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World Trade Organization (WTO) members have approved proposals to streamline and facilitate the accession process for Least Developed Countries (LDCs) seeking membership of the global trade body.
The decision, agreed by ministers at the Eight WTO Ministerial Conference in December 2011, and confirmed again on July 6, 2012, will be submitted to the General Council of the WTO on July 25-26, 2012, for formal adoption.
Welcoming progress towards the eased requirements, WTO Director General Pascal Lamy stated: “LDC accessions have a special systemic value because they demonstrate the development dimension of the Organization. Trade opening and legislative reforms provide a tool for faster economic growth and poverty alleviation. However, it is also true that the WTO accession is not an easy process, especially given the limited capacity in many of the world’s poorest countries. The agreement reached by WTO members recognizes this careful balance. These improved guidelines provide a simpler framework for the entry of LDCs into the WTO family. It is another example of positive action in favour of the world’s poorest countries.”
The proposed Decision will set benchmarks for acceding LDCs for market access negotiations. The Decision contains five key elements: benchmarks on goods; benchmarks on services; transparency in accession negotiations; special and differential treatment (S&D) and transition periods; and technical assistance.
Under the plans, acceding LDCs will bind all agricultural tariff lines at an average rate of 50%. Normally full binding of agricultural tariff lines is a standard feature in all WTO members’ commitments.
Acceding LDCs will bind 95% of tariff lines for industrial goods at an average rate of 35%. The LDCs have the flexibility to retain 5% of their industrial tariff lines unbound, though the specific lines would need to be negotiated. A footnote clarifies that the unbound tariff lines will include lines that take into account the sensitivities of acceding LDCs.
In order to encourage more comprehensive binding coverage in industrial goods, the guidelines provide an alternate option to the LDCs such that, if any acceding LDC desires to move towards comprehensive binding coverage, they would be allowed proportionately higher average bound rates than 35% overall average rate, with transition periods of up to 10 years for up to 10% of their industrial tariff lines.
On services market access, members agreed that acceding LDCs shall not be required to undertake commitments in services sectors and sub-sectors beyond those that have been committed by existing WTO LDC members. Nor shall they be required to undertake commitments in sectors and sub-sectors that do not correspond to their individual development, financial and trade needs.
To enhance the transparency of the accession process, members have stressed the importance of making use of the Accession Working Parties to serve as a forum for collective review of the different bilateral market access negotiations on goods and services. Members have agreed that they would refrain from reopening the accession package once negotiations have been completed and consolidated schedules circulated for verification at the level of the Working Party.
Members have further agreed that acceding LDCs should be able to access all special and differential treatment provisions from the day they become members of the WTO. Requests for additional transitional periods, beyond those foreseen under the WTO agreements are to be favourably considered, on a case-by-case basis, members have agreed.
Lastly, as part of each LDCs accession process, the WTO Secretariat will draw up technical assistance framework plans, in order to achieve better coordination and more effective delivery of technical assistance at all stages of the accession process. These plans will be shaped by input from the acceding LDCs themselves, and will be adjusted over time to reflect changes in their needs.
Among the 48 LDCs listed by the United Nations, 32 to date have become WTO members, including four LDCs which acceded after the establishment of WTO in 1995. These are Cambodia (2004), Nepal (2004), Cape Verde (2008), and Samoa (2012). Vanuatu completed its accession process in 2011 and will become a member upon completion of its domestic ratification procedures.
Another ten LDCs are in the process of acceding to the WTO: Afghanistan, Bhutan, Comoros, Equatorial Guinea, Ethiopia, Laos, Liberia, Sao Tome & Principe, Sudan, and Yemen. Among them, the accessions of Laos and Yemen have reached their final stage and are poised for conclusion this year.
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