The end of differential treatment for developing countries? lessons from the trade and climate change regimes

Review of European, Comparative and International Environmental Law

Volumn 22, Issue 1, 2013, Pages 29-41

  Pauwelyn, Joost ^a  

^a GRADUATE INSTITUTE OF INTERNATIONAL AND DEVELOPMENT STUDIES   (Switzerland)

Author keywords

[No Author keywords available]

Indexed keywords

BIFURCATION; CLIMATE CHANGE; DECOLONIZATION; DEVELOPING WORLD;

CHINA; RUSSIAN FEDERATION;

EID: 84875747337     PISSN: None     EISSN: 20500386     Source Type: Journal    
DOI: 10.1111/reel.12017     Document Type: Article

References (90)

1. The 'Third World' is referred to as opposed to what were once the 'first, capitalist world' and the 'second, communist world'. The Economist, 'Rethinking the "Third World" ', The Economist (10 June 2010).
2. Charter of the United Nations (26 June 1945; in force 24 October 1945), Article 2.1 (the principle of sovereign equality).
3. When referring to 'differential treatment' for developing countries, I mean a norm which 'by its terms provides different, presumably more favorable, treatment to developing countries'. D.B. Magraw, 'Legal Treatment of Developing Countries: Differential, Contextual and Absolute Norms', 1:1 Colorado Journal of International Environmental Law and Policy (1989), 69, at 98. Magraw usefully distinguishes 'differential treatment' from 'contextual treatment' - that is, a 'norm, without specifically mentioning developing countries, [which] requires or allows consideration of characteristics that typically vary according to the economic developmental situation in a country'.
4. As Robert Benchley famously put it: 'There are two kinds of people in the world, those who believe there are two kinds of people in the world and those who don't.' See .
5. See also P. Cullet, Common but Differential Responsibilities, in: M. Fitzmaurice, D.M. Ong and P. Merkouris (eds.), Research Handbook on International Environmental Law (Edward Elgar, 2010), 161, at 175-176: '[I]t is necessary not only to rethink existing categories [of developing and developed countries] but also to reconsider the very need for banding countries together in loose groupings . . . the category that we know as "developing countries" has long outlived its relevance.
6. P. Cullet, Differential Treatment in International Environmental Law (Ashgate, 2003), at 172, rightly points out that differential treatment is a matter of both justice/equity and effectiveness: 'Differential treatment is, in essence, related to considerations of justice. . . . Beyond this ethical dimension, differentiation also constitutes a very pragmatic approach to solving certain international problems.
7. See, e.g., A. Hurrell and S. Sengupta, 'Emerging Powers, North- South Relations and Global Climate Politics', 88:3 International Affairs (2012), 463, at 465 ('the ever greater heterogeneity across the developing world and, above all, the power of today's emerging developing states, make any residual reliance on ideas of the Third World or the South wholly redundant');
8. J. Viñuales, 'Balancing Effectiveness and Fairness in the Redesign of the Climate Change Regime', 24:1 Leiden Journal of International Law (2011), 223, at 225 ('the distinction between Annex I countries and non-Annex I countries for purposes of allocating obligations under the current [climate change regime] is not sufficiently sensitive to variations in the level of emissions, human development, financial and technological capabilities, population and other criteria potentially relevant for a fair distribution of the benefits/burden of addressing climate change');
9. S. Schwab, 'After Doha: Why the Negotiations are Doomed and What We Should Do About It', 90:3 Foreign Affairs (2011), 104, at 104-105 ('the bipolar division between developed and developing countries shortchanges most in the developing world').
10. R. Zoellick, 'The End of the Third World: The Case for Modernizing Multilateralism', International Economy (Spring 2010), 40, at 40.
11. P. Collier, The Bottom Billion (Oxford University Press, 2008), at 3: 'The Third World has shrunk. For forty years the development challenge has been a rich world of one billion facing a poor world of five billion people. . . . By 2015, however, it will be apparent that this way of conceptualizing development has become outdated. Most of the five billion, about 80 percent, live in countries that are indeed developing, often at amazing speed. The real challenge of development is that there is a group of countries at the bottom that are falling behind, and often falling apart.
12. See ?(2012 classification).
13. On this matter, see, e.g., from a political theory perspective, S. Vanderheiden (ed.), Political Theory and Global Climate Change (MIT Press, 2008);
14. from an ethics perspective, M. Gardiner, A Perfect Moral Storm: The Ethical Tragedy of Climate Change (Oxford University Press, 2011);
15. from an economics perspective, J. Gatti et al., 'The Biodiversity Bargaining Problem', 48:4 Environmental and Resource Economics (2011), 609.
16. See the contribution by D. Farber in this issue; and Greenpeace India, Hiding behind the Poor: A Report by Greenpeace on Climate Injustice (2007), found at: .
17. The G20 is composed of 19 countries plus the EU. The eight developed countries that are part of the G20 are: Australia, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Together, the G20 represents 80% of gross world product, 80% of world trade (including intra-EU trade) and two-thirds of the world population. See the G20 Information Centre, University of Toronto, found at: .
18. International Monetary Fund (IMF), 'IMF Executive Board Approves Major Overhaul of Quotas and Governance', Press Release 10/418 (5 November 2010), found at: .
19. IMF, 'Quota and Voting Shares Before and After Implementation of Reforms Agreed in 2008 and 2010' (undated), found at: . India's quota share will rise from 1.945% to 2.749%; and Brazil's from 1.42% to 2.315%. In contrast, Russia's quota share will go down from 2.782% to 2.705%, and so will that of South Africa (from 0.874% to 0.65%).
20. For an overview, see Note by the WTO Secretariat, Implementation of Special and Differential Treatment Provisions in WTO Agreements and Decisions (WTO Doc. WT/COMTD/W/77, 25 October 2000).
21. See also B. Hoekman and C. Özden, Trade Preferences and Differential Treatment of Developing Countries: A Selective Survey, World Bank Policy Research Working Paper 3566 (World Bank, April 2005);
22. A. Keck and P. Low, Special and Differential Treatment in the WTO: Why, When and How? Staff Working Paper ERSD (World Trade Organization, May 2004).
23. The official WTO website puts it as follows: 'There are no WTO definitions of "developed" and "developing" countries. Members announce for themselves whether they are "developed" or "developing" countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries.' See .
24. See .
25. Accession of the People's Republic of China (WTO Doc. WT/L/432, 23 November 2001) ('China's Accession Protocol'), paragraphs 1.3, 7.3, 10.3 and 12.1.
26. In its first case filed with the WTO, China invoked a developing country preference under Article 9.1 of the Safeguards Agreement. The United States denied that China qualified for the preference. The Panel, however, did not reach this particular claim as it had already found other violations and exercised judicial economy on the matter. WTO DS 11 July 2003, United States - Definitive Safeguard Measures on Imports of Certain Steel Products, WT/DS252/R, paragraph 10.714.
27. In one recent dispute, the United States was only willing to assume arguendo that Indonesia is a developing country. The Panel accepted Indonesia's developing country status with reference, inter alia, to its classification at the World Bank. WTO DS 2 September 2011, United States - Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/R, paragraphs 7.622-7.624.
28. See, e.g., the WTO Agreement on Subsidies and Countervailing Measures (Marrakesh, 15 April 1994; in force 1 January 1995) ('Subsidies Agreement'), Annex VII (a): 'Least-developed countries designated as such by the United Nations. . . .
29. See .
30. For a full list of UN criteria, see .
31. Agreement on Trade-related Aspects of Intellectual Property Rights (Marrakesh, 15 April 1994; in force 1 January 1995) ('TRIPS Agreement'), Article 65.3.
32. For information on Equatorial Guinea, see .
33. Accession of the Russian Federation (WTO Doc. WT/L/839, 17 December 2011), paragraph 3.
34. As a result, the American Mathematical Society, for example, lists Russia as a developing country for purposes of special, low membership dues. See .
35. The original General Agreement on Tariffs and Trade (Geneva, 30 October 1947; in force 1 January 1948), Article XVIII, does refer to parties 'the economy of which is in the process of development' (Article XVIII.4(b)) and, within this group, singles out parties 'the economy of which can only support low standards of living and is in the early stages of development' (Article XVIII.4(a), which a note further defines as not only parties 'which have just started their economic development, but also . . . economies . . . undergoing a process of industrialization to correct excessive dependence on primary production').
36. R. Hudec, Developing Countries in the GATT Legal System (Gower, 1987), at 4.
37. P. Low and R. Santana, 'Trade Liberalization in Manufactures: What is Left After the Doha Round', 3:1 Journal of International Trade and Diplomacy (2009), 63, at 67: 'Developing countries played a relatively small role in GATT negotiations in the early years, and really only engaged significantly in making market access commitments during the Uruguay Round.
38. Decision of 28 November 1979 (L/4903) on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, found at: .
39. UNCTAD, World Investment Report (UNCTAD, 2012), found at:
40. Principle 23 of the Stockholm Declaration on the Human Environment, found in Report of the UN Conference on the Human Environment (UN Doc. A/CONF.48/14/ Rev.1, 16 June 1972) ('Stockholm Declaration'), provides: 'Without prejudice to such criteria as may be agreed upon by the international community, or to standards which will have to be determined nationally, it will be essential in all cases to consider the systems of values prevailing in each country, and the extent of the applicability of standards which are valid for the most advanced countries but which may be inappropriate and of unwarranted social cost for the developing countries.
41. L. Rajamani, Differential Treatment in International Environmental Law (Oxford University Press, 2006).
42. L. Rajamani, 'The Changing Fortunes of Differential Treatment in the Evolution of International Environmental Law', 88:3 International Affairs (2012), 605, at 606.
43. Protocol on Substances that Deplete the Ozone Layer (Montreal, 16 September 1987; in force 1 January 1989).
44. Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel, 22 March 1989; in force 5 May 1992).
45. United Nations Framework Convention on Climate Change (New York, 9 May 1992; in force 21 March 1994) ('UNFCCC'), Preamble, Articles 3.1 and 4.1.
46. Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto, 11 December 1997; in force 16 February 2005).
47. See R.O. Keohane and D.G. Victor, 'The Regime Complex for Climate Change', 9:1 Perspectives on Politics (2011), 7.
48. Turkey was deleted from Annex II by an amendment that entered into force 28 June 2002.
49. See Decision 26/CP.7, Amendment to the List in Annex II of the Convention (UN Doc. FCCC/CP/2001/13/Add.4, 21 January 2002).
50. Kazakhstan is an Annex I party only for purposes of the Kyoto Protocol and therefore part of Annex B to the Protocol. For purposes of the UNFCCC, however, it is not part of Annex I. See Decision 13/CMP.7, Proposal from Kazakhstan to Amend Annex B to the Kyoto Protocol (UN Doc. FCCC/KP/CMP/2011/10/ Add.2, 15 March 2012).
51. Proposal from the Russian Federation to Amend Article 4, Paragraph 2(f), of the Convention (UN Doc. FCCC/CP/2011/5, 26 July 2011).
52. Amendment that entered into force on 13 August 1998, pursuant to Decision 4/CP.3, Amendments to the List in Annex I to the Convention under Article 4.2(f) of the Convention (UN Doc. FCCC/CP/1997/ 7/Add.1, 25 March 1998).
53. Decision 1/CP.17, Establishment of an Ad Hoc Working Group on the Durban Platform for Enhanced Action (UN Doc. FCCC/CP/2011/ 9/Add.1, 15 March 2012), at paragraph 2.
54. The Rules of Procedures of the UNFCCC COP and subsidiary bodies, adopted at Kyoto in 1997, leave the matter of voting open and discuss several options. See Note by Mr Chen Chimutengwende (Zimbabwe), President of the Conference of the Parties at its Second Session, on His Informal Consultations on the Draft Rules of Procedure (UN Doc. FCCC/CP/1997/5, 19 November 1997), Rule 42.1. However, in practice, consensus is the operating fallback rule (with exceptions, such as when the 2010 Cancún Agreements were adopted by consensus minus Bolivia). In contrast, Article 15 of the UNFCCC (n. 37 above) explicitly provides that amendments can be adopted by three-quarters majority vote (of the parties present and voting at the meeting). To enter into force such amendments must subsequently be accepted (i.e., by ratification or accession) by threequarters of the parties and even then parties that did not accept the amendment are not bound by it.
55. See D. Bodansky, Legal Form of a New Climate Agreement: Avenues and Options (Pew Center on Global Climate Change, April 2009), found at: .
56. Doha Ministerial Declaration (WTO Doc. WT/MIN(01)/DEC/1, 20 November 2001), paragraph 16.
57. P. Klein-Bernard and J. Huerta-Goldman, 'The Cushioned Negotiation: The Case of WTO's Industrial Tariff Liberalization', 46:4 Journal of World Trade (2012), 847, at 862. These groups include: developed countries (only ten, counting the EU-27 as one: Australia, Canada, European Union, Iceland, Japan, Liechtenstein, New Zealand, Norway, Switzerland and the United States); certain developing countries for which the tariff cutting formula would, with certain flexibilities, apply (including Brazil, China and India); recently acceded members (including China); members with low binding coverage (such as Nigeria and Sri Lanka); small and vulnerable economies (such as Gabon, Georgia and St Lucia); and least developed countries.
58. Fourth Revision of Draft Modalities on Non-agricultural Market Access (WTO Doc. TN/MA/W/103/Rev.3, 6 December 2008).
59. Agreement on Government Procurement (Marrakesh, 15 April 1994; in force 1 January 1995), Article V.
60. Decision on the Outcome of the Negotiations under Article XXIV:4 of the Agreement on Government Procurement, Annex to the Protocol Amending the Agreement on Government Procurement (WTO Doc. GPA/113, 2 April 2012), 7.
61. See A.C. Müller, 'Special and Differential Treatment and Other Special Measures for Developing Countries under the Agreement on Government Procurement: The Current Text and New Provisions', in: S. Arrowsmith and R.D. Anderson (eds.), The WTO Regime on Government Procurement: Challenge and Reform (2011), 339, at 339 (highlighting that further differentiation must not mean less attention to developing country concerns, quite the contrary) and at 340 ('whereas the wording of the 1994 text with respect to [special and differential treatment] is ambitious and expansive (arguably "promising the moon and the stars" but guaranteeing nothing), the corresponding provisions of the . . . revised text are more specific, concrete and time-bound').
62. Draft Consolidated Negotiating Text, Negotiating Group on Trade Facilitation (WTO Doc. TN/TF/W/165/Rev.12, 8 May 2012), Section II, paragraph 1.2.
63. P. Lamy, 'Emerging Economies have Shifted the Balance of Power in World Trade', Richard Snape Lecture, Melbourne, Australia (26 November 2012), found at: .
64. Economic Partnership Agreement between the CARIFORUM States, of the One Part, and the European Community and Its Member States, of the Other Part [2008] OJ L289/I/3, Articles 70 and 79.
65. Decision 2/CP.15, Copenhagen Accord (UN Doc. FCCC/CP/2009/ 11/Add.1, 30 March 2010), paragraph 5;
66. Decision 1/CP.16, The Cancún Agreements: Outcome of the Work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (UN Doc. FCCC/CP/2010/7/Add.1, 15 March 2011), paragraph 49;
67. Decision 2/CP.17, Outcome of the Work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention (UN Doc. FCCC/CP/2011/9/Add.1, 15 March 2012), preambular recital 8 to section II.B.
68. Decision 1/CP.13, Bali Action Plan (UN Doc. FCCC/CP/2007/6/ Add.1, 14 March 2008), paragraph 1(b)(ii).
69. International Tropical Timber Agreement (Geneva, 27 January 2006; in force 7 December 2011), Article 10.
70. The Future We Want (UN Doc. A/RES/66/288, 11 September 2012), Annex, paragraphs 15 and 191.
71. The American Clean Energy and Security Act, H.R. 2454, Bill Text as Passed by the House, section 761(c)(1).
72. See J. Pauwelyn, 'Carbon Leakage Measures and Border Tax Adjustments under WTO Law', in: G. Van Calster and D. Prévost (eds.), Research Handbook on Environment, Health and the WTO (Edward Elgar, forthcoming 2013) (noting that UNFCCC rules 'may oblige (or at least enable) the carbon-restricting country to impose a graduated import tax or regulation depending on the stage of economic development of the foreign country in question');
73. M. Hertel, 'Climate-Change-related Trade Measures and Article XX: Defining Discrimination in Light of the Principle of Common but Differentiated Responsibilities',45:3 Journal of World Trade (2011), 653, at 667 ('unilateral trade measures requiring developing countries to adopt [greenhouse gas] reduction policies comparable in effect to those adopted by developed countries would amount to discrimination within the meaning of Article 3(5) [of the UNFCCC] and would thus be prohibited');
74. S. Davidson Ladly, 'Border Carbon Adjustments, WTO Law and the Principle of Common but Differentiated Responsibilities', 12:1 International Environmental Agreements: Politics, Law and Economics (2012), 63.
75. J. Pauwelyn, 'Testimony before the Subcommittee on Trade of the House on Ways and Means', Speech Delivered at the Committee of Ways and Means (Washington, DC, 24 March 2009), found at:
76. Directive 2003/87/EC of 12 October 2003 Establishing a Scheme for Greenhouse Gas Emission Allowance Trading within the Community, [2003] OJ L275/32 (as amended in 2004 and 2009), Article 28.
77. On this matter, see L. Bartels, 'The WTO Legality of the Application of the EU's Emission Trading System to Aviation', 23:2 European Journal of International Law (2012), 429, at 466 (concluding that 'except in certain limited cases, any discriminatory effects of the measure are likely to be justified on environmental grounds');
78. J. Scott and L. Rajamani, 'EU Climate Change Unilateralism', 23:2 European Journal of International Law (2012), 469, at 483 ('the Aviation Directive is not consistent with the principle of CBDRRC in respect of its application to businesses, and it is probably not consistent in so far as it applies to states').
79. For a view that the EU Directive complies with UNFCCC rules, see Commission of the European Communities, Impact Assessment of the Inclusion of Aviation Activities in the Scheme for Greenhouse Gas Emission Allowance Trading within the Community, SEC(2006)1684 (20 December 2006), at 52.
80. Interestingly, the G77 does not include Russia or most other former Soviet republics. However, it does include some of them, such as Tajikistan and Turkmenistan. See .
81. For different WTO negotiation groups, see .
82. For party groupings in the UNFCCC, see .
83. For such an attempt to classify countries based on 'data - rather than judgment or ad hoc rules', using an economic model where a variety of development proxies can be plugged in, see L. Nielsen, Classifications of Countries Based on Their Level of Development: How It is Done and How It Could be Done? (IMF, February 2011), at 45.
84. WTO AB 20 April 2004, EC - Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, paragraph 162 (emphasis in the original).
85. Office of the US Trade Representative, US Generalized System of Preferences (GSP) Guidebook (November 2012), found at:
86. Regulation 978/2012 of 25 October 2012 Applying a Scheme of Generalized Tariff Preferences, [2012] OJ L303/1.
87. See Scale of Assessments for the Apportionment of the Expenses of United Nations Peacekeeping Operations (UNGA Resolution A/RES/67/239, 24 December 2012);
88. Scale of Assessments for the Apportionment of the Expenses of the United Nations (UNGA Resolution A/RES/64/248, 5 February 2010).
89. Steve Charnovitz goes as far as arguing that China's unwillingness to make legally binding commitments to reduce the absolute level of its greenhouse gas emissions 'is a violation of the customary law capsulized in Principle 2 of the Rio Declaration that pronounces a responsibility to ensure that activities within a state's jurisdiction do not cause damage to areas beyond its national jurisdiction' and that Article 4(f) of the UNFCCC on differentiated responsibility is no excuse as that provision 'allows it [China] to merely curb its emission intensity as a percent of gross domestic product rather than its emission growth'. S. Charnovitz, 'Trade and Climate Change: Reviewing Carbon Charges and Free Allowances under Environmental Law and Principles', 16:2 ILSA Journal of International and Comparative Law, 395, at 410.
90. As the former South African Ambassador to the WTO, Faizel Ismail, put it, special and differential treatment for developing countries 'should not be confused with the broader development dimension of the trading system nor become a substitute for it'. F. Ismail, 'A Development Perspective on the WTO July 2004 General Council Decision', 8:2 Journal of International Economic Law (2005), 377, at 379.