“UNIVERSITY OF LUSAKA”

“School: SCHOOL OF LAW”

Programme: BACHELOR OF LAW
“Course name and code: INTERNATIONAL TRADE AND ECONOMIC LAW (L312)”

Name: RODNEY KOMBE

Student ID: LLB19116548
Mode of Study: FULL TIME”
E-mail Address: rodneykombe59@gmail.com
Lecturer: MRS. WINJIE SIWALE.
Due Date: 17TH SEPTEMBER, 2020.

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This essay with the use of practical examples discusses the “efficacy of special and
differential treatment for developing countries" and concludes by giving a commentary
on whether or not China should give up its status as a developing country.

The World Trade Organization (WTO) is a fairly new international organization which
focuses on a wide range of trade rules among nations. It is primarily established to
ensure that trade is conducted efficiently, with certainty and liberally to benefit its
members. It affords member states with a platform where they can negotiate trade
agreements with a view to lowering the impediments to international trade, and thus
contributing to their economic growth and development. Lastly, it creates a legal
structure that is viable for the execution, settling and monitoring of trade agreements. 1

In view of the foregoing, defining and contrasting developing countries from developed
countries is relative to ascertaining “efficacy of special and differential treatment for
developing nations in the WTO.”

Essentially, “developing countries” are those nations with lower industrialization and
“per capita income” levels whereas, “developed countries” are those nations with higher
industrialization and per capita income levels. “Per capita income” refers to an average
income per person and it is determined by considering a nation’s total national income
and then dividing it by the total population of that nation. Generally nations that are
classified as developing countries roughly have per capita income levels that range from
$1,000 to $12,000. However, developed countries have per capita income levels that
are about or above $12,000.2

Since one of the objectives of the WTO is to ensure that developing countries benefit
from trading with other nations in a manner that supports their developmental needs, in
order to achieve this, developing nations under the WTO are conferred with special
rights and privileges that ultimately influence the manner in which they engage in the

1
K Fukasaku and P Low Special and Differential Treatment for Developing Countries: Does It Help
Those Who Help Themselves ( The United Nations University, 2000) 9
2
J Shinn Economic Inequality: Differences in Developed and Developing Nations
https://study.com/academy/lesson/economic-inequality-differences-in-developed-and-developing-
nations.htm 10/09/2020

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multilateral trading system with other developed nations. These special rights and
privileges that developing countries are afforded are commonly referred to as “special
and differential treatment.”3

The efficacy of special and differential treatment provisions for developing countries
under the WTO agreements is that “they give developed countries the leeway to treat
developing countries more favorably than other WTO Members.” For example,
developing nations are given an extended transition period before they are expected to
completely implement the WTO agreements. They are also entitled to receiving
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technical assistance from developed nations.

Article XXXVIII (8) of the GATT5 talks about “non-reciprocity” of trade between
developed and developing countries. The legal implication of this principle is that when
developed countries award trade reductions to developing countries, they should not
anticipate developing countries to make the same offers in return. For instance, if the
United Kingdom decides to remove quotas on commodities such as cotton or Mukula
tree that it is importing from Zambia, then in light of this concept of “non-reciprocity” of
trade, the United Kingdom should not expect Zambia to remove quotas in return when it
starts importing commodities from the United Kingdom.

Another practical example involves the trade facts between Zambia and the United
States of America which reveal that Zambia was ranked the115th major supplier of
imported goods in the United States in 2018. The goods America imported from Zambia
amounted to $189 million, and the major commodities it imported included copper worth
$121 million and emeralds worth $59 million among others. Therefore, in applying the
concept of “special and differential treatment for developing countries” to the aforesaid
trade facts, it can be reasonably inferred that since both countries are members of the
WTO, for Zambia to have had access to the US market as a developing country, and
manage to export the commodities stated above, the American government must have

3
K Fukasaku and P Low Special and Differential Treatment for Developing Countries: Does It Help
Those Who Help Themselves ( The United Nations University, 2000) 9
4
A Keck: Special and Differential Treatment in the WTO: Why, When and How? ( WTO, 2004) 7
5
Article XXXVIII (8) of the General Agreement on Tariffs and Trade 1994

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put up certain measures such as reducing its tariff barriers on the imported goods from
Zambia so as to enhance Zambia’s competitive advantage of supplying the
abovementioned commodities in the US market and thus helping it to achieve its
economic development agenda.

In order to strengthen the application of “special and differential treatment for

developing countries” in the WTO, various governments during the Doha round resolved
that all the special and differential treatment provisions were a vital component of the
WTO agreements. They further agreed that they were to be revised in a manner that
enhances them and makes the more effective and operational. Lastly, they resolved
that all governments were to protect the trade interests of developing nations by helping
them with capacity building to perform the WTO’s mandate among others. 6

However, the application of “special and differential treatment for developing countries”
comes with its own challenges. For example, there exists no definition for “developed”
or “developing” countries under the WTO provisions. This in some cases may impede
on the efficient application of special and deferential treatment provisions for developing
countries in the sense that some nations would want to categorize themselves as
“developing” countries in perpetuity so that they can continue to enjoy the benefits that
accrue to developing countries. As a result, this may potentially blemish the credibility of
the WTO and consequently threaten the multilateral trading system that exists among
its members. Therefore, there is need for the WTO to clearly define developed and
developing countries, and also establish a proper legal frame work that will help
countries to graduate from the state of being categorized as developing countries to
developed countries.

Commenting on whether or not China should give up its status as a developing country,
it should be noted that a developing country as earlier stated is one that has lower
industrialization and per capita income levels. While research shows that china’s
economic growth rate is very high, nevertheless, China is quit behind in terms of
economic and social development compared to other countries. For instance in 2018

6
World Trade Organization Ministerial Conference Fourth Session Doha ( WTO, 2001) 18

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alone, China’s per capita income level was below $10,000 which was below the world
average.7 Such statistical information is important when it comes to ascertaining
whether a country like China must be categorized as developed or developing country.
Therefore, based china’s per capita income levels in the recent years, it can still be
argued that china is a developing country as opposed to being a developed country.

Another factor worth considering is China’s urbanization rate. For instance, as of 2018,
china’s permanent urban population was recorded to have been at 59.58 percent even
though the urbanization rate in developed countries was recorded to have been around
80 percent. Therefore, this demonstrates that there still exists a huge disparity between
the urban and rural populations in China. Consequently, this gives rise to high wealth
inequalities in the country. Moreover, about 16.6 million people in china were recorded
to be living below the national poverty line in 2018.” 8

In conclusion, it can be argued that while China's economic growth rate has been
outstanding in the recent years, it does not necessarily mean that China should give up
its developing country status based on the numerous factors discussed above.
Challenging or depriving China of its developing country status would mean infringing
on its legitimate privileges in the World Trade Organization.

REFERENCES
7
J Shinn Economic Inequality: Differences in Developed and Developing Nations
https://study.com/academy/lesson/economic-inequality-differences-in-developed-and-developing-
nations.htm 10/09/2020
8
China’s status as a developing country undeniable
https://www.globaltimes.cn/content/1173184.shtml 10/09/2020

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STATUTES

The General Agreement on Tariffs and Trade 1994

BOOKS

Fukasaku K and Low P Special and Differential Treatment for Developing

Countries: Does It Help Those Who Help Themselves (The United Nations
University, 2000) 9

Keck A Special and Differential Treatment in the WTO: Why, When and How?
(WTO, 2004) 7

World Trade Organization Ministerial Conference Fourth Session Doha (WTO, 2001)
18

INTERNET SOURCES

China’s status as a developing country Undeniable

https://www.globaltimes.cn/content/1173184.shtml 10/09/2020

Shinn J Economic Inequality: Differences in Developed and Developing Nations

https://study.com/academy/lesson/economic-inequality-differences-in-developed-and-
developing-nations.htm 10/09/2020