WORLD TRADE  
ORGANIZATION  TN/CTD/W/31 
TN/MA/W/78 
TN/AG/GEN/23 
30 June 2006 
 
 (06-3164) 
Committee on Trade and Development Special Session 
Negotiating Group on Market Access 
Committee on Agriculture Special Session Original:   English 
 
   
 
DUTY-FREE AND QUOTA-FREE MARKET ACCESS 
IMPLEMENTATION OF  THE DECISION ON MEASURES 
IN FAVOUR OF LEAST-DEVELOPED COUNTRIES OF ANNEX F 
OF THE HONG KONG MINISTERIAL DECLARATION OF DECEMBER 2005  
 
Communication from Zambia on behalf of the LDC Group
 
 
 
 The following communication, dated 29 June 2006, has been received from the Delegation 
of Zambia on behalf of the LDC Group.  
 
_______________ 
 
 
1. Introduction 
  In adopting the Decision on Measures in Favour of Least-Developed Countries (36) of 
Annex F, WTO Members agreed that developed c ountry Members shall, and developing country 
Members declaring themselves in a position to do so  should provide duty-free and quota-free (DFQF) 
market access on a lasting basis, for all products originating from all LDCs by 2008 or no later than 
the start of the implementation period of the Doha  Round in a manner that ensures stability, security 
and predictability. 
  There are qualifications to this commitment which are as follows:   (i) that if specified Members face difficulties at this time to provide 100 per cent duty-
free and quota-free market access to LDCs, th ey would commit to 97 per cent defined 
at the tariff line level; 
  (ii)  developing country Members shall be  permitted to phase in their commitments and 
shall enjoy appropriate flexibility in coverage. 
 
 The Ministerial Decision also specifies that Members shall notify the implementation of the 
schemes adopted under this decision annually to th e Committee on Trade and Development.  The 
Committee shall also annually review the steps take n to provide LDCs with DFQF market access and 
report to the General Council for appropriate action.  TN/CTD/W/31 
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   In the Closing Session of the Ministerial Meeting in Hong Kong, Ministers took note of their 
understanding that the text concerning the DFQF de cision in sub-paragraph (a )(ii) of Annex F was a 
framework, and that developed Members and deve loping Members declaring themselves in a position 
to do so were urged to set out, by the end of 2006,  the means by which they would implement this 
decision.  (WT/MIN(05)/SR/12)   Follow-on work on the DFQF market access ag reement will be done in the Committee on 
Trade and Development in Special Session (CTDSS) where it was dealt with in the run-up to the 
Hong Kong Ministerial Meeting and results thereof will form an integral part of the negotiations on 
Agriculture and NAMA.   LDCs reiterate their firm intention to im plement policies and programmes which will allow 
them to graduate out of the LDC category and, by  graduating, give up the market access provisions 
and other SDT provisions granted to LDCs in A nnex F of the Hong Kong Ministerial Decision.  
However, for LDCs to graduate out of the LDC cate gory, it is recognized that they require assistance 
from other WTO Members who should implement the deci sions in the spirit that they were made and 
in recognition of the fact that LDCs require SDT in order for them to play a more meaningful role in 
the multilateral trading system.  
 This submission by the LDC Group makes proposals on how the decision taken on DFQF 
market access for LDCs shall be made operational.  
2. Implementation of the WTO Ministerial Decision on DFQF Market Access  
  Given the very limited number of tariff lines which are exported by LDCs, Members are 
called upon to implement the decision on DFQF mark et access in a way which will be commercially 
meaningful to LDCs and in a way that will contribut e to the expansion of LDC exports, so as to allow 
LDCs to use trade as a developmen t tool to graduate out of the LDC category.  Specifically, Members 
should implement the decision as follows:  
 (i) In order to meet the minimum 97 pe r cent benchmark (with a view to achieving 
100 per cent coverage), deve loped country Members should provide DFQF market 
access in tariff lines in which positive duties are still applied to LDC existing exports.  
The list of tariff lines, extracted from the World Trade Organization’s (WTO) Integrated Data Base (IDB), which are not zero-rated for LDCs, is available on 
request. 
 
 (ii) Those developing countries consideri ng themselves in a position to provide LDCs 
with DFQF market access should make th eir positions known by the end of 2006, or 
in the shortest possible time.  They shoul d provide, as a first step, DFQF market 
access to products of export interest, and which are commercially meaningful, to 
LDCs, with a commitment to gradually achieving 100 per cent. 
 
 (iii) DFQF market access that is provided to LDCs will be defined as the percentage of the 
total number of tariff lines which are zero rated for all LDCs. 
 
 (iv) In providing DFQF market access to LDC exports as set out above, the origin of 
goods will be conferred to LDCs if they co nform to the LDC Rules of Origin as set 
out in TN/CTD/W30. 
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   (v) In order to ensure that the improved market access provided under the DFQF market 
access provisions are not nullified by non-ta riff barriers to trade, SPS provisions and 
other technical barriers to trade, WTO Member s will work with LDCs to ensure that 
they receive the necessary trade-related t echnical assistance and capacity building and 
aid for trade to allow them to conform to  non-tariff regulations which govern imports 
into WTO Member markets. 
 
3. Notification and Negotiations 
 
 In Paragraph 36 of the Hong Kong Ministerial Declaration, Ministers took note of the work 
done on the Agreement-specific pr oposals, especially the five LDC proposals.  Ministers also 
recognized that substantial work still remains to  be done and committed themselves to address the 
development interests and concerns  of developing countries, especially the LDCs, in the multilateral 
trading system, and recommitted themselves to comp lete the task they set themselves at Doha. 
Ministers accordingly instructed the Committee on Trade and Development in Special Session to 
expeditiously complete the review of all the out standing Agreement-specific proposals and report to 
the General Council, with clear recommenda tions for a decision, by December 2006. 
  Annex F of the Hong Kong Ministerial Declara tion is a framework agreement and work needs 
to be done to complete the impl ementation modalities of the framewo rk agreement.  This follow-on 
work will be done in the Committee on Trade and De velopment in Special Session (CTDSS) where it 
was dealt with in the run-up to the Hong Kong Minist erial Meeting and results thereof will form an 
integral part of the negotiations in Agriculture and NAMA.   
 Developed countries and developing countries d eclaring themselves in a position to provide 
DFQF market access to LDCs shall, by the time th ey submit their comprehensive draft schedules of 
concessions, indicate how they intend to impl ement the commitments they assumed under the 
Decision on Measures in Favour  of Least-Developed Countries  and as outlined above. 
  Developed countries and developing countries d eclaring themselves in a position to provide 
DFQF market access to LDCs shall provide a provi sional list of the products they intend to exclude 
initially from DFQF market access, th e steps they intend to take to  progressively achieve compliance 
with the obligation to provide DFQF market acces s to all products from all LDCs, and the time frame 
within which they intend to complete those steps.   
 Once these steps are completed, developed countries and developing countries declaring 
themselves in a position to provide DFQF market a ccess, will enter into negotiations with the LDC 
Group to allow the LDCs the opportunity to negotiate an improvement in market access.  
4. Monitoring and Review  
  Members have decided that they shall notif y the implementation of the schemes adopted 
under the decision taken under Annex F of the Hong Kong Ministerial Declaration every year to the 
Committee on Trade and Development.  The Comm ittee on Trade and Development shall annually 
review the steps taken to provide DFQF market access to the LDCs and report to the General Council 
for appropriate action. 
 
 In order to allow accurate monitoring of the implementation of the decision on DFQF market 
access to LDCs, Members shall provide preferential da ta to the IDB, which is currently done on a 
voluntary basis.  TN/CTD/W/31 
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  Technical Annex 
 
 
I. LDC Export Profile
1  
 1. In 2004, LDCs as a group accounted for 0.6 per cent of world exports and 0.8 per cent of 
world imports (Table 1). In growth terms, their performance has been mixed over the past 15 years 
(Chart 1).  
 
2. Of particular note is the significant growth rate  of exports posted by LDCs in 2004, which 
was 34 per cent, compared to 21 per cent for world expor ts (Table 1).  This figure, however, is for all 
LDCs and masks considerable varian ce in the performance of individua l countries.  Five oil exporters 
as a group, which account for 47 per cent of tota l LDC exports, experienced a growth rate of 
52 per cent, whereas manufacturing and commodity expor ters experienced growth rates of 19 per cent 
and 22 per cent respectively.  Eight commodity exporting LDCs (Malawi, Liberia, Central African Republic, Comoros, Samoa, São Tomé and Princi pe, Kiribati and Tuvalu) experienced negative 
growth rates.  3. The diversity of export performance across countries is also important in absolute terms.  Two 
LDCs accounted for 36 per cent of all LDC exports in 2004 - Angola, which is a fuel exporter and 
Bangladesh, which is predominantly a clothing expor ter.  Their performance, due to their size, 
determines, to a significant degree, the ove rall performance of the LDCs as a group.  
 4. Chart 2 illustrates a distinct shift in the rela tive importance of different product groups in the 
total exports of LDCs.  In 1995,  food was the most important e xport, representing 21.7 per cent of 
total exports, followed closely by fuels representing 21.5 per cent.  By 2003, food became the fourth 
largest export behind fuel, which accounted for 36 pe r cent of exports.  Clothing became the second 
most important export, representing 19.9 per cent of total exports.  Much of this significant shift is 
due to changes in oil prices, but at the same time, it also represents a structural shift towards clothing 
exports. 
 
5. In terms of specific country markets, Tabl e 2 shows that the European Union and the 
United States continue to be the most important destinations for LDC exports.  Although the EU's 
share of total LDC exports declined in 2004 to 29.2  per cent from 39.6 per cent in 1995, it is still the 
most important market.  The share of LDC exports to the US has fluctuated over the ten-year period 
reported in Table 2, but is still, approximately, one  fifth of total exports.  China is the third most 
important market and after that the top ten markets have approximately the same share.  These markets are: Thailand; Japan; India; Republic of Ko rea; the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu (Chinese Ta ipei); Canada; and Singapore.   
 
                                                     
 
1 Sections I to III draw heavily on the WTO Secretariat paper entitled "Market Access Issues Related to 
Products of Export Interest Originating from Least-Developed Countries" (WT/COMTD/LDC/W/38) of 22
 February 2006 .  TN/CTD/W/31 
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  Table 1: Merchandise exports and imports of least-developed countries by selected country 
grouping, 2004 
(Million dollars and percentage) 
 
   Exports    Imports 
  Value    Annual percentage change  Value    Annual percentage change 
 2004   2000-04 2002 2003 2004  2004    2000-04 2002 2003 2004 
                            
Least-developed countries  61825   14 10 16 34   71233   13 5 22 17 
Oil Exporters  29168   18 17 20 52   16945   22 25 27 19 
Angola  13850   15 27 14 46   6500   21 18 46 19 
Equatorial Guinea  5190   47 21 33 76   1410   33 -29 142 15 
Yemen  4150   0 -1 12 11   4190   16 18 26 14 
Sudan  3778   20 15 30 49   4075   27 25 18 41 
Chad  2200   86 -2 141 393   770   25 142 -38 -24 
Exporters of manufactures  17022   9 5 9 19   23728   7 -6 18 14 
Bangladesh  8150   6 1 14 17   12026   8 -5 21 15 
Myanmar  2850   15 28 -18 15   2220   -2 -18 -11 6 
Cambodia  2798   19 28 10 32   3170   13 11 12 22 
Madagascar  990   5 -48 76 16   1230   5 -37 84 11 
Nepal  756   -2 -23 17 14   1870   4 -4 24 7 
Lesotho  726   35 33 29 51   1400   15 9 38 26 
Haiti  391   5 2 24 13   1306   6 12 5 10 
Lao People's Dem. Rep.  361   2 -10 20 1   506   -1 -18 12 5 
Exporters of commodities  15635   15 7 17 22   30561   14 6 24 19 
Zambia  1576   24 -6 2 67   2143   21 -4 24 38 
Senegal  1529   14 6 25 15   2710   16 17 18 13 
Mozambique  1504   43 -6 58 44   1970   14 19 39 12 
Congo, Dem. Rep. of  1413   17 14 19 10   1873   16 35 28 33 
Tanzania  1338   19 13 39 10   2490   13 -1 30 14 
Mali  1123   19 21 5 22   1320   13 -12 31 16 
Togo  771   21 20 44 25   1050   17 7 46 21 
Guinea  700   1 -3 -14 15   690   3 11 -4 8 
Benin  672   14 20 24 21   865   9 23 10 16 
Ethiopia  639   7 5 5 27   3080   25 -8 29 44 
Uganda  635   8 4 12 19   1491   -1 -29 14 15 
Burkina Faso  445   21 10 33 37   1155   17 13 25 25 
Malawi  441   4 -9 13 -4   792   10 23 1 13 
Afghanistan  420   23 150 40 20   2300   43 50 53 0 
Mauritania  410   3 -8 4 22   400   6 -5 1 11 
Niger  370   7 3 22 9   560   9 8 23 14 
Somalia  310   13 4 -25 39   610   15 1 14 18 
Liberia  235   -8 -4 15 -13   900   8 -2 11 32 
Maldives  172   12 20 15 13   645   13 0 20 37 
Bhutan  165   13 7 18 24   400   23 3 26 61 
Sierra Leone  139   81 69 88 51   286   18 45 15 -5 
Central African Republic  120   -7 4 -17 -2   150   6 12 9 15 
Rwanda  99   17 -24 -3 57   285   8 -12 4 10 
Solomon Islands  97   9 23 28 31   100   2 -26 22 22 
Guinea-Bissau  81   7 -14 28 17   86   10 -6 19 25 
Burundi  47   -2 -22 25 24   176   4 -7 21 13 
Djibouti  41   7 13 3 11   275   7 1 21 16 
Vanuatu  37   9 0 35 37   128   10 -13 18 22 
Eritrea  35   -1 174 -33 0   650   8 27 10 10 
Gambia  22   10 30 -8 83   200   2 10 25 8 
Cape Verde  15   8 10 18 15   386   14 18 27 10 
Comoros  15   21 33 25 -25   115   13 20 33 -4 
Samoa  11   -6 -7 7 -27   168   12 4 1 23 
São Tomé and Principe  6   19 90 33 -10   45   11 9 36 7 
Kiribati  2   -16 -29 -22 -20   48   5 5 -7 20 
Tuvalu  0   78 736 9 -33   18   38 217 40 16 
Timor Leste ...  ... ... ... ...  ...  ... ... ... ... 
Memorandum item:               
World a  9153000   9 5 16 21   9495000   9 4 16 21 
                            
a Includes significant re-exports  or imports for re-export.           
Note: Data for 2004 are largely estimated.            
Source : WTO. TN/CTD/W/31 
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  Chart 1: Growth in the value of LDC merchandise trade, 1990-2004 
(Indices 1990 = 100) 
70120170220270320
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004LDC Exports
LDC Imports
World Exports
 
Source : WTO. 
 
 
Chart 2: Exports of least-developed countries by major product, 1995 and 2003 
(Percentage) 
0 5 10 15 20 25 30 35 40OthersTextilesOther semi-manufacturesRaw  materialsFoodClothingFuels
1995
2003
 
Source : WTO. 
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  Table 2:  Top 10 markets for LDC exports, 1995-2004  
(percentage)  
 
Rank   1995 1996 1997 1998 1999 2000 2001 2002 2003 2004*
1 EU 15 39.6 36.9 34.9 37.3 34.6 31.1 33.4 32.8 30.6 29.2
2 USA 20.5 21.5 22.8 23.5 24.7 26.4 25.6 23.8 24.8 22.7
3 China 3.5 4.2 6.1 3.5 4.9 10.7 7.7 8.7 13.5 17.8
4 Thailand 3.9 3.5 3.8 3.1 3.8 3.7 4.9 4.9 5.1 5.0
5 Japan 6.5 6.4 4.7 4.0 3.6 3.3 2.9 4.0 3.4 4.2
6 India 2.7 2.6 2.7 3.0 4.1 2.5 3.4 3.3 3.1 2.9
7 Chinese Taipei 1.7 2.4 1.5 2.2 2.0 1.8 1.9 2.2 2.2 2.9
8 Korea, Rep. of 2.8 2.5 3.8 2.0 4.8 4.9 2.6 2.5 1.9 1.8
9 Canada 0.9 1.2 1.0 1.0 0.8 0.8 0.9 1.0 1.7 1.5
10 Singapore 2.8 2.2 1.5 2.7 2.0 1.6 1.9 1.4 1.1 1.2
* Preliminary estimates. 
Source : WTO. 
 
II. Market Access in Developed Countries 
 
6. Developed countries provide preferential market access to products originating from LDCs on 
a non-reciprocal basis through their GSP schemes2  
 7. The difference between the current status of th e tariff treatment of LDC exports in developed 
country markets and complete DFQF treatment is dependent on what measurement indicators are used.  There would appear to be two ways to measure the value of DFQF market access: 
 
 (i) The percentage of imports from LDCs in to developed markets that are duty free.  
Using data from Table 3, this figure was 82.2 per cent in 2003, but figures from Table 
3 also show that 97 per cent of this value is accounted for by imports into just two 
markets – Japan and the US.  Japan provides duty-free treatment to 51 per cent of its 
imports from LDCs and the US to 62 per cen t.  Other developed countries offer duty-
free access to 100 per cent, or at least 95 per cent, of products originating from LDCs.  
  (ii) The number of duty-free tariff lines over the total number of tariff lines.  Using this 
method, the US has almost 82 per cent of its total lines duty free (and if the lines with positive duties but no imports from LDCs are eliminated, this figure jumps to 
94 per cent) although, in terms of value, 38 per cent of LDC exports to the US are 
dutiable.  Similarly, Japan can claim to have only 1 per cent of its lines applying a duty to LDC imports, or 86 per cent of its lin es duty free.  Yet, in value terms, almost 
50 per cent of imports are dutiable. 
 
                                                      
2 A non-exhaustive list of preferences granted to LDC exports in developed and developing countries 
can be found in Annex 2 of WT/COMTD/LDC/W/38 (TN/MA/S/19) of 22 February 2006 TN/CTD/W/31 
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Table 3: Tariff treatment of LDC exports in selected developed country markets, 2003 
 
  Number of Tariff Lines Imports (millions $US) Duty-Free Status 
(per cent) 
   MFN LDC MFN LDC  
Market Sector  
Total Dutiable With 
Imports Dutiable 
with 
Imports Total Total Dutiable Tariff 
Lines  
Imports 
Australia   6,102 0 655 0 84,366 89 0 100 100 
Australia Agri 773 0 73 0 3,975 14 0 100 100 
Australia NonAg 5,329 0 582 0 80,392 135 0 100 100 
Canada   8,497 97 1569 1 234,984 769 0 98.9 100 
Canada Agri 1,372 97 194 1 14,531 36 0 92.9 100 
Canada NonAg 7,125 0 1375 0 220,454 733 0 100 100 
European 
Communities   10,404 67 3517 19 992,010 13,705 120 99.4 99.1 
European 
Communities Agri 2,115 42 505 17 66,248 1,562 120  
98.0  
92.3 
European 
Communities NonAg 8,289 25 3012 2 925,762 12,143 0  
99.7  
100 
Japan   9,296 1,350 776 89 376,941 1,564 766 85.5 51.0 
Japan Agri 1,858 938 121 31 37,152 177 5 49.5 97.2 
Japan NonAg 7,438 412 655 58 339,789 1,387 760 94.5 45.2 
New Zealand   7,414 59 521 3 18,439 31 0 99.2 100 
New Zealand Agri 1,026 36 51 2 1,543 7 0 96.5 100 
New Zealand NonAg 6,388 23 470 1 16,896 24 0 99.9 100 
Norway   7,165 261 509 2 39,765 81 0 96.4 100 
Norway Agri 1,337 258 55 2 2,724 12 0 80.7 100 
Norway NonAg 5,828 3 454 0 37,041 70 0 99.9 100 
Switzerland   8,477 1,167 818 47 96,177 118 5 86.2 95.7 
Switzerland Agri 2,227 1,156 185 47 6,418 41 5 48.1 87.8 
Switzerland NonAg 6,250 11 633 0 89,759 77 0 99.8 100 
United States   10,496 1,911 1421 581 1,196,833 10,489 3,991 81.8 62.0 
United 
States Agri 1,808 274 183 3 49,988 361 2 84.8 99.4 
 NonAg 8,688 1,637 1238 578 1,146,845 10,128 3,989 81.2 54.5 
Source WTO . 
 
III. Market Access in Developing Countries 
 
8. Preferences by developing countries can generally be classified into three categories: 
 (i) non-reciprocal preferential market access schemes; 
 (ii) preferential market access granted on a bilateral or regional basis; and  (iii) the Global System of Trade Preferences (GSTP).  9. However, preferential access offered by developi ng countries to LDCs is limited in terms of 
its depth and coverage, and market access condi tions facing LDC exports in these markets are 
determined primarily by MFN rates.  
IV. DFQF Market Access Requirements 
 
10. The main exports, by value, from LDCs consis t of petroleum products, garments, aluminium 
and gemstones and come from a small number of LD Cs (mainly, by value, from Angola, Yemen, 
Sudan, Equatorial Guinea, Bangladesh
, Mozambique, DR Congo, Tanzania, Cambodia and Guinea).  
These exports account for well over 50 per cent of the total value of imports from LDCs, with 
petroleum products taking up a large share of this value. 
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  11. An examination of the IDB shows that tariff lines which are not free of quotas and duties are 
mainly those of export interest to LDCs. Chapters  1 to 24 of the Harmonized System are agricultural 
goods and most tariffs applied to LDC products by  developed countries are either in these Chapter 
Headings or those which apply to textiles and apparel, which is anot her sector in which LDCs have a 
competitive advantage.  12. Of equal importance to LDCs as DFQF market access is the ability to take advantage of the 
improved market access conditions on offer.  There are a number of examples where imports from 
LDCs, theoretically, are not dutiable, but where duti es are paid.  This is true, for example, for EU15 
imports of garments from LDCs despite the fact th at the LDC GSP of the EU covers "everything-but-
arms" (arms being Chapter Head 93).  The reason for th is is that all imports into developed countries 
under existing GSP schemes must conform to the partic ular GSP Rules of Origin.  If origin is not 
conferred, perhaps because the process is compli cated (as is the case for the EU’s GSP Rules of 
Origin for textiles and garments as these products have to go through a "double-transformation" 
process, meaning that, in effect, garments should be manufactured from cloth originating from the 
LDCs) or expensive to prove, then the import is charged the MFN tariff.  13. There is an obvious need for LDCs to expa nd the volume and values of existing exports and 
diversify their export bases.  The developed and so me developing countries could assist LDCs to do 
this by improving market access for LDCs by removi ng tariffs for not only existing exports but also to 
remove tariffs on goods in whic h LDCs have a comparative or competitive advantage.  This, 
combined with a simple and single set of criteria conferring origin, would assist LDCs to not only 
expand the values and volumes of exports but also to  diversify their export bases, which would have 
obvious welfare benefits to not only the poor in LD Cs but also for consumers in importing countries. 
 
 
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