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SPOTLIGHT summary: How long should the smooth transition period last?

In response to the lack of guidelines to support the transition of countries from the LDC category, a UN General Assembly resolution established a smooth transition framework in 2004 . The 2004 resolution does not contain any mandatory provisions. Instead, it invites partners to extend smooth transition measures to graduated countries. Since the adoption of the resolution, no phasing out mechanisms were introduced for most ISMs. A few exceptions exist. Notable examples are those from the EU related to LDC specific trade preferences under the Everything but Arms  initiative and continued access for a limited period to funding from the Enhanced Integrated Framework . In...

ODA flows to LDCs in 2012: bilateral ODA declined significantly but how about multilateral development aid?

by Hiroshi Kawamura (*) Many in the donor community have expressed concern over the news from the OECD DAC that bilateral development aid fell by 4 per cent in real terms in 2012 and to LDCs by 12.8 per cent.  With this, OECD noted that there is an apparent shift in aid allocation away from the poorest countries and towards middle-income countries.  What was not widely reported is the fact that bilateral contributions to multilateral institutions declined by 7.1 per cent in real terms in 2012.  A lower bilateral contribution to multilateral institutions could aggravate the negative impact of the declining bilateral ODA on LDCs by further reducing multilateral ODA to...

Many scholarships, few applications

By Namsuk Kim (*) There are a growing number of  financial support measures  available (in many cases, exclusively) to students and researchers from LDCs. Types of support are diverse, including support for getting enrolled in graduate degree programs, for participating in academic conferences, and for conducting research projects. Fields of specialization are also diverse, covering agriculture, business, economics, engineering, and information technology, among others. Notwithstanding the diversity of programs and providers, a common problem confronts them all: too few LDC applicants. As a result, scholarship providers have loosened the eligibility criteria and started...

Assessing the accession: highlights of Lao’s package

  On 2 February 2013, Lao People's Democratic Republic became the latest LDC to join the WTO. Negotiations lasted for 15 years and required Laos to make substantial changes in its legal and regulatory framework as well as to introduce new legislation. The working party on the country's accession involved 66 members of the WTO.  During the negotiations, Laos received technical assistance by the WTO, other multilateral organizations and development partners. The terms of accession package were agreed by late September 2012 and approved by the General Council of the WTO in October 2012. This implies that several of the recommendations adopted in July 2012 to further strengthen,...

LDCs to keep DFQF benefits in Canada

The Canadian Government announced major changes to its General Preferential Tariff, its GSP scheme for all developing countries. Seventy-two countries, including major trading nations such as Brazil, China, India and the Republic of Korea will be excluded from the scheme from 1 January 2015. These are countries that have either achieved upper middle or high income status according to the World Bank classification  for two consecutive years or have a share in world exports of higher than 1 per cent. Among the current LDCs, Equatorial Guinea will be excluded from preferential access in Canada due to its high income status. The country had been recommended by the CDP for graduation...

LDCs and trade in services

LDCs continue to play a marginal role in global trade in services flows, but their market share is increasing. In 2011, the LDC market share in commercial services stood at 1.05 %, only slightly below their share in merchandise trade of 1.14 %. However, whereas the trade balance of LDCs as a group in merchandise trade is approximately zero and even had a small surplus in 2011, LDCs are net importer of services. Services exports stood at 22 billion $ in 2011, whereas imports were 62 billion $. Moreover, imports are growing faster (15.2 per year between 2000 and 2011) than exports (12.9 per cent per year). Hence, services exports play only a small role for LDCs external financing, with only...

Smoothing the Transition

On 7 December 2012, the General Assembly of the United Nations adopted a resolution on smooth transition for countries graduating from the list of LDCs . The resolution endorses several of the recommendations put forward by the ad hoc working group of the General Assembly on strengthening smooth transition provisions. The working group initiative had been mandated by the Fourth UN Conference on the LDCs which took place in Istanbul in May 2011. Graduation has been a source of concern for many LDCs. Despite the introduction of smooth transition provisions by some development  (for example, UN General Assembly travel benefits) and trading partners (the EBA is a case in point),...

Spotlight summary: EIF success stories - lessons learned

In October and November 2012, Spotlight discussions on the Portal focused on how positive experiences can be replicated by LDCs. The discussions highlight some of the successes and lessons learned from EIF activities in LDCs such as the Gambia, Lesotho, Mali, Nepal and Uganda. One message coming out of the discussions is that the implementation of the integrated framework is facilitated by the national units responsible for implementation. However, a number of respondents reported that there is a need to further develop the capacity of Government officials in formulating EIF projects. Several contributors stressed that the capacity to initiate and sustain trade-related...

Untying aid for LDCs: Trends and implication

Between 2000 and 2010, the proportion of untied OECD DAC bilateral aid to LDCs has increased from 57.5 per cent to 84.4 per cent. Despite the progress achieved, at least 30% of the aid disbursed to LDCs and other programme countries is estimated as tied (and reporting is far from complete), when the exempt technical cooperation and food aid are included. Furthermore, donors can in practice tie their programme and project aid informally for various reasons such as lack of capacity of local and regional contractors, which is particularly an important factor in LDCs. Traditionally, many donor countries have seen aid as an opportunity to promote their own commercial interests, by...

UN Budget Scale Assessment Methodology

Under the current scale of assessment, contributions by LDCs to the regular budget of the UN are capped at 0.01 per cent of the total budget, while every Member State is required to pay at least a minimum assessment rate of 0.001 per cent.  At present, the scale of assessment is based on the following considerations: total GNI in national currency; market exchange rates are used, except in cases where that would cause excessive fluctuations and distortions in the income level –when expressed in US dollars-- of  Member States; averages are  applied (periods of 3 or 6 years) to in GNI, GNI per capita and other variables used  to avoid abrupt changes in the...

Bangladesh' exports to Canada: the importance of flexible rules of origin*

The Canadian GSP scheme for the LDCs was revised in 2002 when almost all tradable items were made eligible for duty-free (and quota-free) treatment. Four excluded items were eggs, poultry, dairy and refined sugar, none of which is exported by Bangladesh. Most of Bangladesh's exports to Canada (89.3 per cent in FY2010) are ready made garments (RMG). Average Canadian tariffs on apparels items are about 17 per cent and several apparels items face tariff peaks. However, the average MFN duty in Canada was much lower at about 3.2 per cent. The Canadian GSP rules of origin (RoO) are considered to be the most LDC-friendly of all, requiring only 25 per cent domestic value addition. Bangladesh...

LDCF Background and Experience

The LDCF was proposed at the 7th session of the Conference of the Parties to the UNFCCC in Marrakesh, in 2001. The GEF, as a financial mechanism of the Convention, was requested to operate the fund. In 2002 the GEF reported that arrangements had been made for the establishment of the fund. Objective The fund addresses the needs of the 48 LDCs which are particularly vulnerable to the adverse impacts of climate change. As a priority, the LDCF supports the preparation and the implementation of the National Adaptation Programs of Action (NAPAs), which are country-driven strategies that identify the immediate needs of LDCs in order to adapt to climate change. Preparation of NAPAs ...

EIF and its Tiers

All  LDCs that became beneficiaries of the Integrated Framework (IF), prior to the IF enhancement, automatically became beneficiaries of the Enhanced IF (EIF). New LDC entrants need to be qualified as  EIF beneficiaries. Two main financing mechanisms are envisaged: Tier 1 aims at supporting greater trade capacity and increased policy ownership. It provides financial resources with the following objectives: Building the human resource capacity of and providing operational support for the National Implementation Arrangements (NIAs). The NIAs often comprise the national focal point, the national implementation unit , the national steering committee and the donor...

Standards and Trade Development Facility

The STDF is a global partnership that supports LDCs Least Developed Countr and other developing countries in building their capacity to implement international sanitary and phytosanitary standards (SPS Sanitary & Phytosanitary ) to gain and maintain access to markets. The STDF ds and Trade Development Facility contributes to this by helping countries build up their capacity to implement requirements known as "sanitary and phytosanitary (SPS)" standards through increased awareness and knowledge of good practices and by funding projects that promote compliance with the standards, including grants to help prepare projects. The objective is to assist countries tackle pests,...

LDC-preferential market access treatment: exclusive and inclusive?

Preferential market access for LDCs is one of the most important international support measures available for this group of countries. Most developed and, increasingly also, developing countries are providing LDCs with DFQF access to their markets. Even though conditions of access, such as rules of origins, differ across schemes available information indicates that utilization of preferential schemes is generally high, between 80 and 90 per cent of eligible exports. Surprisingly, the list of beneficiary countries differs across schemes, despite the fact that there is only one LDC list by the United Nations. There are non-LDCs receiving LDC preferential treatment as well as LDCs not...

China's LDCs and Accession Programme

The Government of China and the WTO signed a Memorandum of Understanding on 14 July 2011, on the basis of which the Government of China established the "China's LDCs and Accessions Programme", which is commonly known as  "the China Programme". The Programme has the objective of facilitating participation of LDCs in WTO discussions as well as building capacity for accession negotiations. It comprises three main activities: 1. WTO accession internships , 2. WTO accession round table meetings; and, 3. LDC participation in selected WTO meetings.  The Programme was launched with an initial contribution by China of US$400 thousand and anticipated to last for one year....

Trade capacity for acceding LDCs: WTO/ITC programme

Launched on 1 December 2009  during the Seventh WTO Ministerial Conference, which took place in Geneva, the WTO-ITC Programme on Trade Capacity for Acceding LDCs aims at building capacity of private business sector and government representatives involved in accession negotiations and faciliate the implementation of immediate post-accession commitments.  All LDCs with Observer status at the WTO are eligible to participate in the Programme. Programme implementation is gradual. Initially, five LDCs were selected to participate, namely, Ethiopia, Lao's People's Democratic Republic, Liberia, Yemen and Samoa which recently acceded to the WTO. ITC activities under the programme...

Smooth transition and preferential market access

Countries graduating from the list of LDCs are often concerned about loss of LDC-specific benefits and its impact on the development progress they have achieved. Member States of the United Nations agreed that provisions for smooth transition  from the category could alleviate this concern. In the area of trade preferences, the United Nations General Assembly has called upon LDC trading partners to consider extending preferences or to reduce them is a phased manner. However, despite the common commitment by all countries, there is in practice a wide disparity by trading partners. Only one major traditional trading partner, the European Union, has adopted an explicit...

EiF: brief historical background

The Integrated Framework was mandated by the WTO at its first Ministerial Conference , held in Singapore (1996) as a multi-agency, multi-donor programme to assist LDCs in developing the necessary capacities in the area of trade, including improving upon their supply response to trade opportunities and better integrating themselves into the multilateral trading system. Agencies involved in the initiative include the International Monetary Fund, the International Trade Centre, UNCTAD, UNDP, the World Bank and the WTO. Subsequently, UNIDO joined the group in 2009  as an observer. Following the endorsement of an enhanced IF by the Development Committee of the World Bank and the IMF...

Senegal: making use of SDT provisions under the Customs Valuation Agreement

Senegal made use of its status as a developing and least developed country in extending the period of implementation of the Agreement of Customs Valuation. Initially, the country delayed implementation for five years (Article 20.1) since it was not party to the Tokyo Round Customs Valuation Code, without notifying the WTO. Subsequently, the country was allowed to delay the implementa­tion of the Agreement for another 18 months, until 30 June 2001 (Annex III, paragraph 1). On 5 June 2002, Senegal submitted a request for a waiver under Article IX of the WTO Agreement to continue to use minimum values for customs valuation purposes for a number of products.  In 2004, the General...