WORLD TRADE WT/COMTD/LDC/INF/2

28 May 2003
ORGANIZATION
(03-2863)

Sub-Committee on Least-Developed Countries

ACCESSION OF LEAST-DEVELOPED COUNTRIES

I. INTRODUCTION

Accessions, especially accessions of LDCs, remain an important political and technical

challenge for the WTO. Putting in place WTO-related legal and enforcement mechanisms and the
lack of trained personnel have particularly affected the pace of accession negotiations, including the
accessions of least-developed countries. Except for Vanuatu, which is a special case, no LDC has so
far completed the Article XII accession procedures. Significant delays have been observed in the
preparation of even the basic initial documentation required to start the accession negotiations.

In the Ministerial Declaration in Doha, Ministers stressed the urgency to address this issue.
They stated the importance they attached to concluding accession negotiations, in particular those of
LDCs, "as quickly as possible" (paragraph 9 of the Doha Ministerial Declaration). They agreed to
work to facilitate and accelerate accession negotiations with acceding LDCs and instructed the
Secretariat to reflect the priority attached by Members to LDCs' accessions in the WTO annual plans
for technical assistance (paragraph 42 of the Doha Ministerial Declaration). Important work on this
issue was initiated by the Sub-Committee on LDCs under the Doha mandate resulting most recently in
the Guidelines adopted by the General Council in December 2002 (WT/L/508).

Of the 49 countries classified by the United Nations as least-developed, 10 are currently in the
process of accession (Bhutan, Cambodia, Cape Verde, Ethiopia, Lao PDR, Nepal, Samoa, Sudan,
Vanuatu, and Yemen). While a number of these accessions are still at an intermediate or initial stage,
significant efforts have been made over the past two years to accelerate the accession process of
LDCs and there are now good prospects that one or more among them will be able to join the WTO
by the Cancún Ministerial Conference.

II. STATE OF PLAY

The current status of individual LDCs' accession is as follows:

A. POSSIBLE COMPLETION IN 2003

1. Cambodia

Cambodia's Working Party was established in December 1994, but the accession did not pick
up until mid-1999, when Cambodia submitted its Memorandum. With the Geneva process formally
engaged, the process gained momentum. Four Working Party meetings have been organized since
May 2001. The last meeting, held on 16 April 2003, confirmed Members' willingness to conclude
this accession in July, in time for the Cancún Ministerial Conference. We are targeting a final formal
meeting of the Working Party in mid-July.

On the bilateral front, a series of meetings between Cambodia and interested Members took
place from 27 March to 3 April this year and, subsequently, again on the fringes of the 16 April
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Working Party meeting. We have indications that important breakthroughs were made.
Cambodia expects to sign most of the bilateral agreements in the forthcoming weeks.

2. Nepal

Nepal's accession was inactive for some time. The Memorandum on the Foreign Trade
Regime was received in final revised form in August 1998, more than 9 years after Nepal's
application for membership first in the GATT and subsequently in the WTO. The work then
accelerated with a first, very constructive meeting of the Working Party in May 2000 and a second
one in September 2002. Important efforts have been made since then to accelerate Nepal's accession
process and ensure the best chances for completion by Cancún.

Following the visit of a Secretariat team in April, all inputs needed to advance the process
were received from Nepal (e.g. legislative action plans and revised offers on goods and services),
making it possible for the Chairman of the Working Party, Ambassador Pierre-Louis Girard, to hold a
first series of consultations between a high-level Nepalese delegation and WTO Members on
22-23 May. It was agreed to meet again informally in late June to discuss the draft Report to be
prepared by the Secretariat and "pre-finalize" the accession documents with a view to concluding
work by Cancún. This consultative process is an innovation designed to accelerate negotiations, as
well as to reduce the obvious budgetary and manpower constraints on LDCs like Nepal in servicing
numerous formal Working Party sessions in Geneva.

3. Samoa

Samoa's accession process has been progressing well. The Working Party was established in
July 1998. The Memorandum on the Foreign Trade Regime was received 19 months later, and the
replies to questions raised by Members were submitted after another 18 months. A first Working
Party meeting and first round of bilateral negotiations took place in March 2002.

The required inputs were received recently, enabling the Secretariat to start a first version of
the draft Working Party Report – to be ready for circulation to Members towards the end of May. The
target is to conclude this accession this year with a formal meeting of the Working Party possibly in
July 2003, around the Geneva Week.

Revised offers on goods and services are still awaited. While we understand that Samoa is
working on these documents, we do not have any clear indication as to when they might come.

4. Vanuatu

Contrary to many other LDC's accessions, Vanuatu's accession started in an expeditious

manner. Vanuatu applied for membership in July 1995, submitted its Memorandum three and a half
months later and answers to the first round of questions after another 6 months, in May 1996. The
process then continued with several informal meetings and consultations to minimize the resource
drain on Vanuatu. The Working Party held its final meeting on 29 October 2001 in time for approval
by Ministers at Doha. However, shortly before the Ministerial Conference, the Vanuatu authorities
informed the Secretariat that they were considering whether or not to accept this package. This
accession could be completed in 2003 if the Government of Vanuatu provides approval or final
responses with respect to the accession package negotiated and agreed in the Working Party. The
Secretariat has contacted the authorities to ascertain their latest position.
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B. ACTIVATED AND INTERMEDIATE ACCESSIONS

1. Bhutan

Bhutan's Working Party was established in October 1999. The Memorandum on the Foreign
Trade Regime was submitted only recently, in February 2003, i.e. more than 3 years after Bhutan's
request for accession. Accession negotiations have not yet started. Bhutan is currently answering the
first set of questions submitted by Members. Depending on when the Secretariat receives the replies
to the questions, a first meeting could be organized this year.

2. Lao PDR

Like in the other cases, quite a long time – 3 years – elapsed between the establishment of the
Working Party in February 1998 and the submission of the Memorandum on the Foreign Trade
Regime in March 2001. Lao PDR is now answering questions from Members on the Memorandum.
We do not have a clear indication as to when the replies might be received.

3. Sudan

Sudan applied for membership in 1995. It submitted its Memorandum on the Foreign Trade
Regime some 4 years later in 1999, and replies to a first set of questions on the Memorandum were
received in November 2000. Another 2 years elapsed before answers to a second set were submitted,
in January 2003, followed in April by additional documentation on agriculture, services, TBT/SPS,
and TRIPS. As all the awaited inputs have now been received, the Secretariat intends to organise the
first Working Party meeting in July this year.

4. Yemen

Yemen's Working Party was established in July 2000. The preparation of the Memorandum
on the Foreign Trade Regime, which was circulated in November 2002, took over 2 years. Yemen's
authorities are now answering questions from Members.

C. ACCESSIONS AT INITIAL STAGES

1. Cape Verde

The Working Party was established almost 3 years ago, in July 2000, and the Memorandum
on the Foreign Trade Regime has not been submitted yet. Accession negotiations have therefore not
started. We have been informed that Cape Verde's authorities have been facing difficulties putting
together all the required information. Some assistance is being provided by UNCTAD and USAID.
According to the latest information, the Memorandum should be submitted in June, making it possible
to have a first Working Party meeting before the end of the year or early next year.

2. Ethiopia

Ethiopia is the latest country to have applied for membership. The Working Party was
established at the last General Council meeting in February 2003. We have indications that the
Memorandum would be sent to us before the summer break. Should this be the case, a first Working
Party meeting could be organised by the end of the year or early next year.
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III. ISSUES

A. TRANSITION PERIODS

A welcome flexibility by WTO Members has been observed recently on the issue of transition
periods, thereby putting into practice the Guidelines on LDCs' accession adopted in December 2002
by the General Council. Members have adopted a positive attitude towards the granting of transition
periods provided that detailed action plans are submitted by acceding LDCs and made an integral part
of the clear-cut commitments set out in the Working Party Report and Protocol. Any technical
assistance needs aimed at assisting acceding LDCs in achieving these commitments would be
separately considered and provided in a timely and focussed manner.

B. PROCESS

Specific steps have been taken to streamline the accession process and make procedures as
transparent, predictable, and open-ended as possible, in particular for LDCs, where the number of
Working Party meetings has been reduced to 2 or 3 (the average figure for other acceding
governments is 6 or 7). In agreement with WTO Members, a pragmatic approach to the conduct of
negotiations has been developed putting greater emphasis on focussed informal consultations between
interested Members and the acceding LDC with a view to accelerating the accession process,
lessening the financial and human resources burdens of negotiations, and reducing the number of
formal meetings for LDCs (e.g. Samoa and Nepal). However, the main problem concerns the
complex nature of WTO-related obligations required for membership. These apply both to bilateral
market access and WTO-related systemic issues of legislation and enforcement.

The preparation of documentation is an arduous task, especially for LDCs whose financial,
human, and institutional capacities are limited. For example, significant delays have been observed in
the drafting of the Memorandum on the Foreign Trade Regime (which takes on average three and a
half years for LDCs compared to about 2 years for others) and responses to WTO Members' questions
(15 months for LDCs as opposed to 7-8 months for others). The effective start of accession
negotiations is therefore invariably delayed for long periods.

During the accession process, the pace of progress has also been seen to be affected by
changes in political priorities and an overall lack of capacity to carry out fiscal and customs reforms
and pass the minimum set of laws and regulations needed to bring their legal and institutional
framework up to the standards of the WTO, e.g. in areas such as Customs Valuation, TBT, SPS, and
TRIPS. Timely and focussed technical assistance is central and critical in reducing these
infrastructural bottle-necks.

C. TECHNICAL ASSISTANCE

The pace of accession is linked closely to the economic and structural reform process being
conducted at the national level in the acceding governments. As stated earlier, technical assistance is
therefore crucial for all acceding countries, in particular LDCs.

From January 2001 to March 2003, acceding LDCs participated in 107 different technical
assistance activities organized by the Secretariat in Geneva or at the national/regional level in the
form of workshops, seminars, training courses and technical missions. Bhutan was involved in 20
activities, Cambodia 32, Cape Verde 20, Ethiopia 34, Lao PDR 28, Nepal 20, Samoa 22, Sudan 29,
Vanuatu 24, and Yemen 24. These activities covered training and technical assistance on all aspects
of WTO Agreements.
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More specifically, ad hoc technical assistance is provided outside the WTO Technical
Assistance Plan upon request. Focused technical assistance from WTO's Accessions Division both
independently and in coordination with UNCTAD was behind the completion of Bhutan's
Memorandum on the Foreign Trade Regime, whose quality has been widely appreciated by Members.
Sudan's representatives recently had a number of technical meetings in Geneva with various WTO
experts to assist them in preparing documents on agriculture, services, TBT/SPS and TRIPS. Samoa
has received regular technical assistance to help them complete the documentation needed for the
preparation of the draft Report and their revised offers on goods and services.

Technical assistance is also delivered by other international organizations and individual

WTO Members. An example of the positive results achieved in this area is Cambodia, which has
received extensive technical assistance from organizations and agencies such as FAO, UNCTAD,
IMF and ADB. Some of this assistance was provided under the Integrated Framework. Technical
assistance for Nepal is also in the process of being intensified both bilaterally and under the Integrated
Framework, particularly in the area of legislation and enforcement.

The planning of effective and timely technical assistance is critical for success. The WTO
Technical Assistance Plan for 2003 is a positive step in this direction. However, in the future, it is
likely to evolve and take into account the changing needs and priorities of the recipients. A critical
first step should be for the acceding governments to clearly identify their priorities and needs. In this
regard, the early submission of detailed legislative action plans, including specific needs for technical
assistance, is important to help advance the accession process.

The accession process of LDCs would be facilitated if more systematic awareness and
training activities were organized on the accession process before these countries formally apply for
membership. This would help them have a realistic understanding of the wide-ranging requirements
involved and allow them to build the expertise needed. The lack of trained personnel and negotiators
is too often a factor of delay.

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