Summary:

WTO member nations have successfully reached an agreement to provide support to Bangladesh and other least developed countries (LDCs) as they progress towards graduation. Starting November 2026, Bangladesh will continue to receive trade benefits even after it graduates from the list of least-developed countries. However, the World Trade Organization (WTO) has decided to extend support measures for countries that are graduating from the least-developed category. 

Content:

On October 23rd, the WTO General Council made a decision. During a meeting that took place on October 23rd and 24th at the WTO headquarters in Geneva, senior officials gathered to prepare for the 13th WTO Ministerial Conference, which is set to take place in Abu Dhabi in February 2024. Prof Mustafizur Rahman, an expert in trade matters and a distinguished fellow at the Centre for Policy Dialogue (CPD), highlighted the significance of the decision for Bangladesh and other LDC graduates. 

Prof. Mustafiz, pointed out that there is still uncertainty about how long the benefits of duty-free market access will last for countries that graduate from the LDC status. This issue may be discussed and clarified during the upcoming Abu Dhabi conference. Bangladesh, a country set to graduate from the LDC status in 2026, initially requested a 12-year extension of duty-free market access from the WTO. This extension was meant to ensure a smooth transition for LDCs by allowing them to continue receiving special trade benefits even after graduating from LDC status. 

LDCs, or the least developed countries, are the most vulnerable members of the international community. When an LDC meets certain United Nations development criteria, it graduates and is no longer considered an LDC. The WTO provides special treatment to LDCs, such as enhanced market access opportunities and flexibility in adopting WTO rules. 

Initially, a proposal was made for LDC graduation to occur between 9 to 20 years. Subsequently, the proposal was revised for a shorter range of 9 to 12 years. Another proposal was presented by Chad, a central African nation, suggesting a transition period of 6 to 9 years. 

The WTO has encouraged its members to provide a smooth and sustainable transition period when they remove countries from their duty-free and quota-free preference programs upon graduation from the LDC list. This decision is significant in implementing the Doha Programme of Action for LDCs from 2022 to 2031. Ngozi Okonjo-Iweala, the WTO Director-General, expressed her appreciation for the decision, stating that LDC graduation is a crucial indicator of development progress. She added that the decision is a significant step towards addressing the specific challenges faced by graduating LDCs. Ambassador Athaliah Lesiba Molokomme of Botswana, the chair of the General Council, congratulated the members, particularly the LDCs, for the successful outcome. The decision will provide some measure of predictability and trust for those on the road to graduation and further integration into the trading system, said Ambassador Kadra Ahmed Hassan of Djibouti, the coordinator of the WTO Group of LDCs. There are currently 46 LDCs, of which 16 are at different stages of the graduation process. Ten of these are WTO members, and four are negotiating their terms of entry into the WTO. The remaining two LDCs on the graduation path are Kiribati and Tuvalu. The Doha Programme of Action for LDCs calls for 15 more LDCs to meet the graduation criteria by the end of the decade. 

The decision taken by the WTO is a significant milestone towards achieving the goal of graduating LDCs and will help to ensure a smooth transition for the withdrawal of these preferences after graduation. It is another welcome sign that the wider WTO membership is responding to LDC priorities and is committed to helping the LDCs tap into the opportunities that international trade brings. 

Picture and Article Source; The Business Standard