 
 WORLD TRADE  
ORGANIZATION   
WT/COMTD/LDC/W/33 
26 May 2004 
 
 (04-2257) 
Sub-Committee on Least-Developed Countries  
  
 
ASSISTANCE TO ADDRESS SUPPLY-SIDE CONSTRAINTS 
 
Note by the Secretariat
1 
 
 
I. INTRODUCTION 
1. Increasing the share of international trade of the 50 Least-Developed Countries (LDCs) 
continues to be a main challenge facing the mu ltilateral trading system.  The Doha Ministerial 
Declaration recognizes that the  integration of the LDCs into the trading system requires three inter-linked elements:  (i) meaningful market acces s;  (ii) support for the diversification of their 
production and export base; and (iii) trade-related technical assistan ce and capacity building.  On 
market access, LDCs have generally been gr anted more favourable terms through preference 
schemes.
2  Despite these preferences, ho wever, LDCs' exports have not increased their share of world 
trade and remain stagnant at around 0.4 per cent sin ce 1990.  There are a number of reasons for this 
stagnation, including the presence of non-tariff barri ers (NTBs), as well as stringent rules of origin 
requirements for preferential entry into importing countries.3  Another often cited reason concerns the 
weak supply-side capacities of LDCs to respond to market access opportunities.   
2. While in general addressing LDCs' supply-side  issues does not directly fall within the 
mandate of the organization, the WTO is committed to finding ways to meet this challenge with its 
partner governments and organizations.  The supply-si de challenge facing the LDCs is mentioned in 
paragraph 43 of the Doha Ministerial Declaration.   The issue has also frequently emerged at the 
Sub-Committee on LDCs in its discussion on various  items of the WTO Work Programme for LDCs.4 
3. This note has been prepared by the Secretaria t in response to a request by the Sub-Committee 
at its 36th Session.  The following sections describe the characteristics of LDCs' supply-side 
constraints, capacities, and how the WTO is worki ng with other partner institutions to meet this 
challenge.   
II. DEFINITION AND CHARACTERISTICS OF SUPPLY-SIDE CONSTRAINTS  
4. While the term is frequently mentioned in the WTO, there is no uniform definition of 
supply-side constraints.  Generally, supply-side c onstraints refer to impediments to the development 
of capacity to produce goods and services competitively and to the ability to get them to markets at a 
reasonable cost.  Such a broad definition cove rs a wide scope of issues impeding the LDCs' 
participation in international trade.  The issues range from physical infrastructure, customs, trade 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. 
2 See the Secretariat's paper on market access in document WT/COMTD/LDC/W/31. 
3 For a review of trade preferences and rules of origin, see UNCTAD (2003), "Trade Preferences for 
LDCs:  An Early Assessment of Benefits and Possible Improvements".  
4 The Work Programme for LDCs, adopted by the General Council in February 2002, is contained in 
document WT/COMTD/LDC/11. WT/COMTD/LDC/W/33 
Page 2  
 
 support services and human and institutional capacity to technology requirements, the provision of 
public utilities and  macroeconomic policy frameworks.  
5. Among the diversity of supply-side constraint s facing the LDCs, the lack of physical 
infrastructure, including road networks, railways, por ts, airports and warehousi ng, is often cited as 
one of the major impediments to engage in trade.  The poor network of transport linkages hinders the 
ability of LDCs to get their products to foreign markets.  In addition, 16 of the 50 LDCs are 
landlocked and thus face additiona l transport bottlenecks.  These bottlenecks, coupled with poor 
arrangements for transit transport operations and limited administrative capacities, inflate transaction 
costs and further reduce the participation of LDCs in international trade.   
6. The lack of access to finance and reliable telecommunications networks also hinders the LDC 
exporters' ability to market their products.  Expor t credit insurance and guarantees, and other trade 
finance products and services are the essential financia l tools to engage in international trade.  The 
lack of access to such tools would effectively de prive LDC exporters of trading opportunities.  In 
regard to telecommunication networks in LDCs, even when telephone systems exist, the cost of using 
them is often so high that it raises the overall cost of engaging in business.  Relatedly, the lack of 
access to the internet hinders the LDC trader s' ability to access key market information, 
communication and knowledge, all of which are vital to engage in business transactions and to expand 
business opportunities .  
7. Customs is another area where challenges exist for LDCs' participation in international trade.  
The absence of efficient customs infrastructure, including inadequate computerisation, lack of 
transparent administrative procedures and a shorta ge of trained officials, imposes high transaction 
costs on LDC exports.
5  With the lowering of tariffs across the globe, the cost of complying with 
customs formalities has been reported to exceed in many instances the cost of duties collected.  In the 
modern business environment of just-in-time production and delivery, traders need fast, cost-effective 
and predictable customs procedures.  
8. Trade support services generally refer to business information, trade finance and insurance, 
market promotion, product adaptation, intern ational purchasing and supply management, export 
quality management and export packaging.  They ar e offered in the form of information, advice, 
guidance, training and technical documents.  In LDCs, trade support services are often too expensive 
to establish and maintain, as they require constant research, analysis and dissemination by professional experts familiar with the evolving busin ess needs.  There are also indications that even 
when trade support services exist, firms have not made  use of such services and are not very satisfied 
with the services that are currently provided.
6 
9. What is common among the above-mentioned supply -side issues, although different in nature, 
is that they effectively raise the transaction cost for businessmen in LDCs to engage in trade.  This 
cost comes in addition to the market barriers imposed  on their products at the borders, such as tariffs, 
thereby reducing their competitiveness in export ma rkets.  Different types of supply-side problems 
confront different products/sectors and in different countries.  In Bangladesh, for instance, the ready 
made garment enterprises ranked the lack of export promotion services as the most severe constraint 
to increasing their exports, while agro-processing enterp rises identified the lack of training as the most 
pressing challenge.7  Having said the foregoing, it is important to note that not only trade-oriented 
                                                      
5 According to estimates by UNCTAD, the average customs transaction involves 20 to 30 different 
parties, 40 documents, 200 data elements and the re-keying – at least once - of 60 to 70 per cent of all data.   
6 For instance, see Bonaglia and Fukasaku, "Export Diversification in Low-Income Countries:  An 
International Challenge after Doha", Technical Paper No. 209, OECD Development Centre, June 2003.  
7 Bhattacharya and Rahman, "TRCB in Bangladesh:  Nature of the Problem, Recent Efforts an 
Outstanding Agenda" Centre  for Policy Dialogue.  WT/COMTD/LDC/W/33 
 Page 3 
 
 
 sectors, but also non-trade, domestic sectors, confr ont the above-mentioned supply-side constraints in 
doing their business.  For instance, a poor road network affects not only a country's exports but also its internal distribution. 
10. Supply-side constraints are often mentioned together with the lack of or need for export 
diversification.  Dependence on a few commodities is a typical feature of LDCs' export profile, and is 
closely associated with their weak supply-side  capacities.  Supply-side bottlenecks deprive 
commodity dependent economies of the opportunity to  build new areas of co mpetitive advantage in 
non-traditional products, while volatility in commodi ty prices aggravates their already existing 
difficulties associated with the supply-side.  Ov ercoming supply-side weakness is a precondition for 
developing and diversifying a sustainable export portfolio.  
III. ASSISTANCE TO ADDRESS LDCS' SUPPLY-SIDE CONSTRAINTS 
11. Overcoming supply-side constraints requires ec onomy-wide interventions which need to be 
implemented over a long-term period and backed by sound financial commitments.  The international 
community has made commitments to address supply-si de constraints in a number of different fora.  
For example, as part of the Brussels Programme of Action, adopted by the UN Conference on LDCs 
in May 2001, LDCs and their development part ners have committed themselves to "building 
productive capacities to make globalisation work for the LDCs".  Under this commitment, a number 
of actions are listed, including physical infrastructure, technology, enterprise development, energy, agriculture and agro-industries, manufacturing and mining, rural development and food security, and 
sustainable tourism.  Similarly, the internati onal community at the UN Conference on Financing for 
Development, held in Monterey, Mexico in Marc h 2002, invited multilateral and bilateral financial 
and development institutions to e xpand and coordinate their efforts, with increased resources, to 
gradually remove supply-side constr aints, improve trade infrastructure, diversify export capacity and 
support an increase in the technological content of exports, strengthen ins titutional development and 
enhance overall productivity and competitiveness. 
12. The WTO's main activities are rule-making,  enforcement and market opening through 
negotiations.  A number of the areas mentioned in th e previous section are integral part of the WTO 
work programme.  For instance, the rules related to  customs are discussed in the Council for Trade in 
Goods and its subsidiary bodies.  Infrastructure-rela ted sectors, such as finance, telecommunications 
and transport, are part of many Members' commit ments under the GATS.  LDCs ' needs in th ese areas, 
however, may go beyond rule-making and liberaliza tion.  In such instances, additional assistance, 
both technical and financial, provi ded by development partners other than the WTO, is essential for 
the LDCs to fully benefit from the increased oppo rtunities and welfare gain s that the multilateral 
trading system could generate.  It is therefore th rough co-operation with ot her development partners 
with technical expertise and financial resource s that the WTO is contributing to addressing the 
supply-side concerns of the LDCs.  WTO's collabora tion with other institutions can be classified into 
two categories:  first, co-operation on technical  assistance and capacity building on WTO-specific 
matters, and second, broader co-ope ration arrangements to support trade and development linkages. 
A. T
ECHNICAL ASSISTANCE ON WTO-S PECIFIC MATTERS  
13. Addressing LDCs' supply-side challenges requi res multiple interventions, including policy 
reform, technical and financial assistance.  Gene rally, WTO technical assistance focuses on building 
institutional and human capacity to understand and im plement WTO agreements and to participate in 
trade negotiations.8  The main mode of technical assistance delivery is in the form of workshops, 
seminars and training courses, either held on a national or regional basis, mainly addressed to 
                                                      
8 The WTO Technical Assistance and Training Plan gives priority to meet the technical assistance 
needs of the LDCs.  See WT/COMTD/W /119/Rev.3 for the 2004 plan.  WT/COMTD/LDC/W/33 
Page 4  
 
 government officials.  In regard to assistance fo r developing countries' supply-side capacities, the 
WTO Secretariat's Technical Assistance Plan stipulates that "through advocacy, coordination and coherence, the WTO encourages development in stitutions and regional institutions to fund 
trade-related commercial infrastructure".   
14. The WTO Secretariat has engaged in the joint delivery of technical assistance with other 
organizations to complement and benefit from thei r respective expertise and resources.  The limited 
size and resources of the Secretariat has made co-operation with others an important part of the implementation of WTO technical assistance and capacity building activities.
9  Moreover, several 
provisions in the WTO Agreements, as well as deci sions taken in the WTO context, recognize the 
necessity of technical and financial assistance to enab le developing countries to meet the requirements 
stipulated in the WTO Agreements.  In this re gard, WTO committees provide a forum for information 
exchange on the technical assistance needs of devel oping countries, and of LDCs in particular, and 
technical assistance activities by other multilate ral, regional and bila teral organizations. 
(a) SPS 
 
15. Article 9 of the Agreement on Sanitary and Ph ytosanitary (SPS) recognizes the importance of 
technical assistance to help developing country  Members comply with SPS measures in export 
markets.  Under this Article, Members agreed to facilitate the provision of technical assistance on a 
bilateral basis or through international organi zations in areas ranging from scientific advice to 
hands-on assistance in setting up national inspection services or investments in laboratory infrastructure.  Where substantial investments ar e required by an exporting developing country to 
fulfil an importing Member's SPS requirements the la tter should consider provi ding related technical 
assistance.  In the Decision on Implementation Concer ns agreed at the Doha Ministerial Conference, 
Members were also urged to provide the financial and technical assistance necessary to enable least-developed countries to meet the SPS requirement s in their export markets, and to help these 
countries with their implementation of the SPS Agreement.  Subsequent discussions within the SPS 
Committee have focused on strengthening the implemen tation of technical assistance and special and 
differential treatment provisions.   
16. In the SPS Committee, technical assistance is di scussed as a regular item, whereby the WTO 
Secretariat and observer organizations, including the FAO, the World Bank and the OIE, provide 
reports on their technical assistance activities.  In  addition, a questionnaire on technical assistance 
needs was circulated to WTO Members in July 2001, and has b een used as a basis for technical 
assistance discussion.
10 
17. The Standards and Trade Development Facility  (STDF) was established in September 2002 
following the commitment made by the Heads of the WTO, the FAO, the WHO, the OIE and the 
World Bank at the Doha Ministerial Conference.  The purpose of the STDF, which is managed by the WTO, is to enhance the capacity of developing co untries in the standards area through co-operation 
between the relevant institutions in SPS-related activ ities, including through the development of joint 
institutional projects and provisions of STDF -funding to projects in developing countries.
11  T h e  
partner agencies are looking at mechanisms to stim ulate projects from LDCS and to favour LDCs in 
                                                      
9 See document WT/COMTD/W/102 for inter-agency co-operation in the delivery of technical 
assistance.  
10 The questionnaire on technical assistance needs is  contained in document  G/SPS/W/113.  The WTO 
Secretariat also prepared a note on typology of tec hnical assistance (G/SPS/GEN/206).  By October 2003, 
32 Members submitted responses to the questionnaire regarding their technical assistance needs (contained as an addendum to G/SPS/GEN/295). 
11 For more information, see the STDF website  at www.standardsfacility.org and G/SPS/GEN/486.  WT/COMTD/LDC/W/33 
 Page 5 
 
 
 the allocation of Facility resources. Attention is also  being given to exploiti ng synergies and avoiding 
unnecessary duplication with the Integrated Framework and JITAP programmes. 
(b) TBT 
 18. Technical assistance is also an important issue for developing countries in the area of 
technical barriers to trade (TBT), as reflected in Ar ticle 11 of the TBT Agreement.  Since the Second 
Triennial Review of the Agreement in 2000, th e TBT Committee has deve loped, a demand-driven 
technical cooperation programme to enhance the participation of devel oping and least-developed 
Members in the global trading system.  The progra mme includes a survey on needs identification and 
prioritization by developing country Members;  consideration of existing technical assistance 
activities by multilateral, regional and bilateral organizations;  e nhancement of cooperation between 
donors and identification of technical assistance partne rs and financial considerations.  To date, some 
53 submissions have been received from Members in response to the "Questionnaire for a Survey to 
Assist Developing Country Members to Identify and Prioritise their Specific Needs in the TBT 
Field".
12  Reports on technical assistance activities ha ve been provided by observer organizations, 
including ALADI, FAO/WHO Codex Alimentarius Commission, IEC, ISO, ITC, OIE, OIML, 
UN/ECE, UNIDO, WHO and the World Bank.   
19. The Director-General has also been exploring w ith the relevant international standard-setting 
organizations and relevant inter governmental organizations financia l and technical mechanisms to 
assist developing countries participate in sta ndard-setting activities in both SPS and TBT areas.13   
(c) Customs Valuation 
 
20. Article 20.3 of the Agreement on Implementa tion of Article VII of the GATT 1994 urges 
developed country Members to draw up progra mmes of technical assistance which include, inter alia,  
training of personnel, assistance in preparing implementation measures, access to sources of 
information regarding customs valuation methodolog y and advice on the application of the provisions 
of this Agreement.  Pursuant to the agreemen t, the Committee on Customs Valuation has technical 
assistance as a standing item for discussion on its agenda, which includes review of technical assistance activities by the WTO Secretariat in co-ope ration with other interna tional organizations like 
the World Customs Organization (WCO), the Co mmonwealth Secretariat, and various national 
customs authorities, as well as those conducted independently by the WCO.
14  The Committee has 
also developed a Work Programme on Technical A ssistance for Capacity Building as regards the 
Implementation and Administration of the WTO Ag reement on Customs Valuation, emphasising the 
importance of co-operation and coordination in the area of technical assistance delivery.15   
(d) Services  
 21. The Special Session of the Council for Trade in Services adopted the "Modalities for the 
Special Treatment for LDC Members in the Nego tiations on Trade in Services" in September 2003.
16  
Recognising the serious difficulty of the LDCs in undertaking negotiated specific commitments, the modalities are aimed to ensure maximum flexibility  for LDCs in the services negotiations.  The 
modalities provide, inter alia , for the continuation of technical  assistance and capacity building 
                                                      
12 G/TBT/W/178 
13 The reports are contained in  documents WT/GC/42, WT/GC/45, WT/GC/46/Rev.1, WT/GC/54, 
WT/TBT/W/172. 
14 The reports by WCO on its technical assistance ac tivities are contained in document G/VAL/8 and its 
addendum.  
15 The agreed work programme is contained in document G/VAL/W/82/Rev.1.   
16 The modalities are contained in document TN/S/13.   WT/COMTD/LDC/W/33 
Page 6  
 
 programmes in order to strengthen LDCs' domestic  services capacity, build human and institutional 
capacity, and enable them to undertake appropriate  regulatory reforms.  The modalities also call upon 
Members to take measures aimed at increasing LDCs' participation in trade in services.  These measures could include:  strengthening programmes to  promote investment in LDCs, with a view to 
building their domestic services capacity and enhancing their efficiency and export competitiveness; 
reinforcing export/import promotion programmes;   promoting the development of LDCs' 
infrastructure and services export through training, technology transfer, enterprise level actions and 
schemes, inter-governmental cooperation programmes,  and where feasible, financial resources, and 
improving the access of LDCs' services and servi ce suppliers to distributions channels and 
information networks, especially in sectors and modes of supply of interest to LDCs.   
22. In the areas of trade in services, co-operation exists with a number of international and 
regional organizations that deal with the sectors c oncerned, including the IMF, the International Civil 
Aviation Organization, the International Telecommun ication Union, the Universal Postal Union and 
the World Tourism Organization  
(e) TRIPS 
 
23. The WTO and WIPO launched a Joint Initiative on Technical Co-operation for LDCs in June 
2001.  One of the aims of this initiative is to help LDCs make the best use of the intellectual property 
system for their economic, social and cultural development.
17  Intellectual property systems can be 
used to promote the diversification and deve lopment of knowledge-based economic activities, to 
foster internal and foreign investment of financ ial and other resources in these areas and to create 
conditions conducive to the transfer  of technology.  The TRIPS C ouncil annually reviews technical 
assistance activities provided by the WTO Secretariat,  including its joint activities with WIPO, as well 
as by developed country Members and intergovernme ntal organizations such  as the OECD, the IMF, 
the FAO and UPOV.18   
24. The TRIPS Council also provides a forum fo r information exchange on transfer of 
technology, stemming from a February 2003 decisi on on "Implementation of Article 66.2 of the 
TRIPS Agreement".19  This article requires developed c ountry Members to provide incentives to 
enterprises and institutions in their territories to  promote and encourage technology transfer to 
least-developed country Members in order to enable  them to create a sound and viable technological 
base.  Under this Decision, developed country Me mbers submit annually reports on actions taken or 
planned in pursuance of their commitments under Ar ticle 66.2.  The Council took up its first annual 
review of developed country Memb er's reports on their implementati on of Article 66.2 at its meeting 
in November 2003.20   
(f) Other areas 
 25. In addition to the above-mentioned areas, the WT O Secretariat collaborates closely with other 
agencies, which have technical expertise and fina ncial resources, on other WTO-related matters which 
have an influence on LDCs' supply-side concerns.  Since the launch of the DDA, there is an increased 
collaboration with other organizations in the are as of trade and investment, trade and competition 
                                                      
17 For more information, see a note by the Secretariat entitled "WIPO-WTO Joint Initiative on 
Technical Co-operation for Least-Developed Countries" (WT/COMTD/LDC/W/21). 
18 The latest reports are contained in IP/C/W/406, W/407 (and its addenda), and W/408 (and its 
addenda).  
19 The decision is contained in document IP/C/28, which gives effect to the instructions of the Doha 
Ministerial Conference in paragraph 11.2 of the Decision on Implementation-Related Issues and Concerns 
(WT/MIN(01)/17) to put in place a mechanism for ensuri ng the monitoring and full implementation of the 
obligations in question.   
20 Submissions made to the Council are contained in document IP/C/W/412 and its addenda.  WT/COMTD/LDC/W/33 
 Page 7 
 
 
 policy, trade facilitation, and transparency in go vernment procurement.  The need for enhanced 
technical assistance and capacity building in these areas is explicitly recognized as part of the Doha 
Work Programme, and joint technical assistance activ ities with other organizations have been reported 
to the respective bodies.  For inst ance, close co-operation exists with UNCTAD in investment and 
competition policy.  In the area of trade facilitation,  joint technical assistance activities are carried out 
with WCO, UNCTAD, World Bank, UNECE and a num ber of regional institutions, and are reported 
to the Council for Trade in Goods.  
B. BROADER CO -OPERATION   
26. The WTO participates in broader collaboration arrangements with multila teral institutions to 
address the trade and development challenges of devel oping countries, in particular the LDCs.  These 
partnership arrangements are intended to go beyo nd the collaboration on technical assistance in WTO-
specific areas, as described in the previous section,  and to complement and find synergies between the 
respective institutions' mandate and areas of competen ce.  Institutions particip ating in such broader 
co-operation arrangements with the WTO include:  the IMF, the ITC, UNCTAD, UNDP, UNIDO and the World Bank.   
(a) Coherence mandate with the IMF and the World Bank 
 27. The coherence mandate originates from the Minist erial Declaration on the Contribution of the 
WTO to Achieving Greater Coherence in Globa l Economic Policymaking, adopted in 1994 in 
Marrakesh.  The Declaration calls for the WTO to  develop its co-operati on with the IMF and the 
World Bank with the aim of each institution following consistent and mutually supportive policies.  In 
1996, the Declaration  was translat ed into formal co-operation Agre ements between the WTO and the 
IMF and the WTO and the World Bank.  These agr eements were approved by the General Council
21 
and the Executive Boards of the IMF and the Worl d Bank.  The importance of greater coherence in 
global economic policy-making was reiterated by  Ministers in Doha in November 2001. 
28. The coherence mandate has been implemented thr ough staff participation in relevant official 
meetings;  research, analysis and data exchange;  technical co-operation; and exchange of views on 
trade and trade-related issues.22  WTO co-operation with the Bret on Woods institutions has expanded 
since the launch of the Doha Development Agenda  in 2001, as they consider that a successful 
conclusion of the trade negotiations could positively contribute to the advancement of the shared 
objectives of sustainable growth, development and poverty reduction, as expressed in the Millennium 
Development Goals.  In addition to enhanc ing and expanding co-operation through the above 
channels, the IMF and the World Bank announced thei r intention to provide technical and financial 
support for developing countries to adjust to or take advantage of a new trading environment 
emerging out of the Doha negotiations.  The World Bank's "Doha Development Initiative" aims to assist poor countries to take advantage of new ma rket opportunities and offset any adverse initial 
impacts of trade reforms stemming from the Doha  Round.  The initiative envisages new resources 
devoted to trade logistics (e.g. transport costs) a nd trade facilitation, in addition to enhanced sectoral 
lending in support of programmes designed to prot ect workers and vulnerable groups, and programme 
lending over sustained periods for countries implem enting development-related Doha trade reforms.
23  
                                                      
21 WT/L/194 and Add.1 and WT/L/195 
22 See annual reports for more details on the activities carried out under the WTO co-operation 
agreements with the IMF and World Bank.  The last report is contained in WT/TF/COH/S/8. 
23 New lending by the World Bank for trade capacity building doubled from $132 million in FY 
1998-2000 to $267 million in FY 2001-2003.  At the end of FY 2003, the World Bank lent close to $400 million 
for trade capacity building in some 50 countries, covering  customs reform, trade facilitation and logistics (56 per 
cent), export development including boosting trade financing facilities (30 per cent) and product standards 
(9 per cent). WT/COMTD/LDC/W/33 
Page 8  
 
 The IMF's Trade Integration Mechanism aims to he lp finance possible adjustment costs arising from 
multilateral liberalization by LDCs' trading partne rs, notably the total elimination of quantitative 
restrictions on textiles and clothing in 2005, and loss of trade preferences and increased food costs.
24 
(b) Integrated Framework 
 
29. The Integrated Framework (IF) is a partne rship initiative among the LDCs, multilateral 
agencies and bilateral donors aimed at assisting the LDCs to increase their participation in the multilateral trading system and global economy.  The co re partner agencies involved in the IF are:  the 
IMF, the ITC, UNCTAD, UNDP, the World Bank and the WTO.  Combining their distinct competencies, the IF partners seek to assist LDCs  in meeting their trade and development challenges 
by mainstreaming trade into their national devel opment plans such as the Poverty Reduction Strategy 
Papers (PRSPs).  The IF also aims to coordinate the delivery of trade-related assistance among different providers.  In addition to the six core  agencies, bilateral donors and other regional and 
multilateral institutions, such as FAO and UNIDO, are important players in the implementation of the 
IF.  The WTO Doha Ministerial Declaration endor sed the IF as a viable model for LDCs' trade 
development.  At the same time, it called upon the IF stakeholders to seek ways to enhance the IF 
with a view to addressing the supply-side constraints of LDCs.  LDC Trade Ministers at their recent meeting held in Dakar, Senegal, Ma y 2004, reiterated this challenge in  their declaration, which refers 
to the IF as a potentially viable instrument  for enhancing LDCs' supply-capacities.  
30. In the implementation of the IF, the Diagnostic Trade Integration Study (DTIS) is the main 
instrument for identifying and addressing impediments,  including supply-side constraints, that LDCs 
face in the integration into the multilateral trading sy stem and global economy.  As an integral part of 
the DTIS, an Action Matrix consolidates technical a ssistance needs identified by various analysis in 
the study in a prioritised manner.  Once the DTIS is finalized and approved by the government, the Action Matrix serves as the main tool for the gove rnment to conduct follow-up consultations with 
development partners, including to seek support for th e identified supply-side needs.  By May 2004, 
the diagnostic studies have been completed or are being completed for 13 LDCs.  Additional studies 
are currently being prepared for Benin, Chad , Lao People's Democratic Republic, Mozambique, 
Sao Tome and Principe, Tanzania and Zambia. 
31. While issues covered in the DTIS vary from one country to the other, supply-side constraints 
are commonly identified as the main impediment to  the participation of LDCs in the multilateral 
trading system.  Trade facilitation, combining transp ort infrastructure (roads and ports, in particular) 
and customs, is identified by all the DTIS to date as the major impediment to trade.  In the landlocked 
LDCs (Burundi, Ethiopia, Lesotho, Malawi, Mali a nd Nepal), the issue of transit, which requires 
working closely together with their neighbours, is highlighted as an additional trade facilitation 
bottleneck.  Actions proposed to address trade fac ilitation needs in the DTIS generally include a 
combination of policy reform, complemented by enhancement of physical infrastructure, and human 
capacity building.  Overall, the recommendations to  the governments include regulatory reform of 
road transport, air transport and port services, simp lification and harmonization of customs procedures 
or controls, rationalization of tariff structures a nd implementation of the WTO Agreement of Customs 
Valuation.  Enhancement of physical infrastruct ure, such as the rehabilitation and maintenance of 
roads, rails and ports, and computerization and automation of customs points, is proposed to 
complement the above government measures.  Tr aining of professional customs officials is often 
identified as an integral part of customs reform.  
                                                      
24 The main features of the IMF' s Trade Integration Mechanism are described in document WT/L/565 
and its addendum.  The mechanism does not address BOP problems arising from a country liberalising its own 
import restrictions, for which regular IMF financing facilities continue to be available.  WT/COMTD/LDC/W/33 
 Page 9 
 
 
 32. Some elements of trade support services, such as access to trade finance, export promotion, 
trade information and quality contro l, are referred to as important needs to enhance LDCs' trade 
participation.  Another issue identified across th e DTIS is the need to strengthen trade policy 
formulation and coordination, including inter-mini sterial coordination and pub lic-private dialogue in 
policy formulation.  Regarding foreign direct invest ment, which is viewed by LDCs as an important 
channel for transfer of technology, the creation of an investment friendly environment is considered 
an essential condition to increase trade and investment .  Creating such an environment requires reform 
of the legal framework, simplification of the pro cedures for investment registration, enforcement of 
the judiciary system and the provision of reliable public utilities, such as electricity, telecommunications services and water.  
33. Once the needs are identified in the Action Matr ices, it falls to the government to take the 
necessary steps to ensure implementation.  Such  efforts are led by the National Steering Committee 
and the IF Focal Point that conducts the necessary follow-up internally within the government, and 
with development partners.  In many LDCs which have completed the DTIS, it is still too early to 
make a quantitative assessment of how much of the technical and financial assistance needs identified 
in the DTIS is being responded to.  Many of them  are still engaged in bi lateral discussions with 
development partners within the context of the PRSPs  and the related donor financing forums such as 
the Consultative Group or Round Table meetings, or through IF implementation meetings with 
donors, following the finalisation of the DTIS a nd the Action Matrices.  (See Annex for Table: 
Progress in the Implementation of the IF.) 
34. The following general observations can be made.  First, despite the initially slow responses by 
the governments and their development partners, th e identified needs in the Action Matrices have 
been largely taken on board in donor assistance programmes in Cambodia and Senegal, where the 
DTIS were finalized in 2001-2002.  In the subsequent group of countries where the DTIS were completed in 2003 (Burundi, Ethiopia, Guinea, Leso tho, Madagascar, Malawi and Yemen), as well as 
in Mauritania and Senegal, the follow-up efforts by  the Governments have b een complemented by the 
funds available under Window II of the IF Trust Fu nd to finance priority projects identified in the 
Action Matrices.  To date, projects submitted by Ca mbodia, Ethiopia, Guinea, Lesotho, Malawi and 
Mauritania are being funded from Window II with a view to assisting their government efforts to complete the mainstreaming process successfully.  Finally, the preparation of the DTIS and its subsequent inclusion into the nati onal development plan, such as the PRSP, have resulted in increased 
attention and support for the country's trade prioriti es, which are reflected, in a number of cases, in 
increased resources for trade within  the government budget allocation and by development partners. 
(c) JITAP 
 35. The Joint Integrated Technical Assistance Pr ogramme (JITAP) mobilizes the expertise and 
support of ITC, UNCTAD and the WTO to help African countries benefit from the multilateral 
trading system.  The JITAP aims at building cap acity and strengthening th e national knowledge base 
of the multilateral trading system with a view to cont ributing to:  (i) more effective participation in the 
trade negotiations, implementing the WTO agreements , and formulating related trade policies;  and 
(ii) improved supply capacity and market knowledg e of exporting and export-ready enterprises, to 
derive benefits from business opportunities resulti ng from better market access under the MTS.  After 
the first phase of implementation in 1998-2002, the JITAP has launched its second phase (JITAP II) 
in February 2003.  At present, 16 African countries are beneficiaries of the JITAP programme, ten of 
which are LDCs (Benin, Burkina Faso, Malawi, Ma li, Mauritania, Mozambique, Tanzania, Uganda, 
Senegal and Zambia). 
36.
 The implementation of JITAP is conducted th rough five different modules as follows:  
(1) MTS institutional support, compliance, po licies and negotiations, led by UNCTAD;  (2) 
strengthening MTS reference centres and national e nquiry points, led by WTO;  (3) enhancing MTS WT/COMTD/LDC/W/33 
Page 10  
 
 knowledge and networks, through join t delivery;  (4) products and services sector strategies, led by 
ITC, and (5) networking and programme synerg y, through joint delivery.  Moreover, needs 
assessment of beneficiary countries is conduc ted through the "Needs Assessment Programming 
Exercise" (NAPE), which is carried out by the National Steering Committee (NSC) in the partner country.  The designing process of the country project  document is intended to ensure ownership and 
sustainability through a participatory process wh ich involves a wide range of MTS–related 
stakeholders.  
(d) WTO-UNIDO Programme  
 37. A partnership arrangement between the WTO Se cretariat and the UNIDO, established by the 
Memorandum of Understanding signed at the Canc ún Ministerial Conference in 2003, aims to 
increase developing country exports by removing supp ly-side constraints, developing ways of helping 
exporters provide proof that th eir products conform with technical requirements.  Under this 
partnership, UNIDO's contribution focuses on issues relating to a country's supply-side capabilities, while the WTO focuses on deepening the underst anding of beneficiaries of the rules based 
multilateral trading system.  Under the agreement,  a series of joint WTO- UNIDO activities are being 
carried out, initially for nine bene ficiary countries, including two LD Cs, to assess their needs in the 
TBT and SPS areas and to establish a work programme for follow-up actions.
25 
(e) WTO as a forum for trade and development  
 38. In addition to the different forms of colla boration mentioned above, the WTO provides a 
forum for discussion on how the trade needs of deve loping countries, including the supply-side, can 
be addressed.  This often takes place as part of WTO regular meetings, or in the form of seminars or 
conferences where multilateral, regional, or bilate ral development institutions with the relevant 
technical expertise and financial resources are presen t.  For instance, such discussion has become a 
regular part of meetings held in the context of the Trade Policy Reviews for LDCs, where their trade-
related technical assistance needs and priorities, including supply-side cons traints to trade, are 
periodically assessed and updated by the Secretariat,  in co-operation with the country concerned.
26  
39. The WTO has also organized a number of high-level events to foster dialogue between the 
trade and development communities.  In recognition of  the crucial role played by regional institutions 
in developing countries, partnership has been pur sued with regional development banks and other 
regionally based institutions.  Furthermore, the WTO has developed close co-operation with the 
Development Assistance Committee, a forum for de velopment co-operation of  bilateral donors in the 
OECD, including the organization of joint meetings and the establishment of the Trade Capacity Building Database. 
IV. CONCLUSION  
40. This note has reviewed a number of issues related to the supply-side constraints that affect the 
integration of LDCs into the multilateral trading sy stem.  The characteristics of supply-side problems 
are diverse and complex and addressing them in an effective manner requires different combinations of policy reforms and technical and financial assist ance.  While addressing supply-side issues does not 
directly fall within the mandate of the WTO, th e organization collaborates with other multilateral, 
regional and bilateral development partners who have the necessary technical expertise and financial 
resources to respond to the LDCs' supply-side challenges.  Complementary activities by other 
                                                      
25 The beneficiaries include:  Armenia, Bolivia, Cambodia, Cuba, Egypt, Ghana, Jordan, Kenya and 
Mauritania.   
26 Where possible, the TPRs for LDCs  are programmed as an integral part of the DTIS, such as in 
Burundi, Lesotho, Malawi and Mauritania.    WT/COMTD/LDC/W/33 
 Page 11 
 
 
 organizations, such as the World Bank, ITC, UNIDO , regional development banks, as well as bilateral 
donors, to extend assistance for the supply-side issues are essential for the realization of the benefits 
that the rules-based multilateral trading system generates.  
41. Coordination and coherence at th e domestic level are of utmo st importance in responding to 
LDCs' supply-side problems.  As many of the supp ly-side problems go beyond border issues, it is 
crucial that they are considered in the wider context of economic reform.  This requires the 
involvement of a large number of stakeholde rs, including various branches of government 
administrations and Ministries, the bilateral donors,  and the regional and multilateral institutions as 
well as the private sector.  These observations all po int to the critical importance of mainstreaming 
trade into the LDCs' national development plans, su ch as the PRSPs, which are the main platform for 
policy planning and budget allocation by the governments, as well as for interventions by 
development partners.  In this context, among the variety of co-operation arrangements in which the 
WTO participates, the Integrated Framework can al so respond to the LDCs' supply-side challenge, as 
the DTIS and Action Matrix, with their linkages to  the PRSP framework, offe r a common platform for 
coordination among the government and development partners, based on the principle of country 
ownership.  At present, there are over 30 LDCs at various stages of the IF process.  For those LDCs 
which are not part of the IF, it is also essential that  their trade needs are articulated within the national 
development framework.  
 WT/COMTD/LDC/W/33 
Page 12 
ANNEX 
 
Table:  Progress in the Implementati on of the IF (as of 1 May 2004) 
 
 
 DTIS DTIS Validation 
Workshop Consultative 
Group/Round Table/ IF 
Implementation 
Meetings Status of follow-up Inclusion of trade in 
PRSP Comments 
Angola      Technical Review in 
progress. 
Bangladesh      IF project implemented 
as follow-up to the old IF 
Round Table. 
Benin Under preparation:  
TORs defined and a 
facts-finding mission 
planned for May 2004.      
Burkina Faso      Technical Review in 
progress. 
Burundi Final version being 
prepared to take account 
of the workshop 
outcome. December 2003. The workshop outcome 
presented at the Round 
Table meeting in January 
2004.  Trade identified as 
priority in  Interim PRSP 
in December 2003.  
Cambodia Finalized in November 
2001. November 2001. Discussion on the IF at 
the CG meeting in June 2002. An IF project  
implemented since 2002   Additional follow-up 
activities on-going  IF results fully 
incorporated in PRSP in December 2002.  
Central African Republic      Technical Review in 
progress. 
Chad Under preparation:  
TORs defined and a facts-finding mission 
planned for May 2004.      
Comoros       Technical Review in 
progress. 
Djibouti Draft DTIS completed 
for the workshop.  May 2004.   IF results to be included 
in forthcoming PRSP in 2004.  
Ethiopia Final version being 
prepared to take account 
of the workshop 
outcome. November 2003.  IF Trust Fund Window II 
projects approved in 
2004 Trade partly covered in 
PRSP in July 2002.  
Eritrea      The IF process  
  WT/COMTD/LDC/W/33
 Page 13 DTIS DTIS Validation 
Workshop Consultative 
Group/Round Table/ IF 
Implementation 
Meetings Status of follow-up Inclusion of trade in 
PRSP Comments 
suspended at the request 
of the Government. 
Equatorial Guinea      Technical Review in 
progress. 
The Gambia      IF project implemented 
as follow-up to the old IF Round Table. 
Technical Review in 
progress. 
Guinea Final DTIS approved by 
Government December 2003. October 2003. TBS IF Trust Fund Window II 
projects approved in 2004. IF results to be 
incorporated in forthcoming PRSP 
Progress Report in 2004.  
Haiti      IF project implemented 
as follow-up to the old IF 
Round Table.  
Technical review 
pending. 
Lao P.D.R Under preparation:  
preliminary mission 
planned for May 2004.      
Lesotho Final DTIS approved by 
Government November 
2004. February 2003.  IF Trust Fund Window II 
projects approved in 
2004. IF results to be 
incorporated in 
forthcoming PRSP Progress Report in 2004.  
Madagascar Final DTIS approved by 
Government September 
2003. July 2003. 
 
 
  IF donor meeting in 
January 2004. IF Trust Fund Window II 
projects in preparation. IF results fully 
incorporated in PRSP in 
July 2003.  
Malawi Final version being 
prepared to take into 
account the workshop outcome. September 2003.  IF Trust Fund Window II 
projects approved in 
2004. Trade is not included in 
PRSP Progress Report in 
August 2003.  
Maldives      Technical Review in 
progress. 
Mali Draft DTIS to be 
discussed at workshop. 
 June 2004 [TBC].   Trade partially covered 
in PRPS in February 
2003.   
 WT/COMTD/LDC/W/33 
Page 14 
 DTIS DTIS Validation 
Workshop Consultative 
Group/Round Table/ IF 
Implementation 
Meetings Status of follow-up Inclusion of trade in 
PRSP Comments 
Mauritania July 2001. November 2001. 
 IF donor meeting in 
November 2002. An IF project 
implemented since 2002. 
Additional IF Trust Fund Window II projects 
approved in 2004. IF results fully 
incorporated in PRSP 
Progress Report in June 2003.  
Mozambique Under preparation with 
assistance of USAID. 
 October 2004 [TBC].     
Nepal Final DTIS approved by 
Government October 2003. June 2003. IF donor meeting in 
November 2003. IF Trust Fund Window II 
projects in preparation. Trade is not included in 
PRSP in November 2003.  
Niger      Technical Review in 
progress. 
Rwanda      Technical Review in 
progress. 
Sao Tome and Principe Under preparation: TORs 
being defined as result of preliminary mission in 
April 2004.      
Senegal Final DTIS approved by 
Government in April 
2003. December 2002. IF donor meeting in June 
2003. 
Action Matrix presented at the CG meeting in 
June 2003. Follow-up activities in 
progress. 
IF Trust Fund Window II projects in preparation. Trade covered in PRSP 
June 2002.  
Sudan      Technical Review in 
progress. 
Tanzania Under preparation with 
assistance of Switzerland.     IF project implemented 
as follow-up to the old IF Round Table. 
 
Togo      Technical review 
pending. 
Uganda      IF project implemented 
as follow-up to the old IF Round Table.  
Technical Review in 
process. 
Yemen Final DTIS approved by 
Government in 2003 June 2003.  IF Trust Fund Window II 
projects in preparation. IF results to be included 
in the next PRSP 
progress report.   
  WT/COMTD/LDC/W/33
 Page 15 DTIS DTIS Validation 
Workshop Consultative 
Group/Round Table/ IF 
Implementation 
Meetings Status of follow-up Inclusion of trade in 
PRSP Comments 
Zambia Under preparation: 
preliminary mission 
planned in May 2004.      
 
_______________ 
 
 
 
 