"Development" has become another hotly-debated topic in the WTO these days. On Jan 15, the US tabled its communication "An undifferentiated WTO: self-declared development status risks institutional irrelevance", which Simon blogged about earlier. A month later, China, along with several other countries, tabled its own paper titled “The Continued Relevance of Special and Differential Treatment in Favor of Developing Members to Promote Development and Ensure Inclusiveness” to rebut the US arguments.
At the General Council meeting yesterday, development again became a hot issue, with the US and China engaged in heated debate. In his statements, Chinese Ambassador Dr. Zhang Xiangchen quoted in agreement the statement by Indian Ambassador J.S. Deepak and stated that
"the only indicator employed in the WTO agreements to measure the level of development is a concept of “per capita”, i.e. ASCM 8.2(b) and Annex 7."
The two ambassadors are absolutely right by pointing to the two provisions as proof that the measurement of development status shall be based on per capita figures, but interestingly, the same Agreement also explicitly recognize the possibility for some developing countries to assume more obligations when they achieve higher levels of overall development. For example, while ASCM Article 27.4 gives developing countries 8 years to phase out their export subsidies, Article 27.5 reduce the period to 2 years for a developing country Member which has reached "export competitiveness in any given product", a concept that is defined in Article 27.6 as "a developing country Member's exports of that product have reached a share of at least 3.25 per cent in world trade of that product for two consecutive calendar years."
In other words, I would summarize the current rules on development in the existing WTO agreements as follows:
- The determination of development status is mostly based on per capita levels;
- However, when a member's overall development crosses certain thresholds, it might have to assume more obligations.
Of course, the fact that the current rules are designed in such a way does not necessarily mean that future rules also have to be crafted likewise, but it is important to understand the status quo before we move on into further discussions.
