Statement by Ambassador Narayanan of India at the 4th Session of the Seminar on Special and Differential Treatment for Developing Countries
Organized under the auspices of WTO Committee on Trade and Development at Geneva on 7 March 2000
I find that this session is expected to cover the difficulties of implementation by developing countries and the experience of its application by trading partners. It is also indicated that this session should deal with S&D provisions in specific agreements rather than as a general issue. As regards difficulties of implementation by developing countries, my delegation has always been pointing out that there are three types of implementational problems: (a) inequities and imbalances in the existing agreements; (b) non-realization of anticipated benefits from some of the agreements; and (c) non-binding and/or non-operational nature of S&D provisions.
I am proceeding on the basis that in this session we do not have to deal with implementation as a general issue and that I have to focus on S&D provisions in some of the WTO Agreements. In other words, I am limiting myself to the implementation issues arising out of non-binding and/or non-operational nature of S&D provisions.
I understand that in a paper circulated this morning, S&D provisions have been broadly classified into (a) provisions aided increasing trade opportunities (b) provisions requiring WTO Members to safeguard the interest of developing countries; (c) provisions permitting developing countries to assume lesser obligations; (d) provisions relating to transitional periods; and (e) provisions relating to technical assistance. I find that aspects relating to increased trade opportunities and technical assistance have been covered in the forenoon sessions. In my presentation I will cover only provisions that require WTO Members to safeguard the interest of developing countries and provisions permitting developing countries to assume lesser obligations. Obviously, it is not possible to deal with all the agreements. I find that my colleague from Dominican Republic has already touched upon a number of agreements like the Textiles Agreement, Services Agreement, Subsidies Agreement etc. I would therefore limit myself to those agreements, which have an important implication for market access in developed countries for products of developing countries, namely, SPS Agreement, TBT Agreement and the Anti-dumping Agreement. In addition, I would also briefly touch upon Article XVIII:B of GATT 94 and the Dispute Settlement Understanding because of their importance.
Let me start with the SPS Agreement. Article 10 of this agreement reads as follows: (1) In the preparation and application of sanitary or phytosanitary measures, Members shall take account of the special needs of developing country Members, and in particular of the least-developed country Members. (2) Where the appropriate level of sanitary or phyto-sanitary protection allows scope for the phased introduction of new sanitary or phyto-sanitary measures longer time-frames for compliance should be accorded on products of interest to developing country Members so as to maintain opportunities for their exports. (3) With a view to ensuring that developing country Members are able to comply with the provisions of this Agreement, the Committee is enabled to grant to such countries . And (4) Members should encourage and facilitate the active participation of developing country Members in the relevant international organisations.
The problem with regard to this article can be summarized as follows:
Article 10.1 of the Agreement states that in the preparation and application of sanitary or phytosanitary measures, Members shall take in to account the special needs of developing country Members.
There are two important aspects of these provisions. One relating to the preparation and the other to the application of the SPS measures. Evaluation shows that the implementation of both these aspects has been ineffectual and lacking.
International standards are normally adopted on the basis of the deliberations in the three international standard setting organisations. It has been a fairly unanimous view of developing countries that they are grossly outnumbered in these deliberations, which more often than not results in the development and adoption of international standards, which do not take in to account their developmental and implementational constraints. My delegation tried, during the Seattle preparatory process, to get a decision to the effect that only those standards which are developed by relevant international bodies with the involvement of developing countries would be treated as international standards for the purposes of SPS as well as TBT Agreements. However, our major trading partners from developed countries were not in a position to support this decision.
Similarly, the provisions of article 10.1 relating to the application of SPS measures have also remained ineffectual. Developed countries have rarely ever taken account of the special problems of developing countries when adopting and applying SPS measures.
This has largely been because of the fact that Article 10.1 only stipulates that Members shall take account of the problems of developing countries. Since it has not been specified how this account shall be taken, these provisions have rarely been effectually implemented.
Similarly Article 10.2 provides that where the appropriate level of sanitary or phytosanitary protection allows scope for the phased introduction of new sanitary or phytosanitary measures, longer time-frames for compliance should be accorded on products of interest to developing country Members so as to maintain opportunities for their exports.
Several developing countries Members have however noted that this provision is not being implemented in a satisfactory manner. But, in its review of the operation and implementation of the Agreement, the SPS Committee only took cognizance of this problem and did not suggest any concrete measures to overcome this situation which developing countries have been facing. Again the main reason for the ineffective implementation of this provision has been because of the manner in which the provision has been drafted. Until and unless the provision specifies a time period, for instance, 45-60 days, which must be given to developing countries, this article will also remain a non-implementatble best endeavour clause.
Coming to the TBT Agreement now, Articles 12.5 and 12.6 of the TBT Agreement states as follows: Members shall take such reasonable measures as may be available to them to ensure that international standardizing bodies, upon request of developing country Members, examine the possibility of, and, if practicable, prepare international standards concerning products of special interest to developing country Members; (2) Members shall, take such reasonable measures as may be available to them to ensure that international standardizing bodies, upon request of developing country Members, examine the possibility of, and, if practicable, prepare international standards, concerning products of special interest to developing country Members.
The problems with regard to the application of the above provisions can be mentioned as follows:
Like all other S&D provisions, the language in Article 12.6 is not legally binding and is at most a best endeavour clause. Thus, expressions used are: Members shall give particular attention.. or shall take into account.
Article 12.5 says that Members shall take reasonable measures as may be available to them to ensure that international standardizing bodies and international systems for conformity assessment are operated in a way which facilitates active and representative participation of relevant bodies in all Members, taking into account the special problems of developing country Members. This provision has led to quite a few problems. First, the obligation is not a binding one; it is confined to taking reasonable measures as may be available to them. Secondly, the developed countries ask how then can force the international bodies to ensure participation of developing countries. Third, the international bodies do not always take decisions by consensus. So, even assuming the developing countries participate (a big if) they may be overruled.
Thus, the major problem is that the SPS and TBT Agreements only impose a duty on developed countries to consider what the impact of their measures would be on developing country Members. They do not specify that developed Members should refrain from implementing refrain from implementing or withdraw their measures when it has been demonstrated by developing country Member that the measures would harm its trade interest. A duty to consider something cannot be equated with a duty to accept it.
Let me come to the Anti Dumping Agreement now. Article XV of the Agreement says that It is recognised that special regard must be given by developed country Members to the special situation of developing country Members when considering the application of anti-dumping measures under the Agreement. Possibilities of constructive remedies provided for by this agreement shall be explored before applying anti dumping duties where they would affect the essential interests of developing country Members.
The problems faced in the application of the application of this article can be summarized as follows:
Article 15 of the Agreement provides that special regard must be given by developed country Members to the special situation of developing country Members when considering the application of anti-dumping measures under this agreement including exploring the possibilities of constructive remedies provided for by the agreement. However, this provision has rarely been implemented in practice.
Let me turn to Article XVIII:B of GATT 1994. This article has the title Government Assistance to Economic Development and can be legitimately viewed as a special and differential treatment to enable developing countries to achieve their developmental goals. However, in practice, this provision has ceased to be a S&D provision. In terms of the recent decisions in a dispute involving India it would appear it is more advantageous to invoke Article XII rather than Article XVIII: B. The ability of developing countries to invoke Article XVIII: B in order to maintain BOP related quantitative restrictions had been seriously impaired. This should be a cause for concern for all developing countries.
Let me turn to the Dispute Settlement Understanding. If one goes through the DSU one will be impressed by the fact that a number of provisions in this understanding deal with possible concerns of developing countries. There are a number of provisions like Article 4.10 , 8.10, 12.11, 21.2,1.7, 21.8 24, 27.1 and 27.2 which in a way deal with concerns of developing countries. However, the articulation in these provisions is not in specific terms and generalisations are used. Let me give you two examples.
Article 21 of the DSU deals with surveillance of implementational recommendations and rulings. Para 2 of this article reads as follows. Particular attention should be paid to matters affecting the interest of developing country Members with respect to measures which have been subject to dispute settlement. While the provision appears very attractive it has neither operational value nor legal enforceability. Another instance that I would like to quote is the DSU annex relating to working procedures. The party complained against gets 2-3 weeks time to respond to the first submission. During the DSU review process, my delegation tried to increase this time limit by about two weeks when the party complained against is a developing country. Regrettably, our proposal met with stiff resistance from major trading partners.
The main thrust of what I have been trying to say is that the S&D provisions as they stand in various agreements are not providing any benefit or relief or value to the developing countries. If it were the intention that these provisions should have no value to the developing countries, I would suggest that these be deleted. By simply having these provisions without any operational significance or legal enforceability, we are creating an impression as though some benefit is being derived by developing countries. Therefore I feel that the existing S&D provisions should be either made operational and legally enforceable or they should be deleted. In future, we should not incorporate non-binding S&D provisions in agreements. In that situation developing countries will be made to evaluate their commitments without a false sense of complacency promoted by S&D provisions of the type we are having now.
Mr. Stevens in his presentation remarked that S&D provisions constitute an exception to the multilateral trading system and the costs of this exception should be evaluated. I respect this approach. However, I would like to add that two major sectors of interest to developing countries namely agriculture and textiles have remained an exception from the rules of multilateral trading system for over 50 years now. I trust costs of these exceptions, from the point of view of developing countries, would also be evaluated by our experts.