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Professor Xiankun LU

Managing Director

09.09.2021

Developing Country Status

and

Special & Differential Treatment

Professor Xiankun LU

Managing Director

LEDECOSwitzerland

Development: an evolving discussion

I. WTO Preamble: Recognizing further that there is a need for positive efforts designed to

ensure that developing countries, and especially the least developed among them,

secure a share in the growth of international trade commensurate with the needs of their

economic development.

II. Doha Development Round (DDA): “The majority of WTO members are developing

countries. We seek to place their needs and interests at the heart of the Work Programme

adopted in this Declaration. ”

III. Ongoing discussions of the WTO Reform:

I. “(T)here is a group of self-declared developing country Members that are relatively advanced,

wealthy, and influential and that should not have access to blanket special and differential

treatment in current and future WTO negotiations. ” (US proposal: WT/GC/W/757/Rev.1)

II. S&D is ‘an integral part of the multilateral trading system’, and self-declaration of developing

country status ‘a fundamental rule’ and ‘the most appropriate classification approach’ for the WTO.

(China, India et al: WT/GC/W/765/Rev.2)

Developing Country Status

I. In WTO legal texts: membership are

categorized ass developed,

developing and least-developed

countries (LDCs).

II. LDCs: I. UN: 47 countries designated on the basis

of income, human assets and economic vulnerability;

II. Annex VII of the WTO Subsidies and Countervailing Measures Agreement (SCM Agreement): per capita income below USD 1,000 (in 1990 constant dollar terms).

III. Developing countries: designation is

self-determined

Special and differential treatment (S&D)

I. Provisions that aimed at increasing the tradeopportunities of developing Members

II. Provisions under which WTO Members shouldsafeguard the interests of developing countryMembers

III. Flexibility of commitments and use of policyspace

IV. Technical assistance to all developing members

V. Provisions relating to LDC Members

S&D: What and how?I. US proposal – graduation of 37 WTO members, based on:

1. Membership of or application to join OECD

2. Member of G20

3. Member classified as “high income” by World Bank

4. Member who accounts for at least 0.5% of global merchandise trade (X + M)

Includes:

Antigua and Barbuda, Aruba, Argentina, Bahrain, Barbados, Brazil, Brunei

Darussalam, Chile, China, Colombia, Costa Rica, Hong Kong, India, Indonesia, Israel,

Korea, Kuwait, Macao, Malaysia, Mexico, Oman, Panama, Peru, Philippines, Qatar,

Saudi Arabia, Seychelles, Singapore, South Africa, St. Kitts and Nevis, Taiwan,

Thailand, Trinidad and Tobago, Turkey, United Arab Emirates, Uruguay, Viet Nam

II. EU proposal: case by case approval based on real needs

S&D: What and how?

Proposal by China, India, South Africa and Venezuela

1. Against graduation on grounds of development divide – e.g.

industrial structure, GDP per capita, poverty, under-nourishment,

size of agricultural sector, IPR ownership, technology, R&D, digital

divide

2. Rejection of “absolute reciprocity” for any developing countries

(remember this is a self-designated status, and this is defended by

China et al.)

S&D: What and how?

I. G90: implementation morphed into Agreement-Specific

ProposalsCurrently (2017): TRIMS, GATT Art. XVIIIA & C (industrial

development), XVIIIB (balance of payments), SPS, TBT, SCM, Customs

valuation, Enabling clause, Technology transfer, LDC accessions to WTO

II. Proposal by China on WTO reform – section on S&D

1. Reduce ‘best endeavors' elements in S&D

2. Make S&D more precise, effective and operational

1. DFQF for LDCs

2. Improve technical assistance

3. Resume S&D negotiations to ensure its adequacy and effectiveness

4. Encourage developing countries to assume higher levels of of obligations

commensurate with their development needs and capabilities

S&D: What and how?

Proposal by Norway (Ottawa Group)

1. Don’t waste time on the definition of development status –irrelevant

to degree of access to S&D and level of obligations

2. S&D needs to be decomposed into its constituent parts

3. S&D must be need-based

4. S&D must be enabling, not exempting

5. TA and capacity building is essential

GDP world No.2

PollutionUnbalanced economic structure

Developing Country Status and S&D: Conclusions

I. Stop politicizing development status and S&D and the

static zero-sum thinking

II. Every members have and will get some “S&D”

III. S&D must be enabling (not exempting), dynamic (not

permanent)

IV. Creative thinking is needed. TFA approach is an option, but

not a panacea

V. One size fits all won’t work, customized S&D is an option

VI. Trust is non-existing and must be rebuilt

VII. This must be put under the big context of the WTO reform,

including decision making, format of negotiations, etc.

LEDECO Geneva

日内瓦箂科中心

Email :

Linkedin:

WeChat（微信）:

xiankun.lu@ledeco-geneva.com

https://www.linkedin.com/in/xiankun-lu-a61b002b/

xiankunlu