3.5 developing countries in wto sys

8/7/2019 3.5 Developing countries in WTO sys

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Sri Ram Khanna Aug09 3.5 Developing Countries in theWTO System

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3.5 Developing countries in the WTO system.

1. Are there any special Rules for Developing Countries?

Expansion of the negotiating agenda to include sectors of interestto most developing countries, notably agriculture and textiles.

Many special provisions in favour of developing countries that have

been incorporated into the individual agreements and decisions of

the Uruguay Round. Take into account the special needs of these

countries, supplementing a number of previously existingmeasures carried over unchanged from the GATT 1947.

Article XVIII, Part IV and the Enabling Clause introduced in 1979.

The first allows flexibility in the use of trade measures to protect

infant industries and in the use of quantitative import restrictions to

alleviate balance-of-payments difficulties. The second is a section

covering the principles and objectives of the GATT with regards to

developing countries.

Page. 71


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It encourages developed countries to improve access to their markets

and states that developing countries are not expected to reciprocate

trade barrier reduction commitments made by developing countries.

The Enabling Clause (Decision on Differential and More FavourableTreatment, Reciprocity and Fuller Participation of Developing

Countries,28 November 1979 (L/4903) permits preferential treatment

to be given to, and exchanged among, developing countries subject

to stated conditions. It also authorizes specially favourable treatment

for least developed countries. Page.71

2. Least-developed countries (LDCs) which have been specifically

targeted as beneficiaries of many special treatment clauses included

in the Round. Ministerial Decision on Measures in Favour of

Least-Developed Countries, gives them special treatment, allaspects of all the agreements and requires regular reviews of their

needs. Permits LDC members to apply only those commitments

which are consistent with their development needs and individual

capabilities, and it sets a framework for other countries to follow when

formulating and implementing their national trade policies so thatthese are helpful to the LDCs. Page. 72


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3. Specific provisions within the individual agreements allow LDCs

more flexibility in implementing certain WTO rules and encourage

other members to cooperate when LDC interests are involved. Help

them to have access to technical cooperation from other membersand from the WTO Secretariat. Many special provisions are not

automatic, must be requested by the member concerned. In some

cases, reviews of special treatment given are also required in order

to encourage the gradual integration of all developing countries into

the regular WTO legal framework.

4. Overview of the contents ofall the new special provisions made in

the agreements, Legal Instruments and Ministerial Decisions.

Uruguay Round package, which refer specifically to developing

countries. Each was written in the context of an individual agreementor decision. Ministerial Decision on LDCs is listed first, and

reproduced almost in full, as it affects the whole Marrakesh

Agreement.

Page. 72


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The special measures have also been grouped under four

headings:

i) Those recognizing the interests of least-developed/developing

countries in a general manner;

ii) Those easing the rules or numbers ofobligations to be met;

iii) Those providing longer time-frames for the implementations of

certain obligations

iv) Those providing fortechnical assistance.

5. Synopsis of Provisions of the Uruguay Round Concerning

Developing Country Members:

5.1 Marrakesh Agreement Establishing the World TradeOrganization:

1. Recognition of general interests: Developing country members,

and especially least-developed countries (LDCs), secure a share

in the growth on international trade that is commensurate with

their economic development needs. Page. 73


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2. Fewer obligations or differing rules: Committee on Trade and

Development periodically review the special provisions in favour of

developing country members and, in particular the LDCs which

reporting results to the General Council for appropriate action.LDCs are only required to undertake commitments and

concessions consistent with theirindividual development, financial

and trade needs, or their administrative and institutional

capabilities.

5.2 Decision on Measures in Favour of Least-Developed

Countries:

1. Recognition of general interests: Effective participation of LDCs

in world trade requires improved trading opportunities for products

of interest to them. Regular reviews of the implementation of allspecial and differential measures taken in favour of LDCs help

ensure their actual execution.

Members encouraged to apply Uruguay Round concessions on

tariffs and non-tariff measures in advance with without staging.

Page.74


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Import relief measures or other restrictions special consideration

to the relevant export interest of LDCs.

Difficulties faced by LDCs will be kept under review and efforts

will be made to adopt positive measures to help expand their

trading opportunities.

2. Fewer obligations or differing rules: LDCs will only be required

to apply individual commitments, obligations and concessions

which are consistent with their individual development, financialand trade needs, or their administrative and institutional

capabilities.

Rules be applied in a flexible and supportive mannerwith regards

to the LDC members. Page. 74

4. Technical assistance: Given substantially increased technical

assistance to develop, strength and diversify their production and

export bases.

Page. 75


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Sri Ram Khanna Aug09 3.5 Developing Countries in theWTO System 7

5.3 Decision on Notification Procedures:

4. Technical Assistance: Council for Trade in Goods undertakes a

review of notification obligations and procedures, some

developing country members may need assistance in meetingthese administrative obligations.

5.4 Understanding on Rules and Procedures Governing the

Settlement of Disputes:

1. Recognition of general interest: Dispute involved an LDC,particular consideration will be given to its special situation.

Members exercise restraint in raising matter under the dispute

settlement procedures and in asking for compensation, [Article

24.1]

2. Fewer obligations or differing rules: Developing country

members has a complaint, entitles developing countries to the

good offices of the Director-General and a shorter panel

procedure. Page. 75


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During dispute consultations, special attention to the particular problems

and interest of developing countries. [Article 4.10]: In cases where:

Consultations involving a measure taken by a developing countrymay be extended beyond the usual time period.

If consultations involving an LDC fail, LDC may ask the Director-

General of the DSB chairman to offer his good offices before a formal

request for a panel is made.

5.5 Trade Policy Review Mechanism:

2.Fewer obligations of differing rules: Developed country members

subject to review eitherevery two of four years. Most developing

countries will be reviewed only once every six years.

4.Technical Assistance: Trade Policy Review Body with annual

statistical information, special briefs. Technical assistance will be

available from the WTO Secretariat for developing countries,

especially LDCs. Page. 76


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5.6 Understanding on the Balance-of Payments provisions of

GATT 1994:

1. Recognition of general interests: in (BOP) consultations

concerning developing country members, background and

analytical material on the impact of the external trading

environment on the consulting members financial situation and

prospects by WTO Sectt.

2. Fewer Obligations of differing rules: As agreed in 1972,balance-of-payments consultation procedures may be used by

LDCs and other developing country members that are already

pursuing liberalization efforts in conformity with a BOP Committee

time-schedule.

4. Technical Assistance: Available to developing country to help

prepare documentation for BOP consultations for WTO Sectt.

Page. 76 & 77


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Sri Ram Khanna Aug09 10

COW ECONOMICSPerhaps we all need a bit of cheering up...

SOCIALISMYou have 2 cows.you give one to your neighbour.

COMMUNISM

You have 2 cows.The State takes both and gives you some milk.

FASCISMYou have 2 cows.The State takes both and sells you some milk.

NAZISMYou have 2 cows.The State takes both and shoots you.


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Sri Ram Khanna Aug09 11

COW ECONOMICScontd BUREAUCRATISM

You have 2 cows.The State takes both, shoots one, milks the other, and thenthrows the milk away

TRADITIONAL CAPITALISM

You have two cows.You sell one and buy a bull.Your herd multiplies.You then employ someone else to do the work and you graball future profits to fund your indolent lifestyle.

SURREALISMYou have two giraffes.The government requires you to take harmonica lessons


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5.7 Agreement on Agriculture:

1. Recognition of general interest: Special and differential

treatment of developing country members is considered to bean integral part of this agreement and have been taken into

account for reform in agriculture trade.

* Possible negative effects of the implementation of the reform

programme on LDC and net food-importing developing country

members should be considered.* Developed country members will provide greater market

access for agricultural products of particular interest to

developing countries. Page. 77

2

. Fewer obligations or easing of rules: Developing countriesdo not have the commitment to reduce certain domestic

support measures which are an integral part of their

development programmes.

Page. 78


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Developing countries have a higher de minimus level with respect

to trade distorting domestic support (10 percent as opposed to 5

percent for developed countries). [Article 6.4].

Developing countries are not required to undertake commitments

on subsidiesto reduce the costs of marketing exports of

agricultural products or internal transport subsidies for export.

Developing countries not required to consider the food security

concerns of othermembers when applying an export prohibitionor restriction of foodstuffs.

For developing countries, the required cuts for tariffs are lower, by

one third, that the rates applicable for developed countries.

LDCs not required to undertake reduction commitments inagriculture market access, domestic support of export subsidies.

Page. 78


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Agriculture negotiations take into account, special and differential

treatment for developing countries. Page. 78

Special and differential treatment includes public stockholding forfood security.

Special treatment clause, allowing agriculture-specific non-tariff

measures.

3. Longer time-frame for implementation: Their commitments toreduce protection and trade-distorting support in 10 rather than

six years.

5.8Measures Concerning the Possible Negative Effects of the

Reform Programme an Least Developed and net Food-

Importing Developing Countries.

1. Recognition of general interests: Negotiations to establish food

aid commitment levels sufficient to meet the needs of developing

country members during the reform. Page. 79


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Increasing proportion of basic foodstuffs is provided to LDCs and net

food-importing developing country members in grant form, or on

concessional terms.

Any agreement on agricultural export credits makes provision for

differential treatment in favour of LDCs and net food-importing

developing country members. Page. 79

4. Technical Assistance: LDCs and net food-importing developing

country members for technical and financial assistance, for theimprovement of their agriculture productivity and infrastructure,

will be given full consideration.

5.9 Agreement on Sanitary and Phytosanitary Measures (SPS):

1. Recognition of general interest: Developing country membersdifficulty in complying with the SPS measures, therefore, receive

assistance, need help to formulate and apply SPS measures

within their own territories.

Page. 80


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Phased introduction of new SPS measures, members should accord

longer time-frames for compliance an products of interest to

developing country members.

3. Longer time-frame for implementation: Time-limited exceptions

from some or all obligations of this granted to developing country

members by the Committee on SPS Measures.

LDCs may delay until 2000 the application of all other developing

countries may also delay, until 1997. Page. 80

4. Technical Assistance: help developing country members by

technical assistance in the form of advice, credits, donations and

grants.

Exporting developing country members to fulfil the SPS requirementsof an importing member, necessary technical assistance.

Facilitate the active participation of developing countries in

international organizations related to SPS regulations. [Article 10.4]

Page. 81


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COW ECONOMICScontd

A

NAMERICA

NCORPORATIO

N

You have two cows.You sell one, and force the other to produce the milk of four cows.Later, you hire a consultant to analyse why the cow has dropped dead.

ENRON VENTURE CAPITALISMYou have two cows.

You sell three of them to your publicly listed company, using 20 letters of creditopened by your brother-in-law at the bank, then execute a debt/equity swap with anassociated general offer so that you get all four cows back, with a tax exemption forfive cows.The milk rights of the six cows are transferred via an intermediary to a CaymanIsland Company secretly owned by the majority shareholder who sells the rights to allseven cows back to your listed company.

The annual report says the company owns eight cows, with an option on one more.You sell one cow to buy a new president of the United States , leaving you with ninecows.No balance sheet provided with the release.The public then buys your bull.


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5.10 Agreement on Textiles and Clothing (ATC):

1. Recognition of general interest: LDCs should be accorded

special treatment.

Cotton-producing exporting members to be consulted.

Transitional safeguard actions used as sparingly as possible.

More favourable treatment in the application of quota base-levels,

growth rates and flexibility is to be given to small suppliers, wool-

producing developing country members and countries having a

significant proportion of their trade in outward processing.

. Transitional safeguards cannot be taken against: exports of hand-

loom fabrics from developing country members, hand-made

cottage industry products orfolklore handicrafts when properlycertified. Page. 81

2. Fewer obligations or differing rules: LDCs may also benefit.

Improve the access possibilities ofsmall suppliers and new

entrants to trade may move ahead one stage in the relaxing of

restrictions (growth process). Page. 82


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3. Longer time-frame for implementation:

Due early 1995 for these members, as opposed to October 1994.

Members countries part of MFA.

5.11 Agreement on Technical Barriers to Trade (TBT):

1. Recognition of general interest: Developing country encounter

special difficulties in the formulation and application on technical

regulations, standards and conformity-assessment procedures.

Members wish to assist developing countries in this matter.

Members should allow sufficient time between the publication and

entry into force of new technical regulations. So that producers

particularly in developing country may adapt their products or

production methods. Page. 82

Members are to take care not to create unnecessary obstacles to

exports from developing country members.

Page. 83


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Members shall try to ensure: International standardizing bodies and

international conformity-assessment systems take into account the

special problems of developing countries; upon request by

developing country members, international standardizing bodies

examine the possibility ofpreparing international standards for

products of special interest to them.

Developed country members take into account, special and

differential treatment that is being accorded to developing country

members.

Committee on Technical Barriers to Trade periodically examine the

special and differential treatment that is being accorded to

developing country members.

2. Fewer obligations or easing of rules: Developing country

members not expected to be use international standards as the basis

for their own technical regulations, standards or testing methods.

Page. 83


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3. Longer time-frame for implementation: Developing country

members, time-limited exceptions from obligations.

4. Technical Assistance: WTO Secretariat draw attention of

developing country members to any notification relating to products

of particular interest to them.

Members obliged to provide advice and/or technical assistance to

other countries, developing country priority going to LDCs.

5.12 Agreement on Trade-Related Investment Measures (TRIMS):

1. Recognition of general interests: Take into account the

particular trade, development and financial needs to developing

country members, LDCs. Page. 84

2. Fewer obligations or easing of rules: Right of developing

country members to temporarily apply otherwise prohibited TRIMs.

3. Longer time-frame for implementation: LDC members have a seven-

year transitional period to eliminate all GATT inconsistent TRIMs.

Developing countries have five years and developed country membershave just two years. Page. 85


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5.13 Agreement on Implementation of Article VI of the GATT

(Anti-Dumping):

1. Recognition of general interests: Developed country members

give special regard to the situation of developing countrymembers.

Constructive remedies provided explores before anti-dumping

duties are applied.

5.14 Agreement ofSubsidies and Countervailing Measures:

1. Recognition of general interests: Subsidies play an important

role in economic development programmes ofdeveloping country

members. Page. 85

2. Fewer obligations or differing rules: Annex VII (LDCs andcertain otherdeveloping countries) not subject to the prohibition

on export subsidies. (non-Annex VII) developing countries have

an eight-year transition period to phase out their export subsidies.

Page. 86


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LDCs have eight-year transition period, other developing countries

have a five-year transition period ofphase out theirlocal content

subsidies.

Subsidies presumed to cause serious prejudice to the interests will

not be presumed to do so in the case of developing country

members. Include: total ad valorem subsidization exceeds 5%,

subsidies to cover losses sustained by an industry, direct forgiveness

of debt.

Actionable subsidies maintained by developing country members only

actionable multilaterally if they cause injury to an industry in the

complainants market, or nullify or impair another members benefits

under the GATT 1994, by displacing or impeding that membersimport of like products into the developing countrys market.

Investigation on an export from a developing country member must

be terminated if: volume of subsidized imports is negligible, i.e. less

than 4%.

Page. 86


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Termination of countervail investigations against developing country

if the level ofsubsidization is no more then 2% of the per unit value

of the product. For Annex VII countries de minimus level is set at

3%. Page. 86

3. Longer time-frame for implementation: Developing country not

included in Annex VII, allowed to phase out their export subsidies

over a period of eight years. Phasing-out period for developing

country export subsidies may be extended year by year. Any

developing country applying for an extension before the originaleight years are up will automatically gain two more years exemption,

even if the application is turned down.

The prohibition on local content subsidies does not apply to

developing country members for a period offive years, nor to LDC

members for a period of eight years. Page. 87

Developing country members other than Annex VII countries that

attain export competitiveness for particular products have two

years to phase out export subsidies if a developing countrys exports

of a product reach 3.25% of world trade, for two consecutive years.


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Sri Ram Khanna Aug09 3.5 Developing Countries in the

WTO System

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COW ECONOMICScontd A FRENCH CORPORATION

You have two cows.You go on strike, organise a riot, and block the roads, because you want three cows.

A JAPANESE CORPORATIONYou have two cows.You redesign them so they are one-tenth the size of an ordinary cow and produce

twenty times the milk.You then create a clever cow cartoon image called 'Cowkimon' and market itworldwide.

A GERMAN CORPORATIONYou have two cows.You re-engineer them so they live for 100 years, eat once a month, and milk

themselves.

AN ITALIAN CORPORATIONYou have two cows, but you don't know where they are.You decide to have lunch.


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5.15 Agreement on Safeguards: Exempt from safeguard measures

if: (a) those imports share of the importing members imports of

the product concerned does not exceed 3%; and (b) total imports

from those developing country members having less then a 3%individual import share do not account collectively for more than

9% of the total imports of that product.

Developing country may apply safeguard measures for a

maximum initial period offour years. Additional period of six years,

rather than the four-year extension allowed for developed country

members.

Generally, safeguard measures more than 180 days cannot be

reimposed until after a period of time equal to the original duration

of the safeguard with a minimum country allowable non-application period of two years. For developing country members,

reimposition is allowed after the lapse of a period equal to half the

time that the original measures was in place, although the two-

year minimum still applies.

Page. 88


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5.16 Agreement on Implementation of Article VII of GATT 1994

(Customs Valuation), and related decision:

1. Recognition of general interests: Secure additional benefits fortrade if developing country members. Page. 88

2. Fewer obligations or easing of rules: Developing countries

refuse a request form an importerto reverse the order of the

fourth destructive and fifth computed methods of valuation listed in

the agreement.Developing countries may also reserve the right to value imported

goods on the unit price at which the imported goods have been

resold in the country of import.

3. Longer time-frame for implementation: Five-year grace period

for Developing countriesDeveloping countries an extra three-year extension.

Developing country members may retain a system of officially

established minimum values.

Page. 89


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4. Technical Assistance: Developing country request technical

assistance.

Developing country problems regarding the non inclusion in the

customes value of special discounts and commissions. It canrequest that a study be undertaken. Customs Cooperation

Council to conduct research in domains of potential concern to

developing country members. Page. 89 & 90

5.17 Agreement on Preshipment Inspection:1. Recognition of general interests: Developing country need to

do so for as long as it is necessary to verify the quality, quantity or

price of imported goods.

4. Technical Assistance: Developing country technical assistanceon a bilateral, plurilateral or multilateral basis.

Page. 90


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5.18 Agreement on Import Licensing Procedures:

1. Recognition of general interests: Take into account the trade,

development and financial needs of Developing country members.

Special consideration to those importers buying products fromdeveloping country members.

2. Fewer obligations or easing of rules: Developing countries

must provide, upon request, all relevant information not expected

to undertake additional administrative or financial burdens to

provide this last requirements. Page. 90 & 91


delay the implementation of the following obligations for up to two

years: (a) the acceptance ofapplications for automatic licences on

any working day prior to the customs clearance of the goods; and(b) the granting of automatic licenses, receipt within a maximum of

10 working days.

Page. 91


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COW ECONOMICScontd A RUSSIAN CORPORATION

You have two cows, You count them and learn you have five cows.You count them again and learn you have 42 cows.You count them again and learn you have 2 cows.You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION

You have 5000 cows.N

one of them belong to you.You charge the owners for storing them.

A CHINESE CORPORATIONYou have two cows. You have 300 people milking them.You claim that you have full employment, and high bovine productivity.

You arrest the newsman who reported the real situation.

AN INDIAN CORPORATIONYou have two cows. You worship them.


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5.19 General Agreement on Trade in Services (GATS):

1. Recognition of general interests: Developing country members

need to regulate the supply of services in their territories in order tomeet national policy objectives.

Members will negotiate specific commitments to facilitate the

increasing participation of developing countries in world trade in

services. Page. 91

Developed country members are to establish enquiry points to helpsuppliers from developing countries.

Developing country members will try to be flexible when negotiating

new multilateral disciplines on certain trade-distorting subsidies

within the service sector.

In future negotiations liberalization of the movement of naturalpersons. An objective of the GATS to increase the participation of

developing countries in trade in services and expand their service

exports.

Page. 92


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2. Fewer obligations or differing rules: Flexibility exercised with

respect to developing country members which are parties to any

such agreement, concerning the elimination of discrimination.

Developing country members will have some flexibility for openingfewer sectors, liberalizing fewer types of transactions, offering

market access extension only so far as their development

situations allow, and attaching market access conditions.

Developing country may place reasonable conditions on accessto, and use of, public telecommunications networks and services,

according. Page. 92

3. Longer time-frame for implementation: Two-year deadline for

setting up enquiry points applied with flexibility for developing

countries.

4. Technical Assistance: Support telecommunications cooperation

among developing country.

Page. 93


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Information available to developing countries on

telecommunications services and developments in

telecommunications and information technology.

Opportunities for the LDCs to encourage foreign suppliers of

telecommunications services to assist in the transfer of

technology, training. Page. 93

5.20 Agreement on Trade Related Aspects of Intellectual

Property Rights (TRIPS):

1. Recognition of general interests: LDCs need maximum

flexibility in the domestic implementation of laws and regulations in

order or enable them to create a sound and viable technological

base.


have a five-year transitional period. LDCs an 11-yearperiod, they

do not have to apply the provisions of the TRIPs. Developed

country members gave only a one-years transitional period.

Page. 94


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For developing country further delay of five years will be allowed.

4. Technical Assistance: Incentives to enterprises and institutionsto help promote the transfer of technology to LDCs. Technical and

financial cooperation in favour of developing country members,

and LDCs.

Page. 95

5.21 Declaration on the Contribution of the WTO to Achieving

Greater

Coherence in Global Policy-Making:

1. Recognition of general interests: Timely flow of concessional

and non-concessional financial and real investment resources todeveloping country members is needed.

Page. 95

(Source: Pages 71-95 Handouts)


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COW ECONOMICScontd A BRITISH CORPORATION

You have two cows.

Both are mad.

AN IRAQI CORPORATIONEveryone thinks you have lots of cows.You tell them that you have none.No-one believes you, so they bomb the **** out of you and invade your

country.You still have no cows, but at least now you are part of Democracy.

AN AUSTRALIAN CORPORATIONYou have two cows.Business seems pretty good.

You close the office and go for a few beers to celebrate.

A NEW ZEALAND CORPORATIONYou have two cows.The one on the left looks very attractive.

Source: http://unrepentantcommunist.blogspot.com/2008/11/cow-economics.html


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3.5 developing countries in wto sys

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