This group of countries are now exporting a more diversified set of products and are increasingly trading with emerging economies such as Brazil, China and India. They are also facing a more testing environment for international trade – growth in global trade has slowed significantly since 2010.
Given these shifts, the poorest countries need to change their approach to the WTO negotiations – starting in Nairobi.
New negotiation strategies
Until now, LDCs have adopted a defensive approach in the negotiations – they want to protect their preferential access into developed country markets.
Continuing with this approach in Nairobi (and beyond) is not going to benefit them much – they can delay reductions in most-favoured-nation (MFN) tariffs, but they do not have any way of stopping wealthier countries from matching their preferential access by signing up to free trade agreements with richer nations.
LDCs would do better to focus on securing enhanced access to markets in emerging economies. Under existing WTO Agreements, developing countries enjoy special rights through special and differential treatment provisions that allow them to make milder concessions than developed countries on market access. But these apply to countries such as China, Korea, India, Israel and Taiwan, who are in a position to make additional and deeper commitments on market access that are closer to those already made by developed economies.
How can LDCs secure better access to these markets? They could opt to support the position of large developing countries on market access for agricultural products in developed countries in exchange for better access into their markets. This should include commitments from large developing countries to liberalise their tariffs on agricultural products and in terms of non-agricultural market access.
LDCs should also push for large developing countries like India and China to adopt a more limited list of special products (products for which they are allowed additional flexibility in granting market access on the basis of food and livelihood security and rural development). This would increase the reach of any tariff reductions made by these countries.
Poor countries need a new round of trade talks – one that’s relevant to their challenges
Given the unlikelihood of reaching an agreement in Nairobi, the best outcome would be for the talks next week to result in the finalisation of the current Doha Round. At this stage, the outcome does not matter.
Ultimately, what is most important for LDCs is to establish a new negotiation round – with a new package of rules and disciplines – that actually reflects the current realities and challenges that they face.