SPECIAL AND DIFFERENTIAL TREATMENT PROVIDED BY GATT, GATS AND TRIPS AGREEMENT

By- Anjanee Goel[1]

In 1958, Prof. Haberler found in his report that due to export trade barriers in developed countries, the earnings of developing countries, for their developmental needs, were insufficient. A committee was created which recommended removing all trade barriers on the export of manufactured products in developing countries in reply to this report in 1963. In 1965 all through Kennedy Rounds, Part IV on Trade & Development was added to GATT.

Theoretically, there can be below mentioned four forms of Special & Differential treatment:

  1. Synchronized measures which positively help the developing nations to be taken among developed and budding nations.
  2. So as to make accessible to the budding nations some autonomous policy space, exemptions for them as a broad-spectrum rule.
  3. The obligation of moderately lesser accountabilities on budding nations taking into consideration their comparatively weaker position.
  4. In accordance to make developing nations conform to certain obligations, measures for accommodating them a longer period of time for completion.

Special and Differential treatment under the GATT

Modification of Article XVIII of the GATT

In 1957, sections B, C, and D were added to Article XVIII after amendment. Section B permitted developing nations to put and make use of quantitative restrictions more generously than developed countries, to meet up with their balance of payments. Developing countries were enabled to pursue infant industry protection policies through Sections C and D.

Integration of Part IV

Part IV, titled ‘Trade and Development’ was supplemented to the GATT in 1966, and is comprised of three articles, namely, Articles XXXVI, XXXVII and XXXVIII. Part IV was interpreted to be just a moral obligation. The provisions underneath Part IV GATT were a further imitation of Article 8 of the Havana Charter, 1948.

It provided only that developed nations ‘shall’ take into account the particular and exceptional needs of budding nations. The provision had no compulsion and its language was very vague and ambiguous. The section incorporates the idea of non-reciprocal favored treatment, i.e. developed nations ought not to expect the developing countries to make similar offers in return when they award trade concessions to budding nations.

Nevertheless, developing countries assert that Part IV has been devoid of practical importance because it does not comprise of any responsibilities for developed countries.

Embracing the Enabling Clause

On 28th November 1978, signatories to GATT came to this decision that developed nations can accord or grant special and differential treatment to budding nations without providing for the same to other member nations keeping aside the provision of Article 1 of General agreement.

This made differential and exceptional treatment, reciprocity, and fuller participation of developing nations more prominent and accommodated a permanent basis for granting of preferences in support of developing countries to guarantee their fuller participation in International exchange.

Special and Differential treatment under GATS

The objective of article IV of the GATS is increasing the involvement of budding nations in World trade. It aims at the strengthening of the competitiveness of the domestic services of budding nations via access to technology and information networks.

Article XII permits developing countries and nations in the transition towards the same for reasons of balance-of-payments difficulties, to restrict trade in services.

Special and Differential treatment under TRIPS

Article 66 accommodates least-developed nations with a prolonged time-frame to put into operation all the TRIPS Agreement provisions and encourages the transfer of technology.

The provision relating to accommodating technical assistance is given under article 67 of the agreement. TRIPS also provides a transition period of 5 years to comply with obligations in the Agreement, while developed countries have to comply with them within one year from the commencement of the Agreement.


[1] 5th Year, BBA LLB (H.) in Corporate Laws, UPES, Dehradun.

Short notes

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