WTO Ministerial Section • Volume 7 • Number 5 • 12th February 2003

S&D Review in Limbo as General Council Fails to Adopt Report

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The 10 February meeting of the General Council failed to adopt a report on special and differential treatment (S&D) for developing countries, thus missing a third deadline for strengthening S&D provisions. The General Council meeting took place after a string of consultations in January and February on the review of S&D provisions, which had ended in another stalemate between developed and developing countries. In a 7 February meeting, Members appeared willing to move ahead with a developing country proposal to ask the General Council to provide "clarification" on the S&D mandate provided by Ministers at the Fourth Ministerial Conference in Doha (see BRIDGES Weekly, 6 February). At the 10 February Committee on Trade and Development (CTD) special session, held immediately prior to the General Council meeting (see related article, this issue) Members adopted a report (TN/CTD/7, available at http://docsonline.wto.org) recommending that "the General Council provide clarification, as it considers appropriate" on the S&D mandate. However, the report — and the request — was thrown in limbo when a handful of developed country Members prevented it from being adopted at the 10 February General Council meeting.

Where to now?

At time of press a great deal of ambiguity remained over how the issue was actually concluded at the General Council meeting — and where and how the S&D review would be picked up again. Reports indicate that when consensus could not be found, General Council Chair Sergio Marchi (Canada) attempted to ‘take note’ of the report rather than adopt it, but that this was met opposition from some Members. Concerns were reportedly raised over the arbitrary introduction of ‘taking note’ of the report as opposed to ‘adopting’ it, as well as the longer-term implications of the General Council not adopting something that was agreed to by consensus in a subsidiary body.

In the end, citing this lack of consensus, Ambassador Marchi moved to revert the item to the next General Council meeting (this also being met by opposition) — where it would come under the purview of incoming Chair Carlos Pérez Del Castillo (Uruguay). One report from a trade official indicated that Ambassador Marchi decided to "take note of the debate", however neither Members nor Secretariat officials contacted could confirm exactly where this matter stood. Many wait now for the minutes of the meeting, to see the exact language that is recorded from the proceedings. These minutes, speculated one trade source, along with discussions with Ambassador Marchi, would form the basis of how incoming General Council Chair Pérez Del Castillo will work with CTD special session Chair Ransford Smith (Jamaica) to carry the matter forward. It is clear, noted one trade source, that S&D now has been elevated to the highest level of the WTO decision-making structure.

Clarification request sets bad precedent

One negotiator recounted that the developed country Members who voiced their reluctance to adopt the report, including the EC, US, and Australia, cited the bad precedent that the CTD request for such a ‘clarification’ of the S&D mandate would set for the future. Norway reportedly suggested however, that requesting ‘guidance’ as opposed to ‘clarification’ might offer a compromise - noting further that based on the Marrakech Agreements (the agreements establishing the WTO) either option was at the General Council’s disposal.

A difference in expectations

Developed countries on the whole disagreed that the mandate was unclear and were of the view that the difficulties arose from the different perspectives on how the mandate should be implemented, as well as different expectations about the outcome of the review. Most were inclined to proceed with the 12 proposals on which there was consensus, and continue working on the others in the lead-up to the Cancún Ministerial in September 2003 (either in the CTD or other relevant bodies). This was one of three options offered to Members in an earlier draft report that was rejected at the 7 February meeting (TN/CTD/W/25/Rev.1, available at http://docsonline.wto.org).

Lack of a common understanding

One developing country delegate summed up his belief that a clarification was needed since a deadlock had persisted virtually since the first sitting of the special session (see BRIDGES Weekly, 5 March 2002), and was attributable to the lack of a common understanding of the mandate provided. He emphasised the need to know how Members can "strengthen" S&D provisions (as mandated in the Doha Ministerial Declaration) without changing the language of the agreements — something developed country Members refused to consider, arguing it would alter the ‘balance of rights and obligations’. This, the delegate continued, is exactly why the 12 proposals that were on the table for early- harvest (being watered-down versions of those made by developing countries) were viewed as wholly inadequate — in his opinion, they simply re-affirmed obligations already present in the agreements. He added his belief that the reluctance on the part of developed countries to adopt the report was evidence of the lack of political will to deliver on another of the promises made at Doha (see BRIDGES Weekly, 6 February). He concluded by urging caution with regard to S&D being used in Cancún as a trade-off for commitments in contentious areas such as investment, competition, environment, and/or industrial tariffs.

Developed country Members expressed similar disappointment with the turn of events, with one negotiator saying it was a shame that developing countries did not accept what was there. Some expressed the view that the position being taken by developing countries was a tactical one, with one trade source indicated that he saw see this move as a developing country attempt to add pressure to the negotiations and extract greater concessions from industrialised Members.

No further special sessions of the CTD are currently scheduled, while informal consultations on S&D are likely to take place. The next General Council meeting is scheduled for 15 May 2003, but will likely convene earlier, as it was suspended to allow for more negotiation on Trade-related Aspects of Intellectual Property Rights (TRIPS) and public health (see related story in this issue).

ICTSD reporting.