WTO: S&D REVIEW STRUGGLES FOR AGREEMENT

The last three weeks has seen special sessions of the WTO's Committee on Trade and Development (CTD) meet three times to discuss agreement- specific submissions as part of its review of special and differential treatment (S&D) provisions for developing countries.

Starting with a 23 October meeting on safeguards and services, they met again on 6 November for submissions relating to sanitary and phytosanitary measures, and again on 12 November on dispute settlement. The general debates on these submissions reportedly saw little movement in countries' positions (see BRIDGES Weekly, 24 October), with developed countries repeatedly saying that agreements could not be re-negotiated in this forum and should be relegated to the relevant bodies. Industrialised Member countries also said that proposals put forward by developing countries were impractical and would not achieve desired aims, and/or that sufficient flexibility was already available in the current rules. Many developing countries reportedly expressed disappointment and exasperation that the talks were essentially going in circles. In addition to these three meetings, an informal EC paper on the issue of differentiation (i.e. providing different levels of S&D to countries at different levels of development) was met with intense opposition from developing countries when it was circulated at a 4-5 November meeting for senior officials hosted by the EC.

WTO Members are working towards reaching agreement around strengthening S&D provisions ahead of a 31 December 2002 deadline, already extended from a missed 31 July 2002 deadline.

Safeguards

Discussions on the Safeguards Agreement were relatively short and focused on Article 9 (dealing with developing country concerns). The proposal on this item contained in the Africa Group submission (TN/CTD/W/3/Rev.2, not yet de-restricted) asserts that the nature of the prohibition against applying safeguard measures on products from developing country Members and the right for developing country Members to extend/augment safeguard measures is binding. Developed countries generally said there were no reasons to question the binding nature of Article 9, and requested clarification on what was meant by a "binding right" (which they interpret as an obligation). At the end of the discussions, Members simply agreed that the Article was binding.

With respect to the elements of the Africa Group proposal that looked to increase the level of a developing country's exports upon which a safeguard could not be applied, the EC, Japan, and Norway indicated that these matters had already been considered in another forum but that no conclusion had been reached.

Services

The services discussion saw little headway, with developed country responses to the proposals (primarily from the Africa Group, see above) pointing to the inherent flexibilities already embedded in the positive- list approach to the General Agreement on Trade in Services (GATS), in particular the allowance for lower levels of commitments from developing countries. Developed countries reportedly said that developing countries should take advantage of this approach by making requests in the context of the services negotiations for items of export interest to them. Countries such as the US and New Zealand said they were willing to discuss the question of technical assistance for the services negotiations currently underway. The perception that there was neither sufficient time nor an appropriate mandate to re-negotiate GATS (in the CTD or otherwise) was cited by a number of developed countries.

An Africa Group proposal that developed country Members reserve quotas for the supply of services by developing country suppliers in sectors that developing country suppliers have interests was widely rejected by developed countries on account that quotas went counter to GATS' liberalisation efforts.

Sanitary and phytosanitary measures

On the contentious issue of sanitary and phytosanitary measures (SPS) -- measures that can often negate crucial market access opportunities for developing countries' exports -- developed countries expressed a lack of understanding of many concerns underlying the developing countries' proposals. Industrialised country Members reportedly said that the proposals (TN/CTD/W/2 & W/6, searchable at http://docsonline.wto.org; and W/3/Rev.1, not yet de-restricted) placed too many restrictions and delays on implementing new SPS measures and/or required unlimited technical assistance funding, which was not available.

Australia said that withdrawing and/or providing exemptions to SPS measures defeated the purpose of protecting against risks. The EC mentioned that it could offer further work on equivalency systems and transparency. Canada and the US followed on earlier arguments that despite the unique nature of S&D with regards to SPS measures, the current S&D provisions had not been used effectively, and that making better use of existing provisions should be the priority (as opposed to changing/adding to them). Developed countries on the whole indicated that further consultations in the SPS Committee would be useful when new SPS measures were likely to cause problems for developing countries (as suggested in the Canadian submission to both the CTD special session and the SPS Committee, G/SPS/W/127).

Developing countries responded that their proposals did not in fact ask that sanitary and phytosanitary standards be lowered, but rather that meaningful and mandatory technical and financial assistance be provided in order to meet the new standards. Commenting on the Canadian proposal, Egypt noted its value, but said it did not address the related proposals that sought to secure and enhance current levels of exports from developing countries. They agreed that S&D provisions were in fact under-utilised, but attributed the cause to the vagueness of the language used in them -- a vagueness that one trade source noted was explicitly what was meant to be addressed under the CTD's mandate. Furthermore, Egypt added that often when S&D provisions had been used it was in a bilateral setting, and as such were not recorded by the WTO Secretariat. A delegate from the Africa group reportedly queried at one point, "if these proposals were not workable, then what was?"

Dispute Settlement

While Members did engage in an in-depth discussion of the various proposals on the Dispute Settlement Understanding (DSU), many (developed and developing) countries preferred to focus on these items in the special session of the Dispute Settlement Body (DSB) -- where a number of the same proposals had been tabled. Some developing country delegates, however, noted that while the DSB meetings were looking primarily at new provisions and rules, the CTD's mandate was to operationalise the current ones. The EC reportedly noted that while it would entertain discussions in the CTD on the DSU, any modification should come in the relevant negotiating body (the special sessions of the DSB). Of note, the issue of providing blanket provisions for special treatment and/or technical assistance to all developing country Members, as opposed to only those on the lower end of the income bracket, came up repeatedly in the discussion.

EC paper on differentiation and graduation

This same issue was the focus of a paper circulated at a 4-5 November meeting outside Geneva, hosted by the EC for senior officials. The informal EC paper was reportedly aimed at steering the S&D review away from how to strengthen these provisions and make them "more precise, effective and operational", and push it towards a discussion on differentiation (i.e. providing different levels of S&D to countries at different levels of development).

Differentiation between developing countries has been a long-standing and hotly contested debate (both between developed & developing countries and amongst developing countries themselves). The EC paper, widely supported by the major trading powers, allegedly outlines that if any substantial concessions were to be made on the mandate to strengthen S&D provisions, it would have to be done in the context of differentiation and graduation, in the sense that as a country develops, it qualifies for less S&D provisions. One developed country source reportedly said that even if this were the case, little agreement was likely to be reached by 31 December (the new deadline for completing with the first part of the CTD's mandate on S&D, which was already postponed from its initial 31 July date).

In light of the mandate provided at Doha to review the agreement- specific provisions, combined with the sensitivity over the issue of differentiation, developing countries, according to sources, vehemently opposed the EC paper and re-affirmed their commitment that if the S&D review is sidetracked, it will have very negative impacts on the entire Doha round.

The next CTD special session is scheduled for 20-21 November.

ICTSD reporting.