WORLD TRADE  
ORGANIZATION  WT/AFT/W/23 
14 December 2006 
 (06-5990) 
Aid for Trade Original:   English 
  
 
COMMUNICATION FROM ARMENIA, THE KYRGYZ REPUBLIC  
AND THE REPUBLIC OF MOLDOVA 
  
 The following communication, dated 13 December 2006, is being circulated at the request of 
the Delegations of Armenia, the Kyrgyz  Republic and the Republic of Moldova. 
 
_______________ 
 
 
AID FOR TRADE 
 
I. INTRODUCTION 
1. According to Paragraph 57 of the Hong Kong Ministerial Declaration, Aid for Trade should 
aim to help developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to assist th em to implement and benefit from WTO Agreements 
and, more broadly, to expand their trade.  
2. In order to fulfil this mandate, the WTO Dir ector-General established the Task Force on Aid 
for Trade to discuss issues regarding its im plementation. The Task Force submitted its 
recommendations at the General C ouncil meeting of 27 July 2006. 
3. Armenia, the Kyrgyz Republic and the Repub lic of Moldova highly appreciated the work 
performed by the Task Force. At the General Counc il meeting of 10 October 2006 they welcomed its 
recommendations on how to operationalize Aid for Tr ade and on how Aid for Trade might contribute 
most effectively to the development dimension of the current round. At that meeting, Moldova, on 
behalf of the three countries, stated that, unfortuna tely, the Task Force had failed to take explicitly on 
board our countries’ substantive concerns as sm all and low-income countries with economies in 
transition. However, implicitly the Task Force recommends exploring the need of establishing a 
"separately funded, in-country process for non-LD Cs "International Development Assistance (IDA)-
only" countries". Armenia, the Kyrgyz Republic and the Republic of Moldova are "IDA-only" countries. 
4. Armenia, the Kyrgyz Republic and the Re public of Moldova support this recommendation 
and call upon Members to elaborate and operationalize it further.  
2. Small low-income countries with economi es in transition in Aid for Trade 
5. We propose that the recommendations of the Task Force are acted upon without delay so that 
the small low-income countries with economies in tr ansition, which are "IDA-only" countries, benefit 
from Aid for Trade from the outset. To start this, we think it is important to recognize that small low-income countries with economies in transition are cons idered to be direct beneficiaries of Aid-for- 
Trade programmes and mechanisms. Therefore, we reiterate our earlier proposal to complement the 
recommendations of the Task Force with such explicit recognition.    WT/AFT/W/23 
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  6. In this regard, we also recall Paragraph 38 of the Doha Ministerial Declaration, which 
recognises the particular situation of low-income co untries in transition and their need for technical 
assistance to adjust to WTO rules and disciplines, implement obligations and exercise the rights of 
membership, including drawing on the benefits of an open, rules-based multilateral trading system. 
3. Challenges faced by small low-income co untries with economies in transition 
7. External trade is of major importance for small low-income countries with economies in 
transition. Exports are the main source for th e accumulation of currency earnings. The overall 
financial situation of our countries and the possibilit y to acquit the external debts depend greatly on 
the development of our export capacities.  
8. At the same time, our participation in world tr ade is insignificant. The most recent share in 
world exports is between 0.004% - 0.1% for each of the three countries. Our exports are destined to a 
limited number of markets. Moreover, the possibiliti es of diversification of the export are conditioned 
by the structure of our exports, which remains rath er limited. The supply-side capacity and the level 
of competitiveness are restrained, as is the case of many vulnerable developing countries. Therefore, 
diversification of our production,  development of trade-related in frastructure and building productive 
capacity are of primary importance for our economies.  
9. During the last few years the situation with our  foreign trade deficit has become critical. In 
2005, the trade deficit was 4 times higher than in 2000. Today, imports exceed exports more than 
twice. 
10. Small low-income countries with economies in tr ansition are at the same stage of economic 
development, if not lower, than many deve loping countries. Our countries are listed among the 
world’s poorest economies benefiting from Official Development Assistance (ODA) in the DAC list 
of ODA Recipients.  
11. Small low-income economies in transition have very limited hum an and institutional 
capacities and face difficulties in designing and im plementing trade policy as well as in meeting the 
ambitious obligations assumed upon accession to the WTO. Armenia, the Kyrgyz Republic and the 
Republic of Moldova joined the WTO by accepting an  unprecedentedly extensive level of obligations 
and commitments. Since then, our governments have ma de substantial efforts to fully implement these 
commitments. Although we believe that trade libera lization is beneficial in a longer term, today our 
highly fragile economies face serious problems in terms of adjustment costs. Prompt liberalization caused various structural difficulties to our industries and aggravated the social situation. As a result, 
our countries have not been able to take full adva ntage of WTO agreements and WTO membership at 
large.  
12. Furthermore, national budgets of our count ries are highly dependent on tariff revenues.
1 As a 
result of our high multilateral commitments, significant revenue losses could not be compensated by other revenues and still negatively affect our economies.  
13. In addition, Armenia, the Kyrgyz Republic  and the Republic of Moldova, are landlocked 
countries facing additional challenges to successfully  integrate themselves into the world economy 
and trade. 
                                                     
 
1 For example, monetary transfers from customs to the state budget in the Republic of Moldova account 
for 70% of its total revenues.  WT/AFT/W/23 
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  II. CONCLUSIONS 
14. In sum, small low-income countries with economies in transition need substantive 
international support to adjust their economies to trad e liberalization, as well as to implement and start 
fully benefiting from WTO agreements. Aid for Tr ade should therefore help our countries overcome 
the challenges and enhance our  capacities and competitiveness. 
15. It should be recalled that in the context of  trade facilitation, the needs of low-income 
economies in transition have been already recogni zed by the Core Group of Developing Countries on 
Trade Facilitation (CGDCTF)2 and other developing and developed Members3. It was proposed that 
these countries should enjoy the same treatment as developing countries in the negotiations on trade 
facilitation.  
16. We hope that other Members would understa nd and support our request to be among the 
direct beneficiaries of Aid for Trade.  If that is the case, we would appreciate having a clear message to that effect from the WTO Dir ector-General, the international development agencies and the donor 
community. 
__________ 
 
  
                                                     
 
2 Bangladesh, Botswana, Cuba, Egypt, India, Indonesia, Jamaica, Kenya, Malaysia, Mauritius, 
Namibia, Nepal, Nigeria, Philippines, Rwanda, Tanzania, Trinidad & Tobago, Uganda, Venezuela, Zambia and Zimbabwe.  
3 See Implementation Mechanism of Trade Facilitati on Commitments Including Key Elements for 
Technical Assistance , WTO, TN/TF/W/137, 21 July 2006 and Proposal on Implementation Mechanism for 
Special and Differential Treatment (S&D) and Technical Assistance and Capacity Building (TACB) Support , 
WTO, TN/TF/W/142, 31 July 2006.