ITC guide helps LDCs make the most of the WTO services waiver

Least developed countries recognize that they must be proactive to take full advantage of the new business opportunities opened up for their services industries by World Trade Organization decisions authorizing governments to effectively discriminate in favour of LDC services exports.

The International Trade Centre’s new guide, Making the Most of the LDC Services Waiver, helps LDC negotiators, government officials and service sector businesses understand how to use the waiver and create a roadmap to increase their services exports. It also spells out how ITC, with its proven expertise in connecting small and medium-sized enterprises (SMEs) in developing countries to regional and global value chains, can assist them along the way.

WTO rules have long let governments grant lower tariffs or even duty-free market access to LDC exports of manufactured or agricultural goods while denying such treatment to merchandise from richer countries. In 2011, WTO members found a way to put services on a par with goods trade, when they approved a ‘waiver’ from core WTO non-discrimination principles that permits preferential market access for LDC services exports. Subsequent WTO decisions have reinforced the original waiver.

By early 2015, 25 WTO members had indicated that they would grant such preferential access to LDCs, and more were expected to follow. These market access offers are supposed to be formally notified to the WTO in July.

The LDC share of the world services export market is only some 0.5%. Better integration into the global services economy will require action not only on the demand side – where the new preferential market access can help – but also on the supply side, to make sure LDC businesses are sufficiently knowledgeable about the opportunities, competitive and connected to global value chains.

The guide provides a roadmap to help LDCs make the most of the new market access. It sets out 10 key steps for LDCs to use the waiver to enhance their services trade. These include securing better information on services market opportunities; facilitating dialogue and coordination among governmental agencies and the private sector; and conducting trade promotion activities and events.

In addition, the guide outlines how ITC can assist LDCs with supply side interventions to improve SME competitiveness.