June 2005
Author: Thomas Fritz
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Introduction
In the aftermath of the failed World Trade Organization (WTO) Ministerial Conference in Seattle in June 1990 a heated debate about special and differential treatment (SDT) has developed in the trade policy community. According to a widely cited definition this instrument is "the product of the co-ordinated political efforts of developing countries to correct the perceived inequalities of the post-war international trade system by introducing preferential treatment in their favour across the spectrum of international economic relations" (Gibbs 1998). This definition shows that special and differential treatment can be considered as an expression of the long-standing struggle for a more equitable world economic order. It encompasses the entire range of regulations whose integration into the international trade regime has been advocated by Southern governments. The progress in implementing these special provisions has always been proof of the negotiation clout of these governments.
After its final integration into the General Agreement on Tariffs and Trade (GATT) special and differential treatment underwent a radical change which was described by many observers as a transformation from a development to an adjustment instrument. This change occurred during the Uruguay Round of GATT that started in 1986. The end of this eight-year long liberalisation round not only saw the agreement to found the World Trade Organization but also a fundamentally changed concept of special treatment which in the years to come should turn out to significantly weaken development policy concerns. The more conspicuous the difficulties of the developing countries in implementing the WTO agreements became, the louder became the demands to re-strengthen special treatment.
The present study deals with exactly this issue. It describes the history as well as the impact of this trade policy instrument and discusses the different proposals to strengthen it. The practical relevance of these proposals is not to be underestimated. The concrete design of special and differential treatment will depend greatly on the extent to which acknowledged development policy shortcomings of the WTO agreements can be remedied in the future. To conclude this study we will present various issues and intervention possibilities which should be taken into account in the further and more intensive discussion of the special treatment.
Ingrid Spiller
Heinrich Boell Foundation
Michael Windfuhr
Germanwatch
(also available in German, see 05-1-04)