The fifth meeting of ministers of landlocked developing countries (LLDCs) was held on 23 June 2016.

Trade is a driver of inclusive growth and is key to achieving the Sustainable Development Goals. However the LLDCs face very high trade costs that can be twice as high as those of coastal developing countries according to an estimate by the World Bank. The landlocked developing countries accounted for only 1.2% of global merchandise exports in 2014. Coastal counties do more than 50% more trade than the LLDCs.

Capacity building

The WTO Director General suggested that international cooperation is important and the WTO can contribute in a number of ways including through capacity building. The Aid for Trade initiative has mobilized resources for capacity building and trade related infrastructure. LLDCs are a beneficiary of the program. The Aid for Trade work continues in 2016 and 2017 under the theme of Promoting Connectivity and the sixth global review of Aid for Trade is to be carried out in the summer of 2017.

Trade Facilitation Agreement

The Director General pointed out that the Trade Facilitation Agreement concluded at the Bali conference would help LLDCs by streamlining, standardizing and simplifying customs procedures resulting in reduced compliance costs at the borders. The agreement when implemented could reduce trade costs for LLDCs by an average of more than 15% (19% for manufactured products and more than 11.5% for agricultural products). As a result of the reduced compliance costs smaller enterprises could trade internationally.

The issue of goods in transit is particularly important for LLDCs. Under the Trade Facilitation Agreement countries would not apply their technical regulations and standards to goods in transit, an issue that is crucial for LLDCs. The agreement also envisages capacity building support for implementing the reforms required under the agreement. Support can be accessed through the Trade Facilitation Agreement Facility in the WTO. Twenty-five LLDCs are members of the WTO and the Director General encouraged them all to ratify the Trade Facilitation Agreement as soon as possible to help bring the agreement into force at an early date.

Nairobi conference

The Director General also referred to the abolition of agricultural export subsidies agreed at Nairobi in December 2015, describing it as the biggest reform in agricultural trade rules in the past twenty years. This was also an element in the Sustainable Development Goals.

The WTO members also agreed at Nairobi to permanently resolve the issue of public stockholding for food security purposes and work out a special safeguard mechanism for times when there are surges in imports of food products that could threaten domestic production. Also at Nairobi the WTO members agreed to eliminate tariffs on a large number of new generation information technology products.

Future discussions

WTO member countries have suggested other issues that should be discussed at the WTO including inclusion of micro, small and medium enterprises (MSMEs); investment facilitation; e-commerce; private standards; and trade finance. The members must however be more specific on the particular issues they wish to consider. The Director General encouraged the LLDCs to ensure that issues important to them are reflected in future WTO discussion.

One example is the issue of e-commerce which can help LLDCs to overcome barriers to international markets, especially in the case of the services sector. Also trade finance is an issue of importance to LLDCs as they have difficulty in accessing finance on affordable terms. Improvements in the provision of trade finance would further help enterprises from LLDCs to reach international markets.