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“Developing” Countries’ Arrested Development

GENEVA – The World Trade Organization and global climate-change negotiations face comparable challenges. Both need to accommodate different levels of development and match them with appropriate obligations. Even the jargon is similar: “common but differentiated responsibility” in the climate-change talks, and “special and differential” in the WTO.

Similarly, the classic North-South divide that shapes both sets of negotiations recalls the era when “North” was a synonym for “rich,” and “South” was shorthand for those who could not afford to play by the same rules. The world has changed dramatically since then, and in the climate-change negotiations it is now accepted that some developing countries will need to undertake emission reductions by 2020.

The WTO is a step behind. Based exclusively on its own self-assessment, any member can claim to be “developing” and remain at that stage, which automatically entitles them to the benefits of “special and differential” (S&D) treatment. That translates into derogations from general rules and longer periods to introduce less ambitious tariff reductions.

Assigning “common but differentiated responsibility” for climate change is basically a question of allocating mitigation costs between countries responsible for accumulated CO2 stocks and those responsible for current CO2 flows. In the WTO, the challenge is one not of measurement, but of leveling the playing field to ensure “fair” competition and an equitable distribution of the short-term costs of trade liberalization.