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The document discusses the principles and practices of developing countries in the GATT from 1947 to 1986. It covers how trade and development were viewed in the early GATT, provisions adopted in 1954-55 to address developing country needs, and conceptual justifications for special treatment of developing countries. It also discusses differential commitments and obligations of developing countries as well as special measures for least developed countries.

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18 views

49 Pages - 2

The document discusses the principles and practices of developing countries in the GATT from 1947 to 1986. It covers how trade and development were viewed in the early GATT, provisions adopted in 1954-55 to address developing country needs, and conceptual justifications for special treatment of developing countries. It also discusses differential commitments and obligations of developing countries as well as special measures for least developed countries.

Uploaded by

Mary ruth David
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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III.

Principles and Practices of Developing Countries in the GATT, 1947-1986

A. Trade and Development in the Early GATT'

When the GATT was established in 1947, 11 of the original 23 contracting parties would have been
considered developing countries. When the GATT was established in 1947, 11 of the original 23
contracting parties would have been considered developing countries.

Indeed, the fundamental principle of the original agreement was that the rights and obligations applied
uniformly to all contracting parties.

The preamble to the agreement stressed the importance of substantially reducing discriminatory
treatment and emphasized reciprocal and mutually advantageous arrangements (GATT, 1948). No
principles applying specifically to developing countries existed in the GATT at the time of its inception.

Despite these extensive references, there is still no official definition of what constitutes a "developing
country". Rather, countries use the designation on the basis of self selection.

developing countries tended to specialise in raw materials and primary commodity exports, which were
characterised by low price and incomeelasticities of demand as well as considerable price volatility;
while they were dependent on imports for manufactures, especially capital goods and intermediate
inputs needed for investment and industrialization

B. The GATT and Developing Countries, 1954-1986

The 1954-55 GATT review session was the first occasion on which provisions were adopted to address
the needs of developing countries as a group within the GATT. Three main provisions were agreed:

1. Reflecting the argument that developing country members would face balance-of-payments
instability over an extended period of time, Article XVIII (B) was revised to include a specific provision to
allow countries at 'an early stage of their development' to adopt quantitative restrictions on imports
whenever monetary reserves were deemed to be inadequate in terms of the country's long term
development strategy.

2. Article XVIII (C) was revised to allow for the imposition of trade restrictions (both tariffs and
quantitative restrictions) to support infant industries with a view to raising living standards

3. granting the right of veto to certain affected contracting parties was deleted, thus making the
imposition of quantitative restrictions easier (GATT, 1954).

All was not well in the international rules governing developing country trade. There were two sets of
problems:

1. market access
2. just as the developing countries appeared to have attained success in establishing a set of trade rules
that would be beneficial to their development, the intellectual underpinnings for these rules started to
be extensively questioned.

IV. The Conceptual Justification for Special and Differential Treatment

Positive Steps to be Taken by Developed Countries There are three kinds of actions that developed
countries have agreed to take to support developing countries participation in intemational trade: (a)
provide preferential access to their markets; (b) provide technical and other assistance to permit them
to meet their WTO obligations and otherwise enhance the benefits developing countries derive from
intemational trade; (c) implement the overall agreements in ways which are beneficial or least damaging
to the interests of developing and least developed countries

1. Preferential Market Access

developed countries have provided tariff preferences to exports of manufactures from developing
countries under the GSP and, within that context, for special treatment of the LDCs

2. Technical and other Assistance

strengthening of the institutional capacity of developing and least developed countries in way which
would enable them to meet the obligations they have assumed under the agreements.

3. Implementation of WTO Provisions in a Manner Favourable to Developing Country Members

(a) some are of a general nature and are expressed in broad 'best efforts' terminology; (b) in a few cases
there are more explicit provisions as to how developing countries are supposed to be treated more
favourably or in ways which are least damaging to their interests.

B. Differential Commitments and Obligations by Developing Countries

1. Exemptions from Disciplines

principle of non-reciprocity in trade negotiations with developed countries to reduce or remove tariffs
and other barriers to trade.

, many developing countries have not bound tariffs on their industrial products to the same extent as
developed countries or have agreed to bind at substantially higher than applied level

2. Protection to Domestic Industry

(a) be able to grant the tariff protection required for the establishment of a particular industry and (b)
apply quantitative restrictions for balance of payments purposes.

C. Special Measures Concerning LDCs


Decision on Measures in Favour of Least Developed Countries' (1994) allows LDC Members to limit
commitments and concessions to the extent compatible with their individual development, financial and
trade needs, and which were consistent with administrative and institutional capabilities

Market Access and other 'More Favourable' Treatment by Developed Countries.

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