WORLD TRADE  
ORGANIZATION  WT/WGTDF/W/30 
15 April 2005 
 
 (05-1565) 
Working Group on Trade, Debt and Finance Original:   English 
  
 
COMMUNICATION FROM THE ACP 
 
 The following communication, dated 14 April 2005, from the Delegation of Benin is being 
circulated to Members in advance of the Working Group's meeting of 18 April.    
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DRAFT ACP SUBMISSION TO THE WORKING GROUP 
ON TRADE, DEBT AND FINANCE 
7 APRIL 2005 
 
 1. The establishment of the Working Group on Trad e, Debt and Finance (WGTDF), pursuant to 
paragraph 36 of the Doha Ministerial Declaration, is  one of the more concrete manifestations of the 
development focus that the Doha mandate must have .  The issues and concerns raised by developing 
and least-developed countries in relation to the crea tion of the WGTDF continue to be as relevant 
today as they were at the time of the Doha Minister ial Conference.  The trade and debt linkage is at 
the core of the development problematique.   
2. In many cases, developing countries incur de bt as a result of trade failures such as 
fluctuations in commodity prices, the lack of dive rsification in their economies, the concentration of 
exports in income-inelastic commodities, and reduc tions in tariff revenues af ter import liberalization 
uncompensated by increases from other tax revenue sources.  Furthermore, the trade, debt, and financial problems of developing countries are set in a broader context, in which key issues that need to be effectively addressed include, inter alia , increased market access for developing-country 
exports, declining world commodity prices, dei ndustrialization resulting from imbalances in the 
multilateral trading system, and problems of technology transfer.   
3. World agricultural commodity prices have fa llen by some 50 per cent over the past two 
decades.  UNCTAD estimates that this might amount to foregone agricultural export earnings of over 
US$60 billion annually for developing countries.  Tariff protection continues to work against 
developing-country exports.  In the case of agricu lture, tariffs applied by industrial countries on 
developing-country exports average between 25 per cent and 30 per cent, as compared to an average 
15 per cent for those from industrialized countries.  Losses from anti-competitive practices are 
estimated at US$15 to 30 billion a year.  All of these structural problems translate into foregone incomes for producers and foregone tax revenues for governments in developing countries.  Only if 
these constraints are removed and the losses recouped w ould developing countries be able to expect to 
achieve their specific Millennium Development goals and targets. 
4. Given the continued relevance and importance of  the issues addressed within the WGTDF for 
developing and least-developed countries, the WGTD F should recommend to the General Council, for 
transmittal to the 6
th Session of the Ministerial Conference in Hong Kong, China, in December 2005, 
that the WTO's work programme on trade, debt and finance be further strengt hened institutionally and WT/WGTDF/W/30 
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 made more focused on issues of particular im portance and relevance to developing and least-
developed countries.   
5. In particular, the WGTDF should recommend that pursuant to Article IV:7 of the WTO 
Agreement, the Ministerial Conference shall estab lish a regular Committee on Trade, Debt and 
Finance with the following terms of reference:  
(a) Review existing relevant WTO Agreements with a view to addressing their 
relationship to the problems of financial in stability, exchange rate volatility, financial 
flows, balance-of-payments adjustments, a nd external indebtedness.  Such review 
may result, if needed, in ch anges in such WTO agreements  to effectively address the 
trade-related causes of external account imbalances or balance-of-payments problems 
experienced by developing and least-develope d countries.  Input could be obtained 
from UNCTAD and other relevant internationa l organizations in this regard.  The 
review of relevant provisions of the WT O agreements on balance-of-payments shall 
also be made with a view to operationa lizing and making effective the special and 
differential treatment for developing and least-developed Members;   
(b) Review WTO provisions relevant to commodity issues and agree on binding 
commitments for adoption by the General Council to contribute to the diversification efforts of commodity-dependent developing countries towards value-added exports.  
The design and actualization of an intern ational commodity policy in cooperation 
with relevant international organizations  such as the Common Fund for Commodities 
will be a crucial element of the expected outcome of the work of the Committee in 
this area, and should effectively deal with  the problem of price instability in the 
commodities markets;   
(c) Facilitate the exchange of experience  among Members on the impact of capital 
account liberalization on exchange rates and hence competitiveness.  The IMF, regional development banks, UNCTAD, and other relevant international 
organizations may be invited to contribute to this work;   
(d) Identify and agree on technical assistance and capacity building modalities and 
activities for adoption by the WTO and other relevant international organizations in 
support of the creation in developing and least-developed countries of the infrastructure and technical capabilities needed  to exploit the opportunities provided 
by trade liberalization;   
(e) Promote increased market access for devel oping and least-developed country exports 
by agreeing on measures relating to, inter alia , the avoidance of tariff escalation on 
such exports, market access in  the services sectors of interest to developing and least-
developed countries, tightening disciplines on trade remedy actions, strengthening preference schemes such as by simplifying rules of origin;   
(f) Agreement on binding and unconditional comm itments to cancel or substantially 
reduce official bilateral and multilateral debt, as well as support such substantial 
cancellation or reduction of private sector debt, of developing  and least-developed 
countries.  Cancellation of debt should not be reported as equivalent to the provision 
of official development assistance;   
(g) Evaluate the underlying development-orient ed coherence of policies emanating from 
the WTO and the Bretton Woods institutions with a view to ensuring the gradualness, 
coherence and proper sequencing of the trad e liberalization process in accordance  WT/WGTDF/W/30 
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 with the national development needs and pr iorities of developing and least-developed 
countries.  It should not only address the mu tual development-oriented coherence of 
their respective activities, but also ensure they are compatible with development of 
the poorest trading partners and do not nullify/undermine the benefits from WTO 
Agreements.  The Committee shall be gui ded by the concept of policy space as 
defined by UNCTAD XI, and shall agr ee on binding and operational measures and 
commitments for adoption by the General C ouncil to provide for:  more policy space 
and flexibility for developing countries;  adequate adjustment support for trade 
liberalization to minimize adjustment costs;  preferential market access;  less than full 
reciprocity in commitments;  the elimina tion of conditionalities;  and financial and 
technical assistance to improve productivity and economic infrastructure in 
developing countries;   
(h) Review the WTO Trade Policy Review Mechanism (TPRM) to have it cover 
developed countries' policies on the provi sion of development assistance, debt 
reduction and export credit, with the view of  agreeing on commitments to ensure that 
such policies do not undermine the devel opment objectives of developing and least-
developed countries;  or otherwise impose ob ligations more onerous than that of the 
commitments under the WTO;  and  
(i) Serve as the WTO body to monitor and follow-up the outcomes of relevant major 
United Nations Conferences on subjects related to the Committee's terms of reference. 
6. This submission is without prejudice to such ot her submissions that may be made by the ACP 
or its Members.   
 
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