Publication: More Favorable and Differential Treatment of Developing Countries : Toward a New Approach in the World Trade Organization
Date
2003-08
ISSN
Published
2003-08
Author(s)
Abstract
The authors discuss options that could
be considered in the World Trade Organization (WTO) to
provide more favorable treatment-so-called special and
differential treatment (SDT)-to small and low-income
countries. They argue that there is a need both for
differentiation across WTO members and for steps that would
benefit all developing countries. The authors suggest the
following to make the Doha Round more supportive of
development: 1) A binding commitment by industrial countries
to abolish export subsidies and nontariff barriers (tariff
quotas) and to reduce most-favored-nation tariffs on
labor-intensive products of export interest to developing
countries to no more than 5 percent in 2010, and to no more
than 10 percent for agricultural products. All tariffs on
manufactures should go to zero by 2015, the target date for
the achievement of the Millennium Development Goals.
Liberalization should also be undertaken by developing
countries on the basis of a formula approach. 2) A binding
commitment by industrial countries on services to expand
temporary access for service providers by a specific
amount-for example, equal to an additional 1 percent of the
workforce-and not to restrict cross-border trade (for
example, by telecom channels). 3) Unilateral action by all
industrial countries to extend preferential market access
for less developed countries, and to simplify eligibility
criteria, especially rules of origin. 4) Affirmation by the
WTO that core disciplines relating to the use of trade
policy apply equally to all WTO members. 5) Acceptance of
the principle that for small and low-income countries
"one size does not fit all" when it comes to
domestic regulation and to WTO agreements requiring
substantial investment of resources. 6) Recognition that
some WTO agreements need to be adapted to make them more
supportive of development, and a consequent willingness by
industrial countries to modify them. 7) Expansion of
development assistance to bolster trade capacity in poor
countries and strengthening of the links between
trade-related technical assistance and the mechanisms
through which aid priorities are determined in developing
countries. In practice, calls for specific types of SDT
often appear to be motivated by a perception that a certain
WTO rule is "anti-development" and that therefore
developing countries should be exempted from the rule in
question. The authors suggest that the appropriate solution
to such problems is to change the rules rather than seek an
opt-out. What should be up front changes in rules and what
should be part of the negotiating agenda is a major issue
which needs to be addressed at the Cancun Ministerial
meeting. The suggestion that SDT should focus primarily on
WTO rules and be limited to those countries that need it
most-very small and poor economies-implies that criteria
should be adopted to differentiate between countries.
Leaving this to self-declaration-the current approach-is not
feasible, while reliance on case-by-case, agreement-specific
negotiation can generate excessive costs, discretion, and
associated uncertainty. While the authors' preference
is for a simple rule-of-thumb approach to determine
eligibility, this is an issue that requires much more
thought and discussion. They suggest that WTO members
establish a high-level group to consider criteria that could
be used for differentiation purposes and to determine the
set of agreements to which differentiation will apply.
Link to Data Set
Citation
“Hoekman, Bernard; Michalopoulos, Constantine; Winters, L. Alan. 2003. More Favorable and Differential Treatment of Developing Countries : Toward a New Approach in the World Trade Organization. Policy Research Working Paper;No. 3107. © World Bank, Washington, DC. http://hdl.handle.net/10986/18139 License: CC BY 3.0 IGO.”
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