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Special and differential treatment for developingcountries

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  • Ornelas, Emanuel

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 non-discrimination, 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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  • Ornelas, Emanuel, 2016. "Special and differential treatment for developingcountries," LSE Research Online Documents on Economics 66432, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:66432
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    2. Borchert, Ingo & Conconi, Paola & Di Ubaldo, Mattia & Herghelegiu, Cristina, 2021. "The Pursuit of Non-Trade Policy Objectives in EU Trade Policy," World Trade Review, Cambridge University Press, vol. 20(5), pages 623-647, December.
    3. Gnangnon, Sèna Kimm, 2023. "Effects of the Utilization of Non-Reciprocal Trade Preferences Offered by QUAD Countries on Economic Growth in Beneficiary Countries," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 45(1), pages 33-68.
    4. 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).
    5. Gnangnon, Sèna Kimm, 2022. "Effect of the utilization of non-reciprocal trade preferences offered by the QUAD countries on beneficiary countries' economic complexity," Journal of the Japanese and International Economies, Elsevier, vol. 65(C).
    6. Gassebner, Martin & Gnutzmann-Mkrtchyan, Arevik, 2018. "Politicized trade: What drives withdrawal of trade preferences?," Economics Letters, Elsevier, vol. 167(C), pages 10-13.
    7. Magnus dos Reis & Sabino da Silva Pôrto & André Filipe Zago de Azevedo, 2021. "The impacts of the World Trade Organization on new members," The World Economy, Wiley Blackwell, vol. 44(7), pages 1944-1972, July.
    8. Ornelas, Emanuel & Turner, John L. & Bickwit, Grant, 2021. "Preferential trade agreements and global sourcing," Journal of International Economics, Elsevier, vol. 128(C).
    9. Tobias Sytsma, 2021. "Rules of origin and trade preference utilization among least developed countries," Contemporary Economic Policy, Western Economic Association International, vol. 39(4), pages 701-718, October.
    10. Maria Cipollina & David Laborde Debucquet & Luca Salvatici, 2017. "The tide that does not raise all boats: an assessment of EU preferential trade policies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(1), pages 199-231, February.
    11. Fabien Forge & Jason Garred & Kyae Lim Kwon, 2021. "When are Tariff Cuts Not Enough? Heterogeneous Effects of Trade Preferences for the Least Developed Countries," Working Papers 2106E, University of Ottawa, Department of Economics.
    12. Emanuel Ornelas & Marcos Ritel, 2020. "The not‐so‐generalised effects of the Generalized System of Preferences," The World Economy, Wiley Blackwell, vol. 43(7), pages 1809-1840, July.
    13. Ornelas, Emanuel & Tovar, Patricia, 2022. "Intra-bloc tariffs and preferential margins in trade agreements," Journal of International Economics, Elsevier, vol. 138(C).
    14. 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.
    15. 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.
    16. Gnangnon, Sèna Kimm, 2021. "Effect of the Utilization of Non-Reciprocal Trade Preferences offered by the QUAD on Economic Growth in Beneficiary Countries," EconStor Preprints 242848, ZBW - Leibniz Information Centre for Economics.
    17. Jaime DE MELO & Marcelo OLARREAGA, 2017. "Trade Related Institutions and Development," Working Papers P199, FERDI.
    18. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Antonio Martínez-Serrano, 2019. "Reciprocal vs nonreciprocal trade agreements: Which have been best to promote exports?," PLOS ONE, Public Library of Science, vol. 14(2), pages 1-15, February.
    19. Hinnerk Gnutzmann & Arevik Gnutzmann‐Mkrtchyan, 2022. "The impact of trade preferences removal: Evidence from the Belarus Generalized System of Preferences withdrawal," The World Economy, Wiley Blackwell, vol. 45(9), pages 2977-3000, September.
    20. Khorana, Sangeeta & Caram, Santiago & Biagetti, Marco, 2021. "Developmental relevance of Everything but Arms: Implications for Bangladesh after LDC graduation," MPRA Paper 116258, University Library of Munich, Germany.
    21. 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.
    22. Gnutzmann, Hinnerk & Gnutzmann-Mkrtchyan, Arevik, 2020. "The Impact of Trade Preferences Removal," Hannover Economic Papers (HEP) dp-663, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    23. Fernandes, Ana M. & Forero, Alejandro & Maemir, Hibret & Mattoo, Aaditya, 2023. "Are trade preferences a Panacea? The export impact of the African growth and Opportunity Act," World Development, Elsevier, vol. 162(C).
    24. Gnangnon, Sèna Kimm & Iyer, Harish, 2021. "Effect of Aid for Trade and Foreign Direct Investment Inflows on the Utilization of Unilateral Trade Preferences offered by the QUAD countries," EconStor Preprints 238211, ZBW - Leibniz Information Centre for Economics.
    25. 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:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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