5 May 2021
WTO Report Assesses LLDCs’ Trade Performance
Photo credit: @EnvatoElements
story highlights

LLDCs face specific challenges to their economic development such as remoteness, lack of sea access, distance from international markets, and high transit cost, which also make their exports “relatively uncompetitive”.

A “severe” reduction in economic activity caused by border closures and social distancing measures led to increased trading costs, delays for traded goods, and additional technical barriers to trade, exacerbating LLDCs’ “already fragile predicament”.

The World Trade Organization (WTO) prepared a report for the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS) that examines progress in landlocked developing countries’ (LLDCs) trade performance. The report finds the COVID-19 pandemic has hampered LLDCs’ participation in world trade.

The publication analyses WTO members’ notifications on COVID-19, and includes data from the SDG Trade Monitor, launched in October 2020. The report measures progress against the benchmarks in the Vienna Programme of Action for LLDCs for the Decade 2014-2024 (VPOA), which recommends actions for  LLDCs, transit countries, and development partners to support LLDCs’ economic development.

According to the WTO, LLDCs face specific challenges to their economic development such as remoteness, lack of sea access, distance from international markets, and high transit cost, which also make their exports “relatively uncompetitive.” Weak healthcare systems, economic vulnerabilities, and lack of financial resources pose additional challenges. A “severe” reduction in economic activity caused by border closures and social distancing measures led to increased trading costs, delays for traded goods, and additional technical barriers to trade, exacerbating LLDCs’ “already fragile predicament.”

The report finds increasing LLDCs’ global share of exports would boost revenue from trade and help fulfill SDG target 17.11, which aims to significantly increase least developed countries’ (LDCs) share of global exports. One way of achieving this, a WTO press release notes, is to further lower tariffs for LLDCs’ exports to developed countries and to generalize duty-free market access.

The report highlights the WTO’s central role in advancing Priority 3 of the Vienna Programme of Action, on international trade and trade facilitation, and stresses the importance of full implementation of the WTO’s Trade Facilitation Agreement (TFA) to ensure LLDCs “can fully participate” in the multilateral trading system (MTS).

The report discusses the role of the WTO-led Aid for Trade initiative in helping LLDCs build the “trade infrastructure necessary to complement efforts made on trade facilitation,” and explains how the Aid-for-Trade Stocktaking Event, held from 23-25 March 2021, helped address LLDCs’ concerns.

As of 2019, LLDCs collectively represent 1.105% of world trade. From the total of 32 countries falling into the LLDC category, 26 are WTO members and six are observers.

As of mid-March 2021, WTO members submitted 336 notifications on COVID-19, with 22 issued by LLDCs and 105 by transit countries. [Publication: WTO Input for UN-SG Report on VPOA 2021] [WTO Press Release]

related posts