- The decision was unanimously adopted during a special general meeting held in Geneva.
- Presently, there are 46 LDCs, with 16 of them at varying stages of the graduation process.
- Bangladesh is slated to graduate from the LDC category in the year 2026.
The General Council of the World Trade Organization (WTO) recently achieved a momentous milestone in its ongoing efforts to support Least Developed Countries (LDCs) as they strive to graduate from their LDC status. On October 23, the WTO made a pivotal decision aimed at addressing the unique challenges encountered by LDCs during their transition towards greater economic development.
This decision, which revolves around providing essential assistance to countries on the brink of graduation, garnered enthusiastic support from WTO members. This event took place during preparatory meetings leading up to the 13th WTO Ministerial Conference, scheduled for February 2024 in Abu Dhabi.
Ngozi Okonjo-Iweala, the Director-General of the WTO, emphasized the decision’s significance, stating, “LDC graduation signifies a crucial milestone in the journey of development. It showcases the unwavering commitment of WTO members to facilitating a seamless transition for graduating LDCs, ensuring that the hard-earned economic growth and development momentum is not lost in the process.”
She also expressed optimism that this approach could serve as a blueprint for future negotiations, reducing the reliance on Ministerial Conferences as the primary means to reach essential agreements.
The LDC Graduation Process
As of now, there are 46 Least Developed Countries (LDCs) in the world, with 16 of them in various stages of the graduation process. Among these, ten are already WTO members, which are:
- Angola
- Bangladesh
- Cambodia
- Djibouti
- Lao People’s Democratic Republic
- Myanmar
- Nepal
- Senegal Solomon Islands
- Zambia.
Four other LDCs are currently negotiating the terms of their entry into the WTO, namely
- Bhutan
- Comoros
- Sao Tomé Principe
- Timor-Leste
The remaining two LDCs on the graduation path are
- Kiribati and
- Tuvalu
Bangladesh, one of the most prominent LDCs, is set to graduate from this category in 2026. This transition is a significant milestone for the nation as it signifies progress in various development criteria set by the United Nations (UN) that categorize a country as an LDC. While this graduation is indeed a commendable achievement, it brings with it several challenges, particularly related to international trade and economic integration.
What is the WTO?
The World Trade Organization (WTO) stands as the singular global international body dedicated to regulating trade rules among nations. Central to its mission are the WTO agreements, which have been meticulously negotiated, signed, and ratified by a significant majority of the world’s trading nations. The primary objective is to facilitate producers of goods and services, exporters, and importers in conducting their international business operations.
WTO’s Pioneering Move for Graduating LDCs
The WTO’s decision to allow graduating countries, like Bangladesh, to retain trade preferences for a period after graduation is a remarkable development. While the decision does not specify a fixed time frame for these preferences, it urges member countries that offer duty-free and quota-free benefits to provide a seamless and sustainable transition period. This decision is in alignment with the Doha Program of Action for LDCs for the period 2022-2031, and it underscores the WTO’s commitment to helping graduating LDCs maintain their economic growth and development momentum.
The Director-General of the WTO, Ngozi Okonjo-Iweala, praised this decision as a significant step in addressing the unique challenges that graduating LDCs face. She emphasized that it would enable people from these countries to harness the opportunities that international trade brings. It is also an indication that the broader WTO membership is responsive to the priorities of LDCs.
The significance of LDC graduation extends beyond the classification itself. It reflects developmental progress and resilience in the face of adversity. LDCs are the most vulnerable members of the international community, and they receive special treatment at the WTO, such as enhanced market access opportunities and flexibility in adopting WTO rules. However, the process of integrating into the global economy and adapting to international support measures being phased out is a complex task for these countries.
Journey Towards a Smooth Transition Mechanism
Over the past three years, the WTO’s LDC group has been actively pursuing a mechanism for a smooth transition within the organization. Their objective is to extend LDC-specific preferences and provisions in WTO agreements even after graduation. Discussions are ongoing within the WTO Sub-Committee on LDCs regarding other elements of the LDCs’ requests concerning special and differential treatment.
The Chair of the General Council, Ambassador Athaliah Lesiba Molokomme of Botswana, lauded all WTO members, particularly the LDCs, for this positive outcome. She acknowledged the tireless efforts and pragmatism of all members, as well as the current and former LDC Group Coordinators and the Focal Point for LDC Graduation, in bringing this issue to a successful close.
In a world where trade plays a pivotal role in the economic development of nations, this decision by the WTO is a beacon of hope for countries like Bangladesh as they embark on their journey to graduation from the LDC category. It ensures that these nations will continue to have the support they need to navigate the challenges and seize the opportunities that come with progress.
Nonetheless, Bangladesh is set to complete its LDC graduation by 2026. Consequently, countries like Bangladesh, undergoing LDC graduation, will be entitled to special trade privileges.
