The main LDC-specific market access preferences in services are those granted under the decision adopted by WTO Members in 2011 known as the “services waiver” (Decision on preferential treatment to services and services suppliers of LDCs – WT/L/847 – adopted by the 8th Ministerial Conference of the WTO, 2011). The decision allows WTO Members to grant to LDC services or service suppliers preferential treatment that would otherwise be inconsistent with Article II (most favoured nation treatment) of the GATS.
In 2013, the Bali Ministerial Decision established steps to promote the operationalization of the decision. In 2014, the LDC group submitted the “LDC collective request”, identifying the sectors and modes of supply of particular interest to them (S/C/W/356). In 2015, the waiver period was extended to 2030, as part of the “Nairobi Package” (WT/MIN(15)/48). The WTO has received notifications from 24 Members, including the EU, indicating sectors and modes of supply where they were providing or intended to provide preferential treatment to LDC services and service suppliers.
Upon graduation, countries no longer benefit from the services waiver. According to WTO/EIF (2020), “The desired impacts of preferences granted under the services waiver has not yet been realized. In many cases, notified measures reflect the applied MFN regime. Moreover, some notified measures reflect commitments found in preferential trade agreements that also reflect the applied regime. And opportunities have been limited under Mode 4 (presence of natural persons), which has been the single most modal focus of the LDC Group. In addition, a growing body of research suggests that weak domestic supply-side capacities constitute major constraints for LDCs to increase their participation in international services trade. In view of these factors, in the present circumstances, graduating LDCs are unlikely to lose much in services preferences” after graduation.
A session of the Council for Trade in Services (CTS) dedicated to the services waiver was held in October 2019.
Related to trade in services, India waives visa fees for applicants from LDCs applying for Indian Business and Employment Visas.
Sources and further information:
- WTO, “Trade in services and the LDCs” (includes links to the services waiver and related decisions).
- List of notifications (WTO)
- “The LDC Services Waiver – Operationalized?“, UNCTAD, May 2016
- “Making the most of the LDC services waiver” by the International Trade Centre (ITC), 2015
- “Trade impacts of LDC graduation”, WTO and EIF, May 2020
- “WTO members secure ‘historic’ Nairobi Package for Africa and the World”. Press release for 10th Ministerial Conference of the WTO, Nairobi, 19 December 2015
- “WTO Services Waiver: Exploring Opportunities and Challenges for Nepal”. Workshop organized by South Asia Watch on Trade, Economics and Environment
- “Waiting for Service? Progress in Preferential Market Access for Asia-Pacific Least Developed Countries’ Services Exports“, UNESCAP, September 2015