LDC share in global exports shrinks: WTO report
BI Report || BusinessInsider
The share of LDCs in global exports declined from 0.95 percent to 0.91 percent in the last one decade - from 2011 to 2020, a disappointing result compared to the WTO’s target to double LDCs’ share in global exports over the same period.
The ongoing Covid-19 pandemic has only exacerbated the subdued trade performance registered by LDCs in the latter half of the Fourth United Nations Conference on the Least Developed Countries (IPoA) adopted in May 2011.
The World Trade Organisation (WTO) disclosed this in a report titled “Boosting trade opportunities for least-developed countries”, which was released on Wednesday.
The Covid-19 pandemic has had a severe trade impact on LDCs. The report found that in the second quarter of 2020, when many lockdown measures began or were already in force, LDC merchandise exports declined 30 percent year-on-year, compared to a 21 percent drop in merchandise exports at the world level.
“Overall, in 2020, LDC merchandise exports shrank by nearly 12 percent in value terms, compared to the more than 7 percent contraction for the world as a whole,” says the report.
Exports of primary commodities, such as fuel and mining products, have been hit hard with a drop of 41 percent. Manufacturing plants shut down due to Covid-19 restrictions, and spending dropped due to stay-at-home orders; these effects translated into low demand for primary commodities from LDCs, according to the WTO.
The LDC exports of commercial services also declined more sharply than the global average, at 35 percent compared to 21 percent, reflecting the disproportionate share of tourism and travel to LDCs.
As a result, the WTO said further support will be needed from the international community in the next decade to strengthen LDCs’ participation in world trade. While LDCs have benefited over the past 10 years from greater market access opportunities, flexibility in implementing WTO rules and trade-related technical assistance, the Covid-19 pandemic has led to even greater challenges for these countries, hitting their exports hard.
“Increasing LDC participation in global trade is a shared objective of the international community. The WTO offers LDCs a unique opportunity to help shape global trade rules that respond to their trade interests. This report has illustrated the tangible benefits that LDCs working closely with WTO members have achieved over the past ten years. It is important to build on what we have achieved so far and make sure that trade continues to boost economic growth in LDCs and worldwide in the next decade and beyond,” said Director-General Ngozi Okonjo-Iweala.
The report notes that LDCs' participation in global trade can be strengthened by enhancing preferential market access for LDC exports of goods and services. It also highlights the importance of longer timeframes for LDCs to implement WTO rules, including for trade-related aspects of intellectual property rights. Support from development partners will also be crucial to sustain the development efforts of economies graduating from LDC status.
“The least developed countries continue to face considerable challenges in integrating into global trading systems. The United Nations will continue to support these efforts through building ambitious partnerships in the context of the Doha Programme of Action, which will be adopted at the Fifth UN Conference on LDCs (LDC5)", said Heidi Schroderus-Fox, Acting United Nations High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States.
This report is a part of the WTO's contribution to the LDC5 Conference originally scheduled for 23-27 January 2022 but postponed due to recent Covid-19 developments. One of the main objectives of the rescheduled LDC5 Conference is to adopt a Programme of Action for LDCs for the decade 2022-2031.