The 12th ministerial level conference of LDCs, walking shadow

The 12th ministerial level conference of 46 LDC countries was held at the WTO headquarter in Geneva in last June. The conference was scheduled to be concluded on 15th June but the debate on the interests of developed and least developed countries was at its peak. Due to the non-fulfillment of the fair demands of the less developed countries including Bangladesh and other important issues, time of the conference was extended for another day. Being worried about hotel booking, ticket schedule many representatives from LDC countries expressed their anger and frustration inside the conference. Participants from many countries left Geneva before the conference ended. Doubts crept up whether there would be any good announcements at all in the extended period which will be fruitful for the LDC countries. Analysts said that this conference may end with important issues unresolved.

On the inaugural day there was much debate on the role of WTO towards LDC countries because WTO has always allegedly preferred the interest of developed countries, not the LDCs. Bangladesh claimed to enjoy the benefits of LDC for more 6-12 years even after being finally graduated from the list of LDC because pandemic has widely damaged the economy. Moreover, ongoing Russia-Ukraine war has pushed world economy towards serious disaster The United States has opposed to Bangladesh’s claim but the European Union has supported it.

As claimed by our commerce minister, undue interference increases food price. Reckless fishing acts as a threat to poor people and fishermen. So, providing subsidy to reckless fishing must be stopped. Referring to FAO in press briefing, WTO has informed that due to excessive exploitation storage of fish is under risk in many parts of the world. It is assumed that in comparison to 10% in 1974, 34% more fish is being extracted. Due to disproportionate extraction the fish population is continuously becoming unable to replenish itself. Gradually decreasing fish storage increases poverty and push fishermen community towards danger. Regarding this problem there was a draft agreement but member countries have not agreed on some particular points.

Some countries have been forced to withdraw from the demands of the LDC countries since the beginning of the conference. It has been said on behalf of the developed countries - those who will transition from LDCs in 2026 and will help the countries that have already transitioned to maintain sustainable development. In this regard, the WTO has continued the consultation process.

Time limit to enter into the class of developing countries from LDC was 2022. At the request of Bangladesh it was extended up to 2026. After graduation the countries will be deprived of existing trade facilities. WTO will not extend it but WTO is positive towards the countries which are at the doorsteps of transition. So, Bangladesh is in an advantageous position. Besides this, influential member countries of WTO are claiming of providing special benefits to the countries which have graduated from LDC. During pandemic LDC countries were the worst sufferers. Therefore, their demand to increase trade facilities has been reinforced.

After much drama the conference ended with announcement of Geneva Package. Despite continuous discussions no major decision could be reached. However, countries like Bangladesh, which will leave the list of least developed countries in 2026 and enter the ranks of developing countries, have been left open for negotiations to maintain existing trade benefits. Bangladesh can also negotiate to get LDC benefits for at least another six years after 2026. WTO will do the work of negotiation.

According to the Geneva package WTO will provide financial and trade benefits to the LDCs considering the damage caused by Covid-19 pandemic but they should be prepared for any such future situation. The whole world will work together to fight such a global pandemic. It would exempt the World Food Programme from food security, food procurement during emergencies. Consensus can be reached on fisheries sector subsidy, tax waiver on e-commerce and extending trade facilities to least developed countries and graduate LDCs. However, it has not yet specified how long and how the facility will be distributed among beneficiary countries. Standing on this clause Bangladesh has the opportunity to enjoy LDC trade benefits even after transitioning from the list of developing countries in 2026 but more negotiation is required.

At morning of 17th June the WTO reported that its 164 member countries reached consensus on key global issues to facilitate trade growth after long discussion of nearly six days and nights but could not finalise it. The reasons are not yet specified in the declaration but a benefit clause has been included in the declaration. For instance, the WTO said in its declaration, ‘In this difficult context we note with satisfaction that LDC members have met or are about to meet the graduation criteria set by the United Nations Development Principles (CDP). Acknowledge the special challenges that graduation presents, including the loss of trade-related international support systems, as they leave the LDC sector.’

From the standpoint of crude reality it is beyond doubt that the 12th ministerial level conference of WTO could not take any major decision regarding the justified demands of least developed countries, World trade regulators and leaders have not been able to agree on other important points. One of the main demands of this year’s conference was to stop subsidizing deep-sea overfishing, reduction of agricultural subsidies and retention of trade privileges of concerned countries after transition from LDCs. None of these claims were fully met. However, the developed countries have to some extent agreed to discuss issues like maintaining financial and trade benefits of developed countries for corona affected countries, to ensure food security, not hindering the movement of food from one country to another among the developed countries with the least developed countries etc. LDCs are just poor players on the stage of WTO. Commitments from rich countries continue but like walking shadow those are never fulfilled.

The writer is a former Commissioner of Taxes. He can be contacted at [email protected]