Scheme of Special and Differential Treatment for The Developing Member States Under The Trade Remedial Measures Introduced By Wto

SCHEME OF SPECIAL AND DIFFERENTIAL TREATMENT SCHEME OF SPECIAL AND DIFFERENTIAL TREATMENT FOR THE DEVELOPING MEMBER STATES UNDER THE TRADE REMEDIAL MEASURES INTRODUCED BY WTO By Omer Farooq Alvi, Assistant Consultant Ministry of Law, Justice and Hilman Rights, Government of Pakistan Historically, the concept of Special and Differential Treatment (S & D) to facilitate the integration of developing countries into the multilateral trading system has been at the forefront of efforts of the General Agreement on Tariff and Trade (GATT) and the World Trade Organization (WT0).1 The global trading system introduced by the WTO- emphasizes the paramount importance of addressing and mandating the need of such S and D for developing member States and the relevant flexibility they need to make their economies capable fulfilling their obligations under the new global trading system. Even the preamble of WTO states that one of the objectives 'of this organization is to ensure that the developing countries, and especially least developed countries, secure a share in the growth of international trade that is commensurate with their economic development needs.2 The various trade remedial 1. Ref Journal of International Economic Law; March, 2003; JIEL 2003.6(23); European Communities; Trade and Competition in the WTO: Pondering The Applicability of Special and Differential Treatment; Hunter Nottage; JIEL 2003.6(23); Also note that most of the concessions accorded to developing countries under the Uruguay Round Agreements are designed either to provide a grace period . for developing countries to comply with the requirements of the agreements or take some protective measures to safeguard their interests in 10 rather than accord preferential treatment to the products of these countries. [Ref. international and Comparative Law Quarterly; April, 2003; ICLQ.52.2 (425); The Road From Doha: The issues for the Development, Round of the WTO And The Future of International Trade; Suriya P. Subedi; ICLQ.52.2 (425)]1. 2. Ref. Agreement Establishing the World Trade Organization, in Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Marrakesh, 15 April, 1994, the Preamble. Also refer to European Journal of International Law; September, 1999; EJIL 1999 10(549); Differential Treatment in International Law: Towards A New Paradigm of Inter-State Relations; by Philippe Cutlet; EJIL 1999 10(549). measures (TRMs) introduced by this system also recognize this need and flexibility for developing Members and somewhere for the Members with transitional economies to be treated specially and differentially. Although there are a few instances when those S and Ds seem to be denied or heavily contested by some more developed Members, yet those S and Ds have still provided the developing and least developed Members with a lot of concession and softer approaches to be possibly targeted by these TRMs. The following details elaborate how S and Ds for developing etc. Members appear in the three types of TRMs known as the anti-dumping, subsidies countervailing and safeguard measures. S and D under the Anti-Dumping Agreement: The WTO system requires a special regard to be given by developed country members to the special situations of developing country members while considering the application of anti-dumping measures and the exploration of the possibilities of resorting to constructive remedies available under the Anti-Dumping Agreement before applying the anti dumping duties where they would affect the essential interest of that developing country Member.3 S and D under the Agreement on Safeguards: Again, in the Agreement of safeguards, it is required that a safeguard measure shall not be applied against a product originating in a developing country member as long as its share of imports of the product concerned in the importing Member does not exceed 3%, provided that developing country members, with less than 3% import share, collectively account for not more then 9% of total imports of the product concerned.4 Besides, a developing country member is given the right to extend the period of application of a safeguard measure for a period of 2 years beyond the maximum period of 8 years and to further reserve the right to apply a safeguard measure to import of a product which has been subject to such a measure again, after a period of time equal to half of that during which such a measure has been previously applied, provided that a period of non-application is at least 2 years.5 3. See Anti-Dumping Agreement, Art.15: the matter has also been heavily contested in the following cited case: WTO DSB Panel Reports on European Communities-Anti-Dumping Duties on Imports of Cotton-Typed Bed Linen from India, (WT/DS141/R) paras 6.17 and 6.18 (October, 30, 2000) 2000 WTO DS LEXIS 32, 46-48 (WTO DS, 2000) (doc 3). 4. See Agreement on Safeguards; Art.9.1. 5. See id. Art 9.2. S and D under the Subsidies and Countervailing Measures: S and D is also extended to the field of subsidies and countervailing measures and the Agreement on Subsidies and Countervailing Measures carry a separate clause for the developing country member and Members with transitional economies, the detail of which is as follows:-- (a) S and D for developing Country Members: This system recognizes:-- That the prohibition to grant a subsidy contingent upon export performance shall not apply to:-- (i) Developing country members mentioned in Annex-VII i.e. all the least developed countries as designated by the UNO and who are Members, excluding those mentioned therein when their GNP per capita income has reached $1000 per annum:6 and (ii) All the developing country members for a period of 8 year subject to the condition that they shall phase out their export subsidies within the eight-year period, preferably in a progressive manner and if any such Member considers it necessary to apply such subsidies beyond this period, it will do so after consultation and on the approval of the Committee on Subsidies and Countervailing Measures.7 That the prohibition to grant a subsidy contingent upon the use of domestic over imported goods shall not apply to developing Members for a period of 5 years and shall not apply to least-developed country member for a period of 8 years from the date of entry into force of WTO Agreement.8 That all the developing country members which have reached the level of export competitiveness in any given product, shall phase out their export subsidies (allowed under the previously mentioned . clauses) for that product(s) over a period of 2 years, save for the Members referred to in Arinex-VI9 wherein this period shall be 8 years.10 6. See Agreement on subsidies and Countervailing Measures, Art.27.2 (a) and Annex-VII. 7. See id. Art. 27.2 (b) and 27.4. 8. See id. Art. 27.3. 9. See supra 6 (latter part). 10. See supra 6, Art.27.5. That de minimis limit for the amount of subsidy which is generally less than 1%, shall be: (i) Less than 3% for the developing country members listed in Annex-VII and other developing country members which have eliminated export subsidies before the expiration of the eight-year permissible period; and (ii) Less than 2% for the rest of the developing country members.11 That de minimis limit for the volume of subsidized imports shall be 4% of the total imports of like product in the importing developing country member and where more than one developing country members are under consideration, and if individually they do not account for 4% of the volume, action can only be taken if, collectively, they account for more than 9% of the imports.12 (b) S and D for Members with Transitional Economies13: This system further recognizes: That for the purpose of Members with transitional economies, all the existing subsidy programmes which are prohibited by this Agreement, shall be phased out or brought into conformity with the terms of this Agreement within a period of 7 years from the date of entry into force of the WTO Agreement and the available remedies under this Agreement shall not be attracted against them during that period.14 That again, during that period several other concessions shall be granted to those Members regarding matters of serious prejudice and actionable subsidies.15 11. See id. Art.27.11, 27.10 (b) and 11.9: Also see An Introduction to the WTO Agreements; Bhagirath Lal Das; Zed Books Ltd. London and NY and Third world Network, Malaysia, 1998, at 58. 12. See id. Art.27.10 (b): Also see an Introduction to the WTO Agreements; Bhagirath Lal Das; Zed Books Ltd. London and NY and third world Network, Malaysia, 1998, at 59. 13. For the purpose of this Agreement, they will be the Members in the process of transformation from a centrally-planned into a market, free-enterprise economy (Ref. Id. Art.29.1), 14. See supra 128, Art. 29.2. 15. See id. Alt 29.2 (a) and (b).