Academic journal article Journal of Politics and Law

Drawing on the Legal and Economic Arguments in Favour and against 'Reciprocity' and 'Special and Differential Treatment' for Developing Countries within the WTO System

Academic journal article Journal of Politics and Law

Drawing on the Legal and Economic Arguments in Favour and against 'Reciprocity' and 'Special and Differential Treatment' for Developing Countries within the WTO System

Article excerpt

Abstract

The international trade regime embodied in the World Trade Organization (WTO) goes beyond a collection of texts and agreements. As legal rules are not immune to political and economical influences, they have to be analysed in the context in which they have been created and constantly modified. Nowadays, the multilateral system of the WTO gains complexity when the market place does not restrict its subject to goods anymore and when the goal of development is materialized, in its agreements, as one of the pillars of the WTO. Developing countries, empowered by the launch of their economic growth, are acquiring space and voice to criticize the legal framework of the WTO, saying it has not been entirely coherent with its own objectives and claiming for the adoption of an effective Special and Differential Treatment (SDT). On the other hand, developed countries, based on their economic superiority and underlining the importance of free trade through liberalization policies, insist on the necessity of reciprocal commitments to promote economic growth and global welfare. This dilemma is traduced in the impasse of the recent Doha Round, but it is already time for more ideas to be brought and paradoxes to be resolved. The current challenge faced in this study becomes then to conciliate the SDT, Reciprocity the development concerns. At the end, preferential systems do not go against liberalization. Instead, the SDT intends to graduate the liberalization process through fairness (development) and to enable, only afterwards, that seriously discussions regarding free trade and Reciprocity can be held regarding their full or, more plausibly, partial implementation.

Keywords: WTO, reciprocity, Special and Differential Treatment, developing countries

1. Introduction

The notion that trade - free trade, unencumbered by government restrictions - is welfare enhancing is one of the most fundamental doctrines in modern economics, dating back at least to Adam Smith (1776) and David Ricardo (1816). But the subject has always been mark by controversy because the issue facing most countries is not a binary choice of autarky (no trade) or free trade, but rather a choice among a spectrum of trade regimes with varying degrees of liberalization (Stiglitz & Charlton, 2005, 12).

The international trade regime embodied in the World Trade Organization (WTO) goes beyond a collection of texts and agreements. As legal mies are not immune to political and economical influences, they have to be analysed in the context in which they have been created and constantly modified. The legal support is a dynamic instrument aiming both to address and to correct imbalances. However, in a multilateral system such as the WTO, regulation transcends the classic concern of benefits to the direct parties involved in a particular agreement to assure its compliance according to development concerns. (Alessandrini, 2011, 168).

The economic exchanges in the market place are no longer restricted to goods. That is to say, complexities and paradoxes of the WTO legal system have been improved significantly over the last few decades. Developing countries, empowered by the launch of their economic growth, are acquiring space and voice to criticize the legal framework of the WTO, saying it has not been entirely coherent with its own objectives and claiming for the adoption of an effective Special and Differential Treatment (SDT) (WTO Doc WT/GC/W/442 2001). On the other hand, developed countries, based on their economic superiority and underlining the importance of free trade through liberalization policies, insist on the necessity of reciprocal commitments to promote economic growth and global welfare. The question is, then, on what grounds liberalization processes should be observed within a world increasingly interdependent and interconnected (Alavi, 2009).

Faced with this dilemma, the present study outlines the main objections and arguments regarding the SDT and the Reciprocity principle in accordance to the WTO framework, taking into account developing countries current position and interests. …

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