   
  
WT/GC/W/807  
 
17 November 2020  
(20-8251) Page: 1/3 
General Council  
16-17 December 2020  Original: English  
 
 
TRADE RELATED CHALLENGES OF THE LEAST DEVELOPED COUNTRIES AND WAY 
FORWARD: A DRAFT FOR MC DECISION  
COMMUNICATION FROM THE MISSION OF CHAD ON BEHALF OF THE LDC GROUP ON SMOOTH 
TRANSITION IN FAVOUR OF COUNTRIES GRADUATING FROM THE LDC CATEGORY  
The following communication , dated 16 November 2020 , is being circulated at the request of the 
delegation of Chad on behalf of the LDC Group.  
 
_______________  
 
 
1. The 2011 -2020 Programme of Action for the Least -developed countries (LDCs) adopted at 
Istanbul in 2011 (IPoA) sets, for the first time, the goal of " enabling half the number of least 
developed countries to meet the criteria for graduation by 2020 ". During the first forty years since 
the creation of the category in 1971, only three LDCs h ave been able to graduate. Since 2011, 
however, progress towards graduation has accelerated and several LDCs are progressively reaching 
the different graduation thresholds of GNI per capita, Economic Vulnerability Index and Human Asset 
Index, as defined by  the UN Committee on Development Policy (CDP).  
 
2. While meeting these criteria remains a major achievement, graduated LDCs still face 
significant trade and development challenges and risk falling back in the LDC category if their 
progress is not sustaine d. Leaving the LDC category also implies that graduating countries will lose 
access to a wide range of international support measures which have often contributed to their 
socio-economic development. Such support measures not only take the form of official  development 
assistance but also include a wide range of trade -related measures such as preferential market 
access or special and differential treatment (SDT) provisions in WTO rules. Mitigating the negative 
impacts associated with the removal of these sup port measures is therefore essential to ensure a 
smooth transition away from the LDC category. This is particularly true in the context of the current 
COVID -19 crisis which may reverse many of the development progress achieved so far by graduating 
LDCs.  
 
3. In recognition of this need, the United Nations General Assembly introduced the principle of 
'smooth transition' under which LDC -specific support measures should be phased out in a gradual 
and predictable manner following the final exit of countries fro m the LDC list so as not to disrupt the 
development progress of the graduating country.  
 
4. More specifically, paragraphs 8 -10 of the UN General Assembly Resolution 59/209 of 2004 on 
"Smooth transition strategies for countries graduating from the list of l east developed countries" and 
paragraphs 15 -17 of the General Assembly Resolution 67/221 of 2012 on "Smooth transition for 
countries graduating from the list of least developed countries" invite "all members of the World 
Trade Organization to consider exte nding to graduated countries the existing special and differential 
treatment measures and exemptions available to least developed countries for a period appropriate 
to the development situation of the country". The resolutions also invite LDCs trading part ners to 
establish procedures for extending or phasing out preferential market access, and LDC -specific funds 
of the United Nations system to continue providing technical assistance to graduated countries over 
a certain period.  
 WT/GC/W/807  
 
- 2 - 
 
  5. In practice - with the notable exception of the Enhanced Integrated Framework (EIF) - there 
are no formal WTO procedures for smooth transition in relation to LDC -specific assistance measures 
and SDT provisions as envisaged under the UN resolution. This has put graduating LDCs in  a very 
difficult situation, not least because of their economic vulnerabilities and their limited capacity to 
negotiate specific extensions on a case by case basis.  
 
6. Against this background, the LDC Group is hereby submitting a proposal for a draft Min isterial 
decision (as annexed) for consideration of Members to respond to the UN General Assembly 
Resolutions and introduce a comprehensive and effective smooth transition mechanism for 
graduating LDCs under the WTO system.  
 
7. Agreement on this decision w ould be an important contribution to remedy the difficult 
circumstances that graduating LDCs encounter. It would also represent a concrete contribution of 
the multilateral trading system to fostering the advancement of previous UN Resolutions and the 
IPoA goals and targets.  
 
_______________  
 
  WT/GC/W/807  
 
- 3 - 
 
  ANNEX  
Draft Decision  
The Ministerial Conference,  
 
Having regard to  paragraph 1 of Article IX of the Marrakesh Agreement Establishing the World Trade 
Organization (WTO);  
 
Mindful  of the importance attached to the incre ased participation of least -developed countries in the 
multilateral trading system, and of the need to ensure that the system responds fully to their needs, 
including constraints after their graduation from the least developed country (LDC) status;  
 
Recall ing the Programme of Action for the Least Developed Countries for the Decade 2011 –2020, 
adopted at the Fourth United Nations Conference on the Least Developed Countries, held in Istanbul, 
Turkey, from 9 to 13 May 2011, in which Member States committed to a ssisting LDCs with an 
overarching goal of enabling half of them to meet the criteria for graduation by 2020;  
 
Recalling further  UN General Assembly Resolutions 59/209 of 2004 and 67/221 of 2012 on smooth 
transition for countries graduating from the list of  least developed countries inviting all Members of 
the World Trade Organization to consider extending to graduated countries the existing special and 
differential treatment measures and exemptions available to least developed countries for a period 
appropr iate to the development situation of the country;  
 
Recognizing  the need to establish an effective procedure supporting the smooth transition of 
graduated LDCs towards their new status, through the gradual phasing out of LDC -specific trade -
related support m easures over a reasonable period of time;  
 
Decides  as follows:  
 
1.  Support measures available to least developed countries shall be extended to a least 
developed country Member for a period of twelve years after the entry into force of a decision of the 
UN General Assembly to exclude the Member from the least developed country category.  
 
2.  The support measures covered under paragraph 1 shall include:  
 
i. All special and differential treatment measures and exemptions available to a least 
developed count ry under existing and future WTO Agreements, Understandings, 
Ministerial, General Council and other relevant Decisions;  
ii. All LDC -specific technical assistance and capacity building programmes and facilities 
provided under the WTO system;  
iii. Any other relevant measure in favour of LDCs.  
3.  If a decision of the UN General Assembly to exclude a least developed country Member from 
the least developed country category enters into force during a transition period for LDCs provided 
under any existing or future WTO A greements, Understandings, Ministerial, General Council or other 
relevant Decisions, the Member shall be entitled to utilise the remaining period of delay provided for 
LDCs.  
 
4.  Developed and developing countries granting unilateral trade preferences to least developed 
countries shall establish procedures for extending and gradually phasing out their preferential 
market access scheme over a period of twelve years after the entry into force of a decision of the 
UN General Assembly to exclude a country from  the least developed countries category.  
 
5.  After the transition period provided under paragraph 1, a graduated LDC Member shall 
automatically benefit from the most favourable special and differential treatment granted to other 
developing countries Memb ers. 
 
__________  