Differential and More Favorable Treatment of Developing Countries and the International Trading System

This article argues that "differential and more favourable treatment"of developing countries in the General Agreement on Tariffsand Trade (GATT) has been a logical consequence of their owninward-looking policies and the GATT's implicit mercantilism,the latter implying that liberalization, being costly, shouldnot be demanded of relatively poor countries. Time has, however,reduced both the appeal of the protectionist model of developmentand the willingness of developed countries to accord differentialtreatment. The upshot has been pressure on more advanced developingcountries to "graduate" and a growing literature recommendingfuller and more equal participation of developing countriesin the GATT. The case for fuller and more equal participationis not self-evident. It needs to be assessed on its merits interms of the prospects for improved market access abroad andmore efficient policy at home. The analysis indicates that thepotential benefits should not be oversold. On balance, however,the most advanced developing countries would probably gain fromactive and more equal participation in both GATT and the multilateraltrade negotiations while the remaining developing countrieswould benefit from graduation by the more advanced.