Chapter 3: Special Treatment and Policy Space for the Developing Economies in the Multilateral Trade Regime
29970_Evolving/3 12/4/07 15:33 Page 1 3. Special treatment and policy space for the developing economies in the multilateral trade regime Patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish. (John Quincy Adams) INTRODUCTION This chapter dwells on the diversity-driven special treatment of the developing economies in the multilateral trade regime. The concept of ‘special and differential treatment’ (SDT) materialized early during the General Agreement on Tariffs and Trade (GATT) period. During the life-time of the GATT the concept of the SDT developed in several stages. Developing countries were given non-reciprocal preferences under SDT by the industrial economies. Whether the former group benefited from the SDT, and by how much, remained opened to debate. The developing economies used SDT for inter alia securing preferential access in the markets of the industrial countries. The SDT took varying forms and was related to different trade issues. There were numerous categories of preferential market access schedules given to developing countries under different agreements and arrangements. In recent years the SDT intensified for the low-income developing countries and the least-developed countries (LDCs)1 were granted enhanced preferential market access by the industrial economies under the Generalized System of Preferences (GSP), a large category of market-access schedule. In the next section the concept of SDT and its intellectual origins are traced, while the third section focuses on various beneficiary country groups. Trade liberalization on a most-favored-nation (MFN) basis has been eroding the nonreciprocal preferences enjoyed by the low-income developing...
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