Special and differential treatment for developing countries

1
Special and differential treatment for developing
countries

• at the beginning little attention to devt
  problems the Avana Charter contained some
  provisions
• GATT 1947 art.XVIII - governmental assistance to
  economic devt temporary deviation from GATT
  provisions is allowed
• - flexibility in tariff structure to create new
  industries
• quantitative restrictions for BOP purposes taking
  into account the high level of imports determined
  by dev't needs

2
Special and differential treatment for developing
countries

• modifications to GATT 1947 (art.XXVIII bis)
• - negotiations on a reciprocal and mutually
  advantageous basis are conducted with due regard
  to the varying needs of parties
• - the needs of less-developed countries for a
  more flexible use of tariff protection to assist
  their economic devt and the special needs of
  these countries to maintain tariffs for revenue
  purposes

3
Special and differential treatment for developing
countries

• decolonisation and growing power of DCs
• DCs gain majority in the UN General Assembly
• Important UN Declarations
• - Declaration on the granting of independence to
  colonial countries and peoples (1960)
• - A programme for intl devt cooperation (1961)
• the non-aligned movement (1961) based on
  self-reliance

4
Special and differential treatment for developing
countries

• the Group of 77 (1964)
• UNCTAD, UNDP, UNIDO
• non reciprocity developed countries must grant
  concessional tariffs to DCs without requiring any
  concession in return and without extending it to
  other countries
• GATT as it stands in that moment and the liberal
  economic theory are criticised

5
Special and differential treatment for developing
countries

• decision to amend the GATT by introducing part IV
• - derogation to the reciprocity principle
• - commitment to enhance exports from DCs
• - special attention to primary products
• - cooperation with the UN
• - harmonisation of policies and regulations
• - technical and commercial standards
• - facilities to increase the flow of information

6

• generalised systems of preferences (GSP)
  unilateral national schemes to grant tariff
  protection
• ex. US suspended Argentina from Trade Preference
  Scheme
• the idea came out in 1970 but it was outside GATT
  system
• the 1971 a 10-year derogation to the MFN is taken
  by the GATT parties under the form of a decision

7
Special and differential treatment for developing
countries

• DCs unhappy of this decision because it is a
  temporary derogation
• The Charter of economic rights and duties of
  States and the Declaration on the Establishment
  of a New Intl Economic Order (1974)
• power of OPEC countries and of the Group of 77
• In 1979 the Enabling clause is adopted
  permanent derogation to the MFN (decision of the
  CPs)
• SD treatment vs gradual implementation of GATT
  rules by DCs

8
Special and differential treatment for developing
countries

• the Eighties are difficul years for DCs
• - NICs start to emerge
• - growing role of technology
• - big external debt of DCs
• - the Uruguay Round is not a dev't round and the
  new WTO is not based on SD treatment
• - the principles of the new int'l economic order
  are forgotten

9
Case study the EU-India GSP

• GSP all have a similar scheme
• - no criteria on beneficiaries
• - different sectors are covered
• - 0 duty for LDCs
• - safeguard measures
• - rules of origin
• EU regulation 2008/732 applies until the end of
  2013 the proposal for the new scheme (GSP) will
  come into force on January the 1st 2014

10
Case study the EU-India GSP

• the EU-India GSP contained the so-called drug
  arrangement tariff preferences for countries
  having in place programs against drug trafficking
• India said this provision was discriminatory, as
  benefits were allowed just to some DCs (Pakistan)
• this had negative consequences on India's exports
  to the EU, less competitive than the Pakistani
  equivalent
• AB the Regulation does not allow objective
  criteria in order to include other DCs with
  similar problems among the beneficiaries

11
Case study the EU-India GSP

• AB (continued) no objective criteria in order to
  remove beneficiary countries from the list
• the discrimination among WTO countries is
  incompatible with the Enabling clause
• the EU was forced to change its scheme
• special arrangements for labour rights and the
  env't were not at issues, as they were based on
  objective criteria (ILO conventions and int'l
  env'l law)
• sustainable dev't social rights can be included
  in GSP schemes conditionality

12
THE NEW GSP

• the new GSP
• - less beneficiaries countries which have
  reached an average standard of living and those
  enjoying a preferential treatment under other
  schemes will be excluded
• - conditionality (env't, labour, etc)
• - better preferences under the Everything but
  Arms initiative (LDCs)
• - predictability and stability the system
  becomes open-ended

13
THE EVERYTHING BUT ARMS INITIATIVE

• Regulation (EC) 416/2001 (EBA regulation)
• duty-free access to imports of all products from
  LDCs, except arms and ammunitions, without any
  quantitative restrictions
• incorporated into the GSP Council Regulation
• special arrangements for LDCs are maintained for
  an unlimited period
• when a country is excluded by the UN from the
  list of the least-developed countries, it shall
  be withdrawn from the list of the beneficiaries

14
The EC and ACP countries

• Yaoundé and Lomé Conventions governing EU-ACP
  relationships
• international agreements between EU and ACP
  countries
• non reciprocity in trade relations
• stabilization mechanisms for export prices
• clauses about human rights and democracy

15
The EC and ACP countries

• the regime is incompatible with
• - the MFN because of preferential treatment
• - GATT art.XXIV as it is not a regional agreement
• - the Enabling clause because it does not apply
  to any DCs but just to ACP
• starting from the 90s the EC asks a waiver to the
  WTO
• at the end of the Doha Round the waiver is
  extended until 2008

16
The EC and ACP countries

• The Cotonou Agreement is the solution (2000)
• regional trade agreement ex GATT art.XXIV
• 20 years revision every 5 years
• reciprocity gradual opening of ACP economies is
  supposed
• the agreement is implemented through Economic
  Partnership Agreements with each country

17
The EC and ACP countries

• the Banana dispute EU vs US and caribbean
  countries (1995-2007)
• banana imports were subject to a system of
  licences, discriminating according to the origin
• EC has been found in breach of GATT art.I (MFN)
  and XIII (non-discriminatory administration of
  quantitative restrictions)