WORLD TRADE  
ORGANIZATION  TN/RL/W/250 
26 January 2011 
 
 (11-0421) 
Negotiating Group on Rules Original:   English 
  
 
SUBMISSION BY PLURINATIONAL STATE OF BOLIVIA 
 
Negotiations aimed at Clarifying and Improving  Disciplines and Procedures under the Existing 
WTO Provisions applying to Regional Trade Agreements – A Proposal to Clarify  
Developmental Aspects of Regional Trade Agreements  
 
 
 The following communication, dated 25 Ja nuary 2011, has been received from the 
Delegation of the Plurinational State of Bolivia.  
_______________ 
  I. INTRODUCTION 
When GATT Article XXIV was adopted in 1947, only a few developing countries 
participated in the negotiations that resulted in its adoption. This was largely a consequence of the fact 
that at that time, very few regional trade agreem ents existed, hence developing countries had limited 
interest in multilateral disciplines concerning Regi onal Trade Agreements (RTAs).  Several decades 
later, there has been a proliferation of RTAs  and a growing participation of members in 
North-South RTAs. Currently, most developing co untries are negotiating and some have concluded 
RTAs with developed countries members of the WTO involving the liberalization of trade in goods. 
 
 In view of the expansion of Regional Trade Agreements, members agreed that 
GATT Article XXIV rules should be updated to ade quately reflect the context and circumstances 
surrounding the establishment of RTAs. In the contex t of the launch of a new multilateral round of 
negotiations at Doha, members agreed that developm ent should be at the heart of new disciplines to 
be agreed by members. 
 
The Doha Ministerial Declaration adopted in 2001 at the 4
th WTO Ministerial Conference 
stated that "the majority of WTO Members are developing countries.  We seek to  place their needs and 
interests at the heart of the Work Programme adopted in this Declaration" . 
 
In this context, the Doha Work Programme at  paragraph 29 mandates that "negotiations aim 
at clarifying and improving disciplines and proce dures under the existing WTO provisions applying to 
regional trade agreements.  These negotiations shall take into account the developmental aspects of 
regional trade agreements".1  In accordance with this mandate , negotiations on rules have been 
pursued in the Negotiating Group on Rules on seve ral key elements, including: transparency and 
systemic aspects. While members have submitted proposals on each area of negotiations, progress has 
been limited, with the exception of the creation of  the transparency mechanism for regional trade 
agreements.  
 
                                                      
1 WT/MIN(01)/DEC/1. TN/RL/W/250 
Page 2  
 
   A clarification and improvement in WTO ru les on the formation and operation of RTAs 
should support the development strategy of deve loping countries through regional integration by 
providing a supportive multilateral framework. Multilate ral rules should support the enhancement and 
applicability of strengthened Special and Differential Treatment (S&DT) and the less than full 
reciprocity principles  for the rules governing RTAs betwee n developed and developing countries. 
These flexibilities should be transferred into effec tive commitments, especially if we consider 
multilateral rules as the overarching umbrella fo r RTAs. They should also promote coherence 
between different provisions and Agreements such as GATT Article XXVI and GATS Article V by generating similar outcomes.   
 Therefore, the main aim of this document is  to provide for compliance with the mandate 
contained in paragraph 29 of the Doha Work Programme and proposes the incorporation of 
S&DT and the less than full reciprocity principles into GATT Article XXIV so that commitments of 
developing countries under RTAs are made effec tively and consistently with their individual 
development, financial and trade needs.  Furthermore, presently there is no de jure  special and 
differential treatment for developing countries in  meeting the requirements set out in existing 
GATT Article XXIV disciplines.  Introducing those principles into GATT Article XXIV on a de jure  
basis will provide a legal framework in the WTO fo r the formation of North-South RTAs that would 
be supportive of the sustainable development objectiv es of the multilateral trade system and consistent 
with the overarching ambition of the Doha Development Agenda.  II. RATIONALE 
Several developing countries have voiced concer ns regarding potential adverse implications 
for their economies when regional trade agreemen ts do not address economic asymmetries or when 
such agreements are not designed or adapted to the specific national circumstance or development 
imperatives. Others developing countries have reco gnized the potential developmental benefits of 
regional trade liberalization and cooperation if the cons traints refer to herein are removed.  Finally, 
broad-based, "one-size-fits-all" liberalization coul d result in import surges and a loss of government 
revenue that could prove unsustain able economically, socially and po litically. Such an approach can 
have an adverse effect on development broadly,  but more specifically on food security and food 
sovereignty, employment, industr ial growth, and the delivery of public policy objectives.  Deep 
regulatory harmonization that may be required under such agreemen ts could excessively constrain 
their regulatory autonomy and policy space in pursu ing development and po verty reduction policy 
objectives.  
 WTO rules on RTAs exercise a critical influence on regional negotiations.  They set the 
benchmarks against which WTO compatibility of the agreements are judged, especially in terms of 
meeting "substantially all the trade" coverage cr iteria. The lack of an agreed understanding and 
specific parameters and criteria for establishing RT As within the meaning of GATT Article XXIV has 
resulted in powerful Members imposing their prefe rred interpretation on weaker Members, thereby 
prejudging the course of negotiations. This a pproach usually results in unbalanced and 
development-unfriendly terms of  agreements. Such a situati on is nether constructive or 
developmentally sustainable, and above all, defeat s the supremacy of the multilateral trading system 
and its rules-based, as against power based, principle. 
 
Consistent with the developmen t orientation of the Doha Work  Programme, its results should 
have at its heart the interests of developing co untries including in terms of making Regional Trade 
Agreements supportive of their na tional goals and strategies to er adicate poverty.  Making Regional 
Trade Agreements, especially those between develope d and developing countries, more responsive to 
development implies the recognition of certain real ities regarding: (i) the level of asymmetries in 
economic and social development; (ii) the  difficu lties that developing countr ies face to benefit from 
these agreements and assume the costs of implemen tation and adjustment; (iii) the challenges that  TN/RL/W/250 
 Page 3 
 
 
  liberalization schemes can generate for weaker actors and sectors of society; (iv) the need  to preserve 
policy space for introducing incentives and measures to  promote the development of strategic sectors 
and the protection of infant industries; (v) th e existence of imbalanc es in negotiation and 
implementation capacities and (vi) the need to ensure  concrete economic and development outcomes.    
 
 Recognition of such development realities should be translated into legal provisions at the 
WTO level that should firmly entitle developing countries to design RTAs that best fit their developmental imperatives while remain ing WTO compatible.  These include:  
 
• The GATT/WTO principle of "less than full r eciprocity for tariff reduction commitments"
2 
should be fully recognized in RTA negotiations so that developing countries are entitled to 
make a significantly lesser level of tariff a nd non-tariff liberalization commitments than 
developed countries so as to duly reflect their individual level of development;  
 
• Developing countries should be entitled to d esign and undertake progressive liberalization 
over a longer timeframe in order to cater for th eir trade and developmental interests, including 
the possibility of linking trade liberalization w ith development benchmarks as agreed among 
RTA partners; 
 
• Sufficiently and meaningfully long implemen tation periods should be  made available for 
developing countries according to the level of development, including the possibility of going far beyond what is currently envisaged in completing liberalization commitments. 
 
Some developing country Members have proposed  to strengthen the development dimension 
of WTO rules on RTAs aimed at clarifying and impr oving disciplines and procedures consistent with 
paragraph 29 of the Doha Ministerial Declaration.  The ACP Group of States document on "Developmental aspects of regional trade agreemen ts and special and differential treatment in 
WTO rules: GATT 1994 Article XXIV and the Enabling Clause" (TN/RL/W/155) points at key arguments to support the incorporation of a pro- development clarification and improvement of 
GATT Article XXIV.  It calls for formally and explicitly integrating operational and effective 
S&DT in GATT Article XXIV in order to enhance the development dimension in the wake of the 
growing formation of RTAs betw een developing and deve loped countries.  In this regards, the 
Plurinational State of Bolivia, would like to reite rate the following arguments of that proposal:  
 
• There is a strong case for reexamining GATT 1994 Article XXIV to take better into account 
developmental aspects of RTAs between deve loped and developing countries such as the 
significant differences in levels of devel opment, productive and export capacities, and 
competitiveness; 
• Specific S&D treatment for developing countr ies in North-South RTAs is absent from 
existing rules including in Article XXIV of GA TT 1994, although S&D is a key principle and 
integral part of the legal architecture of WT O. The Enabling Clause provides a more flexible 
framework for South-South RTAs but is not applicable to North-South RTAs. 
• The multilateral rules should not pose unduly rest rictive constraints on economic integration 
efforts of developing countries being pursued as part of their fundamental development strategy. 
                                                     
 
2 Paragraph 8 of Article XXXVI of GATT on Trade and Development embodies the principle of less 
than full reciprocity for developing countries.  It provides that "the developed contracting parties do not expect 
reciprocity for commitments made by them in trade negotia tions to reduce or remove tariffs and other barriers to 
the trade of less-developed contracting parties". In the same line of ideas, "less-developed contracting parties should not be expected, in the course of trade negotiations, to make contributions which are inconsistent with 
their individual development, financial and trade needs, taking into consideration past trade developments".  TN/RL/W/250 
Page 4  
 
  • While there exists some de facto  flexibility under GATT Article XXIV arising from the 
ambiguity in terminology used therein, and in the permissive practices evolved over the years of particularly the GATT history and now the WTO, such flexibility apply to all WTO Members and do not differentiate between de veloped and developing Members. Thus, such 
de facto flexibility cannot constitute nor subs titute for legally binding, operational and 
effective S&D provisions.  
 Particularly emphasized: 
 
• There are an important textual and content difference between GATT Article XXIV and 
Article V of the GATS (its counterpart Ar ticle in GATS). GATS Article V, a more 
contemporary and development supportive provision, explicitly recognizes that when 
Economic Integration Agreem ents involve developed and developing countries 
(Article V:3(a))  that extended flexibility acco rding to the level of development shall be 
provided when applying conditions set in the sa me Article (GATS Article V.1).  It also 
differentiates agreements am ong developing countries by indicating that more favorable 
treatment may be granted to juridical persons owned or controlled by natural persons of 
parties to these agreements (GATS Article V3(b )). While many can argue that S&DT is and 
should be an intrinsic part of GATT Article XXIV,  an explicit incorporation of such principle 
in this article would definitely assist in fulf illing paragraph 29 of the Doha Work Programme, 
bringing clarity and improved coherence with   the overarching goals of the WTO and the 
Doha Development Agenda.   
 
Furthermore, the Chair of the Negotiating Gr oup has repeatedly called for new textual 
proposals in order to advance the mandate on systemic aspects of rules on RTAs. At the occasion of the March 2010 stocktaking exercise, the Chair reported to the TNC as follows:  
 
 "On systemic issues relating to RTAs, my impr ession is that while no one is disputing the 
fundamental importance of the issues, the Group can not advance and conclude its work in this 
area without text-based proposals by Members.   I hope to see such text-based proposals from 
delegations soon so that the systemic work of the Group can resume."
3 
 
III. PROPOSAL 
Taking into account the past negotiating history which has focused on detailed discussion of 
systemic issues especially on substantially all the trad e, and with a view to facilitating progress in the 
Negotiating Group and in responding to the Chair's calls for new text-based proposal, the following 
provision, drawing on GATS Article V: 3 (a), is proposed to be inserted in an appropriate place in 
GATT Article XXIV:    "Where developing countries are parties to an agreement with developed countries for the 
formation of a customs union, a free trade area , or an interim arrangeme nt leading to either 
a customs union or a free trade agreement, speci al and differential treatment, in particular 
less than full reciprocity, shall be provided to  developing countries regarding the conditions 
set out above in  paragraphs 5 to 9 inclusive, specially with respect to subparagraph 5(c) and 
subparagraph 8(a)(i) and (b)." 
 Finally, this proposal is submitted without prejudi ce to the right of the Plurinational State of 
Bolivia to submit additional proposal and clarifications. 
__________  
                                                     
 
3 TN/RL/24, 22 March 2010.