UNISMUN XII, Hanoi, 2020 | ​XII Annual Session

Forum: International Law Committee

Issue: Improving Trade Agreements to Eradicate Poverty in Landlocked

Developing Nations

Student Officer: Phong Minh Pham

Position: Procedural Chair

Introduction

Caption #1: Infographic showing nations by number of trade agreements. Please pay special attention to landlocked
nations.

It is an established fact that world economic activities are vastly influenced, if not controlled, by
trade agreements. The largest trade agreements, such as the North American Free Trade Agreement
(NAFTA), the Asia Pacific Economic Forum (APEC), the European Economic Area (EEA) and the
Andean Community are integral in not only advancing economic growth in their individual regions but

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also helping promote international cooperation in matters of trade. In the machine of global economy,
trade agreements are the lubricant that keeps the individual parts working smoothly together.

However, obvious geographical disadvantages hinder the ability of landlocked nations,

especially developing ones, to fully participate in and take advantage of these trade agreements. The
most obvious hindrance to the economic development of these nations is a lack of direct ocean
access: with ninety percent of global goods being transported via sea routes, landlocked nations are
not able to export and receive cargo without dependence on their direct neighbors. A lack of direct
ocean access has proven to be a tremendous economic handicap which stagnates development,
evidenced by the generally meager economies of landlocked nations outside of the European
continent (examples include Afghanistan, Chad and South Sudan, which until recently was engaged in
a civil war). Furthermore, of the bottom twelve countries ranked by Human Development Index, nine
are landlocked.

Yet perhaps the key for these landlocked nations to better economic growth and stability is
improved cooperation with the countries that border them. Through this, landlocked developing nations
can compensate for their geographical disadvantages and tap into other areas of economic strengths,
especially in the manufacturing sector. This mutually beneficial relationship through trade agreements
can already be seen propelling the prosperity of landlocked nations part of the European Union and is
a worthy example when trying to improve the economic welfare of landlocked nations elsewhere.

Definition of Key Terms

Trade agreements

Arrangements between two (bilateral) or more (multilateral) nations which aim to simplify and
facilitate trade as well as loosen restrictions against it. The provisions of a trade agreement may
include, but are not limited to, the lowering of tariffs or other taxes on goods traded within members
of the trade agreement, allowing one nation to transport their goods through the territory of the other,
as well as other trade incentives.

Landlocked nation

A state which is, on all sides, surrounded by land. A landlocked nation does not have access to an
ocean.

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Caption #2: Map of the world’s landlocked nations

Developing nation

Also known as ​low and middle income countries​ (LMIC) or ​underdeveloped countries​. These
are countries whose overall level of economic, industrial and social development are less than those
of developed countries. While no single parameter exists which explicitly categorizes countries as
developed or developing, statistics such as the country’s ​Gross Domestic Product ​and ​Human
Development Index​ are used as a frame of reference when assessing a country’s developmental
status. In some instances, the country in question can claim itself to be developing.

Ocean access

The ability of a state to access an ocean or an equivalent major body of water. This is important to
the state’s economic development, allowing them to transport and receive goods from around the
globe without relying on its immediate neighbors.

Poverty

The state of not being able to sustain one’s basic material needs, such as food, clothing and shelter.
Absolute poverty ​is defined by the United Nations as ​"a condition characterized by severe
deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health,
shelter, education and information. It depends not only on income but also on access to services”.

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Relative poverty ​is a threshold, which may vary from region to region, where a person’s income is
not sufficient to sustain their basic needs living in that specific region.

Gross Domestic Product (GDP)

A measure of the value of all the goods and services produced in a nation over a specific period of
time. ​GDP Per Capita ​is the gross domestic product of a nation divided by its population.

Human Development Index (HDI)

A composite statistic, published by the United Nations Development Program, which takes into
account a nation’s life expectancy, educational quality and per capita income to assess a country’s
level of human development. HDI score is calculated on a scale of 0 to 1.000, with 0 being the
lowest and worst while 1.000 the highest and best. In practice, the range of HDI scores in 2018
varied from 0.377 (Niger) to 0.954 (Norway).

United Nations Convention on the Law of the Sea (UNCLOS)

The international agreement which outlines the rights and responsibilities of nations pertaining to
their usage of international waters as well as the management of oceanic environment, natural
resources and businesses. Article 125 of the UNCLOS provisions that landlocked countries have the
right to access the sea through transit nations without being subject to any form of taxation. In 2019,
167 countries and the European Union participate in the Convention.

Background Information

Trade agreements as they are known today have been around for around two hundred years, a
more cooperative approach to the mercantilist policies of large trading states in the 1600 and 1700s. The
earliest significant example of such an agreement was Great Britain’s Reciprocity of Duties Act of 1823,
which allowed for the removal of import duties on goods imported nations willing to do the same for
Britain. While trade agreements have evolved and become more encompassing over various aspects of
trade, the fundamental goal remains the same: the facilitation and encouragement of trade between its
various signatories. Almost every country in the world forms part of, and benefits from, a trade
agreement.

There exists 49 landlocked nations in the world. While these nations vary greatly in wealth and
levels of development, landlocked countries are generally economically weaker than their immediate,
sea-accessible neighbors. On average, the GDP per capita of landlocked countries is US$9.398.57, 36%
less than the global average (Brittanica.com). Two countries, Austria and Switzerland, account for
around 46% of the GDP of all landlocked nations, while adding Kazakhstan would bring that figure to

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over 50%. Furthermore, poverty continues to be a grave issue facing landlocked developing countries
(LLDCs), especially in Africa, while the country of South Sudan is currently undergoing an unstable
transitory period from a state of civil war into a new government. Further reading on this topic is
encouraged.

The situation regarding poverty in LLDCs is certainly a grave one, especially the positions of
those in Africa. According to the World Bank, South Sudan (82.3%), Zimbabwe (72.3%), Burundi
(64.9%), Eswatini (63%), the Central African Republic (62%) and Lesotho (57.1%) all rank in the top 15
most impoverished countries in the world by percentage of the population living below the national
poverty line. Aside from Lesotho and Zimbabwe, all African LLDCs rank in the low-income group with a
Gross National Income (GNI) of no more than US$830 (Mali). Outside of Africa, Afghanistan, Bolivia and
Laos are all cases of slow economic development leading to high rates of poverty, all ranking in the
bottom 30 in both poverty rate and per capita income. As a whole, due to various circumstances, LLDCs
suffer from more severe states of national poverty than most other nations.

Pertaining to economic potential, a commonality shared between several landlocked nations is

their large and untapped potential in natural resources, especially in oil and natural gas reserves.
Kazakhstan, for example, possesses the world’s 12th largest proven listoil reserve and 15th largest
proven natural gas reserve. Afghanistan, Bolivia, South Sudan, Uzbekistan and several other LLDCs
also rank highly in one or both of the aforementioned categories. In addition, Botswana and Zimbabwe
both rank in the top ten leading global producers of diamond, while Kazakhstan ranks 12th in iron ore
production. Promoting investment and technological development through trade agreements in order to
take advantage of existing natural resource deposits can be viable options when find methods to
promote economic growth in LLDCs.

LLDCs in general currently have somewhat limited access to major trade agreements. All African
LLDCs form part of the African Union (AU), however this can hardly be called a trade agreement rather
than a political union. While in the future, the goals of the AU include the adoption of a free trade area, a
customs union and a common currency, it has not been particularly the particular issue of bettering trade
agreements to end poverty in African LLDCS. Other LLDCs do participate in smaller trade agreements.
Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are signatories to the Trade and Investment
Framework Agreement with the United States, while Kazakhstan is a part of the Eurasia Economic Union
while also participating in the Free Trade Agreement within the Commonwealth of Independent States. In
addition, Laos forms part of the ASEAN Free Trade Area (AFTA).

Key Issues

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Poverty (especially in African LLDCs)

As mentioned above, poverty continues to severely burden LLDCs. These nations consistently
rank poorly in poverty-related statistics comparatively to their neighbors and the world. There are several
causes for this, such as economic stagnation (brought on partially due to their landlocked status),
agricultural disadvantages or a lack of a competent governmental structure and political unrest. On the
map below, please pay particular attention to the darker shades representing landlocked nations.

Caption #3: Map of nations by percentage of population living in poverty

Lack of oceanic access for LLDCs

The most obvious and destructive characteristic of being landlocked is that access to the open
ocean is compromised. Economically, this hinders a nation’s ability to receive imports from more distant
nations whose goods cannot be viably shipped on land. Furthermore, a country cannot directly export its
goods without relying on the willingness of a transport state to allow said foreign goods to pass through
their territory. Militarily, a landlocked nation lacks the practicality for a navy (although some landlocked
nations do field (navies) and can potentially be cut off from its allies should all of its neighboring states
decide to lay siege.

Untapped economic potential

Generally located deep in the heart of their respective continents, LLDCs possess potential for
natural resource extraction. However, due to much of the same reasons that makes poverty such a
serious issue in LLDCs, these nations have not been able to fully capitalize on their rich deposits of oil,
natural gas and other natural resources. South Sudan’s oil reserves, for example, lacks significant
foreign investment because of the recent civil war that brought political instability to the nation.

Political instability

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Systematic corruption, civil war and simply governmental incompetence plague LLDCs. South
Sudan, Afghanistan and Burundi, for instance, rank 178, 172 and 170 out of 180 respectively on the
Corruptions Perceptions Index, while several others rank in the bottom 20. As aforementioned, South
Sudan’s civil war situation has only recently been resolved. With so much political instability, it is
currently challenging for LLDCs to take part in meaningful trade agreements.

Lack of current extensive trade agreements

There are simply very little extensive trade agreements which cater to LLDCs. Although the CIS
block (which includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) do possess several trade
agreements, most noticeably the CIS FTA, this is an outlier instance. The African Continental Free Trade
Agreement, arguably the most viable for African LLDCs, have not been ratified by enough parties to go
into effect. Laos, while participating in the Association of Southeast Asian Nations, lacks trade
agreements with other economic powers. Outside of regional trade pacts, there is a lack in other trade
agreements between LLDCs and developed nations, as well as those more geographically distant.

Major Countries and Organizations Involved

Landlocked Developing Countries (LLDCs)

Includes landlocked countries that are developing. This means that wealthier landlocked nations
like Austria, the Czech Republic, Hungary, Luxembourg and Switzerland are excluded. These countries
require much foreign assistance, which can come in the form of better trade agreements, to overcome
issues such as poverty and economic stagnation.

The United Nations

The United Nations, and more specifically its Development Program (UNDP) and the UN Office of
the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small
Island Developing States (UN-OHRLLS) are committed to helping LLDCs achieve economic prosperity.
In 2014, the UN adopted the Vienna Programme of Action for Landlocked Developing Countries, an
objective of which was to encourage foreign trade cooperation with the international community. As is the
case with several other global issues, the goal of the UN and its organs is to ensure global stability and
to foster economic development.

Developed nations

It is in the interest of developed nations to help foster economic growth in LLDCs for several
reasons. Firstly, developed nations can take advantage of the unextracted natural resources by
introducing the technology and human resources training needed to obtain them. Furthermore,

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corporations from developed nations can take advantage of the readily available workforce available in
LLDCs, especially in the manufacturing sector. Countries like Russia and China, through programs such
as the Belt and Road initiative, are already getting involved in assisting LLDCs in economic growth.

The African Union (AU)

The African Union is the single organization with the most LLDCs, and thus is most involved in
assisting in their development, as well as potentially represent them in potential trade agreements.

Timeline of Resolutions, Treaties, and Events

Date Description of event

The Andean Community is founded

May 26, 1969 Currently consisting of Bolivia (an LLDC), Colombia, Ecuador and Peru, the
Andean Community is a free trade area with an objective to form a customs
union. Paraguay, an LLDC, participates as an associate member.

Adoption of the United Nations Convention on the Law of the Sea

(UNCLOS)

December 10, 1982 The UNCLOS outlines numerous regulations on the use of international waters,
including Article 125, which grants landlocked nations the right to ocean access
through their immediate neighbors.

MERCOSUR is Founded

March 26, 1991 A trade bloc formed by the Treaty of Asunción, MERCOSUR promotes trade
within South America. Its members include Argentina, Brazil, Paraguay and
Uruguay. Peru is an associate LLDC.

Formation of the World Trade Organization (WTO)

April 15, 1994 The WTO is the regulating body for global trade, setting the framework for
commercial goods, services and intellectual property. As of 2019, the WTO has
164 member states.

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Laos Joins the Association of Southeast Asian Nations (ASEAN)

July 23, 1997 Laos joins the likes of Vietnam, Thailand, Singapore and Indonesia in the
ASEAN Free Trade Area

Endorsement of the Roadmap for the Implementation of the Almaty

Program of Action (APoA)

February 4, 2004 The Almaty Program of Action aims “​to establish a new global framework for
developing efficient transit transport systems in landlocked and transit
developing countries, taking into account the interests of both landlocked
and transit developing countries” (un.org).

The Commonwealth of Independent States Free Trade Agreement

(CIS FTA) goes into effect

September 20, 2012 The CIS FTA provides free movement of goods within the CIS, removes
import duties and removes quantity restrictions in trade between CIS
member states

Chinese President Xi Jinping Unveils the Belt and Road Initiative

China’s Belt and Road Initiative aims to pour Chinese investment into
October 2013
infrastructurally strengthening various developing nations throughout
Asia, Africa, Europe, the Middle East and the Americas. The initiative is
especially active and popular with African nations.

Adoption of the Vienna Program of Action (VPoA)

Building upon the Almaty Program of Action, the VPoA aims to promote
November 5, 2014
economic development in LLDCs through promoting infrastructural
development and regional and international cooperation.

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Adoption of the African Continental Free Trade Agreement (AfCFTA)

March 21, 2018

The AfCFTA is a trade agreement between the member states of the
African Union with the objective of creating the African Continental Free
Trade Area. While 54 states have signed the agreement, only 22 have
ratified.

Midterm Review of the Implementation of the Vienna Program of

Action

December 5-6, 2019

Held in New York, participating member nations gathered to review the
progress and next steps regarding the VPoA

Evaluation of Previous Attempts to solve the Issue

Overall, while numerous attempts have been with the end of supporting LLDCs through trade
agreements, the issue remains open and has yet to receive an adequate solution.

The United Nations has no doubt taken on an active role in bringing the attention of the
international community to the serious situation affecting LLDCs through initiatives such as the Almaty
and Vienna Plan of Action. However, these programs are mostly advisory in nature, encouraging
economic cooperation, among other matters. These guidelines can, however, serve as viable guidance
for the international community as different parties get involved with the economic development of
LLDCs.

On a more regional outlook, LLDCs have been seeing limited cooperation as it pertains to trade
agreements with their immediate neighbors. With the exception of CIS countries (Kazakhstan,
Kyrgyzstan, Uzbekistan and Tajikistan) and Laos (ASEAN FTA), few other LLDCs form part of significant
and extensive free trade areas or hold extensive free trade agreements. As aforementioned, the African
Continental Free Trade Agreement has not yet succeeded in its goal of creating a Free Trade Area
within the African continent, while South American LLDCs are in a slightly better position under the
assistance of MERCOSUR and the Andean Pact. Pertaining to more independent, potentially bilateral
trade agreements between LLDCs and other nations, there has also been very few; this may be due to

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the lack of interest from potential trading partners, as well as the unwillingness of LLDC governments
themselves to enter into these agreements (see: Key Issues/Political Instability).

Thus, poverty remains an issue plaguing LLDCs that could be aided with the introduction of better
trade agreements, but is currently not being remedied in this way.

Possible Solutions

Promote the formation of new trade agreements

Perhaps the most obvious solution to this issue is to encourage LLDCs and other nations to enter
into new trade agreements. This is especially beneficial due to the highly intertwined nature of global
trade today: the more connections a nation has in international commerce, the more opportunities will
inevitably present themselves for their economic development.

Improve existing trade agreements

Perhaps the most obvious solution to this issue is to encourage LLDCs and other nations to enter
into new trade agreements. This is especially beneficial due to the highly intertwined nature of global
trade today: the more connections a nation has in international commerce, the more opportunities will
inevitably present themselves for their economic development.

Encourage foreign investment

Foreign developed nations may have specific interests in the economic development of an LLDC.
For example, China has expressed its desire to invest in South Sudan’s oil reserves. The formation of
new trade agreements will no doubt motivate foreign investors to get involved with economic
development in LLDCs, thus greatly benefiting the host nation.

Identify economic strengths and potential

Each country has a unique economic appeal and it is very important that LLDCs find theirs. For
some, this may come in the form of untapped natural resources, while for others it may be the advantage
of a cheap and ready workforce or another economic or commercial edge. In any case, in order to
participate in trade agreements and encourage foreign investment to boost economic growth, an LLDC
must be aware of exactly what they bring to the table and how these strengths can potentially help that
nation end poverty through development.

Implementation of policies to ensure the population benefits

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When LLDCs eventually experience economic growth through the help of LLDCs, it is imperative
that measures are put in place to ensure the growth positively affects the lives of their citizens. This can
be achieved through policies that prescribe infrastructural development, investment in education and
public welfare and other methods that will assist in eradicating poverty.

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