WORLD TRADE
ORGANIZATIONTN/CTD/W/21
6 December 2002
(02-6735)
Committee on Trade and Development
Special SessionOriginal:  English
REALIZING TRADE AND DEVELOPMENT OBJECTIVES THROUGH
SPECIAL AND DIFFERENTIAL TREATMENT
Submission by Canada
The following communication dated 21 November 2002 has been received from the above
delegation.
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I. INTRODUCTION
1. In the Implementation-Related Issues and Co ncerns Decision of 14 November 2001 , the
Committee on Trade and Development (CTD) was instructed to examine Special and Differential
(S&D) Treatment in particular:
(i) to identify those S&D treatment provisions that are already mandatory in
nature and those that are non-binding in character, to consider the legal andpractical implications for developed and developing Members of converting
S&D treatment measures into mandatory provisions, to identify those that
Members consider should be made mandatory, and to report to the General
Council with clear recommendations for a decision by July 2002;
(ii) to examine additional ways in which S&D treatment provisions can be made
more effective, to consider ways, including improved information flows, in
which developing countries, in particular the least-developed countries(LDCs), may be assisted to make best use of S&D treatment provisions, and
to report to the General Council with clear recommendations for a decision
by July 2002; and
(iii) to consider, in the context of the work programme adopted at the Fourth
Session of the Ministerial Conference, how S&D treatment may beincorporated into the architecture of WTO rules.
2. S&D treatment provisions allow for transitional differentiated obligations for developing
countries through such instruments as: non-recipr ocal trade concessions, exemption or exoneration
from certain disciplines and obligations of the multilateral trading system, and trade-related technical
assistance (TRTA) and capacity building.  These provisions are designed to respond positively to thedevelopment, financial and trade needs of developing countries, without prejudice to other Members.TN/CTD/W/21
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3. The WTO Secretariat has identified six categories of S&D provisions:
(i) provisions aimed at increasing the trade opportunities of developing country
Members;
(ii) provisions under which WTO Members should safeguard the interests of
developing country Members;
(iii) flexibility of commitments, of action, and use of policy instruments;
(iv) transitional time periods;
(v) technical assistance;
(vi) provisions relating to LDC Members.  (WT/COMTD/ W/77/ Rev.1/Add.4)
4. The inclusion of S&D treatment provisions in WTO Agreements were recognition that some
developing countries might lack the capacity to fully meet their WTO obligations, and were intended
to facilitate the full integration of developing countries into the global economy.  The implicitassumption was that the capacity of developing countries to make contributions or undertake
negotiated concessions would increase with the progressive development of their economies and
improvement in their trade situation.  Developing countries accordingly expect to participate more
fully in the WTO framework, and to share in the benefits from the increased opportunities and welfare
gains generated by the multilateral trading system.
II. S&D: "A MEANS TO ENDS"
5. The overarching objectives of S&D treatment provisions are to foster the ability of
developing countries to become full participants in the multilateral trading system and reap the
benefits of WTO Membership.  That is, S&D treatment provisions are to be used in accordance with
the conditions that are set out in the various WTO Agreements and gradually become redundant asdeveloping countries incrementally increase their ability and capacity to implement agreements,
decisions and related obligations.  It is only when they are able to implement the full extent of
agreements that they will reap the economic benefits of WTO Membership.  One means, multiple
ends.
6. To this end, S&D treatment is best targeted to a specific country's trade, financial and
development needs.  S&D treatment provisions should provide developing countries with meaningful
and constructive mechanisms to assist them in developing the necessary infrastructure and "know-
how" to allow them to implement fully the obligat ions of an agreement.  At the same time S&D
treatment should reinforce the adoption of sound economic and governance policies and open trade
policies.  It is these policies that secure the economic growth and prosperity sought.  Within this
context, we need to ensure that S&D treatment provisions beneficial to development efforts are
reinforced, including growth, poverty reduction and sustainable development, while those that maypotentially delay this progress are assessed and reconsidered.
7. The carefully negotiated rules of Membership n eed to be adhered to for the system to work
for all.  However, there is a need for flexibility in  the application of the rules in order to take the
circumstances of individual Members into consideration.  Members need to be able to assess their
particular needs and request S&D treatment accordingly, rather than rely on broad categories ofexemption that would not necessarily meet their requirements.  At issue is the pace of adherence, not
adherence itself.  A possible way forward is for the CTD to take a Member-specific focus and
examine methods to develop a predictable cycle to analyze the impact S&D treatment provisions haveTN/CTD/W/21
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had on specific Members' capacity to adhere to obligations and realize the economic benefits of
Membership.
8. With the exception of the LDC exemptions/derogations, which have particular criteria and are
specific to each Agreement, blanket exemptions ar e inconsistent with this Member-specific approach.
Members wishing to take advantage of such special measures should be able to provide the rationalefor the measure, frame domestic plans to advance their ability to meet obligations and demonstrate
results within agreed milestones.
9. Positive S&D treatment measures are those aimed at increasing the trade opportunities of
developing country Members, safeguarding the interests of developing country Members, and
assisting LDCs.  For these provisions, it is incumbent upon the developed and developing country
Members to demonstrate where and how they have been furthering these aims.
10. Similarly, many S&D treatment provisions are of a "best endeavour" nature or involve other
multilateral agencies.  We cannot assume that because we do not have any information from Members
as to how they have tried to implement these, that nothing has occurred.  The Special Session might
consider recommending to the General Council that the Committees and Working Groups responsible
for the relevant WTO Agreements have a more thorough, coherent and regular reporting process on
S&D treatment.  This could be a vital task of the monitoring mechanism proposed by the AfricaGroup.
11. Trade-related technical assistance and capacity building are a means to enabling developing
countries to implement Agreements.  As technical assistance is the fifth category of S&D treatment
identified by the WTO Secretariat, the monitoring m echanism will have a key role to play in ensuring
that TRTA and capacity building activities are effective, properly targeted, and coordinated with otheragencies, to help countries progressively implement elements of Agreements.
III. UTILIZATION EXAMINED
12. S&D treatment represents acknowledgement that no "one size fits all".  S&D treatment exists
to allow developing countries sufficient support and time to make necessary transformative changes to
their economies to enable incremental integration to the WTO, until full participation is achieved.
There has been significant progress.  As WT/COMTD/W/77/Rev.1/Add.4 enumerates, Member
countries have undertaken a variety of efforts to implement these commitments.  Where flexibility
was "encouraged", it has been respected, and it is the exception rather than the rule that a developing
country that invoked S&D treatment was unable to take advantage of it.
13. Canada has taken several actions aimed at increasing the trade opportunities of developing
country Members, including further development of a Trade Facilitation Office to promote exports of
developing countries, and significant increases in funding for trade-related technical assistance andcapacity building.
14. Canada co-founded the Advisory Centre on WTO Law at the Seattle WTO Ministerial
meeting.  Canada has also been a strong supporter of the "Integrated Framework," which pulls
together six agencies (WTO, World Bank, UNDP, UNCTAD, ITC and IMF) to help developing
nations integrate into the multilateral trading system and the modern global economy.
15. Canada maintains a General Preferential Tariff for developing countries, and will institute
quota and tariff-free market access for LDCs.
16. Given the wide range of trade agreements, their differing adoption times, as well as the state
of trade policy and development policy thinking at these times, it is not surprising S&D treatment
provisions are not consistent and coherent.  While this inconsistency has not necessarily meant thatTN/CTD/W/21
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measures are ineffective, it has added to the ad ministrative burden of countries that may need to
invoke provisions.  For example, many S&D tr eatment provisions require that Members make
requests for their use.
17. As has been noted, failure to use S&D treatment provisions does not necessarily mean there is
a problem with their wording or that they are ir relevant.  Some specific proposals are issues for
negotiations and should be dealt with under the agendas of the respective WTO Committees.
Similarly, we should not be too hasty in assuming that they would be better served by changing them.
To make efficient use of our resources in considering proposals to make provisions more effective, we
might first assess if countries can make better use of existing provisions.  This could be furthered by
examining practical illustration of difficulties in utilizing particular provisions.  This is key for
deciding whether to recommend to the General Council that a given provision needs to be revised,
rethought, or eliminated.
IV. ROLE OF MONITORING MECHANISM
18. While only preliminary thought has been given to the framework for monitoring procedures,
creating a new or heavy structure should be avoided.  The mechanism should monitor the
effectiveness of S&D treatment in integrating me mbers into the multilateral trading system.  This
might initially be done by the individual committees and working groups who would then provideinput to the CTD for an overview report.
19. In the short to medium term, a monitoring mechanism could report on progress made in
negotiating committees on the S&D treatment proposals referred to them.  This would have the
advantage of not letting work on proposals become too diffuse.  Also in the medium term, the
mechanism might look at interim policy changes or a road map envisioned by countries to enablethem to meet their commitments.  For example, where S&D treatment involves specific transition
periods, Member countries' actions toward implementation of obligations could be reviewed at stages
within the transition period, in conjunction with reviews of TRTA that is being delivered to
implement obligations.
20. As noted in the African proposal, the monitoring mechanism should have the capacity to take
note of ongoing developments to enable continual refocusing of S&D treatment efforts towards the
most effective means of integrating developing countries into the multilateral trading system.
V. MOVING FORWARD
21. WTO S&D treatment provisions were negotiated within the context of specific Agreements.
Integral to each are certain precepts.  New proposals need to respect these key precepts.  While the
intention is to allow for flexibility, the ultimate aim is inclusion not exclusion.  By joining the WTO,
Members have accepted the underlying notion that global trade rule-making and liberalization play animportant role in promoting the liberalization and expansion of trade and in fostering economic
growth, development and employment.  Similarly,  Members have accepted the framework that has
been developed through the various Agreements.
22. Each S&D treatment provision must be dealt with within the context of the specific
Agreement in which it was negotiated, taking into consideration the changing circumstances of thespecific Member requesting use of the provision.TN/CTD/W/21
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23. Given the preceding analysis of the S&D treatment context and utilization, Canada proposes
that the discussion of strengthening S&D treatment progress on the basis of the following overarching
ideas:
• Transparency:  S&D treatment approach should reflect broader
WTO principles: that is, they should be transparent, open,
predictable, and respect procedural fairness.
• Member-specific Flexibility:  Since the economy of each
developing country is unique, S&D treatment must be flexibleenough to allow each country to chart its individual path to
integration.  Recognizing limited capacity and lack of resources,
S&D treatment should enable developing countries to undertake
commitments and obligations at a pace that is flexible, with
appropriate TRTA and support when required.  The application
of flexibility for some Members should not cause harm to others.
• Cooperation:  S&D treatment provisions should be developed
and examined on a cooperative basis, ensuring coherencebetween committees and the CTD.
• Efficiency and Effectiveness:  S&D treatment provisions should
be assessed on an ongoing basis against their efficiency andeffectiveness in contributing towards integration into the
multilateral trading system.
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