Study commissioned by Germanwatch und the Heinrich Böll Foundation
Berlin 2005
Global Issue Paper No. 18
Information (Heinrich Böll Foundation)
Introduction
In the aftermath of the failed World Trade Organization (WTO) Ministerial Confer-
ence in Seattle in June 1990 a heated debate about special and differential treatment
(SDT) has developed in the trade policy community. According to a widely cited defi-
nition this instrument is “the product of the co-ordinated political efforts of developing
countries to correct the perceived inequalities of the post-war international trade sys-
tem by introducing preferential treatment in their favour across the spectrum of inter-
national economic relations” (Gibbs 1998). This definition shows that special and dif-
ferential treatment can be considered as an expression of the long-standing struggle
for a more equitable world economic order. It encompasses the entire range of regula-
tions whose integration into the international trade regime has been advocated by
Southern governments. The progress in implementing these special provisions has
always been proof of the negotiation clout of these governments.
After its final integration into the General Agreement on Tariffs and Trade (GATT)
special and differential treatment underwent a radical change which was described by
many observers as a transformation from a development to an adjustment instrument.
This change occurred during the Uruguay Round of GATT that started in 1986. The
end of this eight-year long liberalisation round not only saw the agreement to found
the World Trade Organization but also a fundamentally changed concept of special
treatment which in the years to come should turn out to significantly weaken devel-
opment policy concerns. The more conspicuous the difficulties of the developing
countries in implementing the WTO agreements became, the louder became the de-
mands to re-strengthen special treatment.
The present study deals with exactly this issue. It describes the history as well as the
impact of this trade policy instrument and discusses the different proposals to
strengthen it. The practical relevance of these proposals is not to be underestimated.
The concrete design of special and differential treatment will depend greatly on the
extent to which acknowledged development policy shortcomings of the WTO agree-
ments can be remedied in the future. To conclude this study we will present various
issues and intervention possibilities which should be taken into account in the further
and more intensive discussion of the special treatment.