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Special and Differential Treatment for Developing Countries

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  • Emanuel Ornelas

Abstract

Special and Differential Treatment for Developing Countries (SDT) constitutes a central feature of the GATT/WTO system. Its formal goal is to foster export-led growth in developing countries. Its theoretical foundations and empirical support are, however, weak at best. In particular, SDT conflicts with the GATT’s two key principles of reciprocity and nondiscrimination, compromising the efficiency of the multilateral trading system. Still, if SDT provisions help those who most need help, sacrificing economic efficiency may be justifiable. However, there are numerous criticisms, on theoretical and empirical grounds, to the premises and the achievements of SDT-based disciplines, casting serious doubt on its effectiveness in helping developing countries trade and grow. For researchers, the good news is that there is plenty of room for progress, with several important areas where our understanding remains unsatisfactory but progress is feasible–that is, where the expected return to research effort seems unusually high.

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  • Emanuel Ornelas, 2016. "Special and Differential Treatment for Developing Countries," CESifo Working Paper Series 5823, CESifo.
  • Handle: RePEc:ces:ceswps:_5823
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    Cited by:

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    2. Defever, Fabrice & Reyes, José-Daniel & Riaño, Alejandro & Varela, Gonzalo, 2020. "All these worlds are yours, except india: The effectiveness of cash subsidies to export in nepal," European Economic Review, Elsevier, vol. 128(C).
    3. Gassebner, Martin & Gnutzmann-Mkrtchyan, Arevik, 2018. "Politicized trade: What drives withdrawal of trade preferences?," Economics Letters, Elsevier, vol. 167(C), pages 10-13.
    4. Facundo Albornoz & Irene Brambilla & Pablo Garriga, 2016. "Exports of Argentina and Brazil under the Generalized System of Preferences," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(74), pages 27-55, December.
    5. Ingo Borchert & Mattia Di Ubaldo, 2020. "Go ahead and trade: the effect of uncertainty removal in the EU's GSP scheme," Working Paper Series 0520, Department of Economics, University of Sussex Business School.
    6. Samuel Admassu, 2020. "The trade creation effects of Africa’s reciprocal vis-à-vis non-reciprocal trade agreements," Empirical Economics, Springer, vol. 59(6), pages 2717-2730, December.
    7. Facundo Albornoz & Emanuel Ornelas & Irene Brambilla, 2020. "The Impact of Tariff Hikes on Firm Exports," Asociación Argentina de Economía Política: Working Papers 4316, Asociación Argentina de Economía Política.
    8. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik, 2020. "The Impact of Trade Preferences Removal," Hannover Economic Papers (HEP) dp-663, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    9. Nuno Limão, 2016. "Preferential Trade Agreements," NBER Working Papers 22138, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    generalized system of preferences; preferential tariffs; trade policy; World Trade Organization; terms of trade; firm delocation; export-led growth;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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