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International Food & Agricultural Trade Policy Council OpEd

"One-Size-Fits-All Rules for Developing Countries Must be Altered," Say World Agricultural Leaders

9/27/04

Under current WTO rules, developing countries are granted Special and Differential Treatment that gives them longer to comply with trade rules, often with reduced commitments. Currently, there are no criteria for determining which countries are eligible for special treatment in the WTO; countries can designate themselves as developing and are automatically entitled to special treatment. And, under current rules, there are no distinctions between developing countries at very different levels of development. 

This has allowed some countries in the OECD –whose members are the world’s wealthiest countries –designate themselves as developing countries. Under the current system, countries with incomes of more than $9000 a person receive the same treatment as countries with incomes of less than $1000 a person. As a result, developed countries are reluctant to negotiate the concessions needed by the poorest countries if those concessions are also available to more advanced developing countries. Instead, all developing countries are offered less meaningful concessions: Special and Differential Treatment has become too broad and too shallow.

In a significant breakthrough, WTO members reached agreement this summer on a Framework for agricultural negotiations.  If trade negotiators succeed in the coming months, the WTO negotiations should result in substantially reduced subsidies and substantially increased market access that will do more for most developing countries than conventional Special and Differential Treatment ever could. But, to achieve an ambitious result in agriculture, the controversial issue of who gets how much Special and Differential Treatment must be tackled.

Developed country farmers are reluctant to give up their subsidies without the promise of greater access into the growing markets in developing countries. Developing countries, for their part, also want and need more market access—both to the rich markets of the North but also to the growing markets of the South-- but they also want to protect their vulnerable farmers from subsidized international competition.  The one-size-fits-all approach must be altered and tailored so it can better respond to these needs.

The International Food & Agricultural Trade Policy Council--an independent group of agricultural leaders from around the world—proposes a new approach to Special and Differential Treatment.   The International Policy Council recommends that the WTO establish objective criteria to determine which countries qualify as developing.  Objective criteria should also be used to distinguish among Least Developed Countries, Lower-Middle Income Developing Countries and Upper-Middle Income Developing Countries. 

Each group of developing counties would have graduated commitments – with Upper-Middle Income Developing Countries having longer implementation periods and shallower commitments than developed countries, but shorter implementation periods and deeper reduction commitments than Lower-Middle Income Developing Countries. Each category of countries would make different commitments in market access, domestic support and export competition, tailored to their circumstance.  These commitments would allow countries to provide support to vulnerable farmers, but would enable them to gradually open their markets and reduce their export subsidies, and to participate in the global market. 

Developing countries have an important stake in world agricultural trade, and they are playing a central role in shaping the trade negotiations. As several recent trade cases illustrate, developing countries also have a stake in a strong, rules-based international trade system.   Adapting Special and Differential Treatment to the needs of a very diverse group of developing countries, without creating a separate set of rules or country-specific exemptions is challenging and controversial, but it must be done if Special and Differential Treatment is to become “more precise, effective, and operational” as called for in the Doha Declaration. 

A more tailored approach to Special and Differential Treatment can help developing countries make the investments needed to make their agriculture sectors more competitive, and to integrate their agricultural economies into the global trade system.  But, Special and Differential Treatment cannot substitute for domestic agricultural policies in developing countries that support the agricultural sector. Without an appropriate policy environment, no amount of S&D will be sufficient. But, developed countries must also keep their end of the bargain. They must substantially reduce trade-distorting support, expand market access, and increase their foreign aid to agriculture and rural development.

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Click here to read IPC Position Paper #13, A New Approach to Special and Differential Treatment

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