Why in news?
The World Trade Organization is debating reforms to its special and differential treatment provisions, with developed countries seeking tighter eligibility criteria and developing countries insisting on retaining flexibilities.
Origins and purpose
- S&DT provisions originated in the 1960s GATT negotiations, were consolidated in the 1995 WTO Agreement and reaffirmed in the Doha Development Agenda of 2001.
- They recognise that developing countries need more time and flexibility to implement trade obligations and benefit from global markets.
Main features
- Longer transition periods: Developing countries are allowed more time to cut tariffs and implement disciplines on subsidies, intellectual property and other areas.
- Special market access: Least Developed Countries (LDCs) get duty‑free, quota‑free access to many markets under schemes like the Everything But Arms initiative.
- Flexibilities: Countries can protect infant industries, maintain higher subsidies and use safeguards to shield farmers and small industries.
- Capacity building: Developed members provide technical assistance and training to help poorer countries adopt standards and improve trade infrastructure.
Determining status
- WTO rules allow members to self‑declare as “developing” to claim S&DT benefits. This has led to debates, as some large emerging economies receive the same flexibilities as smaller, poorer nations.
- LDC status is defined by the United Nations based on income, human assets and economic vulnerability. There are about 45 LDCs.
- Other members can question a country’s self‑declaration, but there is no binding mechanism to reclassify a member.
Significance and reform debate
- S&DT aims to level the playing field by recognising historical inequalities and enabling developing countries to integrate gradually into the global trading system.
- Some developed members argue that fast‑growing economies like China and India should accept greater obligations to reflect their increased global trade share. Developing countries counter that persistent poverty and development challenges justify continued flexibilities.
- Proposed reforms include objective criteria (income per capita, share of global trade) for eligibility and graduated responsibilities.
Conclusion
Special and differential treatment remains a cornerstone of multilateral trade negotiations. Reform must balance equity and efficiency, ensuring the WTO remains relevant for all members.