   
  
WT/GC/W/919  
 
12 December 2023  
(23-8528) Page: 1/2 
General Council  Original: English  
 
 
WTO SMOOTH AND SUSTAINABLE TRANSITION MEASURES IN FAVOUR OF COUNTRIES 
GRADUATED FROM THE LDC CATEGORY  
COMMUNICATION FROM  DJIBOUTI ON BEHALF OF THE LDC GROUP  
The following communication, dated 12 December 2023, is being circulated at the request of the 
delegation of Djibouti on behalf of the LDC Group.  
 
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1.  In response to the report by the chairperson of the Committee on Trade and Development to the 
General Council on LDC Graduation ( WT/COMTD/LDC/30 ), the LDC Group, w ould like to share its 
reflexions on discussions so far, and propose next steps on this critical issue for LDCs. As highlighted 
in the report, discussions in the LDC Sub -Committee have gone through an in -depth review of the 
different LDC -specific provision s listed in Annex 2 of the LDC graduation proposal 
(WT/GC/W/807/Rev.2 ). In addition to factual presentations by the Secretariat, the LDC Group has 
explained at length the reasons for extending such provisions for a reasonable period of time in 
favour of Members after they leave the LDC category.  
The rationale for smooth and sustainable transition measures in the WTO  
2.  LDC-specific provisions embedded in WTO Agreements and Ministerial Decisions have been 
agreed by consensus by the whole membership  to respond to the unique vulnerabilities affecting 
LDCs. WTO Members have further recogni zed that they should equally apply to all LDCs. The 
question of extending those measures to graduating countries is therefore not whether these 
measures are appropria te or not, but rather if countries after graduation from the LDC category 
have achieved sufficient progress to render these support measures unnecessary. More generally, 
the question is whether graduated countries have been able to build sufficient product ive capacity 
or reduce their vulnerabilities sufficiently to avoid a situation where the removal of those support 
measures would affect their development pathways or undermine the progress achieved so far.  
3.  Based on existing analysis by UNCTAD1 and the UN CDP2, the experience so far suggests that 
LDCs meet the graduation criteria before operating the economic structural transformation, they 
need to engage in global markets on an equal footing with other developing countries. As a result, 
their productive c apacity remains largely underdeveloped and undiversified. These findings provide 
a strong rationale for extending some of the LDC specific provisions listed in Annex 2 as part of a 
smooth transition set of measures.  
4.  In recognition of the fact that Members leaving the LDC category should at least commit to 
comply with the rules and disciplines that apply to other developing countries, the LDC Group has 
proposed that the smooth transition measures take the form of a peace clause. In other words, while  
graduated countries would make their best effort to comply with those new obligations, they should 
not be subject to the dispute settlement mechanism during a reasonable period of time, in case they 
face difficulties.  
 
1 UNCTAD (2021): "Achieving Graduation with Momentum through the Development of Productive 
Capacities ". https://unctad.org/system/files/official -document/aldc2021d4_en.pdf   
2 UN CDP (2017): "Expanding productive Capacity: Lessons Learned from Graduating LDCs ". 
https://www.un.o rg/development/desa/dpad/wp -content/uploads/sites/45/publication/2017 -cdp-policy.pdf   WT/GC/W/919  
 
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  Discussions in the LDC Sub -Committee  
5.  Discussions in the LDC Sub -Committee so far have highlighted that some of the provisions listed 
in Annex 2 of the LDC Group 's proposal ( WT/GC/W/807/Rev.2 ) may need to be consolidated. On the 
Annex  1 of the LDC submission, Members have already a dopted the 23 October 2023 General Council 
Decision ( WT/L/1172 ), which encourages LDCs preference granting Members to provide a smooth 
and sustainable transition period for the withdrawal of their LDC -specific tariff or DFQF preference 
programmes. The LDC Group  welcomes this Decision, which constitutes a step in the right direction 
and recognizes that its implementation by preference granting Members will address several of the 
market access -related issues listed in Annex 2. Based on these considerations, the LD C Group is 
ready to review the list of provisions in Annex 2 and to align it particularly with the General Council 
Decision on unilateral DFQF preferences.  
Next Steps  
6.  As we move towards MC13 and given the critical importance of this issue, instructing the Sub-
Committee to continue the examination of Annex 2 of the LDC graduation proposal and provide an 
appropriate period of time, as envisaged in the LDC sub -committee Chair 's report is not an option 
for the LDC Group. This would be a recipe for endless discu ssion on questions that have already 
been answered by the LDC Group. It will only delay any action on this critical development matter.  
7.  Before continuing the discussion, the General Council should first agree on the principle of a 
transition period, which would apply to the provisions listed in Annex 2 for a fixed number of years. 
As mentioned in the past, the LDC Group envisages, at a minimum, a 6 -year peace clause. This is 
close to the existing mechanism of 5 years available under the UN LDC Technology Ba nk and 
corresponds to the two triennial UN CDP reviews undertaken post - graduation to monitor progress. 
Based on such a decision, further discussions during the time remaining before MC13 could focus on 
which LDC specific provision could benefit from the p roposed transition period.  
8.  As mentioned repeatedly, this is not about negotiating new flexibilities. Graduating LDCs have 
clearly expressed their commitment to comply with new obligations after they leave the LDC 
category but they simply require a transit ional time, in the form of a peace clause to guarantee a 
smooth transition process on a limited set of provisions. Granting such flexibilities does not cost 
anything to other Members but will significantly contribute to ensuring a smooth and sustainable 
transition after graduation. The GC decision on Annex  1 is a clear recognition that a transition period 
after graduation from LDC category is crucial. Achieving a successful outcome on Annex  2 will send 
a strong signal that the multilateral trade system is r esponsive to the need of its more vulnerable 
Members and will generate most needed goodwill to address other critical issues on the MC13 
agenda.  
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