International Civil Society Forum For Advancing LDC Interests in the Sixth WTO Ministerial SPECIAL A

1
International Civil Society ForumFor Advancing
LDC Interests in the Sixth WTO MinisterialSPEC
IAL AND DIFFERENTIAL TREATMENT IN THE WTO
ISSUES OF CONCERN FOR LDCs
Presented by Kazi Mahmudur Rahman Senior Research
Associate, CPD
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
2
ORGANISATION OF THE
PRESENTATION 1. INTRODUCTION 2. STATE OF THE ART
OF SD NEGOTIATIONS 3. EFFECTUALISING SD
PROVISIONING A BRIEF ANALYSIS OF AGREEMENT
SPECIFIC CHANGES PROPOSED IN THE TWELVE SD
PROVISIONS AGREED IN THE WTO 4. CONCLUDING
REMARKS WAY FORWARD
3
1. INTRODUCTION
Why Special and Differential Treatment? Special
and differential treatment (SD) provisions in
the WTO Agreement recognition of the special
problems that developing (LDCs) countries face
in benefiting fully and equally from a
liberalized trade environment due to their weak
institutions, inadequate infrastructure, scarce
human resource and countless supply constraints.

• This could be achieved through
• providing greater access in the markets of the
  developed countries,
• allowing them greater flexibility to pursue
  policy options most appropriate to rapid economic
  development, and
• expecting them to take on fewer obligations and
  commitments.

4
1. INTRODUCTION LDCs Marginal Share in Global
Trade (Contd.)

• Though there has been marginal increase in the
  share of LDCs in global export (from 0.46 in
  1998 to 0.58 in 2003, it is way below their
  combined share of 3.06 in 1954 (UNCATD, 2001)
• There is a need to make trading system work for
  poverty alleviation. People living in extreme
  poverty will increase from 334 mln in 2000 to 471
  mln in 2015 (LDC Report 2004)
• SD provision could be a tool in this respect

5
1. INTRODUCTION SD Provisions by type and
agreement

• provisions aimed at increasing trade
  opportunities (14)
• provisions which call upon WTO Members to
  safeguard the interest of dcs (50)
• provisions offering flexibility of commitments
  (33)
• transitional time periods (19)
• provisions related to technical assistance (14)
• provisions in favour of least developed countries
  (24)

Reality

• Total 155 SD provisions Only for the LDCs 24
• LDC benefited very little lack of specificity
  and non-binding best endeavour
• In view of the paucity of LDC negotiating
  resources it will be productive to deploy LDC
  efforts to the SD provisions that apply to them
  exclusively.

6
2. STATE OF THE ART OF SD NEGOTIATIONS The Doha
Declaration

• Para 44 of the declaration, which
• reaffirmed SDT integral part of the WTO
• concerns implementation of SD provisions
• directed all SD provisions reviewed to
  strengthen to make more precise, effective and
  operational, and
• linked this work to the decision on
  Implementation related Issues and concerns
• The decision on Implementation related Issues
  and concerns mandates the CTD
• identify the SD provisions which should be made
  mandatory
• examine additional ways to make SDT more
  effective
• report to the GC with recommendations by July
  2002
• consider how SDT could be incorporated into the
  architecture of WTO rules

7
2. STATE OF THE ART OF SD NEGOTIATIONS SD work
programme Phases

• The SD work programme was designed to be
  undertaken through the following phases
• Procedural phase Jan02 April02
• Submissions phase May02 Sep02
• Responses and discussions phase Sept02 Dec02
• Negotiating phase Dec02 Feb03
• General Council phase Feb03 Sept03
• The post-Cancun phase
• July Framework, 04
• General Council, July 05

General Council phase

• CTD recommended GC provide a clarification on
  how to give effect to the DDA
• Chairman of the GC put forward an approach based
  on 2 premises
• all proposals would be addressed without
  prejudice to the outcome, and that
• an informal categorization of the proposals was
  necessary to make the work more efficient

8
2. STATE OF THE ART OF SD NEGOTIATIONS SD work
programme Phases
Categorization of Agreement Specific Proposal

• all the 88 Agreement-specific proposals were
  divided into three categories

• Category I 38 (12 have already reached
  consensus) proposals on which it seemed that
  agreement may be possible.
• Category II 38 proposals made in areas currently
  under negotiation for referral.
• Category III 12 proposals on which there
  appeared to be a wide divergence of views.

Cancun Failure and Development Dimension of July
Package
further 3 proposals were added on at Cancun
draft, but were not agreed upon

• Recalls Doha mandate on SD and reaffirms SD is
  an integral part of WTO
• Notes the progress made, but does not propose
  adopting the 28 proposals
• Agreement specific proposals (category I, II, and
  III) deadline extended to July 2005
• Cross-cutting Issues (principles, definition,
  differentiation, graduation, monitoring etc)
  Work to continue and report made to the GC in
  July 2005

9
2. STATE OF THE ART OF SD NEGOTIATIONS Current
Debate

• Systematic Issue (cross cutting) Vs Agreement
  Specific
• Systematic Issue (cross cutting)
• Principles and Objectives of SD
• Transition periods or derogations
• Definition of a developing country
• Differentiation among groups of dcs (Hoekman
  and others)
• Graduation from SD.

• Agreement specific proposals (category I, II, and
  III)

10
2. STATE OF THE ART OF SD NEGOTIATIONS
Categorisation of Agreement Specific Proposals
11
2. STATE OF THE ART OF SD NEGOTIATIONS
Categorisation of Agreement Specific Proposals
12
3. BRIEF ANALYSIS OF 12 AGREEMENT SPECIFIC
PROPOSALS WHERE MEMBERS AGREED IN PRINCIPLE

• GATS IV3 Sectors of interest for LDCs export
  were not included in the text
• GATS IV The proposed decision only draw up
  modalities for LDcs participation in the service
  negotiations, but access to technology were not
  reflected
• GATS XXV.2 Recognition of LDCs supply side and
  infrastructural constrains complement this with
  appropriate TA commitment but without any
  concrete proposal on how this will be done as was
  articulated by the LDCs
• GATS PARA 6 ON TELECOM Need for transfer of
  technology recognized but emphasis only on
  training rather physical Transfer of Technology
• TRIPS 67 Replica of original 67, only a Para
  was added in terms of reviewing agreement between
  WIPO and WTO
• Enabling Clause Implementation of enabling
  clause was reemphasised but procedure and
  benchmarking could be important in coming days
• Notification The proposal reflected the demand
  of LDCs and African Group for simplifications and
  relaxation of LDC notification requirements
• DSU 8.10 This was already there, nothing new
• RoO This was also there but the revised version
  brought the concept from Annex to the main text
• Decision in Favour of LDC Para 2(v) Revised
  proposal talks of strengthening JITAP however,
  no concrete modalities to carry this has been
  articulated
• AoO 15.2 The LDCs and African group interest
  reflected, however there is a need to
  operationalize the objective of coherence mandate
  between the WTO and International Financial
  Institutions (IMF, World Bank)
• BOP of GATT 1994 Para 8 challenge ahead as
  regards how administrative requirements could be
  reduced.

13
4.0 Concluding Remarks Way Forward

• Proposals as regards SD provisions have been
  articulated in various forum
• General Council
• CTD
• Dhaka Declaration 2003
• Civil Society declaration (Dhaka) 2003
• Cancun Draft
• July Package
• Livingstone declaration 2005
• LDCs Concern
• CTD-SS, July, 05 Chairs statement, Several
  issues remain unresolved, rendering it
  impossible.. To make specific recommendations
  to the GC meeting in July 05.
• Will it coming to the track? Will the CTD
  continue consultation on five proposals submitted
  by LDCs? Will it happen in Hong Kong?
• Could be strengthening them through
• If CTDs works going to continue in October and
  December 2005 for LDCs (special session for
  LDCs?) Emphasized appropriate wordings to make
  it precise and enforceable,
• Raising Citizen's Voice 2nd Dhaka civil society
  forum, October 2005 and
• Hong Kong Ministerial

14
4.0 Concluding Remarks Way Forward

• Cautionary approach for LDCs
• LDC proposals need to be more targeted and
  specific
• While redrafting proposals, complete focus should
  be on the DDA and subsequently the July Package.
• Strategy for LDCs
• The African group is expected to be united with
  the LDC proposals as the CTD which is scheduled
  to continue work on African group proposals on
  agreement specific, once work on LDC proposals is
  completed.
• A Friends of Earth type coalition group could
  be formed with the developed countries in order
  to make SD a menu for the Hong Kong Ministerial.
  The idea is to change the perception among
  developed country trade negotiators, of viewing
  SDT from the short-term perspective of static
  gain and losses, towards a long-term vision of
  attaining global prosperity for all.
• Developing countries (G-10, G-20, etc.,) should
  be looking into deep consideration with LDCs and,
  therefore, the issue of SD need to be reflected
  in their priority lists.

15
4.0 Concluding Remarks Way Forward

• There is an urge to ensure progress in all the
  remaining Agreement-specific proposals
  (agreement-specific proposals should be the first
  to be dealt with, cross cutting proposals later),
  especially the LDC proposals, and with a view to
  effectively address the issues of increased
  flexibility, market access and capacity building
  for developing and least-developed countries, as
  is being sought in the majority of the proposals.
  
• In discussing the changes in the rest SD clauses
  (2650), we need to take assessment of the
  results of gain form the 12 agreed SD provisions
  (which is obviously not a bright scenario).
• Technical Assistance should not be concentrated
  only on software part (training, etc.,) rather on
  hardware part like infrastructure building, etc.,
  
• Failure of LDCs proposals (LDCs proposals
  suggested to be identified as a package) May
  also have reflected the lack of movement on other
  areas, and the fact that there is no reason why
  SD negotiations should move forward when talks
  in agriculture, NAMA, services and other key
  issues are blocked.

16
Thank You for Your Attention