Legal basis for preferential market access for goods from least developed countries

The most-favoured-nation (MFN) principle, which underpins the multilateral trading system means countries cannot normally discriminate among trading partners or grant special preferences (see WTO | Understanding the WTO - principles of the trading system).  Special treatment for LDCs is grounded in the following provisions, developed over time.

• The Enabling Clause, 1979. The granting of non-reciprocal preferential market access to developing countries was initially made possible with the adoption, in 1971, of a temporary waiver from the obligation contained in article 1 of the General Agreement on Tariffs and Trade (GATT) to grant most-favoured-nation (MFN) treatment to all contracting parties. In 1979, the decision on “Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries” (known as the “Enabling Clause”) allowed derogations to MFN treatment on a permanent basis. It enabled developed country members of GATT to give differential and more favourable treatment to the exports of developing countries and to grant special treatment to LDCs in the context of any measure in favour of developing countries. The Enabling Clause forms the legal basis for the Generalized System of Preferences that covers the trade preferences schemes of most developed countries for developing countries, and within which many countries also have sub-schemes with further preferences for LDCs. 
• Decision on Waiver, 1999. Developing country WTO members were allowed to extend preferential market access to LDCs through the adoption of a special waiver in 1999. The waiver was initially granted for 10 years and has since been extended on several occasions, most recently to 2029. 
• Decisions on duty-free, quota-free market access since 2001. Market access initiatives for LDCs gained momentum with the Third United Nations Conference on the Least Developed Countries, held in Brussels in 2001, and with the launch of the Doha round of trade negotiations at the WTO. At the Sixth Ministerial Conference of the WTO, held in Hong Kong, China, in 2005, WTO members committed to further improving market access conditions for LDCs. Developed countries and developing countries in a position to do so committed to providing duty-free, quota-free (DFQF) market access on a lasting basis for all products originating from all LDCs. Members experiencing difficulties in making that commitment agreed to provide DFQF market access on at least 97 per cent of products imported from LDCs, defined at the tariff line level. At the Ninth Ministerial Conference, held in Bali, Indonesia, in 2013, WTO members were called to improve DFQF market access for LDCs. A specific decision on market access for cotton was taken at the Tenth Ministerial Conference, in Nairobi, in 2015.
• Decisions on preferential rules of origin since 2013. Following a call for simple and transparent rules of origin for LDCs, as set out in the Hong Kong Ministerial Declaration in 2005, a decision adopted at the Ninth Ministerial Conference (Bali, 2013) contained guidelines to facilitate market access for LDCs under non-reciprocal preferential trade arrangements. At the Tenth Ministerial Conference, held in Nairobi in 2015, another decision provided more detailed directions on specific issues, including (i) expanding possibilities for cumulation; (ii) determination of substantial transformation, including higher thresholds for the use of non-originating materials; and (iii) simplified documentary and procedural requirements. The WTO's Committee on Rules of Origin reviews developments in preferential rules of origin applicable to imports from LDCs on an annual basis and reports thereon to the General Council. The WTO's Committee on Trade and Development annually reviews the steps taken to provide DFQF market access to LDC products.