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Reports on Meetings

February 2003

Report on the AITIC Brainstorming Meeting
‘The Legal Aspects of the Doha Work Programme with a Special Focus on Special and Differential Treatment’

(held in Room E, World Trade Organization, Geneva on 4 July 2002)

Overview of the Legal Aspects of the Doha Work Programme
Implementation and the Special and Differential Treatment Provisions
The Legal Aspects of Special and Differential Treatment
Special and Differential Treatment Discussions in the Special Session of the Committee on Trade and Development
Round Table Discussion

2. Prior to the concluding round table discussion, presentations were given on the following subjects: [Note 1]

II. Overview of the Legal Aspects of the Doha Work Programme

3. Ms Mary Footer (Deputy Director, Amsterdam Center for International Law and Faculty of Law, Unversiteit van Amsterdam) first addressed the legal status of the Doha Ministerial Declaration (‘the Doha Declaration’) and associated documents:

● The Doha Declaration represents an agreement amongst the members to cooperate with respect to a number of issues of joint concern. In legal terms, its major importance is as an interpretative tool. It could, in principle, be used in dispute settlement proceedings, but only as evidence of WTO members’ ‘subsequent practice’. [Note 2] There is nothing to prevent subjects being considered concurrently by a WTO negotiating body and the Dispute Settlement Body, although this is not desirable.
● By contrast, Decisions adopted at the Doha Ministerial Conference – such as the Decision on Implementation-Related Issues and Concerns (‘the Implementation Decision’) – are legally binding and form part of the general body of WTO law and practice. The same applies to the waivers approved at Doha for the EU-ACP Partnership Agreement and the EU Transitional Regime for Banana Imports.
● There is some overlap between the subjects on which negotiations are required under the Doha Declaration and those for which implementation issues must be addressed under the Implementation Decision. Where the two areas overlap (for example, in agriculture), it is to be expected that resolution of implementation issues and negotiation of new disciplines will be interlinked.
● However, other subjects (such as investment and competition) are to be negotiated on the basis of a decision to be taken at the Fifth Ministerial Conference, on the basis of an ‘explicit consensus’ as to modalities.
● Importantly, S&D is a ‘cross-cutting issue’ to be addressed under the Implementation Decision. [Note 3]

4. Ms Footer then analysed the Doha Work Programme, highlighting the following points:

● Existing negotiating mandates call for clarifications (i.e., interpretations) of existing obligations in a number of areas. In addition, the Implementation Decision itself clarifies the meaning of a number of provisions.
● Only in relation to agriculture are modifications of current WTO rules explicitly required by the Work Programme. Special and differential treatment is to be included in the rules to be negotiated.
● The proposed Framework Agreement on Special and Differential Treatment would also potentially result in amendments to existing obligations, but this would be achieved by acceptance of a completely new WTO agreement.
● The choice of legal instrument and policy to implement the negotiating mandate will have both legal and practical consequences. One option is the adoption, by a three-fourths majority vote of members, of an ‘authoritative interpretation’ under Article IX:2 of the Marrakech Agreement Establishing the WTO. [Note 4] However, this procedure cannot be used to amend the WTO Agreements, as that would undermine Article X of the Marrakech Agreement, which lays down special procedures for amendment.
● Formal amendment of the WTO Agreements under Article X raises the possibility of differentiated obligations among WTO members, as amendments that alter members’ rights or obligations take effect only for those members that have accepted them, after acceptance by a two-thirds majority of members. By contrast, amendments that do not alter rights or obligations take effect for all members following acceptance by a two-thirds majority.

5. She then concluded, by identifying a number of systemic issues arising from the Doha Work Programme:

● Paragraph 47 of the Doha Declaration allows implementation on a provisional basis of some changes to members’ rights and obligations arising out of the Doha Work Programme. This seems to open up the possibility of a ‘multi-speed’ approach to implementation.
● The contemplated changes to the Dispute Settlement Understanding appear to fall outside the ‘single undertaking’ approach adopted with respect to the rest of the subjects dealt with in the Work Programme.
● Although the Doha Work Programme has been dubbed by some the ‘Doha Development Agenda’, it seems the multilateral trading system still does not recognise the right to development. A rights-based approach to development has the advantage of including developing countries as stakeholders and active participants, rather than as recipients.

6. General discussion followed, covering the following issues:

● The meaning of ‘consensus’ as an absence of formal objection is well established in the WTO context. [Note 5] However, it is unclear exactly what is meant by ‘explicit consensus’ in paragraphs 20, 23, 26 and 27 of the Doha Declaration. A number of speakers made reference to the remarks of Chairman Kamal at the Doha Ministerial Conference: “my understanding is that … a decision would indeed need to be taken by explicit consensus, before negotiations on trade and investment and trade and competition policy, transparency in government procurement, and trade facilitation could proceed. In my view, this would also give each member the right to take a position on modalities that would prevent negotiations from proceeding after the Fifth Session of the Ministerial Conference until that member is prepared to join in an explicit consensus”.
● Developing countries need to consider whether the single undertaking approach, as adopted in the Uruguay Round, is in their interests. It is possible that an approach including ‘flexible geometry’ may, in fact, be more beneficial to them.

III. Implementation and the Special and Differential Treatment Provisions

7. HE Mr Jaynarain Meetoo (Ambassador, Mauritius) highlighted the following points in his presentation:

● S&D has a long history in the multilateral trading system and can be considered a core principle of the WTO regime. It takes a variety of forms, including provisions designed to assist developing countries further particular policy goals, flexible procedures and transition periods, waivers allowing preferential treatment, statements of particular objectives, flexibility in adoption of commitments and technical assistance.
●  The importance of S&D is reaffirmed by the Doha Declaration. S&D provisions are now to be examined with a view to strengthening them and making them more precise, effective and operational. The Doha Declaration also endorsed the S&D work programme contained in the Implementation Decision.
● A key aspect of the S&D work programme is the proposed transformation of non-binding provisions into mandatory ones. Simply changing ‘should’ to ‘shall’ is likely to be an overly simplistic approach. Authoritative interpretations or Decisions by the Ministerial Conference should also be considered.
● The essence of S&D is equity and fairness. It stems from a recognition that a ‘one size fits all’ approach is likely to create difficulties for some members. Rather than a set of concessions granted to developing countries, S&D should be seen as an acquired WTO right aimed at increasing their participation in the trading system.
● However, S&D has not yet attained the objectives set for it. In particular, some provisions have not been utilised, because they are unclear, non-binding or difficult to use. In order to improve the success of S&D, a monitoring and assessment mechanism is necessary. Objective criteria need to be set, covering targets, instruments and actors.

8. General discussion covered the following points:

● The mandate on S&D from the Doha Declaration requires a central body to focus on the subject. Dispersion of this issue amongst subsidiary bodies is to be avoided. Perhaps developing countries need to take a more selective approach to the issues raised, so as to bring added focus to the negotiations.
● For ACP countries, an important issue is the relationship between the proposed Economic Partnership Agreements with the EC and the progress of the post-Doha negotiations. It may be advantageous to move the first negotiations along more quickly, thereby potentially gaining support from the EC in the latter.
● Both trade preferences and S&D as a principle are under pressure and are being eroded.
● Problems arise from the heterogeneity of the developing countries as a group. An alternative to the ‘bloc’ approach is to adapt paragraph 13 of the Doha Declaration (dealing with agriculture), which requires S&D to be ‘embodied in the Schedules of concessions’. This avoids the problem that broad, joint obligations covering all developing countries tend to be vague and difficult to enforce. It also allows a more flexible approach, matching specific problems and solutions.
● The scope for further South-South cooperation in relation to S&D should be explored. The Generalised System of Trade Preferences is an example of such cooperation.

IV. The Legal Aspects of Special and Differential Treatment

9. Ms Footer began her second presentation with an overview of the modalities used for introducing S&D provisions, as well as the current status of those provisions:

● Although many S&D provisions are contained within a legally binding framework, the obligations themselves are often ‘soft’. They are based on a combination of amendments to treaty texts and waivers agreed to by the members.
● One effect of the Uruguay Round was to move S&D away from the original development-oriented objectives, towards being a point of negotiation and dispute.

10. She then reviewed some of the current proposals for improving S&D:

● When assessing proposals to make more S&D provisions mandatory, regard must be had to developing countries’ experiences with those that are already mandatory. Some mandatory provisions have proved to be less successful than expected, sometimes due to evasive tactics by developed countries.
● Attention must also be exercised in relation to the erosion of S&D benefits through bilateral side-agreements or the imposition of onerous requirements in the WTO accession process.
● Redrafting existing S&D provisions to make them mandatory would alter members’ rights and obligations and as such is likely to make the proposed changes a matter of negotiation and compromise. Developing countries may be called upon to make substantial concessions in order to achieve this objective. They will need to identify exactly what they are prepared to offer in this regard.
● The potential for using an authoritative interpretation as a means of improving S&D provisions may be substantially limited by the requirement that this procedure not be used in such a way as to undermine the amendment procedures in Article X of the Marrakech Agreement.
● The proposed Framework Agreement on S&D will need to specify clearly the principles and objectives on which it is based. It may be beneficial to emphasise obligations of result rather than obligations of conduct, as the latter are often so vague as to be indeterminate (e.g., ‘members will take into account the special needs of developing country members’).
● For dispute resolution purposes, the proposed Framework Agreement could be considered as a ‘covered agreement’ to which the WTO’s dispute resolution procedures would apply. This would require amendment of the Dispute Settlement Understanding.

11. A number of subjects were then raised in general discussion:

● S&D has gone through various stages in its development, but its scope has been limited by the Uruguay Round and the impact of structural adjustment programmes that restrict the policy options available to developing countries.
● Given that developing countries have now made detailed proposals in relation to S&D, the main question is one of political will.
● The essence of S&D is discrimination, through the creation of special rights and privileges for particular countries. The question of defining the group of developing countries is therefore very important, as it determines the beneficiaries of this special treatment. It is necessary to look at the criteria that can be applied, as well as the possible need for different categories of developing countries or ‘graduation’ of more advanced developing countries.
● The political questions that arise in relation to S&D are therefore both North-South and South-South.
● Improvement of S&D may require not only a monitoring mechanism, but also a dispute settlement aspect. S&D could perhaps become a subject for non-violation complaints.

V. Special and Differential Treatment Discussions in the Special Session of the Committee on Trade and Development

12. Ms Celia Labora Rodriguez (Minister Counsellor, Cuba) gave an overview of the discussions that have taken place on the issue of S&D in the context of the Special Sessions of the Committee on Trade and Development:

● The Committee on Trade and Development launched its work programme on S&D in December 2001, with the aim of preparing a set of recommendations for presentation to the General Council in July 2002.
● Despite the relatively large number of proposals from developing countries, progress to date has been limited. This is partly due to the resource constraints affecting developing country missions, limiting their capacity to participate actively in negotiations. But there is also a lack of political will to engage in detailed negotiations on the issues raised in developing countries’ proposals.
● The discussion of S&D needs to include aspects such as the link between improved market access and the debt-servicing capabilities of developing countries, as well as technology transfer and commodity dependence.

VI. Round Table Discussion

13. HE Mr Ransford Smith (Ambassador, Jamaica) reviewed the progress to date in the Special Sessions of the Committee on Trade and Development, of which he is the Chairman:

● Many developing country proposals have been made, tending to focus on specific aspects of S&D. Progress is slow, however, as some recent submissions are still being considered by other members. Moreover, developed country members seem inclined to include some broader issues on the agenda.
● Cross-cutting issues that have arisen include the utilisation and objectives of S&D provisions, as well as benchmarking, technical assistance and institutional aspects.
● Given the end of July deadline for submission, it seems likely that the Committee’s report to the General Council will be relatively limited in scope and will require work to continue in the future.
● Although the exercise has been beneficial to developing countries thus far in terms of concentrating thought and analysis, what is needed for progress is a constructive engagement on the part of all members.

14. Ms Aminata Kourouma (First Secretary, Guinea) made the following points:

● S&D is a right accruing to developing countries that will need to be actively defended post-Doha. It is important to keep S&D discussions in a central forum (the Committee on Trade and Development), rather than dispersing them amongst subsidiary bodies.
● The objectives of S&D provisions should be fairness and the promotion of development.
● Current provisions need to be modified and reinforced, so as to better address particular problems of developing countries such as lack of industrial development and access to technology, commodity dependence, prevalence of subsistence farming, difficulties in assuring food security and lack of resources available for granting subsidies.
● In considering the options for improved implementation and monitoring, it must be kept in mind that the WTO’s dispute settlement regime is largely outside the reach of developing countries.

15. The session concluded with a discussion of issues arising from the Round Table presentations:

● Developing countries should be wary of adopting a position that amounts to defending the principle of S&D ‘at any cost’. That is, they must keep in mind the reality that S&D is negotiated with other WTO members and that developing countries may therefore be called upon to make substantial concessions in return for improved S&D. They need to ensure that the benefits they receive from improved S&D are in fact commensurate with the ‘cost’ represented by these concessions.
● There is a tension between WTO rules on technical and sanitary standards on the one hand and preferential trade regimes on the other. This is because such standards may constitute barriers that prevent developing countries from taking advantage of improved market access conditions flowing from preferential tariff rates.
● In relation to Article 66.2 of the TRIPS Agreement, [Note 6] a possible approach for developing countries is to compile data on developed country companies involved in technology transfer and partnerships with LDCs, in order to see whether they in fact benefit from any incentives. Further thought should also be given to the concrete measures that could be put in place by developed countries (e.g., fiscal incentives).

Note 1: See Annex 1 for the programme and Annex 2 for the participants. (return to text)

Note 2: Article 31.3(b) of the Vienna Convention on the Law of Treaties allows ‘subsequent practice’ to be taken into account in interpreting a treaty. (return to text)

Note 3: Paragraph 44 of the Doha Declaration provides for a review of S&D provisions and endorses the work programme on S&D contained in the Implementation Decision. (return to text)

Note 4: Article IX:2 provides that “the Ministerial Conference and the General Council shall have the exclusive authority to adopt interpretations of this Agreement and of the Multilateral Trade Agreements. … The decision to adopt an interpretation shall be taken by a three-fourths majority of the Members. This paragraph shall not be used in a manner that would undermine the amendment provisions in Article X”. (return to text)

Note 5: See footnote 1 to Article IX of the Marrakech Agreement. (return to text)

Note 6: This Article requires developed countries to provide incentives for technology transfer to LDCs. (return to text)