This Working Paper provides a background analysis of special and differential treatment (SDT). It argues that the underlying case for SDT remains intact even though the status quo is unsatisfactory.
Historically, the cases for and against SDT have been couched in developmental terms, with protagonists arguing over whether lower levels of development justify special treatment or, by contrast, make the adoption of ‘standard’ rules even more desirable. Instead of pursuing these old debates, the Working Paper focuses on the more pragmatic case for SDT. This takes the core role of the WTO as agreeing rules for trade that enhance transparency and predictability – an agenda that can be advanced only on the basis of consensus.
The pragmatic case is that SDT is not only desirable but, actually, essential if the Doha Round is to move beyond a very low lowest common denominator. Consensus decision-making requires all members to acquiesce before a new rule can be agreed. Binding dispute settlement means that no member should acquiesce in any decision on which it is not fully informed. And the complexity of many issues on the Doha agenda means that few developing countries (DCs) will be able adequately to assess all the possible implications.
The key requirements for SDT are that: there is agreement that one size does not fit all yet the interests of each member are not so dissimilar that they require unique treatment; broad groups of countries can be identified on the basis of objective data; and that some active mechanism must be found that relates the shared differences of such groups to the rules that are being proposed. It may be necessary to combine different characteristics in order to identify a coherent group with special needs. This is likely to be a contentious process but, on the precedent of GATT Rounds, problems are more likely to be overcome if there are multiple, cross-cutting sub-groups.