UNCTAD
SPECIAL AND DIFFERENTIAL
TREATMENT
in the Doha Work Programme
UNCTAD
Commercial Diplomacy Programme
Jul y 2002
UNCTAD
THE BASIC IDEAS BEHIND THE
CONCEPT OF
SPECIAL AND DIFFERENTIAL
TREATMENT (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;
– institutional capacity and human resources.
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THE BASIC IDEAS BEHIND THE
UNCTAD
CONCEPT OF
SPECIAL AND DIFFERENTIAL
TREATMENT (S&D)
 The trade liberalisation does not
automatically imply development nor
equitable welfare gains.
 Developing countries do not have the same
capacity as developed countries in taking
advantage of the opportunities created by
trade liberalisation.
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UNCTAD
THE S&D CONCEPT IS APPLIED IN
SEVERAL AREAS OF THE
INTERNATIONAL ECONOMIC
RELATIONS:
• Financing for
development
• Development aid
• TRADE
At the
• national
• bilateral
• regional
• multilateral
levels
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UNCTAD
CATEGORIES OF DEVELOPING
COUNTRIES (AND DIFFERENT
IMPLEMENTATION OF S&D)
WERE INTRODUCED IN THE 80’S:
Least developed countries (LDCs)
UN Index (49 LDCs): category recognised by the 1979
GATT Enabling Clause
Landlocked countries
Island countries
Small economies
Para.35 Doha Min.Decl.
Net food importing countries
Marrakech Min.Decl.
Small suppliers
Textiles
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UNCTAD
SOME BENCHMARKS
IN THE HISTORY OF S&D
IN MULTILATERAL TRADE RULES :
• GATT 1947:same treatment
for all members, exc. art.18
(flexibility and for tariff
protection and QRs for infant
industries and in
case of balance of
payments crisis)
• GATT PART IV (1964):
the principle of “nonreciprocity” is introduced
• ENABLING CLAUSE
(1979): allows for GSPs, trade
agreem. b/w developing countries,
and 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)
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ARGUMENTS AGAINST S&D:
UNCTAD
Arguments against S&D were raised during the 80s in
industrialized as well as in developing countries:
At the level of trade negotiations:
• diversity among developing countries makes the design of S&D
mechanisms difficult;
• S&D is part of the “ideological baggage” superseded by the
processes of liberalization and globalization;
• S&D works as an unnecessary “crutch” for developing countries
as it hinders their insertion in world trade on competitive terms;
At the national level in the developing countries themselves:
• S&D has favoured some enterprises, distorted trade, and
encourages subsidies which are no longer sustainable.
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UNCTAD
WAYS OF IMPLEMENTING THE
S&D IN THE AREA OF TRADE:
“NEGATIVE”
measures
(binding rules,
enforceable)
“POSITIVE”
measures
(non-binding rules,
not enforceable)
• Transition periods to comply
with the rules
• Different criteria and /or
thresholds in the implementation
of the rules
• Exceptions to the rules
• Technical assistance and
capacity building
• Greater market access (GSPs)
• “Best endeavour” clauses
• Positive list approach (GATS)
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UNCTAD
THE WTO SECRETARIAT’S TYPOLOGY
OF THE 155 EXISTING S&D MEASURES:
• Provisions aimed at increasing the trade
opportunities of developing countries (*)
• Provisions under which WTO members should
safeguard the interests of the developing countries
(*)
• Flexibility of commitments, of action, and use of
policy instruments
• Transitional time periods
• Technical assistance (*)
• Provisions relating to LDCs
(*)= “best endeavour” clauses
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UNCTAD
IN THE ON-GOING WTO NEGOTIATIONS
THREE CHALLENGES HAVE EMERGED
FOR DEVELOPING COUNTRIES
CONCERNING S&D:
• To consolidate a “political platform” in favor of S&D,
acknowledging the necessity of mechanisms and
criteria to compensate for the imbalances between
developing and industrialized countries.
• To ensure the implementation and the effectiveness of
S&D provisions (transform “best endeavour” clauses
into enforceable obligations).
• To update the national position on S&D according to
the new world economic context and national
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development policies.
UNCTAD
HOW TO ENSURE ENFORCEABLE
HOW
TO ENSURE ENFORCEABLE
S&D RULES:
S&D CLAUSES:
The Preambles,
Declarations,
Decisions
and footnotes
are NOT
mandatory
CREATE CLEAR OBLIGATIONS FOR THE
DEVELOPED COUNTRIES IN THE
MANDATORY PROVISIONS OF THE
AGREEMENTS, SUBJECT TO THE WTO
DISPUTE SETTLEMENT MECHANISM
WTO criterion: the “SHALL” language is
mandatory (the “should” is not)
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UNCTAD
REQUIREMENTS TO UPDATE THE
NATIONAL POSITIONS ON S&D:
• A national and sectoral evaluation of costs and benefits
of the S&D based on criteria such as the:
– importance of preferential access to markets for the
main exports;
– need for longer implementation periods and greater
flexibility in the implementation of multilateral
rules;
– impact and utility of technical assistance provided
for in the S&D;
– analysis of other examples of S&D (Andean
Community, FTAA, Mercosur, Lomé IV, European
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Union, treatment to LDCs, etc.).
UNCTAD
HOW TO STRENGTHEN THE S&D
PROVISIONS IN THE CURRENT
NEGOTIATIONS:
Through AMENDMENTS of the existing
provisions (ex.: “should” becomes “shall”)
Through AUTHORITATIVE
INTERPRETATIONS (“Understanding
on the interpretation” of the rules)
Through the negotiation of a horizontal
“FRAMEWORK AGREEMENT” on
S&D (para.44 Doha Min.Decl.)
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UNCTAD
PROBLEMS RAISED BY THE
S&D PROVISIONS:
• Discrimination (different treatments, different
categories of countries)
• Graduation criteria
• the effective utilisation of the transition periods and
flexibility
• the impact of S&D provisions
• each area of the trade agenda needs a different kind of
S&D : “positive” or “negative” measures
• the non-binding nature of technical assistance and other
“best endeavour” clauses
• link with the implementation issues.
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UNCTAD
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.
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THE STATE OF PLAY (MID-JULY 2002)
UNCTAD
• Work started in April 2002: no consensus on the
interpretation of the Doha mandate in the Special Session of
the Committee on Trade and Development.
• 2 mandated areas of work:
-(1) make « operational and effective » the EXISTING
S&D provisions;
-(2) prepare a « framework agreement » on S&D.
• Deadline of 31 July to make proposals on (1) to the GC.
• Factual report being prepared by the Chairman since
there is no consensus on the substance nor on the procedure.
• Possibly a « monitoring mechanism » on S&D.
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UNCTAD
SOME CONCLUDING REMARKS
It is important to:
• defend the concept of S&D for all developing
countries;
• formulate clear rights and obligations on S&D;
• establish mechanisms and operational criteria
which take into account:
– structural imbalances (which cannot be solved with
transition periods);
– supply weaknesses of developing countries;
– and the effective results of the S&D.
Ensure that the Doha Work Programme has a
tangible “development content”.
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UNCTAD
THANK YOU !
...QUESTIONS ?
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