RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/LDC/M/43 
9 June 2006 
 
 (06-2757) 
Sub-Committee on Least-Developed Countries 
Forty-Third Session  
 
 
 
NOTE ON THE MEETING OF 16 MARCH 2006 
 
Chairperson: Ambassador Ian de Jong (Netherlands) 
 
A. ADOPTION OF THE AGENDA ........................................................................................................1  
B. WTO  WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES (LDC S) .................................1  
(i) Market Access  for LDCs ......................................................................................................... ....1 
(ii) Market Access Issues Related to Products of  Export Interest Originating from LDCs 
(WT/COMTD/LDC/W/38 and TN/MA/S/19)...............................................................................2  
(iii) Options for Least-Developed Countries to Improve their Competitiveness in Textiles 
and Clothing Business (W T/COMTD/LDC/W/37)....................................................................10  
C. OTHER BUSINESS ......................................................................................................................12  
 
 
A. ADOPTION OF THE AGENDA  
1. The Chairman  expressed his sincere gratitude to Memb ers for re-electing him as the Chair of 
the Sub-Committee on LDCs.  He also thanked Memb ers for the confidence that they had placed in 
him and sought continued cooperation from them. 
2. The Sub-Committee adopted the draft age nda contained in document WTO/AIR/2765. 
B. WTO  WORK PROGRAMME FOR LEAST -DEVELOPED COUNTRIES (LDC S) 
3. The Chairman  said that the Ministerial Declarati on adopted in Hong Kong had mandated the 
continued implementation of the WTO Work Pr ogramme for LDCs and that a number of key 
decisions had been taken in favour of LDCs.   
(i) Market Access for LDCs 
4. The Chairman  said that under the item on market access for LDCs, two Secretariat notes 
would be considered:  (i) Market Access Issues Re lated to Products of Export Interest Originating 
from LDCs contained in document WT/COMTD/LDC /W/38 and TN/MA/S/19;  and (ii) Options for 
Least-developed Countries to Improve their Comp etitiveness in the Textiles and Clothing Business 
contained in document WT/COMTD/LDC/W/37.  WT/COMTD/LDC/M/43 
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  (ii) Market Access Issues Related to Products of Export Interest Originating from LDCs 
(WT/COMTD/LDC/W/38 and TN/MA/S/19). 
5. The Chairman
 recalled that paragraph 7 of the WTO Work Programme for LDCs had 
mandated a review of market access for products  originating from LDCs.  The Note had been 
prepared in pursuance of that mandate and had update d previous studies by the Secretariat.  Specific 
attention had been given to the market access situation for LDC exports  in developing country 
markets.  He invited the Secretariat to introduce the Note.   
6. The representative of the Secretariat  introduced the Note, which included five main sections, 
namely:  mandate;  methodology and data issues;  LDC export profile;  tariff measures facing LDC 
exports in different markets;  and recent market initiatives undertaken in favour of LDCs.  He recalled 
the mandate of the Note in paragraph 7(ii) of the WTO Work Programme for LDCs which stated that:  
"Annual reviews in the Sub-Committee of market  access improvements, of any market access 
measures undertaken by Members, and including the identification of reported market access barriers 
to LDCs' products in markets of interest to them.  These reports will be on the basis of factual annual 
studies by the WTO Secretariat".  The current Note was the fourth of its kind.   
7. He said that for a comprehensive analysis of the market access situation, different data was 
required.  Export data from LDCs , import data from major LDC markets, tariff data including 
reciprocal and non-reciprocal preferential rates and utilization data for preference schemes were 
essential to examine the LDCs' market access situation.  He pointed out that all this data was typically 
stored in different databases.  There was no cons olidated database which could provide a complete 
picture of the market access situation for LDCs.  Also , much data was stored outside the Secretariat.  
He said that Annex Table 1 of the Note examined the state of LDC tariff and trade data in 2003.  The 
WTO Integrated Data Base (IDB) contained tariffs of its Members, along with imports at the tariff 
line level.  The United Nations Statistical Divisi on Database on Trade (Comtrade) was the trade 
database used by the international community.  In 2003, the Comtrade database contained trade data 
for 14 LDCs.  Seven LDC Members had trade data in  the Comtrade database and tariff data in the 
IDB.  There were only four LDCs in 2003 that ha d complete data both in the IDB and Comtrade 
databases.  He recognized the difficulty that LDCs faced in supplying data on a yearly basis, but 
stressed the need for a concerted effort by them to improve the qua lity and coverage of their data. 
8. The representative of the Secretariat  pointed out that the lack of sufficient data caused a 
number of limitations.  First, the lack of specific data had led to certain generalizations.  Second, 
mirror data had been used on occasions where data from direct sources could not be obtained.  Such 
compensating methodologies had its limitations and mi ght not present a complete picture of exports.  
For instance, LDC export data had been constructe d by using the import data from all their export 
markets.  He said that one of th e limitations of using mirror data was that it would not capture the 
exports of one LDC to another LDC.  Third, the act ual reporting years in various tables and charts in 
the Note varied considerably due to the different  methodologies used and different times of collection 
of data.  
9. In 2003, LDCs accounted for less than one per cen t of world trade.  Oil occupied a dominant 
position in the composition of LDC exports.  In 200 4, oil accounted for 47 per cent of LDC exports 
while manufactures and commodities accounted for 28 per cent and 25 per cent, respectively.  He said 
that the LDCs were not a homogenous group of exporter s.  For a small number of LDCs, oil had been 
the principal export, while for a large number of LDCs, commodities had been the major export item.  
He pointed out that though the overall trade perfo rmance of LDCs had been driven by a few LDCs, 
there had been considerable variance in the pe rformance of individual LDCs.  LDCs exported a 
limited number of products.  In 1995, food was th e most important export item of the LDCs while 
fuels accounted for 20 per cent of total LDC exports.  In contrast, in 2003 fuels had become the dominant exports of LDCs, accounting for more th an 35 per cent of all LDC exports.  Clothing  WT/COMTD/LDC/M/43 
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  exports had increased in the period from 1995 to 2 003 combined with a significant decline in raw 
materials in LDC exports.  He cited some majo r LDC export products which included petroleum, 
clothing and accessories, fish and fish products , non-ferrous metals, metals and ores.   
10. The representative of the Secretariat  explained that LDCs were characterized by a high 
concentration of exports.  Based on data from Comt rade, the Note showed the percentage of total 
exports accounted for by the top three exports.  It revealed that the export profile of a number of 
LDCs was dominated by two or three products.  Th e top three products, measured according to the 
Standard Industrial Trade Classification (SITC) thre e-digit level, accounted for more than 50 per cent 
of the total exports of almost all the LDCs.  The export concentration of LDCs was as high as 
50 per cent while that figure was below 10 per cent for developed country Members. 
11. The importance of China as an overall market for LDC exports had significantly increased.  
In 1995, the European Communities accounted for 39  per cent of LDC exports while China accounted 
for 4 per cent.  In 2004, EC's share had declined  to 28 per cent while that of China had grown to 
18 per cent.  He said that agricultural exports fro m LDCs to developing country markets had increased 
over the period 1995 to 2003.  Manufacturing exports  from LDCs to developing country markets had 
also grown but less than that of agricultural e xports.  This showed a general trend of increasing 
importance of developing country markets for LDC expor ts over the last ten years.  In terms of export 
structure, he underlined the importance of exports  of clothing to developed country markets even 
though oil continued to represent a significant part of LDC exports both to developed and developing 
country markets.  He said that the export struct ure was important in analyzing market access since 
market access barriers varied depending on the products. 
12. The representative of the Secretariat  stressed that the focus of the present study was on the 
role of tariff measures facing LDC exports in different markets.  Previous studies also featured some non-tariff barriers (NTBs) facing LDCs.  While p ast studies had focused their analysis on average 
tariff rates, the current study concentrated on what  more needed to be done to reach the duty-free and 
quota-free objective of the Doha Ministerial Declar ation.  Market access conditions for LDC exports 
in developed country markets were primarily determined by non-reciprocal preferences.  In contrast, 
the level of non-reciprocal preferences granted to LDCs in developing country markets was limited.  
A number of LDCs were party to reciprocal schem es.  Those schemes were difficult to take into 
account because data was scarce.  Market access cond itions for LDC exports in  developing country 
markets were largely determined by the MFN rate.  
13. There were many methods which could be u sed to measure duty-free and quota-free market 
access for LDCs in developed-country markets.  One of the methods was value of imports.  If 
100 per cent of LDC exports entered a given market duty free, then it might be concluded that that 
specific market had met the objective of providing duty-free treatment to the LDCs.  However, a 100 per cent value might not necessarily imply comple te duty-free access since some tariff lines could 
remain dutiable.  Another method was to look at the number of tariff lines enjoying duty-free status.  
In other words, this meant looking at the number of duty-free lines over the total number of tariff 
lines.  This indicator also had its limitations.  A small number of tariff line exemptions by a country 
could lead to a large value of LDC imports entering  that country with duty since LDC exports were 
highly concentrated in a limited number of product lines.  Therefore, excluding a small number of 
lines from duty-free access could exclude a significant percentage of imports from LDCs.  He illustrated these points by referring to Table 6 of the Note, which presented values for both indicators.  
In the case of Australia, 100 per cent of tariff lines were duty free and 100 per cent of LDC imports 
into that market entered duty free in 2003.  In th e case of Canada, a small number of tariff lines were 
exempted from the LDC preferential scheme.  The di fficulty associated with this data was that the 
absence of imports from LDCs in those lines could either  be attributed to a lack of export capacity in 
the LDCs or could be due to the prohibitive nature of duties imposed by Canada on those lines.  He 
said that in the case of the United States, more th an 80 per cent of tariff lines were duty free while WT/COMTD/LDC/M/43 
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  62 per cent of imports from LDCs entered the US market duty free in 2003.  This indicated that one 
country could do well according to the tariff lines indicator but might not do well according to the 
value of imports indicator.   
14. The representative of the Secretariat
 explained that developing countries were becoming 
important destinations for LDC e xports.  Two types of tariff averages had been calculated and 
presented in the Note, namely, simple and weighted ta riff average to gauge the market access situation 
of LDCs in developing country markets.  He unde rlined the fact that in the aggregate LDC export 
profile, oil was an important item.  In terms of overall LDC market access, 36 per cent of LDC exports to the world remained dutiable.  Fifty-five  per cent of LDC exports entered developed country 
markets duty free while 12 per cent entered with dut ies.  The figures were 24 per cent and 9 per cent 
respectively for developing country markets.  
15. In conclusion, he said that the Secretariat had not received any new notifications of 
improvement of market access in favour of LDCs in  2005.  There had been other developments with 
regard to market access concerning LDCs.  Annex F of the Ministerial Declaration adopted at the 
Sixth WTO Ministerial Conference at Hong Kong contained a decision on providing duty-free and 
quota-free market access to LDCs.  The President of China had announced an initiative to improve 
market access for LDCs at the UN Millennium Summit in September 2005 
16. The representative of Nepal
, on behalf of LDCs, congratulated the Chairman on his 
re-election.  He said that the Note contained valuab le data that had helped the LDC group to have a 
better understanding of its export profile  in global trade.  It was clear from the contents of the Note 
that the share of LDCs in global exports had remained as low as 0.6 per cent in 2004, where 
47 per cent of LDCs total exports was accounted for by five oil exporting LDCs.  He expressed 
concern that the composition of LDC exports was na rrow.  Three products, namely fuels, clothing and 
food accounted for close to 70 per cent of total LD Cs exports.  That was an indication of LDCs' 
vulnerability in global trade and the need to expand their export base.  Therefore, effective integration 
of LDCs into the multilateral trading system woul d require a concerted effort to provide support 
aimed at diversification of LDCs' production and e xport base.  The inclusion of analysis on tariff 
treatment for LDC exports, as reflected in Table 6 of  the Note, was important as it provided a useful 
guide to assessing market access opportunities for LDCs .  It was not always the case that a high 
number of duty-free tariff lines implied a high level of  actual imports from LDCs.  For instance, in the 
US, 82 per cent of the tariff lines were duty free but only 62 per cent of LDC exports entered the US market duty free in 2003.  He s uggested that it would be useful to have some indication of the 
products from LDCs that faced duties in developed c ountry markets as well as in developing country 
markets. 
17. The representative of Bangladesh
 said that the issue of market access was of fundamental 
interest to the LDCs, since this would determine the extent of bene fits they would derive from WTO 
Agreements.  The Note was thought-provoking and he  welcomed the examination of LDC exports to 
the developing country markets.  In 2004, 38 per cent of LDC exports had been destined for 
developing country markets.  He added that it ha d taken many years for the developed countries to 
provide the LDCs with preferential market access, a nd some of them had not yet done so.  It would 
not be realistic to expect the developing countri es to match the developed countries overnight.   
18. He noted the data limitations that researcher s faced while working on LDC issues and he 
expressed his sympathy in this context.  He also noted the institutional wea knesses and other obstacles 
facing LDCs in reporting statistics to internationa l organizations.  It would be difficult for many 
LDCs to provide statistics that w ould permit meaningful analysis.  Th e Note had provided an alternate 
approach to gathering data for LDCs.  It might be  possible to reconstruct data for LDCs using the 
inverted trade flow approach.  While recognizing that  this system of collecting data was not perfect 
and might have some disadvantages, he encouraged  the Secretariat to use this methodology in any  WT/COMTD/LDC/M/43 
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  further analysis of LDCs' market access conditions .  He said that Annex Table 1 of the Note had 
provided information on the availability of import a nd tariff data in the WTO Secretariat.  Data on 
LDCs that were not Members of the WTO should be  available from the UN Comtrade database.  He 
underscored the need for assistance from internat ional organizations, such as the International 
Monetary Fund (IMF), to improve the ca pacity of LDCs to provide data.  
19. He considered the export profile of LDCs inte resting.  The five oil exporting LDCs, which 
together accounted for 47 per cent of total LDC expor ts, had experienced a growth rate of 52 per cent 
in 2004.  The manufacturing and commodity exporters had experienced growth rates of 19 and 22 per cent, respectively.  However, eight LDCs which were exporters of commodities had experienced negative growth rates:  a cause of  concern for those LDCs dependent on commodity 
exports.  This reinforced the case for providi ng LDCs with preferential market access for 
manufactured products in order to enable them to develop their economies and to create an industrial 
base.  With regard to services, the situation w as alarming.  In 2003, the LDCs accounted for 
0.4 per cent of world trade in services.  Services had been growing in importance worldwide.  However, the LDCs would continue  to lag behind, unless their interests in the services trade was 
given due emphasis.  For many LDCs improved m obility of temporary, less-skilled service providers 
could be an important way of participating in the services sector.  He emphasized the need for the Sub-Committee to pay greater attention to this area. 
20. He pointed out that Charts 2 and 3, as well as Table 3 of the Note had provided an interesting 
analysis of both the products exported by the LD Cs and their destinations .  LDCs' exports were 
concentrated in a few selected products only.  This lack of diversification was of serious concern.  
World market conditions might change dramatically , sometimes without warning.  Countries that had 
greater exposure to world trade had the ability to ad just to the changing circumstances.  The LDCs 
had not been able to develop the ability to adjust a nd required help in this area.  Table 4 of the Note 
was also of interest.  The EC and the US had re mained the major markets for LDC exports.  He 
expressed concern that the share of the EC market ha d declined at a steady pace.  He referred to an 
announcement by the EC that the exports of Bangladesh to the EC in 2005 had decreased by as much 
as Euro 200 million to Euro 4,092 million, a decline of  4.2 per cent from 2004.  He regretted that the 
share of the EC market among the LDC export market s had not risen, despite the EC's offer of duty-
free treatment.  That required further examination.   
21. He welcomed the fact that China had emerged as a major destination for LDC exports.  China 
had been an export powerhouse and was considered as the manufacturing base for the world.  It was 
important that LDCs export in greater quantities to China.  He pointed out that the Chart on page 14 
of the Note was prepared in black and white, ma king it difficult to interpret.  On observation, it 
appeared that LDCs exported more manufactured pr oducts to developed countries than to developing 
countries.  This pattern of trade required change  since LDCs should export manufactured products to 
both the developed as well as developing country markets. 
22. The representative of Bangladesh
 said that with regard to tariff measures facing LDC exports 
in different markets, many issues had been put across in a concise manner in the Note.  It had 
concentrated on tariff measures, as the protectionist  role played by various standards as well as other 
measures on products of export interest to LDCs we re not easy to measure.  While appreciating the 
analysis on tariff measures, he urged the Secretariat to analyze non-tariff measures in a future study.  
A number of developed country Members had provided  duty-free market access to the LDCs.  Table 6 
of the Note analyzed tariff treatment of LDC expo rts in selected developed country markets.  He 
underscored the fact that much more could be done to provide duty-free market access to LDCs, 
particularly by the US and Japan.  He remarked  that the calculations in the Note relating to 
proportions of LDC exports entering developed country markets duty free might not present a 
balanced picture.  Analysis undertaken by his de legation had shown that 83 per cent of the goods that 
had entered the US market duty free in 2003 were mine ral fuels.  That would mean that the remaining WT/COMTD/LDC/M/43 
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  LDC products in the US market were taxed at a very high rate.  He further stated that according to the 
IDB statistics, 31 per cent of the goods that had en tered the US market in 2003 had faced a duty of 
between 15 to 35 per cent representing the incidence of  tariff peaks in certain products.  He suggested 
that further analysis would need to be undertaken to ascertain the full implication of these findings.  In 
the context of Table 6 of the Note, he requested  that a separate column be included showing the 
amount of duties paid on the import of LDC products in the importing countries.   
23. He noted that the EC and a few other developed country Members were in the process of 
improving their market access schemes for LDCs such as the rules of origin requirements.  He would 
welcome information on the changes which these dele gations had made in their schemes for LDCs.  
Some of the programmes that had been referred to  in paragraph 29 of the Note, such as the Global 
System of Tariff Preferences among Developing Coun tries (GSTP) might not benefit the LDCs.  Only 
seven LDCs were party to the GSTP, with anothe r two indicating interest.  GSTP negotiations had 
imposed an additional administrative and negotiati ng burden on LDCs.  In fact, most LDCs were 
unable to benefit from the offers generating from GSTP.  With regard to bilateral and regional 
agreements, the LDCs were usually disadvantaged.  Only what had been offered to the LDCs in the 
context of the WTO was truly meaningful.  He welcom ed the offer made by the President of China at 
the UN Millennium Summit in 2005 regarding duty-fr ee access benefiting a large number of LDCs.  
He requested the delegation of China to inform Members of the major products and tariff lines that 
were accorded duty-free treatment.  He also urged other developing countries that were in a position 
to do so to inform Members of their market access offers for LDCs.  
24. He stressed that it was vital that the informa tion obtained from the analysis be linked to the 
negotiations under the Doha Round.  His delega tion looked upon the study as a part of the 
capacity-building measures to assist LDCs to partic ipate effectively in the negotiations.  The Note 
could have indicated whether the DDA had the poten tial to make real improvements in market access 
for LDC products.  The Note recognized that NTBs had been significant barriers to LDC exports.  His 
delegate's view was that the Note should have  shown the products where market access had been 
affected by domestic subsidy, tariff peaks or othe r NTBs.  The LDCs needed to upgrade their capacity 
to meet standards.  Specific suggestions in this  area would have been helpful.  He noted that 
paragraphs 34 to 36 in the Note had referred to the Hong Kong Minist erial Declaration.  However, 
there was no indication as to how the information in the Note could be used to follow up on the 
Decision in Annex F of the Ministerial Declaration adopted at Hong Kong. 
25. In conclusion, he summarized the elements for suggested further st udy.  First, in view of the 
data limitations facing LDCs, he requested the Secret ariat to make an effort to provide a thorough 
analysis of market access of LDCs using the inverted  trade flows approach.  Second, he requested that 
a note be prepared to inject NTB issues into the discussions and to provide an indication of how these 
issues could be effectively addressed.  He suggested  that the Secretariat select specific sectors or 
products of export interest to LDCs for such analys is.  Third, given the increasing role of services in 
LDC economies, he underlined the need to devote greater  attention to this area,  and to source data and 
information from more than just the WTO IDB and the UN COMTRADE databases.  Fourth, he 
underlined the usefulness of having information on how a market access study could assist LDCs in 
implementing the decisions reached at Hong Kong.  Finally, he looked forward to a revised note 
before the next Sub-Committee meeting.  
26. The representative of Benin
, on behalf of the African Group, congratulated the Chairman on 
his re-election.  He endorsed the statement made by Nepal on behalf of the LDCs.  The structure, 
composition, and destinations of LDC exports had shown the limitations faced by the LDCs in their 
full integration into international trade.  He re called the decision taken at Hong Kong on duty-free and 
quota-free market access for the LDCs and urge d developed country Members and developing 
country Members, in a position to do so, to effec tively implement the decision so that LDCs could 
improve their participation in world trade.  He em phasized the need for con certed efforts to ensure  WT/COMTD/LDC/M/43 
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  that rules of origin contribute to facilitate expor ts from LDCs.  He noted that several statistical 
elements with regard to LDCs were lacking in th e Note.  He hoped that the WTO Secretariat, in 
collaboration with other internati onal organizations, would be able to assist LDCs in collecting and 
disseminating required information for a more comprehensive analysis of market access for products originating in LDCs.  He called upon the trading partners of LDCs to provide information on 
measures taken in the implementation of the deci sion on duty-free, quota free market access for LDCs 
included in Annex F of the Ministerial Declaration adopted at Hong Kong in December 2005. 
27. The representative of Uganda
 conveyed the greetings of the President of the Republic of 
Uganda to the Sub-Committee.  He associated himsel f with the statement made by Nepal on behalf of 
the LDCs.  He expressed concern over the low share of LDCs in global trade.  This was at a time 
when LDCs had exported under preference schemes and reduced tariffs.  LDCs had fundamental 
market access and supply-side constraints, which need ed urgent attention.  The effective integration of 
LDCs into the multilateral trading system required c oncerted efforts by the international community.  
LDCs required support aimed at diversification of th eir export base.  His delegation would continue to 
review the Note to provide a substantive contri bution at a future meeting of the Sub-Committee. 
28. The representative of the United States  recognized the data challenges while working on LDC 
issues.  She said that for future wo rk on market access analysis of LDCs, it would be useful to explore 
ways on how the WTO Secretariat could work with ot her international institutions such as the IMF.  
The Note had provided material for further analysis.  She pointed out that Members had been trying to 
address the issue of NTBs in the context of NAMA negotiations.  She welcomed the analysis on LDC 
market access conditions in deve loping country markets and encouraged the Secretariat to continue 
further studies on this.  She stressed that for future  analysis of tariff measures facing LDC products in 
different markets, Table 6 of the Note could be e xpanded to include a broader range of countries.  She 
reiterated that Members would implement the decision on duty-free and quota-free market access 
taken in favour of the LDCs at Hong Kong.  In this context, she said that it would be worthwhile to 
examine the role of low duties facing LDC exports.  It  might be the case that her Government had not 
yet provided duty-free access to some products, but duties on those products might be low.  The role 
of prohibitive duties and low duties could be exam ined in the context of market access conditions 
facing LDCs in different markets.  That would ma ke the review more comprehensive and would also 
be helpful for ongoing negotiations.    
29. The representative of the European Communities  welcomed the attention given in the Note to 
the market access conditions of LDCs in develo ping country markets.  He noted the various 
methodological issues and data limitations that the Secr etariat had registered in the Note.  The relative 
share of LDCs in world trade had continued to grow and exports of LDCs had increased by 
34 per cent in 2004.  He acknowledged the fact that this aggregate performance of the LDCs 
concealed a variety of individual performances in te rms of products and markets.  He noted that the 
EC had remained the largest market for LDC exports.  He also noted that the EC's share of total LDC 
exports had declined in 2004 to 29 per cent from 40 per cent in 1995.  He said that the decline in the 
relative importance of EC as a market for LDC export s should be welcome.  This should be seen as a 
positive evolution in LDCs export performance, which gave an indication of the diversification of 
their market base.  It also implied a decline in the dependence of LDC exports on the EU.  He 
reiterated the continued support of the member stat es of the EU to complement the efforts of the 
LDCs in addressing their competitiveness challeng es, improving their supply capacity and improving 
their export performance through trade-related techni cal assistance (TRTA) and Aid for Trade.  He 
said that the picture in Table 6 of the Note should change following the implementation of the decision on providing duty-free and quota-free market  access to the LDCs in Annex F of the 
Ministerial Declaration adopted at the Hong Kong Ministerial Conference.  The objective of that 
decision was to reach 100 per cent duty-free and q uota-free market access for all products for all 
LDCs.  Ministers had also called upon developing count ry Members, in a position do so, to pursue the 
same objective.  Table 8 of the Note showed that  imports from LDCs into some developing country WT/COMTD/LDC/M/43 
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  markets had been 100 per cent duty free, while in a number of other developing countries the LDCs 
received no duty-free access.  The LDCs had been ex porting significantly to a number of developing 
country markets where the level of duty-free access w as low.  That suggested further scope of market 
access improvements in those markets.  He hoped that the notification process called for by the 
decision on duty-free and quota-free market access to the LDCs agreed at the Hong Kong Ministerial 
Conference might address some of the data gaps identified in the Note.  His delegation would be 
ready to discuss any steps to improve the quality of the report in future.  Finally, he informed Members that his delegation had continued to work on reforms of its system of preferential rules of 
origin, which covered the Everything But Arms (EBA) scheme, an initiative targeting the LDCs.  
30. The representative of Japan
 welcomed the detailed description of market access conditions in 
developing country markets in the Note.  He underl ined the importance of having relevant statistics 
from every Member in analyzing market access cond itions facing LDC exports.  He agreed that good 
trade policy advice depended critically on the availa bility of high quality and accessible trade data.  
He stressed that coordinated technical assistance s hould be provided to the LDCs in order to improve 
their capacity to report statistics.  In this regard , if requested by the LDCs, his delegation would be 
ready to provide them necessary technical assistance according to bilateral procedures.  As identified 
in Table 4, Japan had ranked fifth in the top ten markets for LDCs for several years.  His delegation 
had announced its develo pment initiative in December 2005.  Em phasis there was laid on expanding 
the imports from LDCs including through providi ng development assistance to address supply-side 
constraints faced by the LDCs.  His Government had made every effort to implement and enhance this 
initiative in due course.  His delegation would star t working on the procedures to amend the relevant 
domestic regulation by end of 2006 with a view to  implementing the decision taken in Hong Kong to 
provide duty-free and quota-free market access to LD Cs by 2007.  Although the exact period for 
implementation was to be determined , his delegation was ready to comply with the timeline set out in 
the Hong Kong Ministerial Declaration. 
31. The representative of China  said that the Note had provided a picture of market access 
measures taken by Members in favour  of LDCs.  He noted the data difficulties in the preparation of 
the Note.  He shared the views from the LDCs that factors beyond statistics would need to be taken 
into account in analyzing the market access cond itions facing LDCs.  He then made certain 
preliminary observations concerning some figures used  in the Note.  He sought clarification from the 
Secretariat as to whether the simple MFN average ra tes used in page 17 of the English version were 
applied rates or rates taken from Members' schedule of commitments.  He drew attention to China's 
simple MFN average rate, which was 15.9 in 2003.  He informed Members that his Government had 
continued to reduce MFN rates si nce its accession to the WTO in 2001.  In 2005, the simple MFN 
average rate for China was around 10 per cent.  He requested the Secretariat to update the figures of 
simple MFN average rates used for China.  He referr ed to paragraph 31 of the Note, which stated that 
93.3 per cent of China's imports from LDCs entered duty free based on 2003 data.  The Note went on 
to say that this figure was misleading given the impor tance of oil in China's import basket from LDCs.  
He stated that his delegation had been singled out  in this case and asked the Secretariat to provide 
similar statistics for major developed country Memb ers.  He said that the announcement by the 
President of China in 2005 to provide duty-free a nd quota-free market access to certain products from 
39 LDCs was a part of the continued effort with in the capacity of his country to promote the 
development of LDCs.  Referring to the query ma de by the representative of Bangladesh in this 
regard, he said that his delegation would provide  information in due course through appropriate 
channels.  He added that China's Ministry of Co mmerce, being the focal point, had been consulting 
relevant government agencies in order to give effect to the decision.  
32. The representative of the Secretariat  thanked Members for their comments.  He noted that the 
issues with regard to data quality explained in th e Note were accepted by the wider Membership.  
Policy advice could be sharper and more precise if availability of data on LDCs was improved.  He 
said that the Secretariat had used mirror data in th e analysis of market access for products originating  WT/COMTD/LDC/M/43 
 Page 9 
 
 
  from LDCs.  There were problems in using mirror data.  For instance, the total figure in Table 3 of the 
Note did not match with any other world totals.  He  noted that Members had shown their flexibility in 
making use of data outside the WTO database in ma rket access analysis for LDCs.  With regard to 
NTBs, he said that Members had been trying to an alyze them in the context of the Non-Agricultural 
Market Access (NAMA) negotiations.  The specific mandate of the Note was to report on market 
access improvements undertaken in favour of LDCs and its scope might not allow an analysis on 
NTBs.  He recalled that Section 4 of the Note  entitled "Options for LDCs to Improve their 
Competitiveness in the Textiles and Clot hing Business" contained in document 
WT/COMTD/LDC/W/37 had a detailed analysis of pref erential rules of origin in some non-reciprocal 
preference schemes.  The question of how the market access review could assist the LDCs in 
implementing the decision on duty-free and quota-free market access to the LDCs taken at 
Hong Kong would be beyond the scope of the Note .  He reiterated certain data difficulties in 
preparing the Note.  There had often been a time  interval between the announcement of the policy 
decision on tariff measures in favour of LDCs, and the actual availability of relevant data.  In this 
regard, he noted that the simple MFN average ra tes for China would be different in 2009 than the 
figures presented in the Note.  He said that oil had been a unique product in LDC exports and in this 
regard expressed apology for singling out China whil e describing the status of duty-free imports into 
developing country markets.  He also noted the re quest to have data for developing countries in the 
context of Table 6 of the Note.  Finally, he u nderscored that the WTO IDB had its own features and 
depending on queries in that database,  different results could be found.  
33. The representative of Bangladesh  requested the Sub-Committee to take up the issue of NTBs 
in its examination of market access for LDCs.  He said that NTBs were an important component of 
market access measures facing LD Cs.  In this regard, he noted the support extended by the 
representative of the United States.  He asked th at the Sub-Committee request the Secretariat to 
examine NTBs faced by LDCs in its review of market access for products originating from LDCs.   
34. The Chairman  expressed his gratitude to Members for th eir kind words on his re-election.  He 
said that the Work Programme for LDCs attached high importance to the issue of market access for 
LDCs.  Members at Hong Kong had reached a decisi on on providing duty-free and quota-free market 
access to the LDCs.  He hoped that once that deci sion was fully implemented, the market access 
situation for LDCs would significantly improve.  He underlined that developing country markets were 
increasingly becoming important destinations for a la rge number of LDCs.  Six of the top ten markets 
for LDCs were now developi ng countries.  In conclusion, he under scored a few points.  First, he noted 
the delegation of China's observation that its c ountry had been singled out in the Note while 
presenting data on the status of duty-free imports into  developing country markets.  Second, he noted 
the request from the representative of Bangladesh for an examination of NTBs for consideration at the 
next meeting.  He suggested that the Sub-Comm ittee request the Secretariat to prepare a note on 
NTBs accordingly.  Third, he welcomed the contin ued commitment from the EC to help LDCs with a 
number of measures.  Fourth, he stressed that the availability and quality of tariffs and trade data for 
LDCs had been poor.  He urged LDCs to make effort s to provide data to the Secretariat.  Equally 
important was to have information on preferentia l tariffs and import data.  He encouraged the 
providers of preferential market access to make ever y effort in regularly providing the Secretariat with 
such data.  Otherwise, market access reviews for LDCs  would lack critical information for Members.   
35. The Chairman  proposed that the Sub-Committee take note of document 
WT/COMTD/LDC/W/38 and all the statements made.  The item would be kept on the agenda of the 
next meeting.  He requested the Secretariat to revise the Note if sufficient new data was made 
available to it and to prepare a separate note on NTBs.  
36. It was so agreed .  WT/COMTD/LDC/M/43 
Page 10  
 
  (iii) Options for Least-Developed Countries to Im prove their Competitiveness in Textiles and 
Clothing Business (WT/COMTD/LDC/W/37)  
37. The Chairman
 recalled that the Note had been discussed in the previous two meetings held 
last year.  At the last session, Members had requested that this item be kept on the agenda.  He recalled that some Members had requested a discussi on on the chapter dealing with non-reciprocal 
preference schemes.  Some Members had wished to co me back to other elements of the Note.  It was 
thus agreed that Members would have another opport unity to make statements on all or any of the 
elements of the Note.  He also recalled that at  the last session, some Members had emphasized the 
need to have more information on the export perform ance of LDCs in the period after the termination 
of the Agreement on Textiles and Clothing (ATC).  It  had been noted that the termination of the ATC 
had an uneven impact among LDCs.  In response to the Sub-Committee' s request at its last session, 
the Secretariat had issued a document contained in JOB(06)/55, providing statistics from 2002 to 2005 on textile and clothing imports of selected economies from LDCs.    
38. The representative of Bangladesh
 said that the LDCs depended heavily on a few markets for 
their textile and clothing exports.  A number of LD Cs including his country had been losing market 
share in one of its key export destinations, which was the EU.  There might be a number of factors 
behind this decline of exports.  Th e termination of the ATC was one of  those factors.  LDCs had faced 
intense competition in the sector after its termination.  Overcoming the obstacles to compete on a level playing field required time.  That was why the LDCs needed special  attention and special 
facilities from the international community so that their textile and clothing industries could smoothly adjust to the new environment.  He stressed that LDCs had two major markets for clothing exports, 
the US and the EU.  The stringent rules of orig in had in some cases denied the objectives of 
preferential schemes which were originally designe d to promote industrial exports from LDCs.  The 
liberal rules of origin under the African Growth Opportunity Act (AGOA) schemes had helped some 
of the LDCs eligible under that scheme to take adva ntage of the preferential market access.  Similarly, 
the rules of origin under the Cotonou Agreement had benefited the ACP LD Cs.  These LDCs had 
seldom used the EBA scheme to ac cess EU markets.  He said that  the low utilization of the EBA 
scheme might be due to its strict rules of origin.  For his country, the EBA utilization rate had been as 
low as 33.8 per cent in 2003.  The figure for Cambodia  in this regard was 30.9 per cent.  The figures 
he quoted were taken from document WT/COMTD/LDC /W/37.  There might be a link between rules 
of origin and the utilization rate of a particular scheme.   
39. He remarked that preferences had been considered as an export promotion and diversification 
tool.  This purpose would be defeated if prefer ence schemes excluded products of export interest to 
LDCs.  The inclusion of textile and clothing products in the Cana dian GSP schemes for LDCs in 2003 
along with flexible rules of origin had produced a re markable effect in LDCs .  In this regard, he 
quoted from document WT/COMTD/LDC/W/37:  "The successful reform of the Canadian GSP for LDC programmes shows that positive results of reform s can be immediate".  He underlined that the 
coverage of clothing products under the US GSP scheme for LDCs was low, and significant 
improvements would need to be made in the US ma rket for LDCs' clothing products.  His delegation 
had a strong interest in the development of this sector.  He cautioned against complacency which 
might be triggered by the fact that they had been able to maintain exports in some of their major 
markets.  This might not be attributed to their competitiveness per se  but trade policy measures taken 
by those countries in respect to other major tex tiles and clothing suppliers, which had been a key 
determinant of LDCs ability to retain exports to tho se destinations.  The full impact of the expiry of 
the ATC was yet to be seen.  Finally, he urged de veloped country partners which had not yet done so 
to immediately provide LDCs duty-free and quot a-free market access for textile and clothing 
products.  He also requested them to simplify their origin requirements so that LDCs could make use 
of their schemes.  That needed to  be done on an urgent basis before the clothing sector of LDCs was 
dislocated by a variety of dynamics beyond th e ambit of the multilateral trading system.   WT/COMTD/LDC/M/43 
 Page 11 
 
 
  40. The representative of Nepal  explained that the clothing sector had been one of the major 
manufacturing sectors for a large number of LDCs.  The textiles and clothing sector had been an 
important sector for his country in view of its importance for growth, employment and foreign exchange earnings.  His country had been severely aff ected by the expiry of the ATC.  It was clear 
from the statistical tables that in all of Nepal's major markets including the US, EC and Canada, the 
export share of his country had declined, specially in 2005.  The figures indicated that with the expiry 
of the ATC his country had become less competitive.  The decline in the market share of his country was severe in those markets where it had no preferential access.  Preferences were one of the key components in determining market access.  That was the case not only for his country.  Referring to 
Table 1 of the document JOB(06)/55, he pointed out th at out of eight LDCs whose exports of clothing 
had been over US$100 million annually, exports of fi ve LDCs had substantially decreased in 2005.  
He reiterated the need for a comprehensive approach  to prevent the declining share of LDC exports.  
Preferential market access with flexible rules of  origin was important for the LDCs.  Technical 
assistance and capacity-building supp ort was needed for those LDCs that had been suffering from a 
severe decline in their clothing exports.  Substan tial support and cooperation was required to help in 
the diversification of LDC products.  He suggested  that the Sub-Committee continue to monitor and 
evaluate the overall market access opportunities for LDCs  in the textiles and clothing sector.  He also 
encouraged the Sub-Committee to play a cataly tic role in fostering measures to increase 
competitiveness of the LDCs' textiles and clothing sect or and to improve the market access situation 
for LDCs.   
41. The representative of China
 noted that the LDCs were not a homogenous group with respect 
to the importance of textiles and clothing sector in  their respective economies.  The impact of the 
elimination of ATC was uneven for WTO Member s and even among the LDCs.  The statistics had 
revealed that some LDCs had been performing bette r than other LDCs in their textile and clothing 
exports.  Some LDCs had registered good exports in so me markets but not in all markets.  That also 
reinforced the assessment that  the LDCs should not be seen as a homogenous group as far as the 
textiles and clothing sector was concerned.  She ho ped that the LDC group could share experiences as 
to how some of them had been performing well in some  markets.  With regard to rules of origin, her 
delegation was of the view that this was a significa nt obstacle to the LDCs' exports.  In this regard, 
she recalled the decision in Annex F of the Mini sterial Declaration adopted at Hong Kong, where 
Members agreed to ensure that preferential rules of  origin applicable to imports from LDCs would be 
made transparent and simple and would contribute  to facilitate market access for LDCs.  She hoped 
that Members would translate what  they had agreed at Hong Kong into action.  Several preference 
schemes had covered textile and clot hing products.  She said that the Note contained in document 
WT/COMTD/LDC/W/37 had identified specific factors that affected the supply capacity of LDCs.  
Supply-side constraints were among the major proble ms of LDCs in expanding their exports.  She 
hoped that the Aid for Trade initiative would give priority consideration to the supply-capacity 
constraints faced by LDCs in the textiles and clot hing sector.  The LDCs might wish to explore means 
to receive support in improving their supply capacity in this sector from the Aid for Trade initiative.  
42. The Chairman  noted that more than one year had elapsed since the expiry of the ATC.  From 
the data it was evident that since then, some LD Cs had experienced an increase in their clothing 
exports while a number of LDCs had witnessed a redu ction in their clothing exports.  He said that the 
Note was prepared in an effort to help LDCs id entify the options to improve their competitiveness in 
the textiles and clothing sector.  He hoped that the LDCs were making use of the findings of the Note.  
He stressed a few points before closing the item.  First, he recalled the presentations from the ITC, the 
World Bank and the IMF at the last session, which had shown that a wide range of assistance was available to LDCs.  He hoped that the LDCs woul d make maximum use of the assistance offered by 
these organizations.  He also recalled in this context that the LDCs could seek technical assistance 
from the WTO under their national technical assistan ce activities.  Second, the Note had suggested 
that there was scope for further improvement in th e preference schemes provided to the LDCs.  More 
flexible rules of origin by preference granting co untries could help LDCs make better use of the WT/COMTD/LDC/M/43 
Page 12  
 
  market access opportuniti es created through prefer ential schemes.  Finally, he encouraged LDC 
governments to look at their own environment in which textile and clothing activities took place.  He 
stressed that efforts to impr ove sector-specific competitivene ss needed to be accompanied by 
improvements in trade infrastructure.  He hoped that the international community would lend all 
support to assist the LDCs to face the challenges in th e post-ATC period.  He believed that the Aid for 
Trade initiative could be helpful in this regard.  He suggested that the Sub-Committee might come 
back to consider any elements of the Note at a fu ture meeting if Members so desired.  He proposed 
that the Sub-Committee take note of the statements made. 
43. It was so agreed
. 
C. OTHER BUSINESS  
44. The Chairman  informed Members that the next Sub-Committee meeting was tentatively 
scheduled for early July 2006.  The exact date would be communicated in due course. 
45. In the absence of any other business, the meeting was adjourned . 
 
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