Differential Treatment Provisions Research Articles

Reimagining the Special and Differential Treatment Provisions in the WTO's Dispute Settlement Understanding

AbstractThe developed and developing members of the World Trade Organization (WTO) are deeply divided on the concept, scope, and beneficiaries of the special and differential treatment (SDT) provisions. The division was revealed in the Committee on Trade and Development meetings, where developed members rejected the Group of 90's proposals to strengthen and operationalize SDT provisions in WTO agreements. This article focuses on the SDT provisions in the Dispute Settlement Understanding (DSU), positing that the provisions are ineffective in upholding the WTO's development objectives. It analyses the extent to which the needs and circumstances of low-income developing countries and least-developed countries have been considered by the WTO adjudicating bodies through the application and interpretation of SDT provisions in the DSU. The article seeks to reimagine SDT provisions’ role in the DSU through secondary lawmaking and progressive treaty interpretation to ensure development is integrated into the WTO's Dispute Settlement Mechanism.

China’s Response Strategies under the Reform of the WTO Special and Differential Treatment Provisions

Special and differential treatment, as an important foundation of the WTO, safe-guards the development rights and interests of developing country members, while to a certain extent promoting fairness and justice under free trade. Special and differential treatment aims to provide developing members with preferential treatment to promote the economic and trade development of developing coun-tries, and requires developed members to undertake the obligation to give more preferential policies to developing members for this purpose. The contrast in power between developing and developed members has evolved in line with economic globalization, making the shortcomings and controversies of the special and differential treatment provisions increasingly apparent. This paper contains three main points: firstly, the controversies and shortcomings of the reform of the special and differential treatment provisions, secondly, a specific analysis of Chi-na’s enjoyment of the special and differential treatment provisions, and thirdly, China’s response strategies. The aim of this paper is to propose corresponding coping strategies for China in the S&D treatment negotiations and future eco-nomic and trade development, including the attitude that China should maintain towards S&D treatment in the negotiations. Therefore, it is concluded that in the process of reforming the S&D treatment provisions, China should adhere to its status as a developing country and apply the principles of S&D treatment, but at the same time should be prepared to graduate from its developing country status.

Who Uses the Special and Differential Treatment Provisions of the WTO?

Why do some countries promptly implement free trade rules, whereas others opt for slow adaptation? The Special and Differential Treatment (SDT) provisions serve as a tool for the developing and least-developed countries to delay the implementation of World Trade Organization (WTO) free trade rules. SDT supporters point out the positive impacts of the provisions in facilitating free trade in the long term. In their view, developing countries may improve their economic status by increasing their chances of participating in free trade. SDT provisions can play a positive role, although they prolong the prompt implementation of free trade rules. However, not all poor WTO members utilize SDT provisions when implementing free trade rules. Some poor members accept the rules without requesting SDT. This study attempts to answer why some such member countries of the WTO use SDT provisions more than others. We found that member countries’ (1) domestic policy implementation capabilities and (2) international socialization determine the utilization of the provisions. When countries lack these factors, they are more likely to request provisions. Our argument is supported by evidence from the implementation of the WTO’s Trade Facilitation Agreement (TFA). World Trade Organization, Special and Differential Treatment, Trade Facilitation Agreement, policy implementation capability, international socialization

The Special and Differential Treatment Provisions in the Trade Facilitation Agreement: New Teeth for an Old Gum?

Various provisions on special and differential treatment of developing countries have been enacted from the time of the General Agreement on Tariffs and Trade 1947 (GATT 1947) through to the current era of the World Trade Organisation (WTO). Perhaps the most significant epoch in the recognition of the special and differential treatment of developing countries in the international trade regime was the 1979 Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, more popularly known as the Enabling Clause. The Enabling Clause, inter alia, allowed for a permanent derogation from the most favoured nation provision in Article I of the GATT 1947 in order to enable developed countries grant preferential treatment to goods coming from developing countries. The advent of the WTO in 1995 also came with specific provisions in the multilateral trade agreements that catered for the special needs of developing countries. Developing countries have, however, raised concerns regarding the effectiveness and utility of most of the special and differential treatment provisions considering the fact that most of these provisions have been formulated in non-mandatory language and thus do not obligate compliance. This article considers the special and differential treatment of developing countries in WTO law and analyses similar provisions in the most recent multilateral trade agreement in the WTO - the Trade Facilitation Agreement - which came into effect on 22 February 2017. The article aims to ascertain the effectiveness of special and differential treatment provisions in the Trade Facilitation Agreement with respect to addressing long-standing concerns of developing countries.

ЗАСТОЙ В ВТО КАК ПРОЯВЛЕНИЕ КРИЗИСА ГЛОБАЛИЗАЦИИ

The present crisis of globalization, which has found one of its manifestations in the crisis of the multilateral trading system, is a growth crisis that arose during the restructuring of the international economic regime. The need for such restructuring is due to the development of transnational production, the deepening of economic interdependence and the weakening of the US as the leader of the world economy. The international economic regime is understood as a system of rules for international economic interaction, including both these rules themselves and the mechanisms that ensure their establishment and implementation. The theory of hegemonic stability, which explained the development of the international economic regime in the past century, in the present century gives way to the theory of interdependence, especially complex interdependence. China will not replace the United States as a guarantor of the stability of the international economic system, not because it is not ready or not capable, but because the new economy needs a new regime that meets the needs of the global market. The US is withdrawing from the role of the guarantor of stability not only because they feel weak relative to their competitors but also because no country is able to play this role in the conditions of growing globalization. As interdependence deepens the stability of the international economic regime will increasingly rely on a system of global governance. The main elements of this system that emerged at the previous stage will undergo changes which are already partly occurring in the IMF, the World Bank and the global financial architecture as a whole. The WTO also needs to be reformed. The most obvious steps of WTO transformation include abandoning the consensus and single undertaking principles in decision-making, enhancing the role of plurilateral agreements, revising the special and differential treatment provisions, expanding the scope of issues beyond traditional trade, harmonizing between the WTO legal system and new norms introduced by mega-regional agreements. The growing complexity of interdependence increases the need for coordination not only between countries, but also between major interest groups, as well as elements of the system of global governance. It seems appropriate to ensure a coherent and coordinated process of transformation of the WTO, the IMF and other parts of the system of global governance. There is a demand for transparent mechanisms that allow to represent interests of transnational businesses, wage earners, consumers and representatives of other participants of the social contract that is to be transformed with the growth of globalization.

Unclogging WTO Decision-Making with the Provisions on Amendments in Article X of the WTO Agreement

The provisions on decision-making in the Marrakesh Agreement Establishing the World Trade Organisation (WTO Agreement) are of fundamental importance in any discussion on democracy in the WTO. Articles IX and X of the WTO Agreement provide for some of the most important decision-making procedures in the WTO. Of particular importance in this regard is the single undertaking principle established in Article II:2 of the WTO Agreement. Under the single undertaking principle all multilateral agreements are binding on all WTO members. This has a significant implication for the democratic legitimacy of decision-making in the WTO because once a decision or agreement is multilateral in nature it is binding on all WTO members. While having the important advantage of bringing rules under the rubric of multilateralism, the single undertaking principle can become overly unwieldy, hence resulting in an impasse-prone decision- making system. This article discusses the single undertaking requirement and decision-making in the WTO and explores the use of paragraphs 1 and 3 of Article X of the WTO Agreement in the adoption of the Trade Facilitation Agreement. It also discusses the special and differential treatment provisions made available to developing and least developed countries based on each country's specific needs.

Of Sustainable Development in Africa: Addressing the (In)Congruence of Plastic Bags Regulations with International Trade Rules

Several aspects of the trade policies of African countries suffer from neglect in the legal literature. When they are the object of research, the focus is sometimes limited to their participation in the dispute settlement system or on the enforceability of special and differential treatment provisions. While practice displays that African countries have almost never been the target of complaints for a number a reasons, those approaches do not always take into consideration African countries’ domestic measures affecting the flow of goods and services, which could eventually trigger disputes. This paper, which intends to fill that gap and add to the existing stream of research, tackles trade measures geared toward sustainable development and environmental protection in Africa, especially the growing body of legislation to restrict the use plastic bags. The multilateral trading rules give the Members of the World Trade Organization (WTO) flexibility to pursue social and environmental policies provided the latter are compliant with the provisions of the covered agreements. While some African countries that have taken the steps to address plastic bags have either made use of quantitative restrictions or licencing schemes, others have combined these border measures with domestic regulations. Coming from all parts of the continent, and all being WTO Members, this is their contribution to the debate on sustainable development goals spelled out in the Marrakesh Agreement Establishing the WTO. The paper reviews these countries’ regulations, not only individually but also in the framework of regional economic integration schemes in which they are parties, in search of their compatibility with the multilateral trade rules.

How Special and Differential Treatment Is (Un)Able to Prevent Marginalisation of Low Income Economies

Mega-Regional Trade Agreements include large shares of global trade and are likely to cover regulatory cooperation and alignment in selected export industries. They are generally attributed with trade diversion for third countries as a consequence of their discriminatory nature, and with substantial economic spill-over effects for third countries that align with regulatory cooperation emanating from Mega-Regional Trade Agreements.Low income economies are, however, likely to suffer from both trade diversion and from an inability to benefit from economic spill-over effects of Mega-Regionals. This may increase their marginalisation in the global market.This paper discusses to what extent WTO law as the regulatory basis of international trade regulation may provide for legal instruments to address the challenges for low income economies emanating from Mega-Regional Trade Agreements. It demonstrates that pre-existing Preferential Trade Agreements of low income economies with individual members of Mega-Regional Trade Agreements could be used to ease trade diversion as a result of discrimination in trade in services and investment. Furthermore, the paper looks at Special and Differential Treatment provisions in WTO law and assesses their capability of dealing with the risk of increasing marginalisation of low income economies. While some Special and Differential Treatment provisions are designed to increase trade opportunities for low income economies through diversification of exports, it may nevertheless require a major effort of all WTO members to render Special and Differential Treatment effective in time to prevent further marginalisation of low income economies as a side-effect of Mega-Regional Trade Agreements.

Least Developed Countries in the WTO Dispute Settlement System

Existing literature on the developing countries’ experience with the WTO dispute settlement system (DSS) has paid scant attention to the participation issue of the least developed countries (LDCs), which currently form one-fifth of the WTO membership but constitute less than one per cent of participation in DSS. This article fills this gap by examining several dimensions of LDCs’ participation. Upholding the significance of LDCs’ participation it explores the challenges faced by LDCs at the pre-litigation, litigation and implementation stage emanating from power asymmetries, resource constraints and flawed DSS remedies. The article particularly looks into the nature of LDCs’ participation, which is mostly in the category of third parties. Ln doing so, it evaluates the third-party participation of Benin and Chad in US — Upland Cotton to ascertain whether third-party participation could be an alternative for LDCs to participate as co-complainants. It analyzes the special and differential treatment provisions of the DSU to further scrutinize whether these provisions and the way they are interpreted and applied in the WTO Panel Reports and the Appellate Body Reports are facilitative for LDCs’ participation. Finally, the article makes recommendations to address the challenges on the part of LDCs and to reform DSS so as to make it effective for LDCs’ participation.

Special and Differential Treatment of Developing Countries and Export Promotion Policies under the WTO

AbstractThis paper explains the export promotion measures that can be utilised by developing countries under the current World Trade Organization (WTO) system and compares the WTO Members’ proposals on modification of export promotion provisions in the Doha Development Agenda negotiations. Non‐reciprocity between developed countries and developing countries in favour of the latter needs to be strengthened in modifying the current WTO regulations, because of the very different levels of economic development between those two groups of countries. Therefore, from the viewpoint of ‘distributional fairness’, it suggests ways of modifying special and differential treatment provisions applied to export promotion policies of developing economies in the Agreement on Subsidies and Countervailing Measures of the WTO.

Substantive Justice Formulated, Implemented, and Enforced as Formal and Procedural Justice: A Lesson from WTO Special and Differential Treatment Provisions for Developing Countries

In accommodating the interests of developing country Members, the World Trade Organization (WTO) provided for approximately 145 Special and Differential Treatment (SD and, as a matter of law, S&D provisions can be considered as a legitimate discrimination or, at least, as an illegitimate but tolerated discrimination.

Legalization of Development in the WTO. Between Law and Politics. By AMIN ALAVI

This book discusses to what extent the concept of development has legal implications for WTO law. The text focuses on the impact of the scattered WTO law provisions that provide special and differential treatment for developing countries. The author perceives of these provisions as constituting a specific legal regime regulating the status of developing countries originally within GATT, and now within the WTO. Perhaps surprisingly, the WTO treaties do not contain a legal definition of developing countries, leaving it up to the members to self classify as ‘developing’, and running the risk that their classification is contested by others. Intergovernmental economic organizations, such as the World Bank group or the OECD do define developing countries for the purposes of their operations. Clearly, such a definition helps in ensuring implementation of the legal provisions that are deemed to apply to that specific category of countries only. A review of the WTO dispute settlement case law on the special and differential treatment provisions leads to a finding that only in a few cases, there has been a ‘positive effect’ (p. 179) on rulings. The author identifies four reasons for this ‘failure’: the invoked provision may not be applicable to the situation, the facts do not support the invoking party, the invoking party does not back up its claims by providing sufficient information, or the judiciary does not interpret the provisions in a ‘development friendly’ manner. From a doctrinal point of view, the final reason is the most intriguing one. The author discusses the interpretive techniques used by the DSU, and finds that ‘the judiciary applied a literal style of interpretation and, as a result, put more weight on the non-binding nature of the provisions and their impreciseness rather than their potential impact on developing countries’ situations’ (p. 22). In the author's view, nothing prevents the WTO judiciary from applying an object and purpose method. This, he argues, would be more appropriate, precisely because the special and differential treatment provisions are intended to provide a degree of flexibility that cannot be achieved by means of a literal interpretation.

Operationalizing Special and Differential Treatment in the World Trade Organization: Game Over?

The notion of providing special and differential treatment to developing countries has a long history in the World Trade Organization, but some commentators continue to question its rationale and practical effectiveness in supporting development and integration into the multilateral trading system. In particular, while operationalizing special and differential treatment is one of the important tasks of negotiators in the ongoing Doha Round, some argue that this will not only be difficult, but in fact impossible to achieve. Doubtless, special and differential treatment cannot of itself solve the problems of the developing world, and relying too heavily on this kind of discrimination will ultimately disadvantage developing country WTO members. Nevertheless, in achieving a successful conclusion to the Doha Round, members must take greater account of the different needs of developing countries and adopt more concrete provisions in this regard than are currently contained in the Uruguay Round agreements. In general, WTO members themselves appear to have accepted this responsibility, despite the slow progress in this as in many other areas of the negotiations. Ideally, this process should involve in-depth economic analysis to identify measurable criteria for granting special and differential treatment to particular countries under specific provisions. If these criteria can be agreed and incorporated into the WTO agreements, no new independent bodies will be required to assess individual cases separate from the established WTO dispute settlement system. KEYWORDS: World Trade Organization, developing countries, international trade, international law, multilateral negotiations. ********** As the Doha Round drags on, many are looking increasing skepticism at its Development Agenda, concerned that even a successful end to the negotiations will be no more development-friendly than was the Uruguay Round before it. That round concluded the successful creation of the World Trade Organization (WTO) in 1995. But since then, it has become clearer that developed countries fared better in the final outcome, fewer disciplines imposed in areas critical to developing countries, such as agriculture and textiles, and more in areas traditionally the province of developed countries, such as intellectual property. From the time that the Doha Round commenced in 2001, many WTO members, commentators, and non-governmental organizations (NGOs) have called for greater emphasis on special and differential treatment for developing countries in the WTO in order to improve support for development and rebalance the playing field. In particular, these voices insist that the existing special and differential treatment provisions in WTO law must be operationalized. Indeed, the ministerial declaration that launched the Doha Round specifically mandated a review of all special and differential treatment provisions with a view to strengthening them and making them more precise, effective and operational. (1) Special and differential treatment sounds, on first hearing, like an ideal solution to developing countries' difficulties in meeting their peoples' needs, complying WTO law, and competing in the global market. However, do developing countries need more special differential treatment or less? And is the WTO the right forum for addressing development concerns? Michael Finger (formerly lead economist at the World Bank) recently described the attempt to operationalize special and differential treatment as heartfelt but ill-defined and ultimately fruitless, declaring that the WTO members' work in this regard in the Doha Round has unsurprisingly c[o]me to nothing. (2) He has since queried whether the WTO has anything useful to do in this area. (3) This highlights the complexities and limitations of special and differential treatment. …

India’s Trade Experience with SAARC and the Future of SAFTA

ndia is also committed to ensure that the special and differential treatment provisions for developing countries under different WTO agreements are translated into specific enforceable dispensations. Currently, India has adopted WTO norms in these sectors i.e. Agriculture, Trade and Industry, Intellectual property and services. SAARC is moving towards a Free Trade Area and South Asia Free Trade Agreement (SAFTA) that is an initial step in the evolution of the South Asian Association for Regional Cooperation as a regional trade block and an economic union. SAFTA was signed on January 6, 2004, during the Twelfth SAARC Summit in Islamabad. But how favorably it will affect the intra-regional trade it is uncertain as economic trouble for India could be created through the Free Trade Agreements. In the present paper, an attempt has been made to depict India’s foreign trade with SAARC nations considering the structural changes in Indian Economy as well as WTO Arrangements in 1995 and also the future of the SAFTA.

The EU-ACP Economic Partnership Agreements and the 'Development Question': Constraints and Opportunities Posed by Article XXIV and Special and Differential Treatment Provisions of the WTO

This article argues that Article XXIV and special and differential treatment (SDT) provisions of the WTO present a number of constraints and opportunities to the design and scope of the proposed economic partnership agreements between the European Union (EU) and African, Caribbean and Pacific (ACP) countries. It examines the negotiating positions of both sides to argue that were the EU's position to prevail, ACP and other developing countries would likely suffer an erosion of the development principles embedded within the WTO. It is shown that the differences between the two groups over the desirability and/or applicability of negotiating free trade agreements between developed and developing countries under the strict jurisdiction of Article XXIV, and of negotiating agreements on services and the Singapore Issues , amount to a contestation over the principles of reciprocity and SDT within the WTO, and of the scope of the WTO.

Operationalizing the Concept of Policy Space in the WTO: Beyond Special and Differential Treatment*

There are large differences between WTO members in terms of resource capacity constraints and national trade policy an d investment priorities. These affect the ability and willingness to incur the costs associated with implementation of new rules, as well as the net benefits of doing so. The 'adjustment burden' of new rules mostly will fall on developing countries, as such rules w ill reflect the status quo in industrialized countries ('best practice'). This paper disc usses options that have been proposed to address country differences and increase the relevance of the WTO. These include shifting back to a club approach, more explicit special and differential treatment provisions in specific WTO agreements, and a concerted effort to establish a mechanism in the WTO where development concerns can be considered. A case is made for the latter—involving a serious effort to increa se the transparency of applied policies, including assessments of their effectiveness and the magnitude of any negative spillovers imposed on other developing countries.