Bridges Weekly Trade News Digest • Volume  • Number  • 28th March 2007

Special And Differential Treatment Negotiations Make Little Progress

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Negotiations on improving WTO provisions for according ’special and differential treatment’ (S&DT) to developing countries are proceeding slowly, as Members work to ready an agreement on the issue in the event of a breakthrough elsewhere in the deadlocked Doha Round negotiations.

Many developing countries felt that the various measures present in WTO rules that provide favourable treatment to developing countries have been difficult to use, or ineffective at achieving their principal goal of promoting development. The Doha mandate therefore called on Members to "review all special and differential treatment provisions with a view to strengthening them and making them more precise, effective, and operational."

These talks are centred in the Committee on Trade and Development - Special Session. At its most recent meeting on 19 March, sources indicate that Chair Ambassador Burhan Gafoor (Singapore) reported on his recent consultations with delegations on 16 proposals for changes to the S&DT provisions in specific WTO agreements.

He said that the sponsors of seven of the proposals had managed to rephrase them in ways that might prove more acceptable to other Members. These proposals deal with a range of different WTO rules. For instance, the African Group is seeking greater certainty about developing countries’ liberty to use a GATT article which in theory allows them to "deviate temporarily" from legal WTO constraints in order to implement policies that promote economic development (Article XVIII).

Other proposals seek to make mandatory a provision that currently ‘enables’ Members to assent to requests from developing countries to be partially or completely exempt from obligations under the Agreement on the Application of Sanitary and Phytosanitary measures based on "financial, trade, or development needs." The non-binding, exhortative language used in existing S&DT provisions - conditional words like ‘would’ and ’should’ instead of ’shall’ - is a common complaint. Several Members have proposed such changes to WTO import licensing rules. They would, for example, exempt developing countries from having to implement expensive new administrative procedures, and require authorities in industrialised countries to give special consideration to exports from developing countries when handing out import licences.

Some developed countries have objected that many of the changes sought in the course of the negotiations would upset the existing balance of rights and obligations in the WTO agreements. Supporters of the proposed reforms counter that the ineffectiveness of existing S&DT provisions suggests that this balance needs some tilting.

Gafoor said that progress seemed unlikely on the nine remaining proposals that the committee was considering, barring new ideas from the sponsors. In one of these, the African Group seeks greater assurance that developing countries would be allowed to deviate from policy constraints imposed by the Agreement on Trade-Related Investment Measures in order to pursue developmental goals.

Delegates are also discussing how a new mechanism to monitor the functioning S&DT provisions might work.

Another issue briefly addressed at the meeting was Members’ decision, taken at the December 2005 Ministerial Conference in Hong Kong, for developed countries and willing developing ones to provide duty- and quota-free market access to products from least-developed countries (LDCs). That decision, which was based on another S&DT proposal, allowed for protections to be maintained on up to 3 percent of tariff lines; a reservation that critics complained would be enough to cover the small number of products for which LDCs are competitive exporters.

In Hong Kong, Members agreed that the removal of trade restrictions on LDC exports would happen "by 2008 or no later than the start of the implementation period [for obligations resulting from the Doha Round]." With the fate of the Doha talks unclear, LDCs want to see this happen in 2008. Last June, prior to the breakdown in negotiations, they tabled proposals calling on countries to commit to eventually extending unrestricted access to all products (TN/CTD/W/31). They also outlined a potential set of rules of origin for goods to qualify as coming from LDCs.

Sources report that the US, which had been reluctant to open its textile sector to competition from Bangladesh and the other LDCs to which it does not already grant unrestricted market access, said that it would only do so in tandem with the Doha Round. Washington has asked Members to notify it of their concerns around how it might implement the decision, which would presumably also include comments about specific products.

Japan, India, Korea, and Brazil indicated that they would soon provide details on how they intend to lift barriers to LDC exports.

The chair indicated that the two LDC proposals would be discussed again at the committee’s next meeting, tentatively scheduled for 26 April.

ICTSD reporting.