WTO Ministerial Section • Volume 2 • Number 19 • 25th May 1998

LDCs call for market access, debt promises fulfilled

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Ministers from the world’s least developed countries (LDCs) last week called on developed countries to fulfill promises made regarding increased market access for LDC exports and reiterated concerns over the speed and scope of debt relief for the world’s poorest countries. In a statement circulated by LDC ministers, the LDCs expressed “deep concern that the share of LDCs in world exports continues to be under 0.4 percent resulting in their marginalization in world trade.”

LDC ministers urged developed countries “to give operational content” to the WTO Plan of Action adopted at the first WTO Ministerial in Singapore in 1996, and the High-Level Meeting of Integrated Initiatives for LDC Trade Development which took place in October 1997. In addition to enhanced flows of Official Direct Assistance (ODA) and zero tariff access for LDC products, LDCs called for “expeditious implementation of the special and differential measures in favor of LDCs as contained in the Final Act of the Uruguay Round.” LDC ministers encouraged developed countries to increase trade-related technical and financial assistance, and recommended that financial support from finance organizations and donors focus on infrastructure development so to increase foreign investment in LDCs.

LDC ministers reiterated their concerns that debt relief initiatives on the part of developed nations remain inadequate. Ministers called the Highly Indebted Poor Countries (HIPC) initiative at the World Bank and IMF a step in the right direction, but warned, “the effectiveness of the initiative will depend on the speed and extent of its implementation.” (See related story this issue.) LDC ministers want more developing countries considered for the program.

In their ministerial statement, LDC ministers called for more time to comply with Uruguay Round commitments. In his address to the WTO Ministerial last week, South African President Nelson Mandela said an extension of time for developing countries to comply with WTO commitments would help promote the conditions necessary to support a multilateral rules-based trading system.

“The developing countries were not able to ensure that the rules accommodated their realities. For understandable reasons, it was mainly the preoccupations and problems of the advanced industrial economies that shaped the agreement. The sections dealing with the developing countries and the least-developed countries were not adequately thought through. Nor have they been fully implemented,” Mr. Mandela said.

Mr. Mandela called on developing countries to lead the formation of a WTO agenda that fully addresses their needs. “[Developing countries] need to define precisely those areas that are obstacles to their progress in the world trading system. Free market access for the LDCs should no longer be the issue debated. It is rather the practical effects of implementing this that need to be incorporated into the multilateral system,” he said.

Mr. Mandela addressed the thorny issue of labor and environmental linkage to trade. “There can be no refusal to discuss matters such as labor standards, social issues and the environment, but equally all must be prepared to listen carefully before judgements are made. If developing countries feel that there is nothing to gain except further burdens, then it will prove difficult to deal with these crucial matters.”

During a working session on implementation of Uruguay Round commitments at the ministerial, India and a number of developing countries called on industrialized nations to speed up the elimination of quotas on commercially meaningful textile and apparel products. India along with Pakistan, Hong Kong, Kenya, Bangladesh and other nations complained that developed countries were not following “letter or spirit” of the Uruguay Round Agreement on Textiles and Clothing (ATC). Under the ATC, textile- importing countries such as the U.S. and EU agreed to a ten- year phaseout period for restrictions on textile imports. Developing countries agreed to the phaseout period, even though developed countries backloaded the most commercially meaningful products at the end of the phaseout period. Developing countries now worry that the U.S. and EU may lack the political will to carry out their commitments. Informed sources said that the working session on Uruguay Round implementation resulted in a “breakdown” between developed and developing countries.

“LDC statement to WTO Ministerial,” WORLD TRADE ORGANIZATION, May 20, 1998; “Statement by H.E. Mr. Nelson Mandela,” WORLD TRADE ORGANIZATION, May 19, 1998; “Trade-Development: Mandela tells WTO to bridge North- South gap,” IPS, May 19, 1998; “WTO sees gap between developing, developed nations,” DOW JONES NEWS SERVICES, May 19, 1998; “India leads developing nation call for better textile quota phaseout,” INSIDE US TRADE, May 22, 1998; “Remove WTO imbalances: Hegde,” THE HINDU, May 19, 1998.