Special and differential treatment for developing countries at the beginning little attention to dev’t problems: the Avana Charter contained some provisions.

Special and differential treatment for developing countries

at the beginning little attention to dev’t problems: the Avana Charter contained some provisions

GATT 1947: art.XVIII - governmental assistance to economic dev’t: temporary deviation from GATT provisions is allowed

- flexibility in tariff structure to create new industries- quantitative restrictions for BOP purposes taking into

account the high level of imports determined by dev't needs

Special and differential treatment for developing countries

modifications to GATT 1947 (art.XXVIII bis)- negotiations on a reciprocal and mutually

advantageous basis are conducted with due regard to the varying needs of parties

- the needs of less-developed countries for a more flexible use of tariff protection to assist their economic dev’t and the special needs of these countries to maintain tariffs for revenue purposes

Special and differential treatment for developing countries

decolonisation and growing power of DCs DCs gain majority in the UN General AssemblyImportant UN Declarations: - Declaration on the granting of independence to

colonial countries and peoples (1960)- A programme for int’l dev’t cooperation (1961)the non-aligned movement (1961) based on self-

reliance

Special and differential treatment for developing countries

the Group of 77 (1964)UNCTAD, UNDP, UNIDOnon reciprocity : developed countries must grant

concessional tariffs to DCs without requiring any concession in return and without extending it to other countries

GATT as it stands in that moment and the liberal economic theory are criticised

Special and differential treatment for developing countries

decision to amend the GATT by introducing part IV- derogation to the reciprocity principle- commitment to enhance exports from DCs- special attention to primary products- cooperation with the UN- harmonisation of policies and regulations- technical and commercial standards- facilities to increase the flow of information

generalised systems of preferences (GSP): unilateral national schemes to grant tariff protection

ex. US suspended Argentina from Trade Preference Scheme

the idea came out in 1970 but it was outside GATT system

the 1971 a 10-year derogation to the MFN is taken by the GATT parties under the form of a decision

Special and differential treatment for developing countries

DCs unhappy of this decision because it is a temporary derogation

The Charter of economic rights and duties of States and the Declaration on the Establishment of a New Int’l Economic Order (1974)

power of OPEC countries and of the Group of 77In 1979 the “Enabling clause” is adopted: permanent

derogation to the MFN (decision of the CPs)S&D treatment vs gradual implementation of GATT rules by

DCs

Special and differential treatment for developing countries

the Eighties are difficul years for DCs:- NICs start to emerge- growing role of technology- big external debt of DCs - the Uruguay Round is not a dev't round and the new WTO

is not based on S&D treatment- the principles of the new int'l economic order are

forgotten

Case study: the EU-India GSPGSP all have a similar scheme:- no criteria on beneficiaries- different sectors are covered- 0 duty for LDCs- safeguard measures - rules of originEU regulation 2008/732 applies until the end of 2013; the

proposal for the new scheme (GSP+) will come into force on January the 1st 2014

Case study: the EU-India GSPthe EU-India GSP contained the so-called “drug

arrangement”: tariff preferences for countries having in place programs against drug trafficking

India said this provision was discriminatory, as benefits were allowed just to some DCs (Pakistan)

this had negative consequences on India's exports to the EU, less competitive than the Pakistani equivalent

AB: the Regulation does not allow objective criteria in order to include other DCs with similar problems among the beneficiaries

Case study: the EU-India GSPAB (continued): no objective criteria in order to remove

beneficiary countries from the listthe discrimination among WTO countries is incompatible

with the Enabling clausethe EU was forced to change its schemespecial arrangements for labour rights and the env't were

not at issues, as they were based on objective criteria (ILO conventions and int'l env'l law)

sustainable dev't & social rights can be included in GSP schemes = conditionality

THE NEW GSPthe new GSP+- less beneficiaries: countries which have reached an

average standard of living and those enjoying a preferential treatment under other schemes will be excluded

- conditionality (env't, labour, etc)- better preferences under the Everything but Arms

initiative (LDCs)- predictability and stability: the system becomes open-

ended

THE EVERYTHING BUT ARMS INITIATIVERegulation (EC) 416/2001 (EBA regulation)• duty-free access to imports of all products from LDCs,

except arms and ammunitions, without any quantitative restrictions

• incorporated into the GSP Council Regulation • special arrangements for LDCs are maintained for an

unlimited period • when a country is excluded by the UN from the list of the

least-developed countries, it shall be withdrawn from the list of the beneficiaries

The EC and ACP countriesYaoundé and Lomé Conventions governing

EU-ACP relationshipsinternational agreements between EU and

ACP countriesnon reciprocity in trade relationsstabilization mechanisms for export pricesclauses about human rights and democracy

The EC and ACP countriesthe regime is incompatible with :- the MFN because of preferential treatment- GATT art.XXIV as it is not a regional agreement- the Enabling clause because it does not apply to any

DCs but just to ACPstarting from the 90s the EC asks a waiver to the

WTOat the end of the Doha Round the waiver is extended

until 2008

The EC and ACP countriesThe Cotonou Agreement is the solution (2000)regional trade agreement ex GATT art.XXIV 20 years + revision every 5 yearsreciprocity: gradual opening of ACP economies is

supposedthe agreement is implemented through Economic

Partnership Agreements with each country

The EC and ACP countriesthe Banana dispute: EU vs US and caribbean

countries (1995-2007)banana imports were subject to a system of licences,

discriminating according to the origin EC has been found in breach of GATT art.I (MFN) and

XIII (non-discriminatory administration of quantitative restrictions)