved some LDCs.  She underlined the point of maintaining coherence and 
consistency in considering the issue in two forums. 
66. The Chairman  suggested an intermediate proposal.  He proposed to discuss the possibility of a 
study with the Chairman of the CTG instead of discussing the scope and contents of a study.  He also 
requested delegations to differentiate between pr oposals made by the LDCs and those made with 
other developing countries.  He requested the delegation of China to reflect on his revised proposal. 
67. The representative of India  said that his delegation was looking at the issue with great 
sympathy and concern and was willing to further disc uss with concerned Members to obtain a better 
understanding of their problems.  He agreed with the Chairman that the discussion had helped to 
better understand the concerns of LDCs.  However, his delegation had difficulties in agreeing to 
undertake a study at that stage.  His delegation had a systemic concern.  Members were in the middle 
of negotiations and should further reflect collectivel y on the idea of a study.  His delegation had no 
mandate to consider a study on the issue.   A number of constructive ideas have been made and might 
be reflected further keeping in mi nd the sensitivities of Members.  He requested the Chairman to 
elaborate his revised proposal. 
68. The Chairman  repeated his revised proposal, which wa s to meet with the Chairman of the 
CTG to discuss the possibility of a study that would also draw on work of other international 
organizations and a possible proposal for a study would or might be presented in due course.  Such a 
study might also look at the elements suggested in the Meeting such as preferential rules of origin, 
Coherence and South-South co-operation. 
69. The representative of Djibouti  said that lack of knowledge, information and capacity 
prevented LDCs from benefiting from what was of fered to them.  He hoped that collaboration with 
international organizations might be encouraged and further examined for improvement.  The WTO 
needed cooperation from other international organizat ions.  In that regard, a paper might be useful. 
70. The representative of Hong Kong, China  said that he would not object to the Chairman 
consulting with the Chairman of the CTG on how to  take forward this matte r.  Such consultations 
should not be based on the presumption that there would be a study.  Any discussion should not 
prejudge the outcome.  He also said that the latest suggestion by the Chairman did not offer sufficient 
level of comfort to his delegation. 
71. The representative of China  maintained her earlier position that it was beyond her mandate to 
agree to the proposal by the Chairman and would have to seek instructions from capital.  She shared 
the views of the delegation of Hong Kong, China, that she would not oppose any kind of discussion 
with the Chairman of the CTG as to how to proceed with the matter.  She stressed the point of consistency in treatment of this issue under consideration in two forums.  She had difficulty to accept 
that discussions would take place under the assumption that in the Sub-Committee, convergence or 
consensus existed to discuss the possibility of having a study. 
72. The Chairman
 said that his suggestion was very open and he only wished to consult the 
Chairman of the CTG to put forward a proposal in future. 
73. The representative of Tunisia  welcomed the delegation of Cambodia to the WTO.  He 
suggested that the Chairman of the Sub-Committee m eet the Chairman of the CTG to discuss different 
elements which should serve as the basis for a future discussion concerning adjustments which might include carrying out a study at a future phase of nego tiations with a view to dealing with the concerns 
expressed by Members. WT/COMTD/LDC/M/38 
Page 16  
 
74. The representative of India
 said that the Sub-Committee had had a good discussion, which 
required further collective reflection.  His delegation had systemic concerns and appealed to the LDCs 
to look at the concerns of other delegations.  He would refer back all discussions to his capital and 
therefore would require more time to reflect on how to proceed on the matter.  He would not constrain 
the Chairman of the Sub-Committee to discuss with the Chairman of the CTG.  At this stage he had 
no mandate to agree on any study on a sectoral basis.  He requested the Chairman to take the concerns 
of his delegation on board. 
75. The representative of Bangladesh  said that the suggestion of the Chairman was not an actual 
study but the possibility of a study subject to approva l of Members at a later stage.  He said that 
discussing issues of interest to LDCs was the re sponsibility of the Sub-Committee.  He expressed his 
readiness to accept any decision from the Chairman.  He hoped that the Sub-Committee would 
follow-up on the issue.  He invited Members to reflect on the total contribution of LDCs in the 
US$400 billion global trade in textiles, which might provide Members a proper perspective.  
76. The Chairman  said that a number of delegations would require to consult their capitals on the 
matter.  He assured that he woul d come back to the issue and Members might further discuss in the 
light of their consultations.  
77. The representative of Uganda  invited those opposing the request of the LDCs for a study to 
come forward with convincing reasons.  He appe aled to the delegations of India and China to 
appreciate the predicaments of the LDCs.  Those Members had been their trading partners for ages. 
Almost all imports to his country came from those Members.  In contrast, they hardly imported 
anything from his country.  He expressed his frustr ation that the approach taken by those delegations 
would contribute to keeping his country remain un der US$1 a day, and in perpetual poverty.  He 
stated that his country had been exporting commodities in raw form with little value. Only recently 
Uganda had started manufacturing using its own cott on.  All his delegation was asking was to turn 
this cotton into value and get more resources which ha d hitherto not been possible.  In his view, those 
efforts were being discouraged, which was not acceptable to his delegation.  
78. The Chairman  said that there was no consensus to mandate the Secretariat to undertake a 
study in line with the request from the LDC Group.  He also took note of the fact that Members would 
reflect on his proposal to discuss with the Chairman of the CTG the  possibility of undertaking a study.  He noted that a number of major textiles importing countries supported the undertaking of a 
study.  He said that he would consult the Chai rman of the CTG and would report back to the 
Sub-Committee at a future meeting.  He encouraged  the LDC Group to continue to follow and involve 
themselves in the consultations being carried out by the Chairman of the CTG.  
79. The representative of Djibouti
 requested to know the exact position from the delegations of 
India and China and the problems that prevented them on agreeing to a study.  In his view, a clear 
position from those delegations would contri bute to the possibility of a consensus.  
80. The Chairman  said that his understanding was that those delegations would consult with their 
capitals.  They did not have the leeway to go ahead w ith a study at this stage.  He said that he would 
meet the Chairman of the CTG to discuss the way forward and would come back on that issue soon. 
81. The Chairman proposed to take note  of the submission by the LDC Group, and of the 
statements made. 
82. It was so agreed .  WT/COMTD/LDC/M/38 
 Page 17 
 
 
(ii) Trade-related Technical Assistance and Capacity-Building Initiatives for LDCs 
-  Assistance to address supply-side constraints (WT/COMTD/LDC/W/33) 
 
83. The Chairman  recalled that at its last session the Sub-Committee for the first time had a 
discussion on assistance to address supply-side  constraints under one single item.  Supply-side 
constraints were one of the major factors affect ing LDCs' integration into the multilateral trading 
system.  LDCs had been raising the issue in various discussions.  At the last session a number of 
delegations had emphasized the need to streng then the cooperation between the WTO and other 
organizations to better address the supply-side constraints of LDCs.  In that session the 
Sub-Committee had also heard statements from the representatives of UNIDO, the World Bank and the ITC on how these organizations were assisting the LDCs in addres sing supply-side constraints.  
He noted that delegations had suggested to keep th e item on the agenda for the next session.  He 
hoped that Members had had the time to reflect on the no te prepared by the Secretariat.  In view of the 
linkage made in the Secretaria t's presentation between market access and supply-side issues, 
discussion on that item might take place in the next session of the Sub-Committee.  He invited other Agencies to share with the meeting any information they felt relevant. 
84. The representative of Thailand
 welcomed the delegation of Cambodia, who was one of the 
Members of the Association of Southeast Asian Nations (ASEAN) and hoped that the country would 
reap the benefits from the multilate ral trading system.  She said that the paper by the Secretariat 
showed that a wide range of assistance was given to LDCs.  While underlining the usefulness of the 
study, she requested the Secretariat for a more in-depth analysis on supply-side constraints which might provide better understanding of LDCs' proble ms and which might also be useful in finding 
solutions for LDCs on sensitive issues such as those discussed in the previous agenda item.  In that 
regard, she urged the WTO to collaborate with other organizations in addressing supply-side issues.  
85. The representative of Zambia
 apologized for the fact that the LDC Group was not ready to 
effectively engage on the Secretariat's paper on market access.  He welcomed the delegation of Cambodia to the Sub-Committee.  At the last sess ion, his delegation indicated that the Secretariat 
paper on supply-side constraints was useful.  He re iterated that the paper might be a good basis for 
further discussions.  In that regard, he proposed  that the Secretariat make follow-up on two important 
issues and provide information before the next se ssion of the Sub-Committee.  First, to provide a 
summary of the state of implementation of the Integr ated Framework DTIS Acti on Matrices related to 
the strengthening of supply capacity fo r those countries that have completed and validated their DTIS.  
And second, to identify factors impeding progress in the implementation of the DTIS Martix in that 
respect.  He said that the DTIS Matrix had the objective of contributing towards strengthening the 
supply-capacity of LDCs. 
86. The representative of Djibouti
 said that a paper on supply capacity in a given country with 
relevance to international trade particularly involving  the transport sector would be useful.  He said 
that elements that prevented Members in making progress in trade should be identified before finding a solution to address supply capacity.  He sa id that there were in stitutional problems of 
supply-capacity in general.  He also stated the problems relating to transport of goods and 
under-capacity in the telecommunications sector.  L ack of human resources held back development of 
trade in certain sectors.  He felt that the Secretariat might look into all  those elements and draw up a 
report to show clearly which were the areas of pr iorities to be taken into consideration in those 
Members. 
87. The Chairman
 said that the information sought by the representative of Djibouti might be 
found in his country's Integrated Framework DTIS study.  He said that the World Bank and the 
UNDP, partners in the Integrated Framework, were also dealing with those issues. WT/COMTD/LDC/M/38 
Page 18  
 
88. The representative of Canada
 welcomed the delegation of Camb odia to the Sub-Committee.  
She said that her delegation had provided comments on the item under discussion at the last meeting.  
She said that assistance to address supply-side constraints needed to be placed in the broader context 
of the commitment by the international community  to the Millennium Development Goals (MDGs).  
The note by the Secretariat did not cover that aspect .  That missing link, she stressed, was crucial to 
the approach used to address the core issue of the link between trade and supply-side constraints.  She 
underlined the importance of keeping the broad picture in mind while continuing to address that paper 
specifically with the questions raised by the delegation of Zambia.   
89. The representative of Rwanda  stressed the link between MDGs and poverty reduction.  She 
agreed with the Chairman to come back to that subj ect in a detailed manner at the next session of the 
Sub-Committee.  She reported that a regional workshop had been organized by the UNCTAD in 
Kigali on the Integrated Framework.  The Workshop ha d had a rich debate.  Specific suggestions and 
recommendations had been made at the Workshop, which she felt might feed into the forthcoming 
discussion in the Sub-Committee.  She requested the IF Secretariat to communicate the 
recommendations and conclusions contained in the report of the Workshop, which might help the discussion, in particular the coordination aspect.  Commenting on the Secretariat's paper on assistance to address supply-side constraints, she said that so far in the IF the emphasis had been on diagnosis.  
She said that LDCs had reached a point to move on to implementation.  It was important to 
concentrate on implementation, which woul d resolve the supply-side constraints.  
90. The representative of China
 said that his delegation attached  high importance to the issue of 
supply-side constraints.  He felt the paper by the Secretariat was a good basis for further discussions. 
His delegation would join the discussion on that item in future meetings.  In response to a comment 
by the delegation of Uganda on the previous item,  he clarified that his country did import from 
Uganda in the year 2003 as evident from page 30 of the Secretariat's paper WT/COMTD/LDC/W/35 
and TN/MA/S/12.  He said that since 2003 his country had started to import manufacturing and 
mining products in addition to agricultural produc ts from LDCs.  That factor demonstrated that 
supply-side constraints constituted one of the factors preventing exports of LDCs into other Members.  He said that his delegation would be willing to  work with the delegation of Uganda and other 
Members of LDCs to address the problem. 
91. The Chairman
 said that he would come back to that item at the next session of the 
Sub-Committee and hoped for a more in-depth discussion.  He said that supply-side constraints 
remained a major challenge for LDCs' participation in international trade.  He hoped that the WTO, within its mandate, and other organizations, within theirs, would make every effort to address that critical challenge.  The Chairman proposed to take note
 of the statements ma de and to request the 
Secretariat to update its note on supply-side constraints (WT/COMTD/LDC/W/33) accordingly. 
92. It was so agreed . 
C. OTHER BUSINESS  
93. The Chairman  said that the Sub-Committee normally would meet early next year.  However, 
in light of the discussions on textiles and clothing and in view of the request from the delegation of 
Zambia on additional information concerning the IF's  role in addressing supply-side constraints, he 
would reflect on the need for a meeting earlier than that.  
94. In the absence of any other business, the meeting was adjourned . 
 
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