Reforming Special and Differential Treatment for Developing Countries in the WTO

Policy challenge
Special and Differential Treatment (SDT) is a set of legal provisions which give developing countries special rights and allow developed countries to treat the former more favourably than other World Trade Organization (WTO) members.¹ SDT acknowledges that countries at different stages of development need different rules to support economic growth. However, since countries in the WTO self-declare their status as “developing”, SDT has often been a contested matter._²

Tensions around SDT have more recently increased, with developed members — notably the United States (US) — questioning whether large emerging economies such as China should continue to claim SDT despite having achieved signifcant economic growth.³ This raises questions of whether and how to set criteria that delimit access to SDT while accounting for divergent levels of development. 

Policy response

WTO members have three main options. First, they can leave the status quo (self-declaration) unchanged, and rely on bottom-up voluntary graduation of large emerging economies from the developing country category. Second, they can seek to introduce clear-cut criteria in a top-down manner that would delimit who gets access to SDT — as the US has suggested. Third, WTO members could opt for “differentiated differentiation”, and introduce issue-specifc criteria that delimit access to differential treatment based on sector-specifc capacity- or competitiveness-related indicators.4 We recommend a layered approach that combines the introduction of sector-specifc criteria for access to SDT with a pragmatic push for voluntary graduation. We oer a classifcation of negotiation issues to assess the likelihood of these different approaches to succeed. 

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Aniekan Ukpe (Lex Mercatoria Solicitors, Abuja). Aniekan Ukpe is a partner at Lex Mercatoria Solicitors, an Abuja-based international trade law & policy consultancy, and a researcher in the ÿeld of International Economic Law.
Clara Weinhardt (Maastricht University). Clara Weinhardt is Assistant Professor in International Relations at Maastricht University, and a Non-Residential Fellow at the Global Public Policy Institute in Berlin.³³

The views expressed here are the author’s alone and not those of the Institute for International Trade.