WTO director general Roberto Azevedo.bloomberg
WTO director general Roberto Azevedo.bloomberg

WTO, members differ on resolution of impasse over special treatment

  • The S&D status gives developing and LDCs more time for implementing multilateral trading rules
  • WTO director general Roberto Azevedo said on Monday evening that the S&D mechanism must be innovative to address the impasse

The developing countries and the World Trade Organization (WTO) Secretariat differed on the way the current impasse over the special and differential (S&D) treatment should be resolved, at an informal two-day meeting of a select group of trade ministers in Delhi on Monday and Tuesday. The different proposals indicated a widening of the gulf between the developing countries and the Secretariat.

The S&D status available to developing and least developed countries (LDCs) gives them more time for implementing multilateral trading rules and commitments.

The US has submitted a proposal at the WTO stating that as several developing countries such as China and India have made significant strides in development, countries that are members of G20 or Organisation for Economic Co-operation and Development, as well as those classified by the World Bank as a high income country or those with 0.5% share in world merchandise trade should not get S&D benefits in trade negotiations.

As many as 17 of the 22 members present at the meeting of trade ministers and senior officials of developing countries and LDCs organized to find common ground on issues of concern brought out a Delhi Declaration insisting on safeguarding S&D provisions. Five members—Kazakhstan, Turkey, Argentina, Brazil and Guatemala—did not sign the joint statement but did not specify the reason for this.

“Special and differential Treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing members into global trade. Special and differential treatment provisions are rights of developing members that must be preserved and strengthened in both current and future WTO agreements, with priority attention to outstanding LDC issues," the joint statement read.

However, WTO director general Roberto Azevedo said on Monday evening that the S&D mechanism must be innovative to address the impasse. “If left unaddressed it may go either way. The ideal way is to have a benchmark because the differentiation is already happening and is essential for small developing countries. The best way forward is to have a trade-facilitation-agreement-type model where countries may set their own benchmarks," he said, according to a statement by India’s commerce ministry.

The joint statement did not mention the plurilateral negotiations on e-commerce among a group of 76 countries, including China, which were represented at the Delhi meeting. It, however, stressed that the outcome of such initiatives “should be conducive to strengthening the multilateral trading system and be consistent with WTO rules".

Azevedo said plurilaterals should not be seen as a division between developed and developing countries as they contain members from both sides.

The statement said the ongoing impasse has weakened the dispute settlement system and threatens to completely paralyse it by December 2019.

“We, therefore, urge all WTO members to engage constructively to address this challenge without any delay in filling the vacancies in the appellate body, while continuing discussions on other issues relating to the functioning of the dispute settlement mechanism," it said.