• WTO and SDT

WTO and SDT

This article focuses on the special and differential treatment (SDT) of the developing economies in the multilateral trade regime. Many small and low-income developing countries are concerned that trade liberalisation under the Doha Round would erode their preferences guaranteed under the SDT.

The article discusses:

• the concept of SDT and its intellectual origins
• various beneficiary country groups
• the issue of hierarchies of beneficiaries
• what new shape the SDT is likely to take under the Doha Round

The paper concludes that small and low-income developing countries stand to gain in the long-term from trade liberalisation and integration into the multilateral trade regime. There are short-term macroeconomic adjustments, which in turn lead to immediate adjustment costs. However, the short-term macroeconomic adjustment costs are small relative to the long-term efficiency gains.

The report recommends the following measures for refining and strengthening SDT:

• a bold unilateral measure like a general reduction in all Most Favoured Nation (MFN) tariffs in the industrial economies on labour-intensive exports of the small and low-income developing economies to 5 percent by 2010 and 10 percent on agricultural exports. By 2015 all exports of manufactured products from the developing economies should be eliminated
• industrial economies need to unilaterally expand market access for LDCs, along with simplification of the Rules of Origin requirements
• developing economies on their part should slash their tariff barriers on the basis of an agreed formula-based approach
• industrial economies should make binding commitments in trade in services to expand temporary excess of services providers by a specific proportion of the workforce, say, one percent
• acceptance of the principle of policy space for the developing economies under the WTO discipline would go a long way in helping many small and low-income developing economies
• the developing economies on their part need to accept the core discipline of WTO on market access, including undertaking liberalisation commitments
• the multilateral trade system needs to explore feasible channels of meeting the special institutional development needs of low-income developing economies and LDCs
• the industrial economies need to meet the trade-related technical assistance needs of the small and low-income developing economies

• Full text of document
• Publisher details
• Send to a friend