CHAPTER 34

SPECIAL AND DIFFERENTIAL TREATMENT OF

DEVELOPING COUNTRIES

Kevin Kennedy1

TABLE OF CONTENTS

I. Developing Countries in the GATT-WTO System . . . . . . . . . . . . . . . . . . . . . . . . 1525

A. Defining the Term “Developing Country” . . . . . . . . . . . . . . . . . . . . . . . . . . . 1525
B. Developing Countries’ Two-Track Approach to Trade . . . . . . . . . . . . . . . . 1528
II. The GATT Rules on Special and Differential Treatment of Developing
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1530
A. GATT Article XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1531
1. Background and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1531
2. Article XVIII, Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1532
3. Article XVIII, Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1533
4. Article XVIII, Section B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1533
5. Article XVIII, Section C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1534
6. Article XVIII, Section D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535
B. GATT Part IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535
1. Background and Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535
2. Article XXXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1536
3. Article XXXVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1537
4. Article XXXVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1537
III. The Generalized System of Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1538
A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1538
B. The Origins of GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1539
C. The Ten-Year Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1539
D. The Problem of Discriminatory Preferences . . . . . . . . . . . . . . . . . . . . . . . . . 1540
E. The Tokyo Round Enabling Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1541
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1541
2. The Terms of the Enabling Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1542
3. The Problem of Graduation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1544
IV. The Uruguay Round Decisions and Agreements Affecting Developing
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1546
A. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1546
B. Decisions in Favor of Least-Developed Countries . . . . . . . . . . . . . . . . . . . . 1546
1. Decision on Measures in Favor of Least-Developed Countries . . . . . . 1546
2. Decision on Measures Concerning the Possible Negative Effects
of the Reform Program on Least-Developed and Net
Food-Importing Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . 1547

1
Professor of International Trade Law at Michigan State University College of Law.
1524 SPECIAL AND DIFFERENTIAL TREATMENT OF DEVELOPING COUNTRIES

C. MTAs Providing Special and Differential Treatment of Developing

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1548
1. Agreement on Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1549
2. Agreement on Implementation of Article VI of the GATT 1994
(Antidumping) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1550
3. Agreement on Subsidies and Countervailing Measures . . . . . . . . . . . . . 1551
4. Agreement on Safeguards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1552
5. Agreement on Sanitary and Phytosanitary Measures . . . . . . . . . . . . . . . 1552
6. Agreement on Technical Barriers to Trade . . . . . . . . . . . . . . . . . . . . . . . . 1553
7. Agreement on Trade-Related Investment Measures . . . . . . . . . . . . . . . . 1553
8. Agreement on Implementation of Article VII of the GATT 1994
(Customs Valuation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1554
9. Agreement on Textiles and Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1554
10. Agreement on Import Licensing Procedures . . . . . . . . . . . . . . . . . . . . . 1555
11. Other Uruguay Round MTAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1555
12. Agreement on Government Procurement . . . . . . . . . . . . . . . . . . . . . . . . 1556
V. WTO Assistance to Developing and Least-Developed Countries . . . . . . . . . . 1556
A. The Singapore Ministerial Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1557
B. Plan of Action for Least-Developed Countries . . . . . . . . . . . . . . . . . . . . . . . 1557
1. High-Level Meeting on Least-Developed Countries . . . . . . . . . . . . . . . 1559
2. Integrated Framework for Trade-Related Technical Assistance . . . . . . 1559
C. The Committee on Trade and Development . . . . . . . . . . . . . . . . . . . . . . . . . . 1561
D. The Doha Ministerial Conference and the Development Round . . . . . . . . 1562
VI. Summary and Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1566

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1570