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FACT SHEET: Multilateral Results Target LDC Development

A number of elements of the package of agreed multilateral outcomes from the 10th Ministerial Conference of the World Trade Organization (WTO) align with the United States’ goals to alleviate poverty and improve economic opportunities through trade policy and development assistance. The development outcomes of the Nairobi package will further facilitate the integration of developing countries – and most especially least developed countries (LDCs) – into the multilateral trading system.

In particular, the United States welcomed the approval of WTO membership terms for two LDCs – Afghanistan and Liberia, and is pleased to have participated in both accession negotiations.  Afghanistan and Liberia have taken strong commitments to implement WTO obligations, demonstrating that these countries will use WTO accession to enhance their economic infrastructure for investment and commercial development.  It is particularly noteworthy that many of the LDCs that have acceded since the WTO’s inception have witnessed faster trade and GDP growth, resilience in crises, increased competitiveness, and greater attractiveness to FDI.

The United States also welcomed progress towards entry into force of the WTO’s Trade Facilitation Agreement (TFA), which presents a unique opportunity for LDCs to lower export costs, compete more effectively with larger economies, and integrate into supply chains for garments and electronics and similar sophisticated manufactured goods.  It is often the case that high port costs, or lack of express delivery capacity, or confusing and opaque paperwork, are greater barriers to LDC exports than tariffs.  In the same way, reducing costs and simplifying paperwork have particularly large growth and export potential for least-developed countries.  According to the WTO, the developing country export gains could range as high as $1.1 trillion to $1.8 trillion.  The United States commends the five LDCs who have already ratified the TFA to date.  The United States hopes to further support LDC implementation of the TFA through the newly launched Global Alliance for Trade Facilitation. 

Recognizing that least-developed countries need special treatment and assistance to achieve their development objectives, Members agreed on several elements that will specifically benefit LDCs.

  • Preferential rules of origin: The Decision on Preferential Rules of Origin Applicable to Least Developed Countries (LDCs) builds upon the 2013 Bali Decision on preferential rules of origin.  The decision contains provisions that seek to make preferential rules of origin and the related documentary requirements as transparent, simple, and objective as possible, with the aim of making it easier for LDC exporters to benefit from the preferential market access available to them through non-reciprocal preference programs.  Under the United States’ Generalized System of Preferences (GSP), the African Growth and Opportunity Act (AGOA), and the Haiti HOPE Act, LDC beneficiaries receive non-reciprocal preferential, duty-free access to the U.S. market.  The decision will also enhance the transparency of Members’ preferential rules of origin regimes, by committing Members to notify the measures being taken to implement the decisions’ provisions by December 31, 2016.
  • Cotton: Members confirmed duty-free quota-free market access benefits to the extent provided for in existing preferential agreements such as GSP and AGOA for cotton and cotton products for LDC Members, and agreed to continue efforts to enhance transparency and monitoring in relation to trade-related aspects of cotton in the WTO. Members will continue to meet twice each year to study the latest information and to discuss the latest developments on market access, domestic support and export subsidies for cotton, particularly from LDCs. Members also underlined the importance of effective assistance to support the cotton sector in developing countries and committed to continued engagement in the Director-General’s Consultative Framework Mechanism on Cotton, which aims to strengthen the LDC cotton sector.
  • Increasing Participation of LDCs in Services Trade: The decision extends the timeframe until 2030 during which preferences may be extended to LDCs under the LDC services waiver. The decision also underlines the importance of technical assistance and capacity building to help LDCs participate more fully in the services sector. For any country, a more vibrant services economy can result in greater economic growth and opportunities, and it can help attract investment to all sectors of an LDC economy.
  • Continuation of LDC Intellectual Property Rights Transition on Medicines:  The WTO agreed to continue the transition period for LDCs to implement specific intellectual property rights (IPR) rules for medicines until 2033.  Consistent with past transition periods, this decision extends the time LDCs have to take on board certain IPR requirements for medicines for an additional period of 17 years.  This decision reflects both the contributions of IPR protection to economic growth and development and that, in this instance, LDCs may benefit from additional time to implement such protection.