'DEVELOPMENT' AT WTO ENDEAVOURS TO MEET ITS DEADLINE

The body tasked by WTO Members to review the special and differential treatment (S&D) provisions in the WTO agreements -- which make up the core of 'development' at the WTO -- met informally on 10 June and formally on 14 June. The 10 June informal special session of the Committee on Trade and Development (CTD) met specifically to discuss proposals tabled at its 16 May session by the Africa Group and the Least-Developed Countries (LDCs) (see BRIDGES Weekly, 22 May 2002). The fourth formal session met on 14 June to discuss proposals on possible amendments to S&D language in the following agreements: GATT 1994, including a number of the 'Understandings' of GATT 1994; TRIPs (Trade-related Aspects of Intellectual Property Rights); and the Trade Policy Review Mechanism. The CTD must report to the General Council by 31 July 2002 with recommendations on how to make S&D provisions more efficient and/or mandatory.

Proposal from Africa Group

The Africa Group proposal (TN/CTD/W/3; not as yet de-restricted) was tabled at the last formal CTD session on 16 May (see BRIDGES link above). It was presented in three parts: i) an examination of the form and meaning of S&D and some suggestions on possible methodologies of amendment; ii) a cross-cutting look at the principles and objectives of S&D in the WTO and related recommendations; and iii) agreement-by-agreement recommendations. Among other things, Part (ii) suggested that non-binding provisions be made binding, that transition periods be criteria-driven and perpetually extendible, that the approach to technical assistance be reconsidered, that S&D be enforceable under dispute procedures and that an S&D monitoring body be established to ensure compliance. Part (iii) contained proposed changes in a number of agreements, including, inter alia, GATT 1994, Balance-of-Payments, Agriculture, Sanitary and Phytosanitary Measures, Technical Barriers to Trade, etc. On whether to make the envisaged changes via interpretive statements or amendments to the Agreements themselves, the proposal supported both options depending on the nature of the change required.

Proposal from the LDCs

The heart of the LDC proposal (TN/CTD/W/4; not as yet de-restricted) was contained in the section 'Measures Required To Strengthen S&D'. Like the Africa Group proposal, it espoused a general framework approach that, inter alia, proposed the re-affirmation of development as the primary goal of the multilateral trading system, the strengthening of this development-principle supremacy in the four major areas of the WTO (goods, services, intellectual property, and dispute settlement), and providing developing and least-developed countries recourse to financial resources in order to exercise their rights (including their S&D rights). It also highlighted the need for addressing supply-side constraints via exemptions or relaxations of obligations for developing countries and obligations for developed countries to assist in this area. The agreement-by-agreement section made recommendations for, inter alia, the establishment of an annual special session on LDCs in the General Council, the legal binding of duty-and quota-free access for LDCs, realistic and flexible rules of origin requirements and an exemption from the Agreement on Trade-Related Investment Measures (TRIMs).

Reactions

A number of developing country delegates spoke in favour of the papers, including Lesotho, Egypt, Nigeria, India, Senegal, Haiti and Indonesia. Thailand also spoke in favour, however it noted that it did not feel that the CTD should be overseeing the work of other committees. The Quad countries of the US, EC, Canada, and Japan said that they saw value in some of the suggestions, although they did not agree on some of the premises upon which the proposals were based (such as wholesale changes of 'should' to 'shall' or unconditional extension of transition times). While a number of countries, including Norway and the US, made statements about their aversion to a 'two-tiered' system, they seemed interested in delving further into discussions over the principles and objectives of S&D. Pakistan, in response to Norway's comment, said that while the WTO should be striving for a single-tier system, it was questionable whether this was realistic, and pointed to the recently released UNCTAD Trade and Development Report, which makes the case for meaningful S&D (see http://www.unctad.org/en/pub/ps1tdr02.en.htm).

The Quad also seemed amenable to some kind of monitoring mechanism, as per the Africa Group suggestion. Sources in attendance noted, however, that vast differences remained over how such a mechanism might work (via the subsidiary bodies reporting to the CTD or by the CTD itself). Also in their comments on these proposals, the Quad Members repeated their calls for an in-depth paper on utilisation (i.e. how often, and which existing S&D provisions had been used to date). While some developing countries gave lukewarm support to this proposal, they cautioned against it delaying the work of looking ahead -- as opposed to looking in the past -- on S&D. One developing country delegate indicated his belief that the utilisation discussion was merely a stalling tactic and meant to divert attention from meaningful review. If anything, the delegate continued, the lack of usage of existing S&D provisions point to deeper problems vis-à-vis their operational nature.

The latest proposals

Three new proposals were available for discussion at the 14 June informal session. One from Paraguay dated 16 May 2002 on the 'Enabling Clause' (TN/CTD/W/5 searchable at http://docsonline.wto.org);  one from Thailand (Import Licensing, Art. 3.5 (a)(iv)); and one from St. Lucia (Art. XVIII:Section C of GATT 1994). As the latter two were only tabled at the meeting itself, the Paraguayan proposal was the focus of the first half of the session.

Paraguay felt that a number of the Art. I (MFN) waivers for Generalised Systems of Preferences (GSPs) had been used to grant discriminatory preferences to certain developing countries. As such, they were incompatible with the 1979 Enabling Clause -- which stipulates, inter alia, that S&D should not be applied in a way that raises barriers or creates difficulties for other developing countries.

The discussions on this centred on the 'discriminatory' effects of certain GSP schemes (preferential trading arrangements). The diversity of perspectives coming from the South emerged quite heavily on this issue -- with a stark divide between those who agreed that preferential treatment must be applied on an MFN basis (e.g. Philippines, Thailand, Argentina, India, etc.) and those who felt that the same treatment could not be accorded equally to all due to differing levels of development (e.g. Uganda, Kenya, Cuba, Nigeria, Zimbabwe, Jamaica, Pakistan). In general, however, most developing countries were supportive of the core observation, embodied in para. 10 of the proposal, which said that the "rules laid down in both the GSPs and Enabling Clause are frequently infringed by criteria for granting these schemes." Further, they observed that the criteria are not relevant to trade; usually driven by other objectives (primarily political); and are arbitrary, unilateral, and discriminatory. Many OECD countries grant 'GSP-plus' preferences to countries that comply with certain labour/human rights, environmental standards, or campaigns against drug trafficking.

Negotiating forum?

Chair Ransford Smith (Jamaica) commented on the question of whether the CTD special sessions constituted a negotiating forum or not at both the 10 June and 14 June meetings (see BRIDGES Weekly, 4 June 2002).  Initially, he reported that despite the prevalent divergences, all Members shared the view that the mandate of the special session derives from the both the Doha Ministerial Declaration and the Implementation Decision and that there is agreement on a work programme and the relevant time-frames. Recognising the two prevailing opinions on the issue of symbol usage on CTD special session documents, he indicated that the symbol 'TN' (i.e. 'trade negotiations') would be maintained and that there would be a note that this is without prejudice to whether this is a negotiating group.

The future winds blow...

Near the end of the 10 June session, Chair Smith suggested that four items be prepared by the Secretariat. Starting with a non-paper (i.e. unofficial document) on the principles and objectives of S&D, he went on to suggest a second non-paper on the systemic institutional proposals (i.e. monitoring, legal options for amendments, etc.), as well as a factual check-list of the various proposals made in the special session thus far. Finally, he requested that the Secretariat revise its background document on utilisation of existing S&D provisions. At the 14 June session, Members did agree to the request to revise the utilisation document.

Chair Smith also indicated that there would be further informal consultations on procedural issues so as to decide how to go about reporting "with clear recommendations for action" to the General Council by the 31 July 2002 deadline -- outlined by Members at the Doha Ministerial Conference last November (see BRIDGES Weekly, 15 November 2002).  One such informal was held on 18 June 2002, however at press time no information was available (see next week's edition for details).

The next formal meetings of the special session of the CTD are scheduled for 2 and 17 July. Another informal session will also be held on the afternoon of 27 June 2002.

ICTSD reporting.