Progress in talks on LDC Services Waiver

9 October 2013
ITC News
LDCs make progress in services trade waiver

Services experts from the International Trade Centre (ITC) who took part in a brainstorming meeting of the LDC Group at the WTO reported progress on how to operationalize a Services Waiver for least developed countries (LDCs). The waiver allows developing and developed country members of the WTO to provide preferential treatment to services and service suppliers from LDCs, releasing WTO members from their legal obligation to provide non-discriminatory treatment to all trading partners.

The LDC Group's brainstorming meeting took place on 3-4 October in partnership with the International Centre for Trade and Sustainable Development (ICTSD), World Trade Institute (WTI) Advisors, and International Lawyers and Economists Against Poverty (ILEAP). The meeting brought international services experts together with trade officials and private sector representatives from LDC capitals to identify concrete needs and priorities for expanding services exports from LDCs through targeted preferences under the waiver.

The LDC Group, with the support of services experts, will now compile insights from the meeting to identify specific modes and sectors where LDCs could benefit from commercially meaningful preferences for their services and service suppliers. A questionnaire, developed by WTI Advisors and ILEAP, was distributed to participants to assist LDCs in identifying areas where preferences could facilitate new or additional services exports.

Implementation of the waiver is seen as a critical tool, along with increased Aid for Trade in services, that could increase the competitiveness and capacity of services exports from LDCs.

At the meeting, ITC’s Trade in Services Unit worked closely with LDC officials and their partner organizations to identify challenges impacting LDC services exports and potential exports and to generate concrete ideas on how these barriers might potentially be overcome.

Jane Drake-Brockman, Senior Services Adviser at ITC, presented an overview of current and potential LDCs services exports, aimed at identifying key services sectors and subsectors where LDCs have particular export interests.

‘Average LDC services export growth is nearly double the world growth rate. With the services sector contributing as much as 47% to GDP but as little as 11% to total LDC exports, the untapped services export growth potential in LDCs is clear,’ she said.

Zhao Quan, Third Secretary of the Chinese Mission to the WTO, announced that China, as the world’s third-largest importer of services and the single largest source of outbound tourists, was considering how it might be able to help LDCs, for example, by waiving restrictions affecting the operations of foreign-invested tour agencies in China.

Wamkele Mene, Counsellor of the South African Mission to the WTO, said that, in addition to the market access exercise, more regional collaboration was needed in Africa among the standard-setting bodies.

Hamish McCormack, Australia's Ambassador to the WTO, reflected on supply side constraints in LDCs, adding that increased Aid for Trade in services would be an important ingredient in bringing the demand and supply sides together.