Transcript Document

Special and differential treatment
(S&D) for developing countries
and trade negotiations
C. O. Bartel
Overview







Background and concepts
Important Benchmarks in MTS
Evolution of the concept
The desired goal
WTO and S&D
DOHA and S&D
Trade negotiations: where we stand
What triggered S&D?
• the accession of a number of newly
independent developing countries to the
GATT in the1950's.
– 103 of 132 WTO membership by September 1998.
• Challenge to the rules-based, nondiscriminatory multilateral trading system
• No level-playing field
• Competition not realistic
IDEAS BEHIND THE CONCEPT OF
(S&D):
• There are structural imbalances between
developing and developed countries in terms of:
– share of world trade;
– access to financing;
– access to technology;
– infrastructure weaknesses;
– supply side
– institutional capacity and
human resources.
SOME BENCHMARKS
IN THE HISTORY OF S&D
IN MULTILATERAL TRADE RULES
• GATT 1947: MFN for all
members, exc. art.XVIII
which allows for
flexibility and for tariff
protection and QRs in
case of balance of
payments crisis
• GATT PART IV (1964):
the principle of “nonreciprocity” is introduced
• ENABLING CLAUSE
(1979): allows for GSPs, trade
agreements among developing
countries, S&D for LDCs
• TOKYO ROUND (1978):
plurilateral codes as a way to
implement S&D
• URUGUAY ROUND
(1994): the “single undertaking”
does not allow for opt-in/opt-out
rules
• DOHA MIN.DECL.(2001):
paras. 44 on S&D, 42-43 on LDCs,
and 35 on small economies (plus the
Decision on Implementation Issues)
GATT: Article XVIII
 recognized the need for additional flexibility
(Review Session (1954-55).
 recognized the structural nature of balance-ofpayments problem
 requirement of prior approval to promote
industry was relaxed (Article XVIII:C).
 These amendments to Article XVIII introduced
for the first time the concept of differential
treatment of developing countries.
SOME BENCHMARKS
IN THE HISTORY OF S&D
IN MULTILATERAL TRADE RULES :
• GATT 1947: MFN for all
members, exc. art.XVIII
which allows for
flexibility and for tariff
protection and QRs in
case of balance of
payments crisis
• GATT PART IV (1964):
the principle of “nonreciprocity” is introduced
• ENABLING CLAUSE
(1979): allows for GSPs, trade
agreements among developing
countries, S&D for LDCs
• TOKYO ROUND (1978):
plurilateral codes as a way to
implement S&D
• URUGUAY ROUND
(1994): the “single
undertaking” does not allow for
opt-in/opt-out rules
• DOHA MIN.DECL.(2001):
paras. 44 on S&D, 42-43 on
LDCs, and 35 on small
economies (plus the Decision
on Implementation Issues)
GATT: Part IV
 Contains a special section, "Trade and
Development“;
 Developed countries to take a number of
best endeavour commitments;
 According high priority to the reduction and
elimination of barriers, customs duties and
other restrictions;
SOME BENCHMARKS
IN THE HISTORY OF S&D
IN MULTILATERAL TRADE RULES :
•GATT 1947: MFN for all
members, exc. art.XVIII
which allows for flexibility and for
tariff protection and QRs in case of
balance of payments crisis
•GATT PART IV (1964):
the principle of “non- reciprocity” is
introduced
•ENABLING CLAUSE (1979):
•allows for GSPs, trade agreements
among developing countries, S&D for
LDCs
• TOKYO ROUND
(1978):
plurilateral codes as a way to
implement S&D
• URUGUAY ROUND
(1994):
the “single
undertaking” does not allow for optin/opt-out rules
• DOHA MIN.DECL.(2001):
paras. 44 on S&D, 42-43 on LDCs,
and 35 on small economies (plus the
Decision on Implementation Issues)
THE DESIRED GOAL OF SDT
 Unique problems of developing countries are
addressed;
 availability of safeguards to minimise or
eliminate structural imbalances;
 Policy space
 to achieve structural transformation, diversification and
international competitiveness,
 overcoming supply-side constraints;
40 Years 0n....
 The trade liberalisation does not
automatically imply development nor
equitable welfare gains.
 Lack of capacity to take advantage of
the opportunities created by trade
liberalisation.
WTO: S&D for Developing Countries
• Provisions aimed at increasing trade opportunities
• important sectors remains excluded
• Provisions under which WTO Members should
safeguard the interests of developing country
Members
• generally weak
• Flexibility of commitments, of action, and the use
of policy instruments
• normally through longer transitional time periods
• Provision of technical assistance
• Provisions relating to LDCs
Tariffs
S&D
Reduction
formula
Working Hypotheses
Variations/Additions
(i) Least-developed countries
to be exempt from undertaking
reduction commitments.
(i) The [net food-importing developing countries]
[countries with subsistence farming] shall be exempt from
further reduction commitments [during a transitional
period.]
(ii) Developing countries to
undertake lower reduction
commitments implemented
over longer timeframes than
developed countries.
(ii) Tariff reductions for developing countries shall be
implemented from final bound tariffs in equal annual
instalments over a 9-year period according to the following
schedule:
(a) initial tariffs falling in the range of 0-50 per cent
inclusive shall be reduced using the Swiss formula with a
coefficient of 50;
(b) initial tariffs falling in the range 50-250 per cent
shall be reduced by 50 per cent;
(c) initial tariffs that exceed 250 per cent shall be
reduced to 125 per cent.
(iii) Uruguay Round formula: Lower simple average cuts
and lower minimum average cut per product shall apply in
the case of developing countries, in equal annual
instalments.
Tariffs
S&D
Product
coverage
Working Hypotheses
Variations/Additions
(i) Developing countries shall designate the primary agricultural
products that constitute the predominant staple in their
traditional diet. These agricultural products shall not be
subjected to the [market access modalities]/[reduction
commitments.]
(ii) Developing countries shall have the flexibility to exclude
from the tariff reduction modalities any primary agricultural
product in respect of which one or more of the following
conditions apply:
(a) the product in question is a predominant staple in the
traditional diet of the developing country [and is not exported];
(b) the exclusion of the product in question reflects a food
security, rural development, [product diversification] [poverty
alleviation] concern;
(c) substantial trade liberalization has already been
undertaken for the product concerned, either as part of a
structural adjustment programme sponsored by a multilateral
agency, or as part of the WTO accession process.
(iii) The products in respect of which new tariff bindings have
been negotiated under GATT XXVIII shall not be covered by these
modalities.
(iv) Developing countries shall define a list of agricultural
products that will be subject to further reduction commitments.
Yes… but..
• Lack of anticipated benefits to many DCs
• Asymmetries in the world economy
• Decline in commodity prices, inability to diversify,
supply side constraints
• Limited market access
• agriculture, textiles, movement of persons
• Problems arising from implementation
• adjustment costs
• Inadequate participation in decision making
• heavy workload and lack of capacity
POSSIBLE NEW APPROACHES TO S&D
 Focus on the “positive” measures and not only on the
“negative” ones
 Preserve “policy spaces” in the trade rules
 Look for the “commercial value” of S&D (for ex. in
agriculture, fisheries, textiles, rules of origin)
 Assess the quality of the technical assistance provided and
link it to the new obligations
 Elaborate “development benchmarks” or “development
needs tests” issues-based rather than country-based
 Enlarge the mandate of the WTO-Committee on Trade and
Development to monitor the S&D provisions.
SOME BENCHMARKS
IN THE HISTORY OF S&D
IN MULTILATERAL TRADE RULES
• GATT 1947: MFN for all members,
exc. art.XVIII
which allows for
flexibility and for tariff
protection and QRs in
case of balance of
payments crisis
• TOKYO ROUND (1978):
plurilateral codes as a way to
implement S&D
• URUGUAY ROUND (1994):
the “single undertaking” does not allow
for opt-in/opt-out rules
• GATT PART IV (1964):
the principle of “nonreciprocity” is introduced
• ENABLING CLAUSE (1979):
allows for GSPs, trade agreements
among developing countries, S&D for
LDCs
• DOHA MIN.DECL.(2001):
paras. 44 on S&D, 42-43 on LDCs, and
35 on small economies (plus the
Decision on Implementation Issues)
Doha Ministerial: Issues for DCs
Doha agenda larger agenda than the UR
(19 different areas)
Complex and difficult issues involved
(for instance: services/environment; agriculture/geographical
indications, agriculture/environment; IPRs/technological transfer;
AD/competition ect.)
Requires human resources and technical
expertise that DCs might not have
The evolution of the concept of S&D
Until the Tokyo Round:
The trade agenda focused
on border barriers (mainly
tariffs): S&D was meant to
avoid these barriers through
preferences.
S&D was conceived as a
development tool to
help the exports of
developing countries
During and after the Uruguay
Round:
The trade agenda focused
on « within the border »
barriers (domestic
measures) and traderelated obligations: S&D
was meant to fulfill them.
S&D conceived as an
adjustment tool to
fulfill the new rules
The evolution of the concept of S&D
Doha Mandates
Reaffirmed S&D provisions
Proposal: framework Agreement
on S&DT (WT/GC/W/442).
Review, strength make precise,
effective and operational
“Resurrection” of S&D,
seeking to make “best
endeavors” contractual
Post Doha
focus on
POLICY SPACE
Development is
furthered by flexible
and responsive set of
rules rather than a
strict beyond the
border agenda.
Operationalizing S&D
SPS - S&D DEBATE
 Canadian proposal on transparency
 To enhance transparency of S&D treatment within the SPS Agreement,
 Requires members to engage in bilateral consultations
 if exporting country identified significant difficulties in complying with
proposed regulations
 The notifying Member to inform the WTO of
 S&D requested
 S&D provided
 or reasons why S&D was not granted
 Discussions on S&D not finalised by Committee on SPS
 Malaysia objections
 onus placed on developed countries instead
Jamaica, Nicaragua Cuba, Peru, Brazil and the US -- urged Malaysia to join the
consensus