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WORLD TRADE

ORGANIZATION

WT/L/409

6 August 2001

·01-3885)

Original: English

LDC TRADE MINISTERS' MEETING

Zanzibar, Tanzania, 22-24 July 2001

The following communication, dated 24 July, has been received from the Permanent Mission of Tanzania.

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ZANZIBAR DECLARATION

MEETING OF THE MINISTERS RESPONSIBLE FOR TRADE OF THE LEAST DEVELOPED COUNTRIES

Zanzibar, United Republic of Tanzania

We, the Ministers responsible for trade of the Least Developed Countries, meeting in Zanzibar, soon after the Third United Nations Conference on the Least Developed Countries in Brussels with a view to adopting a common position on LDC agenda prior to the 4th WTO Ministerial Conference to be held in Doha from 9-13 November 2001,

Recalling various Ministerial declarations of the LDCs made on different occasions after the conclusion of the Uruguay Round Agreements;

Concerned at the marginalization of LDCs in the multilateral trading system as manifested in their insignificant share of 0.4 per cent in world trade;

Further concerned at the slow pace in the accession process of LDCs as reflected in the fact that not a single LDC has been able to accede to the WTO since its establishment;

Recalling the commitments made inter alia at Marrakesh, Singapore, Geneva and Brussels by the international community in assisting LDCs to secure beneficial and meaningful integration into the multilateral trading system and the global economy;

Reaffirming the LDCs proposals contained in the Sun City (South Africa) Communiqué;

Welcoming the recent market access initiatives in favour of the LDCs;

Determined to reverse the marginalization of our countries in international trade and enhance LDCs' effective participation in the multilateral trading System:

1. Call upon all our development partners for understanding and recognition of the special structural difficulties faced by LDCs in making them viable trading economies;

2. Agree to take all possible steps, within our own capacities, to reverse the process of exclusion and marginalization of LDCs in world trade;

3. Seek adequate and meaningful support from all our development partners, through:

·New and additional assistance in upgrading trade related infrastructure in the LDCs;

·Cancellation of all LDCs' debts,

·Meeting the ODA targets, financial and technical assistance for institutional strengthening and capacity building, essential for enhancing the level of development, reducing supply side constraints and making LDCs viable trading economies;

·Strengthening UNCTAD technical assistance and capacity building programme on multilateral trade negotiation issues by providing additional budgetary resources in UNCTAD regular budgetary provisions;

4.Call upon the 4th WTO Ministerial Conference to agree on:

·Binding commitment on duty free and quota free market access for all products from LDCs on a secure, long term and predictable basis with realistic and flexible Rules of Origin to match the industrial capacity of the LDCs;

·Full implementation of the commitments made in the Marrakesh Declaration and Ministerial decisions in favour of LDCs and the Ministerial Decisions on Measures concerning the Possible Negative Effects of the Reform Programme on LDCs and Net- Food Importing Developing Countries;

·Binding and full implementation of the provisions of Special and Differential treatment, including adoption of new Special and Differential measures to take into account problems encountered by LDCs in implementation;

·Full implementation of the commitments undertaken at the Third United Nations Conference on the Least Developed Countries, particularly mainstreaming Commitment Five of the Brussels Programme of Action into WTO Work Programme and the full implementation of the Integrated Framework;

·Facilitating the accession of LDCs into the WTO with a more streamlined process of accession, under terms consistent with their development, financial and trade needs and commitments not higher than those undertaken by LDC WTO members, including transitional periods mandated by WTO Agreements starting from the date of accession;

·Reaffirming the right to apply the TRIPs Agreement in a way that allows member countries to have easy access to medicines to combat HIV-AIDs, TB, Malaria and other killer diseases;

·Further reaffirming that TRIPs Agreement is not interpreted in a manner that endangers food security;

·Putting technology issues in the work programme of WTO as a priority with a view to implementing in full relevant provisions on transfer of technology before the 5th WTO Ministerial Conference;

·Ensuring that, in view of the LDCs' limited capacity to negotiate and undertake further commitments, the scope of the future WTO work programme is manageable and agreed by all members by consensus, and that any future negotiations are based on an agenda accommodating LDCs' interests;

5. Agree to collectively present this declaration and the accompanying Negotiating Objectives and Proposals1 for consideration and inclusion in the decisions of the 4th WTO Ministerial Conference;

6. Decide to institutionalize the LDC Trade Ministers' Meeting to take place at least once every two years to precede the WTO Ministerial Conference;

7. Express our profound appreciation to the Government of the United Republic of Tanzania for hosting this Conference in Zanzibar and thank UNCTAD and WTO secretariats for their assistance in its preparation.

ANNEX I

LDCs' Development Agenda at the Fourth WTO Ministerial Conference

Negotiating Objectives and Proposals of the Least Developed Countries

CONTEXT

Ministers responsible for Trade, representing the least developed countries, met in Zanzibar, Tanzania on 24 July 2001, and agreed on common negotiating objectives for the fourth WTO Ministerial Conference to be held in Doha, Qatar, 9 to 13 November 2001.

Ministers recall and strongly reiterate their common view, as expressed in the Sun City Communiqué adopted at the end of the co-ordinating workshop for senior advisors to ministers of trade in LDCs in preparation of the third WTO Ministerial Conference that the key challenge confronting the multilateral trading system is to ensure that issues of development are addressed decisively. The promotion of development should form the core business of the multilateral trading system.

To this end, Ministers took the view that the 4th WTO Ministerial Conference, coming as it does soon after the Third United Nations Conference on the Least Developed Countries in Brussels, should result in a clear commitment to implement the commitments agreed at the Brussels LDC Conference. With regard to WTO Agreements, the 4th Ministerial Conference should further make significant movement on addressing implementation issues, confirmation of the principles of special and differential treatment and trade policy flexibility to accommodate the interests of least developed countries and a commitment to ensuring an inclusive and transparent negotiating process, before, during and after the Doha Conference. Furthermore, the LDC Ministers also took the view that the scope of future multilateral trade negotiations will have to take into account the inability of LDCs to participate effectively in negotiations on a broad agenda and implement new obligations due to the well-known limited capacity of the LDCs.

In the light of the above well-known background, Ministers responsible for Trade of Least Developed Countries have made the following proposals which will be brought to the WTO General Council Meeting scheduled for 30 and 31 July 2001 and will be further pursued in the context of preparing for the 4th WTO Ministerial Conference at Doha and beyond. These negotiating proposals are divided into four categories: market access, implementation, "built-in agenda" and new issues. Special and differential treatment being a crosscutting issue has been treated under each of these different categories as appropriate.

A. MARKET ACCESS

1. Among the various efforts made at regional and multilateral levels in favour of LDCs in the last decade, the initiative to improve market access for LDCs was first contained in the 1996 Singapore Ministerial Declaration by which WTO members agreed to a plan of action in favour of LDCs. Among the stated objectives of this initiative, was that of taking positive measures, for example, to provide duty-free market access on an autonomous basis, for products of LDCs and thus aiming at improving their overall capacity to respond to the opportunities offered by the trading system.

2. While recent initiatives undertaken by major trading partners in favour of LDCs such as the Everything But Arms and African Growth Opportunity Act should be welcomed, further efforts aiming at providing meaningful market access for LDCs are required to fulfill the following basic conditions:

a. Ensure security of the preferential market access through:

· Establishment of a commitment that provides a contractual status to duty free and quota free preferences through the negotiation of a new legal instrument to make market access secure, stable and predictable. Any temporary withdrawal of duty free treatment should be disciplined in a contractual manner;

· Duty free treatment should be provided to all products. Any temporary exceptions could provide for duty-free tariff quotas, which would be subject to an agreed phase-out programme;

· Existing S&D treatment provisions under the various WTO Agreements should be improved in an effective manner with a view to ensuring the duty-free access is not nullified by non-tariff measures; and

· Technical and financial assistance to meet the cost of compliance with SPS measures and technical standards.

b. Rules of origin

Rules of origin requirements should be realistic and flexible to match the industrial capacity of LDCs in order to ensure the effective and full utilisation of preferences. The rules of origin should also be harmonised among preference-giving countries and subject to simplified customs documentation and procedures.

B. IMPLEMENTATION

3. Within the current process of preparations for the Doha Conference, solutions to implementation issues have become a very crucial element. As an objective to obtain a Ministerial Decision on LDCs at Doha including a comprehensive set of measures in favour of LDCs, the following proposals are aimed at achieving substantive improvements in areas of special interest to LDCs as far as implementation issues are concerned.

Agriculture

4. Immediately implement bound duty free and quota free market access conditions to exports originating in LDCs, which should cover all agriculture products in their primary, semi-processed and processed forms.

5. Implementing in a full and effective manner the Decision on Measures concerning the possible negative effects of the reform programme on LDCs and Net Food-Importing Developing Countries(NFIDCs).

Services

6. Full and effective implementation of Article IV of General Agreement on Trade in Services (GATS), to strengthen LDCs' domestic services capacity, e.g. through access to technology and distribution channels and information networks, to enable LDCs to participate in the trade in services in the modes of supply and sectors of special interest to them, such as tourism, construction, transport, etc.

7. Commitments should be made by developed countries in Mode 4, movement of natural persons, and limitations on Mode 4 should be eliminated. Members shall take steps so that administrative practices do not impede the full and effective implementation of their commitments under GATS as regards the supply of services under Mode 4.

Subsidies

8. The current imbalances in the Agreement on Subsidies and Countervailing Measures (ASCM) should be redressed by:

· Strengthening the effectiveness of non-actionable subsidies, including those for development, diversification and upgrading infant industries as well as to allow for freight rebate schemes to take into account the important role which subsidies play in the development process of LDCs;

· Modifying Annex I of the ASCM to provide LDCs the flexibility to finance their exporters, consistent with their developmental objectives;

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· Providing in Annex VII that an LDC that graduates will be excluded from the Annex only if its GNP per capita remains above the level mentioned in the Annex for a continuous period of four years. Furthermore, delay in excluding a country from the annex would ensure that the increase in its GNP per capita is not due to a temporary economic development, which in the long run cannot be sustained;

· Exemption from competitiveness thresholds of subsidies applied by LDCs; and

· Provision of financial resources to enable LDCs to meet their special needs, in particular with respect to the subsidies covered by article 8.2c (green subsidies).

Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT)

9. Technical assistance should be provided to LDCs for their implementation of these Agreements with a view to responding to the special problems faced by them. Such technical assistance could include, among other things, building-up capacities in the fields of accreditations, standards, metrology and certification.

10. The effective participation of LDCs in the international and regional standards setting bodies should be accorded priority and adequate technical assistance and financial resources should be provided.

Textiles

11. Meaningful market access improvements for LDCs should be provided so as to enable them to prepare themselves to meet increased competition after the end of the integration process.

12. Rules of origin requirements should be realistic and flexible to match the industrial capacity of LDCs in order to ensure the effective and full utilization of preferences. The rules of origin should also be harmonized among preference-giving countries and subject to simplified customs documentation and procedures.

TRIMs

13. LDCs should be exempted from the disciplines of TRIMS.

TRIPs

14. The following issues are of special concern to LDCs:

a. Implementation of all the provisions dealing with transfer of technology to LDCs, in particular article 66.2, TRIPs, by providing the necessary incentives.

b. WTO members should conduct a review and monitoring process, so as to ensure a full and effective implementation of article 66.2 of TRIPs;

c. Access to medicines and TRIPs: LDCs reaffirm the flexibility contained in the TRIPS agreements whereby nothing should preclude the right for members to take actions in a way that allows for easy access to medicines to combat communicable diseases in particular HIV/AIDS, tuberculosis and malaria;

d. The transitional period for LDCs should be extended to match their capacity to implement and benefit from the TRIPs Agreement, based upon an assessment of technological capacity of LDCs by the year 2006.

e. Reaffirmation of the flexibility embodied in the TRIPs Agreement.

Customs Valuation

15. Transitional period provided for in Article 20 of the Agreement on Customs Valuation should be extended in order to allow them to acquire the necessary technical assistance and expertise to implement the agreement, without thereby affecting their comparative advantages.

16. LDCs should also be allowed to continue their reservation concerning minimum values for a longer period.

Anti-dumping and countervailing actions

17. As LDCs are neither able to defend their industries against dumped and subsidized imports nor to protect the legitimate interests of their exporters, simplified procedures for taking anti-dumping and anti-subsidy actions should be devised for the use of LDCs.

a. The "best endeavour" provisions of Article 15 of the Agreement on Anti-Dumping (AAD) need to be operationalized so as to impart stability to the initiatives undertaken to improve market access for LDCs.

b. An agreed interpretation of Article 5:8 of the AAD to raise the threshold for the volume of imports from LDCs from 3 per cent to 7 per cent, and exempting them from cumulation.

c. An agreed interpretation of Article 27:10 of the ASCM to increase the threshold for imports from LDCs from 4 per cent to 10 per cent and exempting them from cumulation.

Safeguards

18. LDCs should be exempted from all safeguards actions. LDCs that are implementing safeguard actions should be exempted from undertaking compensatory measures.

C. BUILT-IN AGENDA

19. The current negotiations on agriculture and trade in services are mandated under the "Built-In Agenda" of the Agreement on Agriculture and General Agreement on Trade in Services. The TRIPs Agreement also has its own built-in agenda in the form of reviews of specific provisions.

Agriculture

20. In order for LDCs to bring closer the reform process to their developmental concerns and to capitalize on trading opportunities, the following actions are required:

a. Article 15.2 of the Agreement on Agriculture (AoA) should be maintained, so as to ensure that LDCs shall not be required to undertake reduction commitments on domestic support, export competition policies, and market access throughout the agricultural reform process.

b. Undertake steps towards immediate abolition of export subsidies for agricultural products which are of particular export interest to LDCs, within the special sessions of the Committee on Agriculture before the review of the Second Phase in March 2002.

c. Immediately implement bound duty-free and quota-free market access conditions to exports of LDCs, which will cover all agricultural products in their primary, semi-processed and processed forms. Such market access opportunities to LDCs should be accompanied with elimination of non-tariff barriers against LDC exports in order to ensure genuine trade growth in LDCs.

d. Establish a consultative group, within relevant Committees, which will: receive requests from LDCs for technical and financial assistance in the areas of SPS and TBT; assess each request to identify the types of technical/financial assistance that will best meet its purposes; and identify possible donor(s).

e. Introduce a fast-track dispute settlement mechanism for cases involving LDCs, and, where appropriate, enable quick compensation for trade losses incurred by an LDC as a result of trade measures found to be inconsistent with the SPS and the TBT Agreements.

f. Introduce contractual and operational provision under the TRIPs which will facilitate LDCs' access to appropriate agricultural technologies and practices.

g. Any new commitments and measures for LDCs should ensure coherence between Bretton-Woods conditionality and the WTO commitments.

h. Set up an inter-agency revolving fund, comprising of existing and new financing facilities as appropriate, to facilitate adequate financing at concessional terms for LDCs and NFIDCs in times of high world market prices; technical and financial assistance to LDCs and NFIDCs to improve their agricultural productivity and infrastructure, in addition to the regular bilateral and multilateral activities of donors in this area; review and monitoring at the regular meetings of the Committee on Agriculture of the implementation of the provisions of technical and financial assistance by bilateral and multilateral donors; provision of food aid, through the Food Aid Convention or otherwise, wholly in grant form in years of high world market prices without attachment of trade conditions.

i. Trade and production distorting domestic support measures in developed countries should substantially and progressively reduced during the course of the reform programme.

Trade in Services

21. As far as LDCs are concerned the following areas are of special interest to them:

a. The structure of the GATS should be preserved, particularly the "positive" list approach, which enables them to select the sectors, sub- sectors and mode of supply where they make commitments;

b. Special priority shall be given to liberalization of market access in sectors and modes of supply of export interest of LDCs, especially in tourism, transport and construction;

c. The negotiations in the area of emergency safeguard measures should permit LDCs to set out the conditions under which governments can differentiate as between foreign and domestically owned enterprises operating in their territories;

d. The negotiations should aim at achieving a further liberalization of movement of persons (mode 4) for LDCs on a sectoral basis and addressing issues that are impeding their market access including issuance of visas, administrative procedures and lack of transparency, economic needs tests;

e. Tourism services sector is of immediate export interest to LDCs. In order to ensure trade in this sector is taking place in a fair and competitive environment, necessary multilateral measures for disciplining anti-competitive practices in the tourist originating countries may be required.

f. LDCs should receive recognition and credit for their autonomous liberalization.

TRIPS

22.

a. Regarding Article 27.3b, the review process should clarify that plants, animals and parts of plants and animals, including gene sequences and biological processes for the production of plants, animals and their parts, must not be granted patents. A provision should be incorporated to the effect that patents must not be granted without prior consent of the country of origin of products referred to in the paragraph above. It should be also clarified that Members have the option to select their own sui generis system (appropriate national system of protection) for plant variety protection, including recognizing traditional knowledge and the rights of farmers to use, save and exchange seeds. The sui generis system can also be in line with the OAU model law on community rights and biodiversity, the Convention on Bio-diversity and the FAO's International Undertaking:

b. Essential drugs included in the WHO list should be excluded from patentability.

c. On geographical indications, the mandated review of 24.2 of TRIPS should encompass the extension of the protection to other products than wines and spirits.

d. LDCs should be provided with access to genetic resources.

e. There is need for legal instruments for the protection of intellectual property on genetic and biological resources, traditional knowledge and folklore.

Accession

23. Cumbersome and time consuming procedures as well as lack of clear and objective rules and disciplines for accession negotiations pose serious difficulties for LDCs that are seeking accession. Therefore, within the spirit of the commitments undertaken in the Programme of Action for the LDCs for the decade 2001-2010 adopted at the Third United Nations Conference on LDCs, a ministerial Decision should be adopted in Doha aimed at supporting the efforts of all LDCs seeking to accede to WTO which should include the following principles:

· The automatic recognition of the status of acceding LDCs, and to facilitate the LDCs accession process by WTO members, on the basis of terms that take into account their stage of development, the Uruguay Round Decision on Measures in Favour of Least Developed Countries and on the basis of special and differential treatment;

· Ensuring that the accession process is more effective and less onerous for LDCs and tailored to their specific economic conditions, taking into consideration LDCs' limited administrative capacities;

· Streamlining procedures and documentation required, minimizing the number of working party and bilateral meetings, consolidating, reducing and expediting Members' exchanges with LDC applicants to a manageable level;

· LDCs should not be subjected to obligations or commitments that go beyond what is applicable to WTO LDC members;

· Establishing clear, simplified and fast-track procedures for the accession of LDCs that are not yet members of the WTO;

· Providing for automatic eligibility of all acceding LDCs for all provisions on special and differential treatment in existing WTO agreements including the same and unconditional transitional periods as stipulated in the respective Agreement for LDCs, counted from the date of accession;

· In view of LDCs' special economic situation and their development, financial and trade needs, WTO members should exercise restraint, in seeking concessions in the bilateral accession negotiations on market access for goods and services in keeping with the letter and spirit of the provisions of the Ministerial Decision on Measures in Favour of the Least Developed Countries;

· WTO members should seek no commitments and/or obligations from an acceding LDC as a condition for its accession, on membership in the Plurilateral Trade Agreements and acceptance of optional sectoral market access, other optional legal instruments of the GATT 1994 or any other WTO Agreements;

· Provide adequate and predictable technical, financial and other assistance to LDCs for their accession process, including institutional as well as capacity building in human resources.

Capacity building and Technical Assistance

24. Capacity building is at the core of needs from the LDCs in their efforts to fully and effectively integrate into the world economy and the multilateral trading system and should therefore be at the core of the WTO multilateral agreements, taking into account full participation by government, private sector and civil society, as well as mainstreaming trade into the poverty eradication strategies. Pursuant to this, LDCs urge WTO members to adopt a Ministerial Decision on capacity building and technical assistance in favour of LDCs. Such Decision should focus and agree inter alia on the following urgent actions:

· Strengthening negotiating capacities of the LDCs as an essential element in integrating these countries into the multilateral trading system.

· Strengthening technical assistance for the implementation of multilateral trade agreements in order for LDCs to exercise their rights under the Agreement and exploit the trading opportunities and making such technical assistance an integral part of commitments to be taken in future trade agreements;

·  Implementing expeditiously and effectively the Integrated Framework for Trade related Technical Assistance in favour of all LDCs, and encourage new and additional resources and contributions to the Trust Fund and ensure greater transparency in its implementation including the selection of beneficiary countries, as well as ensuring that comparative advantages of participating organizations are fully taken into account in the implementation process;

·  Urging for a significant increase in the WTO, UNCTAD and ITC, regular budget provisions to enable planning and programming for technical assistance as well as agreeing to an increase in the regular budgets of the other IF core agencies to provide for a stable and predictable funding for the implementation of the IF;

·  Urging for an increase in the extra-budgetary resources for UNCTAD to carry out in a full and effective manner the technical assistance and capacity-building activities on WTO and trade-related issues;

·  Ensuring that the implementation of the Integrated Framework is regularly monitored and reviewed with regular reports by the Chairman of Integrated Framework Steering Committee so as to determine if the trade-related capacity building needs of the LDCs are being addressed and that they achieve satisfactory results for enhancing their capacity to participate in the multilateral trading system.

·  Providing technical assistance and capacity-building programmes for LDCs, in order to address the supply side constraints including information and communication technology ( ICT), for them to take advantage of trade opportunities identified through the mainstreaming process;

·  Technical assistance should be provided to increase participation and negotiating capacity of LDCs in regional trade arrangements as a step to better participate in multilateral trade negotiations and achieve coherent negotiating objectives.

·  Develop the capacity of the private sector, civil society and the research and training institutions to enable them to formulate constructive proposals on the context and the implementation of trade policies that will reflect strategies for poverty reduction.

D. NEW ISSUES

Trade and investment

25. In approaching the question of possible negotiations on trade and investment, an important point to note is that least developed countries are not demandeurs of a multilateral framework in this area. The implications for development of a multilateral investment agreement, of whatever type, have not been fully discussed nor understood. Hence the study process where work is going on in the working group has to continue. However, in any future work in this area, it is necessary to ensure that the outcome will contribute to facilitating investment flows to least developed countries while preserving their policy space and flexibility to pursue national development objectives geared to deriving maximum contribution of such flows to the achievement of these objectives.

Trade and competition policy

26. As the discussions in the Working Group on Trade and Competition Policy have not yet been completed, it is important to finalize the working groups deliberations prior to any decision whether to formally introduce this issue on any future negotiation agenda. This is particularly valid as most LDCs:

·  do not have competition policy, laws and institutions in place and that, in few cases these are underdeveloped;

·  lack the capacity to enforce competition law and policy; the interrelationship between competition policy and economic development is a complex one;

·  have difficulties as to the complexity of the modalities for introducing anti-competitive policies in "dualistic economies", characteristic of most of them;

·  need to identify the content and form of technical assistance to be provided to developing countries in order to introduce and implement competition law and policy becomes an imperative.

Trade and Environment

27. LDCs attach importance to the ongoing discussions in the Committee on Trade and Environment with a view to resolving the issues related to the interface between trade and environment policies. They are of the view that the mandate for the current work programme should be extended and emphasize that under no circumstances should environmental considerations be used for protectionist purposes against LDCs' products.

Transparency in government procurement

28. LDCs have yet to fully comprehend the implications of a framework on transparency in government procurement in the WTO, especially as to how it would affect social and economic development.

29. The issues involved are complex, and divergent views continue to exist on a great number of issues hence the study process in the Working Group has to continue.

Trade Facilitation

30. LDCs concur with the general assessment that trade facilitation measures are necessary and beneficial and they share the view that this area does not require new rule making. Existing rules and regulations both within and outside WTO are sufficient but may require improvement and a high degree of implementation. In the context of the LDCs, improved facilitation would require increased financial and technical assistance to narrow the technology and human resources gap that exist between them and developed trade partners. Hence the study process in the Working Group should continue.

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