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Margin of preferences and LDC export performance

by Matthias Bruckner * Preferential market access is a major support measure available to LDCs. By lowering or eliminating tariffs on LDC imports, preferential market access contributes to offset higher production costs LDCs have due to structural handicaps such as remoteness from major markets, landlockedness, unskilled labour force, etc. However, the value of preferential market access schemes is often questioned due to on-going liberalization and the proliferation of regional trade agreements that imply in de facto low preferential margins. However, such general conclusion does not take into account the wide range of tariff levels applied to products of export interest of LDCs....

Preferential treatment to merchandise exports

Developed and many developing countries provide preferential access for LDCs, allowing imports from LDCs to enter at zero or reduced tariff rates. In addition, rules of origin are often less restrictive for LDCs than for other developing countries. Some regional trading agreements also contain preferential market access provisions for their LDC members. In developed countries, LDC preferential market access schemes are typically part of the Generalized System of Preferences (GSP) schemes for developing countries, whereas developing countries often have dedicated schemes for LDCs. Preferential market access schemes for LDCs have a multilateral basis in the Enabling Clause ...

Merchandise imports from LDCs by the Eurasian Customs Union

The Eurasian Customs Union, consisting of the Russian Federation, Kazakhstan and Belarus has established an LDC-specific GSP scheme which entered into force on 1 January 2010 and covers 24 per cent of the tariff lines. In 2014, the Eurasian Customs Union was integrated into the Eurasian Economic Union and two new members joined in 2015: Kyrgyzstan and Armenia. Since this LDC-specific GSP scheme entered into force imports from LDCs have almost doubled. However, this increase can be attributed largely to an increase in MFN dutiable imports: from 715 Million US dollar (or 29.8 per cent of all imports) in 2010 to 1,218 Million US dollar (or 59.2 per cent of all imports) in 2013. Although...

Preferential Market Access: Russian Federation, Kazakhstan and Belarus (Eurasian Customs Union)

The Eurasian Customs Union, consisting of the Russian Federation, Kazakhstan and Belarus has established an LDC-specific GSP scheme. The scheme entered into force on 1 January 2010 and covers 24 per cent of the tariff lines. In 2014, the Eurasian Customs Union was integrated into the Eurasian Economic Union and two new members joined in 2015: Kyrgyzstan and Armenia. Utilization by LDCs In 2013, LDC imports in the Eurasian Customs Union (Russian Federation, Kazakhstan, and Belarus) accounted for $1,218 million. 34.79 per cent of these imports were eligible for duty free treatment under the LDC specific GSP scheme. This share remained stagnant since the entry into force of the...

Preferential Market Access- Republic of Korea

The Republic of Korea provides DFQF market access for imports from LDCs since the entry of force of the Presidential Decree on Preferential Tariff for LDCs in 2000. Product coverage has been continuously increased since 2008. In 2007, only 1.8 per cent of all tariff lines were covered. In 2014, 78 per cent of all tariff lines were included in the preferential scheme, while duty free market access was granted for another 18 per cent of the tariff lines via the MNF principle. Utilization by LDCs In 2014, imports by the Republic of Korea from LDCs accounted for $ 5,823million, of which 75.4 per cent was eligible for duty-free market access under the LDC specific preferential scheme. An...

Liberia and Afghanistan to join the WTO

The accession packages for Liberia’s and Afghanistan’s membership to the WTO have been officially agreed upon by the WTO member ministers at the 10 th WTO ministerial meeting held in Nairobi, from 15 to 19 December. Liberia is the 35 th LDC to join the WTO, after eight years of negotiating. Liberia submitted its application in 2007 and the negotiations were de facto completed at the 4 th meeting of the Working Party on 6 October 2015. The accession package has to be ratified by Liberia before 16 June 2015. Taking into account that, on average, the accession process takes 13.4 years for LDCs, the Liberian accession process was relatively short. The negoti ations with...

Overview of China’s duty-free, quota-free market access programme for LDCs

The Chinese duty-free, quota-free (DFQF) market access programme entered into force on 1 July 2010 and was accessible to the 33 LDCs which had diplomatic relations with China. The list of beneficiaries has been adjusted over the years, covering 40 LDCs as of December 2015. Zero tariff rates are applied for 97 per cent of products imported from 24 countries, 95 per cent of products from 14 countries, and 60 per cent of products from two countries (Bangladesh and Mauritania). China has become the largest export market for LDCs. In 2013, 26.8 per cent of all LDC exports went to China.  Fuel exporters such as Angola and South Sudan, and neighboring Asian countries like Myanmar are the...

Preferential Market Access: India’s Duty Free Tariff Preference Scheme for LDCs

India's duty free scheme for LDCs came into effect on 13 August 2008. The scheme was revised in 2014 and import duties are being removed for 98.2 per cent of all tariff lines. 97 tariff lines are excluded and another 114 lines are included in the ‘Margin of Preferences' list.  The updated scheme also applies less stringent rules of origin. All LDCs are eligible to participate in the scheme. In order to be a beneficiary, LDCs have to submit a letter of intent and must provide information on signatories of rules of origin certificates. India also accords preferential market access to Bangladesh, Bhutan and Nepal under the South Asia Free Trade Arrangement. In addition,...

Exports of LDCs to drop after 2018

by Matthias Bruckner* Better integrating LDCs into world markets is a long standing objective of the international community. One of 19 targets associated with SDG 17 " Strengthen the means of implementation and revitalize the global partnership for sustainable development" ( target 17.11) , actually calls for doubling the LDC share of global exports by 2020. But taken at face value, this target is most likely to be missed even before it is going to be adopted in September this year. Source: Own calculations, based on IMF World Economic Outlook. For the composition of the LDC category, see http://esango.un.org/sp/ldc_mem/web/StatPlanet.html . Growth of the share of LDCs...

Briefing on capacity building project for addressing institutional constraints in accessing ISMs and the ePing toolkit

The CDP Secretariat briefed delegates on the results of its capacity building project on removing institutional constraints in utilizing trade-related international support measures for Least Developed Countries. The briefing included a presentation of the new electronic export notification toolkit developed under the project, to alert LDCs on new product-related requirements from trading partners. A presentation of the briefing can be accessed here .

Preferential Market Access: Thailand GSP

Since April 2015, Thailand grants LDCs DFQF market access for a large number of products under its LDC-specific preferential trade scheme. The scheme covers 73.2 per cent of tariff lines and was made operational via the Notification of the Ministry of Finance ‘ Exemption of Customs for the Least Developed Countries ' , issued on 30 March 2015. The Rules of Origin stipulate that ‘ goods shall be treated as […] originating goods if the goods [have] a Qualifying Value Content of not less than 50 percent of FOB (Free-On-Board value)'. Utilization by LDCs No information on utilization by LDCs is available. Available Smooth Transition Procedures The scheme does not include...

ESCAP publication on implementation of Bali package by LDCs

In a new publication, ESCAP discusses the implementation of the Bali package, and provides background information and analyses to prepare LDC negotiators for the upcoming 10 th WTO ministerial conference in Nairobi. Focusing on (Asia-Pacific) LDC concerns, the publication analyses key decisions of the Bali package and identifies challenges and opportunities. Impact assessment strategies and guidelines to capitalize on the implementation of the package are put forward. The publication also analyses the capacity and policy gaps at the national and regional level. The publication examines amongst others preferential Rules of Origin for LDCs, DFQF market access, the services waiver,...

Snapshot on LDC criteria for Nepal

The least developed countries are defined as low-income developing countries suffering from severe structural impediments to sustainable development. Indicators of such impediments are a high vulnerability to economic and environmental shocks and low levels of human assets. The criteria used by the Committee for Development Policy for identification of LDCs are per capita gross national income (GNI), a human assets index (HAI) and an economic vulnerability index (EVI).  The CDP reviews the list of LDCs on a triennial basis using the three criteria and publishes the results on its website. The snapshot  shows the results from the 2015 triennial review for Nepal in the form of...

Preferential treatment to services and services suppliers

The 8th Ministerial Conference of the WTO adopted on 17 December 2011 the Decision on preferential treatment to services and services suppliers of LDCs (WT/L/847).  The decision exempts WTO members from the obligation of treating all members equally (Most Favoured Nation treatment) and allows them to grant market access preferences in services for LDCs. The waiver applies exclusively to LDCs and will expire in 15 years (December 2026). As in the case of goods, the granting of preferential market access is voluntary. Preference giving countries need to inform the WTO (Council for Trade in Services) about the nature and validity of the preference extended. Upon request,...

ICTSD analyses what LDCs stand to gain (or lose) at the 10th WTO Ministerial meeting

The latest issue of bridges Africa , the International Centre for Trade and Sustainable Development’s newsletter, is dedicated to LDCs’ concerns and interests at stake for the 10 th WTO ministerial meeting that will be held in Nairobi in December this year. The issue discusses amongst others Special and Different Treatment, a DFQF deal, rules of origin, cotton, food security , fisheries, the Trade Facilitation Agreement, Non-Agricultural Market Access and services. Sources: “LDC stakes for Nairobi: Going all in?”, Bridges, ICTSD, Vol 4 (9), 11 November 2015

WTO drugs patent waiver for LDCs extended until 2033

On 6 November 2015, the WTO Council decided to extend the exemption for LDC WTO members to implement provisions of the TRIPS agreement related to pharmaceutical products. The exemption will last for at least 17 years, until 2033, when the waiver will be discussed again. LDCs requested a permanent waiver exempting them from the obligation to implement the provisions until a country would graduate from the LDC category. This turned out to be “a bridge too far”. The waiver, agreed upon in 2001 and about to expire at the end of the year, exempts LDCs from obligations under the TRIPS agreement related to patents or other intellectual property rights on pharmaceutical products and clinical...

CDP/ DESA holds workshop on trade and LDCs

From 3-6 November the Committee for Development Policy (CDP) Secretariat of the UN Department of Economic and Social Affairs held a four-day workshop in Geneva to help LDCs benefit more from international support measures (ISMs) and to prepare for possible graduation from the category. Senior policymakers attended from Bhutan, The Gambia, Lesotho, Nepal, Timor Leste, Uganda and Vanuatu. Professor Charles Gore, former Director of Africa and the LDCs at UNCTAD, led the first two days of the workshop. Professor Gore first outlined how to strategically orient the economy to develop productive capacity for trade. In line with his earlier work, Professor Gore defined productive...

Workshop on productive capacity and international support measures for LDCs

From 3-6 November the Committee for Development Policy at the UN Department of Economic and Social Affairs (DESA) is holding a four-day workshop in Geneva to help LDCs benefit more from international support measures (ISMs) and to prepare for possible graduation from the category. The workshop comprises two parts. During the first two days, international experts will explore the issue of how to develop productive capacity for trade, using the latest policy developments as well as case-studies developed by CDP. LDC policymakers from eight countries will be trained in how best to take advantage of existing ISMs and to build productive capacity for trade with a view to sustainably...

Togo ratifies WTO's Trade Facilitation Agreement

Following Niger and Loa People's Democratic Republic, Niger became the third LDC to ratify the WTO Trade Facilitation Agreement (TFA). Concluded at the WTO Bali Ministerial in December 2013, the TFA will enter into force after being ratified by two thirds of WTO membership. To date, 21 members, including Togo, have ratified the agreement. Source and additional information: WTO website