India rallies 51 nations to reject US memo on special treatment

India rallied 51 countries at the World Trade Organization (WTO) on Wednesday to reject a US presidential memorandum, which had sought to deny special and differential treatment (S&DT) to developing countries in current and future trade agreements, said trade envoys.

US President Donald Trump had issued the memorandum on 26 July, threatening developing countries such as China, India and South Africa, that if they do not forgo their S&DT flexibilities at WTO within three months ending on 24 October, they will be named and shamed on the White House and the United States trade representative websites.

At the General Council meeting on 15 October, US trade envoy and ambassador to WTO Dennis Shea reissued President Trump’s memo and warned that WTO will not be able to negotiate future trade pacts if several advanced developing countries claim S&DT benefits, said a trade envoy, requesting anonymity.

S&DT provides several flexibilities for developing countries, such as longer time periods for implementing agreements and commitments, lower levels of commitment and measures to increase trading opportunities.

In response to the US presidential memorandum, India’s trade envoy and ambassador J.S. Deepak, on behalf of 51 countries, issued a hard-hitting statement, asserting that S&DT is an unconditional right in WTO rules, and it must continue uninterrupted.

The developing countries “must be allowed to make their own assessments regarding their developing country status”, India demanded, adding existing S&DT provisions must be upheld and S&DT must be provided in current and future negotiations.

He denounced the concerted “attempt to divide developing countries” by the US on the use of S&DT provisions. Deepak reminded the US and other industrialized countries “that the Marrakesh Agreement establishing the WTO recognizes that international trade is not an end in itself, but a means of contributing to certain objectives, including ensuring that developing countries and LDCs (least developed countries) secure a share in international trade commensurate with the needs of their economic development”.

Further, S&DT “is a right of the developing countries, and is as much treaty-embedded as the other core principles of our rule-based multilateral system, such as the MFN (most favoured nation) and National Treatment”, the Indian envoy told the US at WTO’s General Council meeting.

Developing nations must “continue to benefit from their right to S&DT in WTO rules and negotiations” as long as their “development challenges and difference in levels of development persist”, the Indian envoy maintained.

Without naming the US, he cautioned that “any unilateral attack on S&DT is an onslaught on the very tenets of multilateralism that the WTO seeks to protect”. “This will cause lasting and systemic damage to the multilateral trading system,” he added.

“(The underlying) rationale behind S&DT is simple and obvious—it recognizes the enormous difference in the levels of development between different members of the WTO, and allows developing members space to formulate their domestic trade policies in a way that helps them reduce poverty, generate employment and integrate meaningfully into the global trading system,” he said.

The “US President’s Memo of 26 July, 2019, thus strikes a death knell for the principle and practice of S&DT which will become extinct at the WTO,” warned India.