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Professor Xiankun LU
Managing Director
09.09.2021
Developing Country Status
and
Special & Differential Treatment
Professor Xiankun LU
Managing Director
LEDECOSwitzerland
Development: an evolving discussion
I. WTO Preamble: Recognizing further that there is a need for positive efforts designed to
ensure that developing countries, and especially the least developed among them,
secure a share in the growth of international trade commensurate with the needs of their
economic development.
II. Doha Development Round (DDA): “The majority of WTO members are developing
countries. We seek to place their needs and interests at the heart of the Work Programme
adopted in this Declaration. ”
III. Ongoing discussions of the WTO Reform:
I. “(T)here is a group of self-declared developing country Members that are relatively advanced,
wealthy, and influential and that should not have access to blanket special and differential
treatment in current and future WTO negotiations. ” (US proposal: WT/GC/W/757/Rev.1)
II. S&D is ‘an integral part of the multilateral trading system’, and self-declaration of developing
country status ‘a fundamental rule’ and ‘the most appropriate classification approach’ for the WTO.
(China, India et al: WT/GC/W/765/Rev.2)
Developing Country Status
I. In WTO legal texts: membership are
categorized ass developed,
developing and least-developed
countries (LDCs).
II. LDCs: I. UN: 47 countries designated on the basis
of income, human assets and economic vulnerability;
II. Annex VII of the WTO Subsidies and Countervailing Measures Agreement (SCM Agreement): per capita income below USD 1,000 (in 1990 constant dollar terms).
III. Developing countries: designation is
self-determined
Special and differential treatment (S&D)
I. Provisions that aimed at increasing the tradeopportunities of developing Members
II. Provisions under which WTO Members shouldsafeguard the interests of developing countryMembers
III. Flexibility of commitments and use of policyspace
IV. Technical assistance to all developing members
V. Provisions relating to LDC Members
S&D: What and how?I. US proposal – graduation of 37 WTO members, based on:
1. Membership of or application to join OECD
2. Member of G20
3. Member classified as “high income” by World Bank
4. Member who accounts for at least 0.5% of global merchandise trade (X + M)
Includes:
Antigua and Barbuda, Aruba, Argentina, Bahrain, Barbados, Brazil, Brunei
Darussalam, Chile, China, Colombia, Costa Rica, Hong Kong, India, Indonesia, Israel,
Korea, Kuwait, Macao, Malaysia, Mexico, Oman, Panama, Peru, Philippines, Qatar,
Saudi Arabia, Seychelles, Singapore, South Africa, St. Kitts and Nevis, Taiwan,
Thailand, Trinidad and Tobago, Turkey, United Arab Emirates, Uruguay, Viet Nam
II. EU proposal: case by case approval based on real needs
S&D: What and how?
Proposal by China, India, South Africa and Venezuela
1. Against graduation on grounds of development divide – e.g.
industrial structure, GDP per capita, poverty, under-nourishment,
size of agricultural sector, IPR ownership, technology, R&D, digital
divide
2. Rejection of “absolute reciprocity” for any developing countries
(remember this is a self-designated status, and this is defended by
China et al.)
S&D: What and how?
I. G90: implementation morphed into Agreement-Specific
ProposalsCurrently (2017): TRIMS, GATT Art. XVIIIA & C (industrial
development), XVIIIB (balance of payments), SPS, TBT, SCM, Customs
valuation, Enabling clause, Technology transfer, LDC accessions to WTO
II. Proposal by China on WTO reform – section on S&D
1. Reduce ‘best endeavors' elements in S&D
2. Make S&D more precise, effective and operational
1. DFQF for LDCs
2. Improve technical assistance
3. Resume S&D negotiations to ensure its adequacy and effectiveness
4. Encourage developing countries to assume higher levels of of obligations
commensurate with their development needs and capabilities
S&D: What and how?
Proposal by Norway (Ottawa Group)
1. Don’t waste time on the definition of development status –irrelevant
to degree of access to S&D and level of obligations
2. S&D needs to be decomposed into its constituent parts
3. S&D must be need-based
4. S&D must be enabling, not exempting
5. TA and capacity building is essential
GDP world No.2
PollutionUnbalanced economic structure
Developing Country Status and S&D: Conclusions
I. Stop politicizing development status and S&D and the
static zero-sum thinking
II. Every members have and will get some “S&D”
III. S&D must be enabling (not exempting), dynamic (not
permanent)
IV. Creative thinking is needed. TFA approach is an option, but
not a panacea
V. One size fits all won’t work, customized S&D is an option
VI. Trust is non-existing and must be rebuilt
VII. This must be put under the big context of the WTO reform,
including decision making, format of negotiations, etc.
LEDECO Geneva
日内瓦箂科中心
Email :
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https://www.linkedin.com/in/xiankun-lu-a61b002b/
xiankunlu