WTO AGREEMENTS AND DEVELOPING COUNTRIES
Problems with implementation
This briefing document looks at problems developing countries have encountered with the implementation of the Uruguay Round agreements, and with the provisions that allow them special and differential treatment.
> Director-Generals message
> Built-in Agenda
> Least-developed countries
> Agriculture (1)
> Agriculture (2)
> Sanitary and phytosanitary (SPS) measures
> Intellectual property (TRIPS)
> Textiles and clothing
> Information technology products
> Trade and environment
> Trade and investment
> Trade facilitation
> Trade and competition policy
> Transparency in government procurement
> Trade and labour standards
> Disputes (1)
> Disputes (2)
> Electronic commerce
> Members and accessions
> Some facts and figures
> Glossary of terms
> Other ministerial meetings
The agreements that emerged from the 198694 Uruguay Round the WTOs agreements are now five years old and a new round of negotiations is about to be launched in Seattle. However, five years after the agreements took effect, developing countries still experience difficulties with their implementation.
On the one hand, developing countries lack the financial and human resources to fulfil their commitments such as the complex requirements of the intellectual property (TRIPS) agreement. On the other hand, they say developed countries have failed to implement the agreements in a way that would benefit developing countries trade.
Special and differential (S&D) provisions are included in all the WTO agreements. There are two broad categories:
- more flexible terms within specified time limits: for example, longer transition periods, smaller commitments (for example the commitments on agriculture); and
- clauses which say in broad terms that developed countries should help developing countries in specific areas (such as technology transfer under intellectual property protection) but without defining exactly what action is needed.
In other words, the provisions are designed both to help developing countries implement the agreements and to accentuate the benefits they might enjoy. However, five years later, developing countries feel that these provisions have not served their purpose. They argue that the more specific S&D provisions of category (a) are usually insufficient and that the broader requirements of category (b) are too vague and often ignored.
For this reason, the issue of implementation promises to be prominent in Seattle. Developing countries are eager to see the Ministerial Declaration include language to correct perceived oversights in the Uruguay Round texts. Indeed, many developing countries argue that they are owed this redressal of the Uruguay Rounds results before a new round can start.
Compliance with Uruguay Round requirements
In their proposals to the General Council (part of the process of drafting the Seattle Ministerial declaration), developing countries have identified several difficulties they face in implementing the WTO agreements. Most frequently mentioned are the following:
All developing countries, except the least developed, have to implement the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement by 1 January 2000. (Least-developed countries have until 1 January 2006.) For most, this means amended or new intellectual property legislation and new or more effective means of enforcement.
Many developing countries argue that five years is not enough for such a radical change and have proposed that this transition period be extended. Some say that the five year implementation period granted to them was chosen haphazardly rather than on the basis of their level of development. These countries say they should be allowed to apply different degrees of intellectual property protection, depending on the level of development.
Others envisage the inclusion in the TRIPS Agreement of additional commitments, for example in relation to the transfer of technology and the protection of geographical indications.
Trade-related investment measures
The Trade-Related Investment Measures (TRIMS) Agreement deals with policies that are considered inconsistent with GATT. An illustrative list includes such measures as minimum local content and trade balancing requirements. Developing countries have to eliminate inconsistent measures by 1 January 2000, least-developed countries by 1 January 2002.
Again, developing countries say there is too little time for too many changes. They would also like to retain the flexibility to choose investment promotion policies that they consider necessary to fulfil their developmental needs, including some of those listed as inconsistent with GATT.
Furthermore, some developing countries say they missed the boat: they were unable to notify some of their investment measures in time (they had to do this immediately) and they cannot now apply these measures.
Sanitary and phytosanitary measures and technical barriers to trade
Sanitary and phytosanitary (SPS) measures deal with animal and plant health and safety, and food safety. The Technical Barriers to Trade (TBT) Agreement deals with other technical standards. Both agreements say that members have to take into account the special needs of developing countries when they prepare these regulations. However, developing countries feel they are excluded from the creation of international standards and are often expected to comply with standards that go beyond their technical ability or financial capacity.
Improved market access for developing countries exports
Developing countries say market access has not met expectations for their exports in two areas: agriculture and textiles. They recognize that the letter of the agreements has not been violated, but they feel that the spirit of these agreements has not been honoured.
Developing countries complaints focus on some extremely high tariffs, tariff escalation (higher tariffs on processed goods than on raw materials, which penalizes processing in exporting countries), the difficulties in gaining access to markets through tariff quotas and the trade-distorting effects of subsidies. They are calling for lower barriers on agricultural goods that they export.
Textiles and Clothing
The WTOs Agreement on Textiles and Clothing does two things. Over a 10-year period, it integrates the sector into GATT rules, and as part of that process it phases out quotas. Developing countries complain that although 33 per cent of trade has been integrated as committed, only a few quotas have actually been removed. They add that what little market access has resulted from the implementation of the agreement has been cancelled out by measures taken by the importing countries, such as transitional safeguards, anti-dumping actions and discriminatory rules of origin.
Possible outcome from Seattle
Several developing countries have submitted specific wish-lists to the WTO General Council. These include:
- the creation of a working group to look at implementation issues
- converting all S&D provisions into concrete commitments
- tighter restrictions on the use of anti-dumping measures
- allowing developing countries more flexibility in applying food, animal and plant health and safety (SPS) measures to their products
- enabling developing countries to participate more in bodies which set food safety and technical standards
- speeding up the integration of textiles and clothing products into GATT rules
- allowing developing countries more time and greater flexibility to implement the agreements on investment measures (TRIMs) and intellectual property (TRIPS)
- allowing developing countries greater flexibility to subsidize agriculture
- tighter restrictions in the use of subsidies by developed countries in agriculture
These issues could be up for discussion in Seattle or in the negotiations that follow.
This term implies more than simply giving developing countries special treatment, i.e. preferential market access, and exemptions or longer time periods to implement certain provisions. It also includes the idea that the developing countries do not need to reciprocate.