JOB/TN/CTD/6  
JOB/TNC/119  
 
28 November 2023  
(23-8046) Page: 1/8 
Committee on Trade and Development Special Session  
Trade Negotiations Committee  Original: English  
 
G-90 DOCUMENT FOR THE SPECIAL SESSION OF THE COMMITTEE ON TRADE AND 
DEVELOPMENT (CTD -SS) ON  SPECIAL AND DIFFERENTIAL TREATMENT PROPOSALS  
ON THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 (GATT 1994)  
ARTICLE XVIII: SECTION B  
SUBMISSION BY SOUTH AFRICA ON BEHALF OF THE ORGANISATION OF AFRICAN, CARIBBEAN 
AND PACIFIC STATES (OACPS), THE AFRICAN GROUP AND THE LDC GROUP  
The following communicat ion, dated 2 2 November 2023, is being circulated at the request of the 
Delegation of South Africa on behalf of the Organisation of African, Caribbean and Pacific States 
(OACPS), the African Group and the LDC Group.  
 
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1  INTRODUCTION  
1. The G -90 submits the proposals herein in pursuance of the work directed under 
Paragraph 2 of the 12th Ministerial Conference (MC12) of the world Trade Organization 
(WTO) Outcome Document (WT/MIN(22)/24 – WT/L/1135).  This contribution seeks to 
advance work on the re view of special and differential treatment (SDT) with a view to strengthening 
them and making them more precise, effective, and operational in line with paragraph 44 of the 
Doha Ministerial Declaration.  
2. The submission of the textual proposals in relation t o Section B of the GATT Article XVIII builds 
on the G -90 submission presented to the Special Session of the Committee on Trade and 
Development (CTD -SS) contained in document JOB/TN/CTD /2 - JOB/TNC/106  as part of the ten  
Agreement -Specific Proposals (ASPs) that the G-90 is tabling  for negotiations towards outcomes by 
latest MC13, in line with and consistent with the roadmap that was proposed and presented by G -90 
to the CTD-SS and subsequently agreed by the committee at its meeting on 20 March 2023.  
2  THE RATIONAL E BEHIND THE G -90 AGREEMENT SPECIFIC PROPOSALS  
3. The G90  recall s the following key principles towards realisation of  SDT provisions that are 
precise, effective and operational, in line with the negotiating mandate:  
• SDT for developing and least develo ped countries is an integral part of the multilateral 
trading system architecture and a treaty embedded right.  
• The mandate under paragraph 44 of the Doha Declaration  and reaffirmed at MC12  is to 
review SD T provisions under the covered Agreements with a view to strengthening them 
and making them more precise, effective and operational.  
4. The G -90 is not seeking blanket exemptions from commitments, but instead seeks to ensure 
effective implementation of existin g S&D provisions. The proposals aim to operationalize the 
collective commitments of the WTO Membership in several WTO agreements to facilitate the effective 
integration of developing and least developed countries (LDCs) into the multilateral trading system .  JOB/TN/CTD/6 • JOB/TNC/119  
 
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  5. SDT is not confined to transitional periods and capacity building and technical assistance, but 
should be intrinsically embedded in the trade rules to allow policy flexibility to developing countries 
and LDCs to achieve their development objectives , and under conditions of certainty . 
6. The G -90 proposals have been crafted with a view to ensuring stability, predictability and 
transparency in the implementation of existing S&D provisions, and thus strengthening a key area 
of the multilateral trading system i n favour and benefit of the interests of developing countries, 
including LDCs. These proposals are the result of careful and detailed deliberations among 
G-90 members, taking into account the needs of members at different levels of development.   
3  ABOUT GATT : ARTICLE XVIII - SECTION B  
7. Article  XVIII-B GATT was meant to provide developing countries the needed policy space to 
undertake measures in light of balance  of payments  (BoP) challenges emerging in the context of 
their longer -term economic development and considering the risks emanating from the external 
environment.  Yet, the flexibility afforded to developing countries under Article XVIII :B is limited by 
the complex procedura l conditions that came to be attached to it, particularly under the 
'Understanding on the Balance -of-Payments Provisions ', undermining  the ability to benefit from this 
flexibility. The way this Article has been operationalized tends to put the focus on temporary liquidity 
problems . This leaves unaddressed the  challenges  that developing countries face in order to meet 
their longer -term financing needs  and does not  account for many of the current challenges 
developing countries face, which are rooted in the f inancial vulnerabilities and structural weaknesses 
they face as a result of their roles in the international trade and capital markets .  
8. The G90 had highlighted in previous submissions  that the use of BoP provisions of GATT 
Article  XVIII had declined since  the inception of the WTO, due to more stringent and over -elaborate 
procedures. Only around 14 developing countries have attempted to use Article XVIII:B without 
much success. Any attempts to introduce BoP measures have been met by stringent resistance fro m 
developed countries and developing countries are typically cajoled to withdraw their requests. The 
recent experience of Ecuador in the BoP Committee is instructive, as the Member 's measure was 
subject to 6 rounds of consultations with members in the Comm ittee between June 2015 and 
July 2017 without reaching any consensus.  
4  THE CASE FOR STRENGTHENING SPECIAL AND DIFFERENTIAL TREATMENT UNDER 
GATT: ARTICLE XVIII – SECTION B  
9. Many developing and least developed countries (LDCs) run a persistent and sometimes la rge 
current account deficit (CAD)  (See Annex 1 ). This chronic condition , which they have to consistently 
manage as part of their longer -term developmental trajectories , is closely linked to how these 
economies are inserted in global real and financial markets, consequently to their position in 
international trade and the terms of trade they face as well as their exposure to international capital 
markets.  
10. Adverse terms of  trade and continued dependence on commodity exports1 have made most 
developing countries and LDCs vulnerable and prone to chronic CADs or shallow surpluses . Primary 
products continue to be dominant in the export composition of many developing counties. T his is 
coupled with an inability to effectively pursue economic diversification  and industrialization,  and to 
move towards production and exports of higher value -added that could contribute to advancing their 
developmental trajectories. As pointed out repe atedly by many developing countries Members of the 
WTO, t he solutions are often restrained by the current trade rules, which were designed with the 
absence of many developing countries and without accounting for their longer -term development 
needs. In the context of the latest  polycrisis, including the inflation shock and international monetary 
tightening, and its backdrop of health, food and climate crises, these vulnerabilities have been 
further accentuated.  
11. Commodity dependence poses balance of payments  risks and imbalances because of the 
inherent and exacerbated commodities ' price volatility. Commodity dependant developing countries 
(CDDCs) are vulnerable to negative shocks that affect the quantities and/or the prices of the 
 
1 i.e. where commodities on average constitute more than 60 per cent of the value of exports. See:  
UNCTAD, 'The State of Commodity Dependence ' Report (2023), available at:  
https://unctad.org/publication/state -commodity -dependence -2023 JOB/TN/CTD/6 • JOB/TNC/119  
 
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  commodities exported, along other types of supply or demand shocks that impact the economy.2 
These shocks in turn result in volatile commodity prices. An increase in the volatility of commodity 
prices can then lead directly to an increase in the volatility of terms of trade.3 Terms  of trade shocks 
have serious adverse implications for CDDCs, and may harm growth, worsen distribution of income, 
and raise the odds of highly disruptive currency crises.4 
12. These  challenging conditions are compounded given the  expansion  of unilateral respo nses by 
developed countries to global collective challenges , such as climate change , through interventions 
such as carbon -border adjustment measures (CBAM), and an expansion of localization policies and 
diversion of finance domestically with little regard to the principle of common but differentiated 
responsibilities (CBDR) and transition finance, which were central to the Paris Agreement. This in 
effect increases  trade protectionist measures on a wide range of commodities and manufactured 
goods on the grou nds of enforcing climate change mitigation .5 In the medium to longer term, the 
protracted recovery of many developing countries from the latest polycrisis risks being derailed by 
these unilateral policies, along with renewable commodity extraction, and pr ohibitive intellectual 
property regimes that dissuades effective transfer of climate technology .6 Many developing countries 
have noted how such measures will be disproportionately taxing on their export compositions.7 
13. In equalities in the terms of trade and related vulnerabilities in the era of digitalization and 
transitions towards low -carbon econom ies are also increasing. Developing countries might face more 
dependencies on imports of products and technologies while their products face higher risks of being 
shut out of developed countries ' markets. Furthermore, several raw material producers among 
developing countries face the continued challenge of being locked at the lower end of value chains.  
As import bills increase and exports are curtailed by the inability to diversify and deepen productive 
capacities given the current context, BoP crises among  developing countries are expected to be  more 
frequent and severe.  
14. Moreover, today  developing countries are increasingly exposed to challenges induced by the 
external financial environment  and shocks that are beyond their control . In the context of the la test 
economic crisis,  including the inflation shock and international monetary tightening, it has been 
clearly demonstrated how policy  decisions in reserve -currency countries have had major 
repercussions and negative spill -overs on conditions in many devel oping countries . These monetary 
policy decisions have a ripple effect given the central role of the dollar in the global economy and 
the reliance on the dollar for trade and borrowing on the international markets.8 These decisions 
affect the world financi al markets  by "a priori attracting capital flows away from the developing 
world, pushing upwards their domestic costs of borrowing and creating pressures in favor of 
depreciation of their exchange rates ".9. Persistent global inflation and a prolonged period of higher 
U.S. interest rates have increased the risk of economic and social instability in many lower -income 
and some middle -income countries.  
15. These monetary policy decisions in reserve -currency countries have significant impacts on 
count ries with large debts, who have borrowed externally in foreign currencies to finance their 
 
2 The size and impact of transitory shocks depend on the resilience of the country  concerned, and of the 
agents.  
3 This linkage between supply -demand shocks and volatility in commodity prices is statistically clear and 
visible even on an annual basis.  
4 Avom. D , Brice Kamguia, Joseph Pasky Ngameni, and Henri Njangang (2021):  How does te rms of 
trade volatility affect macroeconomic volatility? The roles of financial development and institutions, 
International Econ omics , Volume 168 , December 2021, Pages 98 -114 
5 Juan Carlos Moreno -Brid, Lorenzo Nalin, Edgar Perez -Medina (February 2023), 'Current External 
Challenges to the Economic Expansion of Emerging Markets ', Institute for New Economic Thinking, page 12.  
6 Ibid, Institute for New Economic Thinking, page 12. The paper points out that "industrial policies 
adopted by several developed economies aimed at re -sourcing diverse processes /links of key global value 
chains, reflecting a shift in objectives in favor of resilience vis -à-vis just -in-time lean inventory management 
and cost -reduction considerations ".  
7 See for example submission by India to the Committee on Trade and Environment  entitled 'Concerns 
on Emerging Trends of Using Environmental Measures As Protectionist Non -Tariff Measures ' (JOB/TE/78 ), 
2023. 
8 See: Francesco Guerrera, 'Why the Dollar Keeps Winning in the Global Economy ', available at: 
https://www.reuters.com/breakingviews/global -markets -breakingviews -2023-02-28/, and 
https://african.business/2023/05/african -banker/interest -rates-hikes-exact -high-price-in-africa   
9 Supra n. 5, page 12.  JOB/TN/CTD/6 • JOB/TNC/119  
 
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  chronic current account deficits. Many expanded borrowing in the era of low interest rates10 to offset 
the financial impact of the COVID -19 pandemic and then later t he effect of higher prices caused by 
the war in Ukraine. Downward pressure on their currencies exacerbates their debt obligations.  It is 
also important to recall that t he COVID -19 pandemic struck during what was already a very 
challenging period for develo ping countries as they were still reeling from the effects of the 2008 
financial and economic crisis.11 The financial turmoil from the 2008 crisis and the significant drop in 
commodity prices had already triggered sharp currency devaluations in developing countries, that 
made it significantly harder for them to enact effective stimulus in the wake of Covid -19 without 
facing binding foreign exchange constraints. Furthermore, many developing countries ' economies 
were already showing recessionary signs in the last quarter of 2019. 
16. Generally, developing countries face a series of interconnected shocks emanating from  a 
highly unequal international financial architecture, that reproduces structural inequalities  between 
countries, and disproportionately penalizes developing countries through a multiplicity of 
interconnected channels including depreciating currencies, rising costs of imports, higher inflation, 
especially food price inflation, rising debt servicing and borrowing costs, an d worsening fiscal and 
current account balances.  In the context of lacking reforms in the international financial architecture , 
developing countries  face compounded challenges emanating from  the increasing dependence on 
private capital flows, the lack of s ustainability of such capital flows, decline in official development 
assistance, the increasing average cost of borrowing in international markets, along with the 
conditionalities associated with the availability of external finance.  
17. From the outset, the design of international system has failed to address the intersection of 
trade, finance and development coherently.12 The question of financing the structural long -term 
development needs of developing countries remained unresolved within the mu ltilateral context. 
While trade rules and measures cannot alone provide solutions to all the challenges emanating from 
the operations of the international financial regime, trade rules ought to be more cognizant of the 
challenges emanating at the nexus of finance, trade and development and accommodative of the 
differences between financing required to meet imbalances created by long -term development needs 
and the provision of liquidity needed to meet shorter -term cyclical international payments 
imbalances. Trade  rules ought to be  reformed  in order to be supportive of development processes, 
including the ability to respond to BoP challenges linked to advancing industrialization or launching 
new industries.  
5  PURPOSE OF THE G -90 PROPOSAL ON SPECIAL AND DIFFERENT IAL TREATMENT UNDER 
GATT: ARTICLE XVIII – SECTION B  
18. The G -90 proposal (see Annex 2 ) is designed to ensure that the original objective of 
Article  XVIII: Section B is served, whereby developing countries  facing BoP challenges would have 
meaningful access to the flexibility that this provision was intended to provide in order to allow them 
the policy space to respond to the unique challenges they face  in their economic development 
process.  
19. In particular, the proposal builds on the lessons learned thus far from  the use and lack of use 
of this provision and  seeks to : 
• Providing needed guidance on the approach to determining the adequacy of a developing 
country 's reserves in the context of its economic development progress and programme  
and clarification  of the role of the Committee on Balance -of-Payments and its authority in 
this regard . 
 
10 See: Somesh Jha (July 2023), 'Is a global debt bomb about to explo de', available 
https://www.aljazeera.com/features/2023/7/4/is -a-global -debt-bomb -about -to-explode   
11 IMF, World Economic Outlook (WEO) Report 2020 . The report note that  this crisis adds additional 
burden on economic capacities of develo ping countries, and leads to balance of payments difficulties along with 
socio-economic disruptions.  
12 For the historical evolution of the multilateral economic system see UNCTAD, Trade and Development 
Report 1984, Part II. For more details, see  also: Com munication from UNCTAD (2002), WT/WGTDF/W/5/Rev.1, 
'The Effects of Financial Instability and Commodity Price Volatility on Trade, Finance and Development '. JOB/TN/CTD/6 • JOB/TNC/119  
 
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  • Providing for a more streamlined approach to the procedural requirements attached to this 
provision with a view towards enabling the concerned Members to ac t in a timely and 
efficient manner and without undermining the needed transparency.  
  JOB/TN/CTD/6 • JOB/TNC/119  
 
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   ANNEX 1  
 
 
 
 
 
 
 
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Source: UNCTADstat  
 
  
JOB/TN/CTD/6 • JOB/TNC/119  
 
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  ANNEX 2  
TEXTUAL SUGGESTIONS ON THE AGREEMENT ON GATT: ARTICLE XVIII – SECTION B  
Notwithstanding the obligations under Article XVIII.4a and Article XVIII:B subparagraphs 9, 10, 11, 
12, and under the Understanding on the Balance -of-Payments Provisions of the GATT 1994 ; 
1. Developing and least developed countries facing balance of payme nts difficulties or 
crisis may take measures to address these difficulties or crises, including quantitative 
restrictions* and tariff measures, with the aim of  
a. forestalling the threat of, or to stop, a serious decline in its monetary reserves, 
or 
b. in the ca se of inadequate monetary reserves, to achieve a reasonable rate of 
increase in its reserves.  
2. These measures may be undertaken until such time these difficulties or crisis have 
been deemed overcome by the concerned national authorities.  
3. In drawing up  its conclusions and recommendations to the General Council, including 
on determining the adequacy of reserves for a developing or least developed country 
availing itself of this [Decision] [Article], the Committee on Balance of Payments 
Restrictions, whil e considering the findings, facts, and other determination provided 
by the IMF in accordance with Article XV GATT, shall ensure that its conclusions and 
recommendations are adequate in the context of a Member 's economic development 
policies as expressed by  the concerned Member and do not undermine the objectives 
recognized under paragraph 2 of Article XVIII and under this [Decision] [Article]. 
Short term financial flows shall not be included in determining the adequacy of the 
concerned Member 's reserves.  
4. A Member undertaking measures under this [Decision] [Article] must:  
a. Notify to the Committee on Balance of Payments Restrictions the measures it 
undertakes within a period of time that does not extend beyond 3 months from 
the date of implementing those mea sures;  
b. Within a period that does not extend beyond one year, the concerned Member 
shall present to the Committee on Balance of Payments a basic document that 
includes;  
i. an overview of the balance -of-payments situation and prospects, including 
a consideratio n of the internal and external factors having a bearing on the 
balance -of-payments situation; and  
ii. a description of the restrictions applied for balance -of-payments purposes 
and related laws, regulations, policy statements or public notices.  
5. Where a Memb er notifying measures under this [Decision] [Article] maintains or 
renews the measures beyond an initial 5 years, the Member must upon request hold 
consultations concerning the measures notified with other Members.  
For greater certainty, actions stipulate d under the last sentence of Article XVIII 
subparagraph  12(c)(ii) and last sentence of Article XVIII subparagraph 12(d) shall be suspended.  
 
This Decision is without prejudice to the flexibilities Members have under various WTO agreements 
and rules.  
 
* It is understood that a Member acting under this provision shall not be required to fulfil the 
requirements under GATT Articles XI and XII . 
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