Emerging Powers, Leadership, and South–South Solidarity: The Battle Over Special and Differential Treatment at the WTO

Abstract

Emerging powers, such as China and India, have used claims of developing world leadership and South–South solidarity to strengthen their bargaining position in WTO negotiations. Yet analysis of the growing battle over special and differential treatment (SDT) suggests that such claims are increasingly tenuous. The question of how emerging economic powers should be classified and treated under global trade rules has become an acute source of conflict in the trade regime. The emerging powers insist on access to SDT as an unconditional right of developing countries. But in a debate dominated by the emerging and established powers, the interests of most developing countries have been largely overlooked. Drawing on the cases of agriculture and fisheries – two areas of international trade of particular importance to the developing world – I show that extending SDT to the emerging powers is increasingly problematic for global development. In these areas, many emerging economies are now among the world's largest subsidizers, and the harmful effects of their policies are felt most keenly by other developing countries. Granting SDT to exempt emerging subsidizers from WTO disciplines would therefore undermine efforts to use global trade rules to promote global development, as well as to protect the environment.

China’s Response Strategies under the Reform of the WTO Special and Differential Treatment Provisions

“…However, there will be direct conflicts between developed and devel-oping countries in the "transition period" and graduation issues. For example, in the case of Indonesia's Specific Measures Affecting the Automotive Sector, which con-cerned the provision of Article 27(3) of the Agreement on Subsidies and Countervail-ing Measures (ASC), Indonesia's failure to provide a transition period for the applica-tion of Article 27(3) of the Agreement on Subsidies and Countervailing Measures (SCM) was a major obstacle to the effective use of the provision [8].…”

“…Various factors have led to a gap between developing and developed countries in various areas, and the selfidentification approach is a good way to alleviate the contradictions and differences between the North and the South in this regard. The self-identification approach is applicable and it is reasonable for China to self-identify as a developing country based on its natural disparities in development [8].…”

“…China's accession commitments are at a much higher level than those of other developing countries and are subject to a large number of special rules that apply only to Chinese trade. China has undertaken not to invoke the provisions of the SCM Agreement that grant special treatment to developing countries [8]. The Protocol to China's accession to the World Trade Organisation sets out China's obligations under the World Trade Organisation Agreement, as well as many additional China-specific commitments arising from China's need to transform its economy and trade patterns.…”

“…For example, Article 18 (7) of the GATT provides that a "developing member" may modify or withdraw a concession in order to promote the establishment of a particular industry. For some provisions that are no longer necessary in light of China's current development, such as the so-called protection of infant industries, China can also explicitly waive these provisions, considering that China's industries and economy are already competitive internationally [8]. China could also make concessions in some industrial sectors with a high degree of development, either through more tariff concessions within the WTO framework or by expanding its opening up and further reducing the scope of the neg-ative list based on negotiations.…”

From Developing Country Leader to Flexible Negotiator: New Directions in Brazilian Trade Strategy

“…On the one hand, WTO Members that self-declare as developing countries can access a catalogue of special legal rights. The exemptions and policy space entailed in this differential treatment – along with the practice of self-declaration – have recently become the focus of international contestation, thus placing the status of emerging economies under particular scrutiny in contemporary trade talks (Hopewell, 2022a). On the other hand, Brazil's status considerations also play a role in determining its negotiation strategy at the WTO, especially as it seeks to overcome entrenched divides that have regularly deadlocked negotiations.…”