In a milestone decision, the World Trade Organization (WTO) has decided to allow graduating countries, including Bangladesh, to enjoy the duty-free and quota-free facilities after the transition from the LDC category.
The decision was taken unanimously in a special general meeting in Geneva on Monday, WTO, which is a forum for governments to negotiate trade agreements, said.
There are currently 46 LDCs, of which 16 are at different stages of the graduation process.
Of these, ten are WTO members - Angola, Bangladesh, Cambodia, Djibouti, Lao People's Democratic Republic, Myanmar, Nepal, Senegal, Solomon Islands and Zambia - and four are negotiating their terms of entry into the WTO - Bhutan, Comoros, Sao Tomé and Principe, and Timor-Leste. The other two LDCs on the graduation path are Kiribati and Tuvalu.
With this new decision, WTO encourages members that remove countries from their duty-free and quota-free preference programmes upon graduation from the UN LDC list to provide a “smooth and sustainable transition period for the withdrawal of these preferences after graduation”.
It marks an important contribution to the implementation of the Doha Program of Action for LDCs for the period 2022-2031, the WTO said.
The decision was taken as senior officials gathered at the WTO on 23 and 24 October for a meeting aimed at making preparations for the 13th WTO Ministerial Conference, scheduled for February 2024 in Abu Dhabi.
Bangladesh will graduate from the LDC category in 2026.
“As a result of this decision, LDCs, including Bangladesh, will continue to enjoy some special trade benefits after graduation,” the Bangladesh mission in Geneva said in a statement.
“Although the decision has not prescribed any specific period, it asks the preference-providing members to provide a smooth and sustainable transition period to a country after it graduates from the LDC category."
Welcoming this achievement, Director-General Ngozi Okonjo-Iweala said: “This decision is a significant step towards addressing the particular challenges graduating LDCs face, and will help people from these countries tap into the opportunities that international trade brings. It also is another welcome sign that the wider WTO membership is responding to LDC priorities.”
LDC graduation refers to the point when an LDC meets certain UN development criteria and is no longer defined as an LDC.
As the most vulnerable members of the international community, LDCs are accorded special treatment at the WTO, such as enhanced market access opportunities and flexibilities in adopting WTO rules.
“LDC graduation is an important sign of development progress. Today, WTO members reaffirmed their commitment to helping smooth this process for graduating LDCs to prevent any loss of the economic growth and development momentum that had propelled them to graduation,” the director-general said.
While graduation from LDC status represents an important milestone in their development, LDCs have underscored the challenges they face trying to integrate into the global economy while international support measures are being phased out.
Over the past three years, the WTO's LDC group has been pursuing a smooth transition mechanism in the WTO to extend LDC-specific preferences and provisions in WTO agreements after graduation.
Discussions are ongoing in the WTO Sub-Committee on LDCs on other elements of the LDCs' requests relating to special and differential treatment.
Chair of the General Council, Ambassador Athaliah Lesiba Molokomme of Botswana, congratulated all members, in particular the LDCs, on this successful outcome.
“Let me also express my appreciation to all members, as well as the current and former LDC Group Coordinators and the Focal Point for LDC Graduation, for their tireless efforts and pragmatism to bring this issue to a close. This is commendable and inspiring, and hopefully puts the work and discussions that lie ahead of us, today and tomorrow, on a positive trajectory.”
