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TWN
Info Service on WTO and Trade Issues (Mar26/40) Yaounde, 28 Mar (D. Ravi Kanth) — The United States has appeared to insist during a stakeholder meeting on “Special and Differential Treatment and Development” that every member should adhere to the same rules, maintaining that the existing treaty-based self-designated process for availing of special and differential treatment (S&DT) by developing countries has been at the root of all problems at the World Trade Organization, according to participants familiar with the development. The meeting took place during the ongoing WTO’s 14th ministerial conference (MC14) in Yaounde, Cameroon. The US is understood to have said that its principal point is to ensure that S&DT is made available according to a targeted approach – whether in terms of technical assistance, capacity-building, or policy flexibility – based on a seemingly unilateral process without exceptions. The US apparently wants to do away with any categorization among WTO members, a system built on the Enabling Clause of 1979 that allows developing countries to avail of commitments based on less-than-reciprocal treatment – a construct that Washington had built into the July 2004 framework agreement, said people familiar with the development. The second point that the US advocated is that the self-designation framework for availing of S&DT by developing countries has apparently stymied possible outcomes, as some industrialized countries have even claimed that S&DT benefits should not be accorded to all developing countries, said participants, who asked not to be quoted. However, several participants at the meeting said the S&DT provisions are an integral part of the WTO rule- book, while insisting that S&DT is distinct from the larger array of issues in the development dossier. These countries contended that S&DT is an inherent right that has also contributed to their integration into the global trading system. In sharp contrast to the targeted approach proposed by the US – which itself appears to be based on a one-size- fits-all model – China said that trade alone “cannot solve all development problems.” China called for advancing WTO reform in “the right direction, which means upholding true multilateralism, placing development at the center of the reform agenda, and safeguarding and strengthening a rules-based, open and inclusive multilateral trading system that is non-discriminatory to all members and more [deferential] to the small and vulnerable.” In an apparent critique of the US position, Beijing highlighted that “a rules-based trading system built on principles of non-discrimination can provide stability and predictability and is conducive to universally beneficial and inclusive development,” said participants who asked not to be quoted. On the other hand, without naming the US, China said that “a power-based trading system [amplifies] the asymmetry between members, leaving the most vulnerable members marginalized.” As a second priority on S&DT, China called for “concrete actions to enhance the effectiveness of special and differential treatment (SDT),” as it is “an important policy tool to help developing members better integrate into the multilateral trading system.” China asked, “how to make it more precise, effective, and better respond to the needs of members at different levels of economic development?” Answering its own query, China said it “believes that an integrated approach that contains elements of needs assessment, capacity building and rules implementation should be explored, as in the case of the Trade Facilitation Agreement and the Fisheries Subsidies Agreement.” China highlighted that “the Investment Facilitation for Development Agreement also builds on such a model,” arguing that “imposing external criteria on SDT eligibility, on the other hand, is never going to make SDT more effective.” As a third marker in the development discussion, China said that “development is much broader than SDT.” “Issues of common interest to developing members include policy space for industrialization, encouraging foreign direct investment, ensuring food security, enhancing supply chain resilience, seizing opportunities in the development of the digital economy, green transformation, and artificial intelligence,” China said, adding that these must be pursued vigorously. OTHER INTERVENTIONS According to details shared by the participants, the European Union, in its intervention on development, is understood to have acknowledged that not all countries have benefited equally from the trade rules. The EU posed several rhetorical questions, such as: How do we achieve benefits for all members, and how do we design provisions when countries need S&DT? What is a transition period, and what is the threshold for availing of special and differential treatment? With differing levels of emphasis, the EU appears to be advocating for a targeted approach with flexibility based on members’ capacity. Further, the EU appears to have said that developing countries want to attract investment, which needs to be part of the reform discussions. Without naming China, the EU hinted that it is in favour of the industrialization of members, as long as it is not “trade distorting,” said participants familiar with the discussions. In short, Brussels wants a targeted approach that is “fit for purpose,” said participants familiar with the EU’s line of argument. Gambia, a least developed country, apparently echoed that it is open to the reform of S&DT while not agreeing with the EU’s proposal. El Salvador apparently underscored the need for further flexibility and fair rules for developing countries to integrate into global value chains. Nigeria apparently said that reform must go beyond an agreement while allowing developing countries to have policy space, said people familiar with the discussions. New Zealand apparently said that there are a number of potential reforms on the table to achieve development, including some pending ones in agreements such as the Agreement on Agriculture, said participants who asked not to be identified. On S&DT, New Zealand appears to have argued that it must exist for developing countries so that they can integrate into the multilateral trading system. Technical assistance and trade facilitation must also be strengthened, not taken away. It underscored the need for an evidence-based approach to S&DT, said participants familiar with the discussions. Saudi Arabia appears to have said that the WTO should continue to support multilateralism while emphasizing that S&DT must be at the core of the WTO rule-book. The Solomon Islands is understood to have conveyed that WTO reform must be transparent. In its intervention, India said the Marrakesh Agreement, which led to the establishment of the WTO in 1995, explicitly calls for the rights of developing countries to be respected without fail. India also argued that the commitment to treat developing countries with S&DT is clear, because the inequalities among members will eventually disappear. India said development must be at the center of multilateralism, adding that policy space must be materialized in the right to industrialization for developing countries. India reiterated that policy space is central to industrialization, suggesting that reform of S&DT must result in precise and effective outcomes.
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