WTO examines progress in landlocked developing countries’ trade performance

The participation of landlocked developing countries (LLDCs) in world trade has been hampered by the COVID-19 pandemic, a new report by the WTO Secretariat finds. Submitted to the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), the report assesses progress on the actions regarding multilateral trade recommended by the Vienna Programme of Action for LLDCs for 2014-2024.

The report includes data from the Sustainable Development Goals (SDG) trade monitor portal launched in October 2020 and analyses WTO members’ notifications on COVID-19. Progress is measured against the benchmarks in the Vienna Programme of Action for LLDCs for the Decade 2014-2024, which recommends actions to be undertaken by LLDCs, transit countries and development partners to support the economic development of LLDCs.

While the share of LLDCs’ merchandise exports increased by 6 % between 2015 and 2019, their services exports have declined over the same period by almost 2 % and remain very low. LLDCs’ export competitiveness is negatively affected by a lack of sea access, distance from international markets and high transit costs, with LLDCs continuing to depend on exports of a limited number of low value-added products. Additional challenges include weak healthcare systems, economic vulnerabilities and lack of financial resources.

The COVID-19 pandemic has exacerbated LLDCs’ already fragile predicament, the report finds. Trade-restrictive measures imposed by governments in response to the crisis have led to increased trading costs, delays for traded goods and additional technical barriers to trade.

The report points to the importance of increasing LLDCs’ global share of exports to boost revenue from trade and to help fulfill the United Nations SDG target 17.11, which aims to significantly increase least-developed countries’ share of global exports. One way of achieving this is to further lower tariffs for LLDCs’ exports to developed nations and generalize duty-free market access.

The WTO plays a central role in contributing to meeting Priority 3 of the Programme of Action, which concerns international trade and trade facilitation. The WTO Secretariat report highlights the importance of fully implementing the WTO’s Trade Facilitation Agreement (TFA) to advance LLDCs’ integration into the multilateral trading system. To date, LLDCs have implemented 50.7 per cent of all requirements for notifying commitments. A WTO-led survey of trade-related government agencies and private sector partners conducted between March and May 2020 showed that release and clearance of goods and freedom of transit have become more challenging for LLDCs while access to trade-related information has become easier.

The report also explores the role of the WTO-led Aid for Trade initiative in helping LLDCs build the trade infrastructure necessary to complement efforts on trade facilitation. The report lays out how the  Aid-for-Trade Stocktaking event held from 23 to 25 March helped to address the concerns of LLDCs.

Among the 336 notifications that WTO members submitted on COVID-19 as of mid-March 2021, 22 were issued by LLDCs and 105 from transit countries.

A total of 32 countries fall into the LLDC category. Of these, 26 are WTO members and six are observers. As a whole, LLDCS represent 1.105 per cent of world trade as of 2019.

The report can be found here.