CTD Special Session stuck on basics

by Chakravarthi Raghavan

GENEVA: The Special Session of the WTO’s Committee on Trade and Development, where the special and differential treatment issues are sought to be negotiated on a fast track to meet a new extended deadline of December 2002, appears to have become mired once again in the attempts of the major industrialized countries to question and dilute the very concepts and make them meaningless.

The mandate that the Ministerial Conference at Doha has given to the CTD is not one to go into the philosophy or basis of the S&D questions, but to reach accords on some cross-cutting issues:

(i)   to identify those provisions on S&D treatment that are already mandatory in nature and those that are non-binding in character, to consider the legal and practical implications for developed- and developing-country members of converting S&D treatment measures into mandatory provisions, to identify those that members consider should be made mandatory, and to report to the General Council with clear recommendations for a decision by July 2002;

(ii)  to examine additional ways in which S&D treatment provisions can be made more effective, to consider ways, including improved information flows, in which developing countries, in particular the least developed countries, may be assisted to make best use of S&D treatment provisions, and to report to the General Council with clear recommendations for a decision by July 2002; and

(iii) to consider, in the context of the work programme adopted at Doha, how S&D treatment may be incorporated into the architecture of WTO rules.

There is no mandate to go into the philosophy and merits of S&D treatment, graduation or anything else.

At its meeting on 7 October, the CTD discussed papers presented by the European Communities, Switzerland, Paraguay and Hungary; and specific proposals to amend certain agreements, proposals put forward by the African Group, St. Lucia, the group of least developed countries and India (as part of the implementation exercise and now referred to the CTD).

The major industrialized countries raised questions concerning:

   *  the principles and objectives of S&D treatment;

   *  how efficient S&D provisions are;

   *  differentiation between developing countries - should all developing countries benefit from the same S&D provisions and should all developing countries be granted similar market access preferences through developed countries’ Generalized System of Preferences (GSP)?;

   *  in what forum should the specific proposals before the CTD be discussed, what will they actually achieve, and are any of them practicable?;

   *  what shape and what objective should the S&D monitoring mechanism (proposed by the African Group and welcomed by everyone) take?

Discussing a monitoring mechanism without an agreement on what to monitor may sound odd to outsiders, but apparently not at the “rules-based” multilateral WTO system.

Members’ interventions, according to trade officials, suggested views emerging on three different tracks: some wanting to start from scratch and review the principles and objectives of S&D provisions, others wanting to work on specific proposals, and a third group wanting to discuss the illegality of discriminating between developing countries.

At the end of the evening, the meeting did not finish the discussions and was adjourned to meet at a future date to be set by the Chair.

New papers were introduced by the various protagonists - the EC, Switzerland, Paraguay (which has challenged discriminatory use of the GSP) and Hungary, a response of sorts.

The EC paper, in terms of the objective of S&D treatment, suggests, as a first step, an assessment of the objective of S&D: integration or permanent exclusion from the multilateral trading system (MTS). For the EC, the aim is integration, which in its jargon means equal obligations.

The EC also wants an assessment of the efficiency of S&D provisions, arguing that making some provisions mandatory will not be instrumental in meeting the overall objectives; the same objectives could be achieved in other ways.

It also raises the issue of differentiation between developing countries - the problematic issue of the different levels of economic development among member countries that designate themselves as developing countries. The EC wants a “more differentiated application of S&D treatment to take account of the different constraints that countries at different levels of development face in relation to the implementation and use of specific WTO rules”. The EC also has “doubts” about the approach taken in some of the submissions on S&D treatment which present proposals across the board, what the EC paper calls “sweeping and potentially permanent exemptions for all developing countries”.

In terms of specific proposals, the EC wonders how work on S&D fits in the Doha agenda. It suggests that “S&D questions now being addressed in the negotiations (e.g. on rules) also would not need to be separately addressed in the CTD.” The EC is willing to consider each specific suggestion and provision with an open spirit but suggests that the CTD Special Session “ascertain whether the proposal, if implemented, will aid the integration of developing countries in the MTS.”

For Switzerland, the S&D provisions “are not meant to set aside the common rules and to create a two-tier trading system” but rather “to fit the reality of evolving and highly differentiated economic conditions among WTO Members, helping some to get a better hold in international trading”.

In its view there should be no “sweeping departure” from the fundamental principles embodied in the WTO system, and S&D provisions by their nature should be temporary and with “graduation criteria”. It also calls for efficiency of S&D provisions and by providing flexibility as in market access talks.

The Swiss also want “a transparent differentiation among developing countries based upon per capita income and trade participation”.

The monitoring mechanism, in the Swiss view, should “analyze periodically the status of S&D provisions” and “report periodically” to the CTD on this.

The papers by Paraguay and Hungary concentrate on the issue of differentiation between developing countries. For Paraguay, such differentiation is illegal under the 1979 Enabling Clause. For Hungary, there can only be differentiation since some WTO developing countries are richer than some WTO developed countries or countries in transition.

Towards the end of the meeting, Canada raised the issue of using the exercise to delete some S&D provisions and promised a concept paper. India objected to the Canadian proposal, saying it was outside the mandate of Doha. (SUNS5209)                                          

From Third World Economics No. 292 (1-15 November 2002)