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Dhaka Tribune

Graduation, trade, and everything in between

What are the implications of and actions required from Bangladesh regarding the 13th Ministerial Conference of the WTO? This is the first of a two-part long form

Update : 22 Apr 2024, 09:10 AM

The recently held 13th Ministerial Conference of the WTO (WTO-MC13) in Abu Dhabi, UAE (February 26–March 1, 2024) was, for understandable reasons, of heightened interest and importance to Bangladesh as a Graduating Least Developed Country (GLDC). As is known, Bangladesh is set to graduate out of the group of the LDCs in November 2026 and MC13 is most likely the penultimate Ministerial before the country leaves the group. Since there were a number of issues on the table of discussion and negotiation at MC13 which were related to particular concerns and interests of GLDCs such as Bangladesh, the conference had an added importance for the country.

Preparation and strategy

To note, in participating in the negotiations at MC13, Bangladesh’s stance and strategy regarding various issues had to take into cognizance the country’s triple identity -- as an LDC, as a GLDC and as a future developing country (in view of the country’s post-2026 status). Indeed, one needs to be reminded in this backdrop that a GLDC is still an LDC since graduating LDCs are not recognized as a distinct group in the WTO (the ones that are recognized are LDCs, (non-LDCs) developing countries, developed countries and small, vulnerable economies -- SVEs). Thus, Bangladesh's participation had to take into account solidarity of the group of the LDCs in the WTO and at the same time be informed by its interests as a future developing country.

It needs to be appreciated that much of the work that goes into global conferences such as the WTO-4 has to take place prior to the event itself. From this perspective, and in view of the WTO MC13, discussions held in Geneva during the period between MC12 and MC13 were of crucial importance. In this connection, the hard and dedicated work carried out by the Bangladesh Mission in Geneva, in close consultation with the Ministry of Commerce, the GoB, deserves recognition and appreciation. The sound preparatory work helped the Bangladesh team to firm up the country’s position on key issues of interest in an informed way when the Trade Ministers from all WTO Member Countries met at MC13 to give final shape to the issues under discussion at the negotiating table.

The sound preparatory work helped the Bangladesh team to firm up the country’s position on key issues of interest in an informed way

Having been present in Abu Dhabi as a civil society participant, by following the proceedings and having had the opportunity to interact several times with Bangladesh official team, one could not but note this. To recall, the Bangladesh delegation was led by the Hon’ble State Minister for Commerce, Md Ahsanul Hoque, MP, and included the Senior Secretary for Commerce and Head of the Bangladesh Mission in Geneva. The Bangladesh team played an active role in relevant Green Room discussions (participated by selected countries) as also in other bilateral and multilateral meetings.

In going to Abu Dhabi, it was evident that there was large divergence among WTO members as stance and approach concerning some of the major issues that came up for discussion at MC13. The fact that in the end members were able to thrash out an outcome document, albeit following intense and extended last-minute discussions was, by any measure, remarkable. For relatively weaker economies, a rule-based multilateral trading system best serves their interests and hence this was a welcome news for Bangladesh.

Only consensus-based outcomes

However, in doing so, the overall ambition level of the MC13 had to be toned down considerably (as is known, WTO Ministerial outcomes are consensus-based, and follows the “nothing is agreed unless everything is agreed” principle as stipulated under the WTO’s single undertaking mechanism of decision making). It will only be fair to say that while some concrete decisions catering to their demands were taken, the MC13 did not fully live up to the expectations of the GLDCs. The outcomes were not in sync with the spirit of the SDGs (particularly, SDG17 relating to Global Partnership) and the decadal LDC Summit held in Doha in March 2023 (LDC V), which had endorsed the Doha Program of Actions for the LDCs (2023 – 2032). On the other hand, it will also be fair to say that a large part of whatever concrete decisions that could be agreed upon at MC13 concerned issues of interests to the GLDCs. 

In Abu Dhabi, Bangladesh pursued a number of issues which were informed by its interests as a GLDC. The important ones were the followings: (a) extension of preferential (duty-free, quota-free) market access beyond the graduation timeline for an agreed period; (b) extension of other international support measures (ISMs) by an additional period following graduation of the LDCs; (c) safeguarding Bangladesh’s interests in the Fisheries Subsidies negotiations; and (d) securing LDC and GLDC interests in any likely WTO reforms. Bangladesh also had keen interest in some of the other agendas on the table: the Peace Clause concerning subsidies for public stockholding, end of the Moratorium on E-commerce, and Plurilateral Negotiations.

UNSPLASH

With regard to the extension of the ISMs for the GLDCs, there was already a positive decision taken by the General Council of the WTO at its meeting held on October 23, 2023. The decision was taken in view of the submission by Chad on behalf of the group of the LDCs in the WTO. The submission concerned extension of the preferential market access and other ISMs for the GLDCs, for a certain period following their graduation out of the group of the LDCs. In light of this, MC13 took the following decision: “To encourage those Members that graduate or remove countries from unilateral tariff or duty-free and quota free (DFQF) preference programmes reserved for least developed countries (LDCs) based on their being graduated from the UN list of LDCs, to provide a smooth and sustainable transition period or withdrawal of such preferences after the entry into force of a decision of the UN General Assembly to graduate a country from the LDC category.”

For relatively weaker economies, a rule-based multilateral trading system best serves their interests and hence this was a welcome news for Bangladesh

Challenges for GLDCs

While this decision was most welcome, a few caveats need to be kept in mind: Firstly, the decision is in the form of best endeavour (thus, not mandatory), leaving it to the preference-offering countries whether to agree to an extension of the DF-QF preferential market access to the GLDCs or not; secondly, there is no mention of any concrete timeline (although the original submission by the group of LDCs had asked for a 12 years extension which was subsequently toned down to six to nine years); and thirdly, only those countries that had in place preferential scheme for the LDCs were covered by the MC13 decision (this meant that countries such as the USA, which does not have a LDC-specific preferential scheme, remained outside the ambit of the Ministerial decision).

Nevertheless, the MC13 decision opens up an opportunity for the GLDCs to pursue the cause of extension of the DF-QF preferential treatment on a bilateral basis with WTO member countries which have LDC -- specific preferential market access schemes. As is known, the EU and the UK have already indicated (much before the MC13 decision) that they would extend their respective market access schemes for the LDCs for an additional three years (in view of the EU’s Everything But Arms -- EBA -- scheme for the LDCs, and the UK’s Developing Countries Trading Scheme - DCTS). The decision of the EU and the UK in this connection establishes a benchmark and provides a reference point for the GLDCs as they enter into discussions with partner countries in this connection. In such discussion, conditions of market access such as the rules of origin will need to be carefully considered.

With regard to the other ISMs (the so-called Annex 2 of the LDC submission endorsed at the aforesaid General Council), there was a decision with regard to only two -- Technical Assistance and Capacity Building support. MC13 took the following decision: “A Member that graduates from the LDC category shall continue to be eligible for LDC-specific technical assistance and capacity building provided under WTO’s Technical Assistance and Training Plan for a period of three years after the date on which the decision of the UN General Assembly to graduated that Member from the LDC category becomes effective.”

 

Professor Mustafizur Rahman is a distinguished fellow at the Centre for Policy Dialogue (CPD).

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