Why and What S & D Treatment for LDCs in the WTO? Presentation - - PowerPoint PPT Presentation

CENTRE FOR POLICY DIALOGUE (CPD) B A N G L A D E S H a c i v i l s o c i e t y t h i n k t a n k

Why and What S & D Treatment for LDCs in the WTO?

25 September 2013: Dakar, Senegal

Presentation by

Fahmida Khatun, PhD Research Director Centre for Policy Dialogue (CPD), Bangladesh

Why S&DT for LDCs?

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• Special

and Differential (S&D) Treatment describes preferential provisions in the WTO agreement for Developing Countries (DCs) and Least Developed Countries (LDCs).

• This is in view of LDCs major bottlenecks to take

advantage of the global trading systems.

• Marginalisation of weaker economies in the context of

globalisation

• Lack of technical capacity
• Lack of financial resources
• Weak capacity to participate in WTO-system
• Weak capacity to take advantage of the opportunities

emanating from WTO system

Why S&DT for LDCs?

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• Trade liberalisation does not automatically lead

to development and welfare gains.

• Lack of capacity to take advantage of the
• pportunities created by trade liberalisation.
• LDCs’ participation in global trade has increased
• ver the years (Figure 1 on export volumes)

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Figure 1: Exports of LDCs during 2000-2012 (in USD mln)

Why S&DT for LDCs?

Why S&DT for LDCs?

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• However, the distribution of growth has not been

equal across regions.



consists of around 12% of world population



has a share of less than 2 % in world GDP



accounts for about 1% of global trade in goods (WTO 2011)

Figure 2: Share of LDCs in World Trade and GDP

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Source: Calculated on the basis of data from UNCTAD, UNCTAD stat.

Why S&DT for LDCs?

What S&DT for LDCs?

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

S&DT provisions for LDCs



Longer time periods for implementing agreements and commitments



Measures to increase trading opportunities



Support to help LDCs build the infrastructure

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• Agreement on Agriculture

 LDCs

are exempt from undertaking reduction commitments

• Sanitary and Phytosanitary Measures

 LDCs had the possibility of delaying implementation

for up to 5 years

• Agreement on Textiles and Clothing

 more favorable treatment than other groups in the

application of the transitional safeguard

• Agreement on Technical Barriers to Trade

 Particular account to

be taken of LDCs in the provision

• f

technical assistance and in the preparation of technical regulations.

WTO Agreements & S&D Provisions for LDCs

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• Trade-related Investment Measures

 LDCs had a seven-year transitional period to

eliminate TRIMS

• Agreement on Import Licensing

 special consideration to be given to importers

who import products from LDCs

• Agreement on Subsides and Countervailing

Measures

 LDCs are exempted from prohibition on export

subsidies

 Prohibition on subsidies that are contingent upon

export performance is not applicable to LDCs for 8 years

WTO Agreements & S&D Provisions for LDCs

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• General Agreement on Trade in Services (GATS)

 Special priority given to LDCs in implementing Article IV of

GATS

 particular account to be taken of the difficulties encountered

by LDCs in accepting negotiated commitments, owing to their particular needs

 Special consideration is given to LDCs with regard to

encouraging foreign suppliers to assist in technology transfers, training and

• ther

activities for developing telecommunications

• Agreement on Trade-related Aspects of Intellectual Property

Rights (TRIPS)

 Delay for up to 10 years in implementing most of TRIPS

• bligations

 Possibility of extension following duly motivated request 

Members to provide incentives for encouraging the transfer of technology to LDCs.

WTO Agreements & S&D Provisions for LDCs

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• Disputes Settlement (DS)

 Particular consideration should be given to the special

situation of LDCs in all stages of a dispute involving an LDC

 Members to exercise due restraint in raising matters

involving an LDC

 LDCs may request use of the good offices of the Director-

General or the Chairman of the DSB.

• Trade Policy Review Mechanism (TPRM)

 Greater flexibility given to LDCs concerning the frequency

• f their reviews

 Particular attention given to LDCs in the provision of

technical assistance by the Secretariat

WTO Agreements & S&D Provisions for LDCs

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WTO Agreements Developed Countries (under GATT UR Decision) Developing Countries (under GATT UR Decision) Least Developed Countries (under GATT UR Decision) DDA, July 2004 Framework and Hong Kong Ministerial Agriculture 6 years 10 years Exempt

• Exemption from undertaking reduction

commitment in AoA and NAMA

• Developing country Members continue to benefit

from the AoA for five years after the end-date for elimination of all forms of export subsidies

• TRIPs & Public Health (derogation up to 2016)
• Extension of TRIPs up to 2013
• Exemption from TRIMs obligation
• GATS-LDC Modality
• Extension on Removal of export subsidies till 2013
• Under Swiss formula, coefficients of 8-9 for

developed countries and 19-23 for developing countries proposed. LDCs not asked to undertake reeducation commitments but expected to bind more of their items. ATC SPS

• 2 years

5 years T&T TRIPs 1 years 5 years 10 years TRIMs 2 years 5 years 7 years Import Licensing

• 2 years
• Safeguards

Up to 8 years Up to 10 years

• Domestic Input

Subsidies

• 5 years

8 years Export Subsidies

• 2 to 8 years

8 years

Time-Lines in Various WTO Agreements

WTO Agreements & S&D Provisions for LDCs

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Doha Mandate (2001) for S&D: Paragraph 44

“We reaffirm that provisions for SDT are an integral part of the WTO Agreements. We note the concerns expressed regarding their operation in addressing specific constraints faced by developing countries, particularly least-developed countries. In that connection, we also note that some members have proposed a Framework Agreement on SDT (WT/GC/W/442). We therefore agree that all SDT provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational. In this connection, we endorse the work programme on SDT set out in the Decision on Implementation-Related Issues and Concerns.”

Doha Development Agenda & S&DT

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Cancun Ministerial 2003

 Members included 28 agreement-specific S&D Provisions in the

Annex C of Draft Ministerial Text

 Eventually these provisions were not adopted due to the

conference’s failure to agree on a number of other issues

Hong Kong Ministerial (2005): Members agreed to 5 S&D provisions for LDCs.

• DFQF access by 2008
• Preferential RoO
• Right to undertake measures for their development
• Trade preferences not be conditional loans, grants and ODA

inconsistent with LDCs development

• Allowed to deviate from obligation in the TRIMS agreements

Doha Development Agenda & S&DT

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Geneva Ministerial (2011):

• Extension of preferential treatment for service trade for another

15 years

• A ‘Draft Decision’ on the expansion of Intellectual Property

Rights transition period

• Some ministers suggested the review and monitoring of S&D

Provisions in the WTO

• Other members expressed support for the S&D monitoring

mechanism & the adoption of Annex C of the Draft Cancun Text which focuses on S&D

• Ministers agreed to expedite work towards finalizing the

Monitoring Mechanism for S&D

• Ministers agreed to take stock of the 28 Agreement-specific

proposals in Annex C of the draft Cancun text with a view to formal adoption of those agreed

Doha Development Agenda & S&DT

S&D Issues in Bali Ministerial 2013

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Major issues Bali Ministerial Conference (MC9) Adoption of 28 S&D Provisions



WTO members never formally adopted 28 proposals relating to various S&D provisions in WTO Agreements proposed in Cancun though MC8 agreed to take a stock of these proposals



Subsequent developments in various ministerial after Cancun may have affected the relevance of some texts in the provisions. There is a need to revise some of the texts



Revisions of the texts could potentially lead to the demand to review or open the others

S&D Issues in Bali Ministerial 2013

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Monitoring Mechanism



The special session of the CTD is discussing an appropriate monitoring mechanism



The purpose is to analyze and review the implementation of all S&D provisions contained in WTO Agreements and Decisions



If such mechanism is adopted it will be a forum of LDCs where they can raise issues and flag difficulties encountered by them in implementing S&DT provisions.

Current Concerns on S&DT

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Implementation of DFQF Market Access



Meaningful & enhanced market access for LDCs differences amongst Asian and African LDCs Effective market access of LDCs after S&D in the US is negative & in the EU is positive but negligible because of:



3% of tariff line excluded from DFQF market access make up a huge share of LDCs exports



Complicated RoO in EU market (Carrere and de Melo 2009) DFQF access for LDCs from 97% to 100% of tariff line will rise LDCs export to developed countries by $4.2 billion (Vanzetti and Peters 2012)

Current Concerns on S&DT

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Rules of Origin (RoO)



RoO requirements differ from country to country, but in the process it excludes major portion of LDCs product from GSP



Product specific rules



LDC proposal: ‘across the board’ RoO based on a percentage criterion

Lack of Capacity to Utilize the Opportunities



For example, LDCs have lack of capacity in utilizing service

• waiver. Waiver was given for 15 years – 2 years are being passed

 LDCs should identify modes & sectors

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