Info Service on WTO and Trade Issues (Aug12/03)
7 August 2012
Third World Network
LDC accession guidelines could harm LDCs, say NGOs
Published in SUNS #7420 dated 27 July 2012
Geneva, 26 Jul (Kanaga Raja) -- The proposed new guidelines for the
accession of the Least Developed Countries (LDCs) could seriously
harm, rather than help, the LDCs in their accession process, and governments
should oppose the current package and send it back for re-negotiation
and improvement, a number of civil society groups have said.
This warning came in a statement signed by some 65 non-governmental
organisations (NGOs) and issued just before the General Council took
its decision on 25 July on the new LDC accession guidelines.
According to the statement, the proposed "Addendum" to the
2002 LDC Accession Guidelines includes language which seems to acknowledge
the difficulties that LDCs encounter in their accession processes.
However, said the NGOs, the guidelines include benchmarks that would
require more liberalization commitments in some areas than the damaging
past LDC accession packages which gave rise to the very need for new
guidelines in the first place.
"Scandalously, the guidelines even include commitments that are
more comprehensive than the commitments of some developed countries,"
the NGOs added.
The statement was signed by several international and regional organisations
including ActionAid International, Asian Peasant Coalition (APC),
Development Alternatives with Women for a New Era (DAWN), Dignity
International, Eastern Europe, Caucasus and Central Asia Network on
Trade and Sustainable Development (EECCA), Oxfam, Pacific Network
on Globalisation (PANG), and Third World Network.
Some fifty-seven national organisations also signed on to the statement.
In their statement, the NGOs said that last spring, nearly all WTO
Members agreed on the need to approve a set of policies to improve
opportunities for the LDCs to use trade for their development.
Unfortunately, said the NGO statement, the United States stymied these
efforts. Instead of real policy change for LDC members, a "consolation
prize" was agreed to at the December 2011 Ministerial, in which
members committed to change the guidelines for LDC accession.
It was agreed that the guidelines should help LDCs, which face innumerable
challenges in their accession processes, ensure a fair accession package
which allows LDCs to use trade for their development, without creating
burdensome demands that would hinder their future development prospects,
the NGOs said.
"Unfortunately, the proposal that has just been forwarded to
the General Council for a vote on 25 July could seriously harm, rather
than help, LDCs in their accession process."
On goods, the statement cited Article 7 (of the new guidelines) which
states that "acceding LDCs shall bind 95 per cent of their non-agricultural
tariff lines at an overall average rate of 35 per cent."
According to the NGOs, the LDC group had proposed to bind only 48%
of non-agricultural tariff lines at an average of 44%. Requiring LDCs
to bind their tariffs at the low rates (set in the new guidelines)
would sharply curtail their ability to use infant industry protection
to industrialize and protect domestic jobs the way that developed
On agriculture, the groups noted that Article 5 (of the new guidelines)
requires acceding LDCs to bind 100% of agricultural tariff lines at
an overall average rate of 50 per cent, although Iceland and Norway
are developed countries which have average bound agriculture tariffs
of 109% and 131% respectively, and many other developing countries
have agricultural tariffs far in excess of 50%.
The LDC group had asked for an average bound agricultural tariff of
79%. This loss of Food Sovereignty is unacceptable for farmers' livelihoods
and for protecting Food Security.
"These steep tariff cuts could cause a permanent loss in tariff
revenue, which is the source of more than 76% of government revenue
of many LDCs according to the International Monetary Fund. This could
result in a drastic reduction of health and education budgets,"
the statement said.
On services, the NGOs said that instead of including guidelines proposed
by the LDCs that would be based on the average number of sectors committed
by original LDC WTO members, the guidelines imply that LDCs can be
required to commit up to as many services sectors as the most liberalized
existing LDC WTO member, which is nearly 100%.
"Given the lack of regulation that led to the global financial
crisis, LDCs should not be forced to open their banking sector, let
alone public services like education that are key for development."
The guidelines also fail to protect LDCs from excessive demands on
intellectual property rules (called TRIPS+) which have been demanded
recently of LDCs, and which the United Nations Special Rapporteur
on the Right to Health has said make it difficult for states to comply
with their obligations regarding the right to health. They also fail
to protect LDCs from demands to open their government procurement.
"The current drastically unfair negotiations process, in which
any WTO member may make any demand upon an acceding country, effectively
making the negotiations 155 against one, is not addressed. The guidelines
even fail to include the small but important improvement proposed
by LDCs, to conduct market access negotiations multilaterally,"
said the NGOs.
They highlighted that these are but just a few of the problems with
the proposed Addendum to the LDC guidelines.
"It is important to note that these guidelines would also impact
other developing countries in accession, since non-LDCs would presumably
be asked to take on commitments even more comprehensive that those
outlined in the Addendum. They would also impact countries in customs
unions with either LDC or non-LDC acceding countries."
The NGOs therefore urged governments to oppose the current package,
and send it back for re-negotiation and improvement before it is accepted
by the WTO membership.
"The future development prospects of farmers, workers, small
businesspeople, and consumers in LDCs should not be sacrificed just
to meet a deadline. It would be most hypocritical if WTO members were
to agree to guidelines that are unfair to LDCs in the guise of helping
them. It was the United States alone which blocked the LDC package
The NGOs urged developed and developing governments alike not to be
complicit in accepting a "consolation prize" which harms
acceding LDCs even further.
"Instead, the Addendum should be revised to contain a process
and terms, at the very least along the lines of the November 2011
proposal by LDCs, which would allow acceding LDCs access more of the
policy flexibility they need to use trade for national development,
based on decent job creation and inclusive sustainability, in accordance
with their current level of economic and social development."