Publication: Achieving WTO Compliance for Special Economic Zones in Developing Countries
Many developing countries operate geographically delineated economic areas in the form of export processing zones, special industrial zones, or free trade zones. They experiment in these special economic zones (SEZs) with infrastructure, regulatory, and fiscal policies that are different from those implemented in the rest of the domestic economy with the aim of attracting foreign investment, creating employment opportunities, and boosting exports. Special incentives for zone-based firms play a prominent role in most countries programs. This note provides an overview of the application of World Trade Organization (WTO) disciplines to incentive programs typically employed by developing countries in connection with SEZ programs. It is intended to inform policy makers, zone administrators, and the development community about the WTO consistency of such incentive measures. The analysis is concerned exclusively with multilateral law and leaves economic aspects concerning beneficial or adverse effects of such fiscal incentives aside. As in all legal analysis, different interpretations of particular provisions might be possible and the ultimate decision on the legality of a particular measure remains subject to the authoritative interpretation of the WTO and its members.
“Creskoff, Stephen; Walkenhorst, Peter. 2009. Achieving WTO Compliance for Special Economic Zones in Developing Countries. PREM Notes; No. 134. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/cd9e5eeb-f45b-5beb-81c6-f06eb8fce64c License: CC BY 3.0 IGO.”