A contract theory approach to special and differential treatment and the WTO

Author:Stephanie Switzer
Position:Faculty of Humanities and Social Sciences, University of Strathclyde, Glasgow, UK
Pages:126-140
SUMMARY

Purpose This paper is prompted by the dissatisfaction of developing countries regarding the grant of special and differential treatment (SDT) under the legal framework of the World Trade Organisation (WTO). As a result of such dissatisfaction, the Doha Round of multilateral trade negotiations explicitly called for a review of such treatment with a view to making it more precise, effective ... (see full summary)

 
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A contract theory approach to
special and dierential treatment
and the WTO
Stephanie Switzer
Faculty of Humanities and Social Sciences, University of Strathclyde, Glasgow, UK
Abstract
Purpose This paper is prompted by the dissatisfaction of developing countries regarding the grant of
special and differentialtreatment (SDT) under the legal framework of the World Trade Organisation(WTO).
As a result of such dissatisfaction, theDoha Round of multilateral trade negotiations explicitly called fora
review of such treatment with a view to makingit more precise, effective and operational. This mandate has
not yet been met to the satisfaction of manydeveloping countries. This paper aims to provide an alternative
way of examiningand evaluating the contestation whichexists regarding SDT in the WTO.
Design/methodology/approach This paper uses the conceptualframework provided by the economic
contract theory and in particular, the conceptof the incomplete contract to provide a scaffold for analysing
SDT. This approachis intended to offer insights beyond those elucidated so far in the literature on the topic.
Findings This paper, by usingan economic contract theory approach, nds that SDT is constructedas an
incomplete contract. Furthermore, the suboptimal outcomes associated with incomplete contracts are
apparent in the constitution of SDT. This nding is useful in both an evaluative andprogrammatic sense,
providing us with an alternative entry point to explain some of the shortcomings with SDT, as well as
garneringus with a useful conceptual tool to think upon how SDT can be improved.
Originality/value The paper contributes to the literature on SDT within the WTO in particular and
differential treatment in international law in general. Drawing on literature on the WTO as an incomplete
contract, the paper provides an original framefor analyzing SDT and draws attention, in particular, to the
utility of the economic contract theory as a programmatic and evaluative frame for SDT and differential
treatmentmore generally.
Keywords Developing countries, WTO, SDT, Differential treatment
Paper type Research paper
Introduction
International law has long grappled with how to structure legal obligations in a way that
takes account of developing country needs and circumstances (Rajamani, 2006). Within
the context of the climate change regime for example, the issue of whether equal
obligations are appropriate given developing countriesdifferent historical contributions
to climate change has been much contested (McGee and Steffek, 2016, p. 51). Similarly, in
the multilateral trade regime, while developing countries were initially subject to the
same rules as their developed counterparts, a shift away from such obligational equality
occurred in the early years of the general agreement on tariffs and trade (GATT). This
was in part a response to equity-related concerns (Lamp, 2015). The practice of p roviding
for a differential legal regime in favour of developing countries continued into the World
The author thanks Prof. Joe McMahon, Prof. Michael Cardwell, Prof. Barry Rodger, Prof. Elizabeth
Kirk, Prof. Elisa Morgera and Dr Gregory Messenger for comments on a previous draft. Any errors
are the authors own.
JITLP
16,3
126
Received13 October 2017
Revised13 October 2017
Accepted24 October 2017
Journalof International Trade
Lawand Policy
Vol.16 No. 3, 2017
pp. 126-140
© Emerald Publishing Limited
1477-0024
DOI 10.1108/JITLP-10-2017-0034
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-0024.htm

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