WORLD TRADE ORGANISATION AND GLOBAL DEVELOPMENT

World Trade Organization (WTO) is a global international institution that specifically deals with
trade rules between different nations. The main aim of WTO is to ensure that the trade flows
smoothly, predictably and freely as much as possible. It has been established to lower trade
barriers through negotiations among the member countries to arrive at an agreement. The
agreements so made or negotiated are binding on the government that ratifies them.

WTO was established in the year 1995. It succeeded the General Agreement on Tariffs and
Trade (GATT), that had been in existence since World War-I. 1 WTO embodies the GATT’s core
principles and provides more robust organizational mechanism for implementing them. Thus,
WTO and GATT have created a prosperous and robust trading system to facilitate free and fair
trade among member governments. Currently, WTO consists of 164 members and 23 observer
governments.

The WTO works through many specialized bodies which have pre-defined roles and
responsibilities. These include Ministerial Conference, General Council, Dispute Settlement
Body, Goods Council, Trade Policy Review Body, TRIPS Council, Service Council and other
numerous specialized councils.

The top-level decision-making body is the Ministerial Conference (MC) that usually meets
every two years. It has been entrusted with the power to make decisions on any issues that arise
under any of the International trade agreements. The first Ministerial Conference (MC-1) was
held in Singapore in 1996, while the 11th was held in Buenos Aires in 2017. The infamous Doha
Round was officially begun in November 2001 at WTO’s Fourth Ministerial Conference in
Doha, Qatar, in the month of November 2001. Below Ministerial Conference is General
Council. The body has representatives from all the member nations which have been authorized
to act on behalf of the ministerial conference. The General Council also meets as the Trade
Policy Review Body (TPRB) and the Dispute Settlement Body (DSB) in various capacities.
More so, DSB undertakes the function of settling disputes among member countries. It has been

1 Christina Majaski ‘General Agreement on Tariffs and Trade (GATT)’ (Investopedia, 11 th May’ 2021) <
https://www.investopedia.com/terms/g/gatt.asp> last accessed on 23rd November 2021.
entrusted with the authority to establish dispute resolution panels, refer matters to arbitration,
adopt panel, form appellate body, prepare arbitration reports, monitor the implementation of
various recommendations and rulings mentioned in the reports, and even suspend any
concessions or benefits if these rulings are not followed. At the next level, there are other three
councils namely, the Council for Trade in Goods, the Council for Trade in Services and the
Council for Trade-related aspects of Intellectual Property Rights (TRIPS). The General Council
should receive reports from such councils. Aside from these, there are a slew of highly
specialized committees, groups and working parties that look into specific agreements and many
other subjects like environmental issues, development, membership applications, regional trade
agreements, etc.

Apart from dealing with international trade regulations, the WTO is a key player in
accomplishing the UN's Agenda 2030 for Sustainable Development, and is collaborating with the
UN's Department of Economic and Social Affairs to track progress toward the SDGs. 2
Furthermore; there are United Millennium Development Goals (MDG’s) which were agreed to
be achieved by the year 2015. The WTO's most essential goal, however, is MDG 8, which calls
for the creation of a global development partnership. More specifically, MDG 8.6 and 8.7 aims
to expand the market access for exports from LDCs and developing nations.

ROLE OF WTO WITH RESPECT TO DEVELOPING ECONOMIES

More than three-quarters of WTO member nations are developing and LCD’s. WTO plays a
significant role in advancing the interest of these member nations. All WTO agreements and
recommendations contain special provisions which provide special and differential treatment to
developing member countries. The Ministerial Conference of 2001 mainly dealt with the
development and growth of developing and LCD’s. The Scheme of Generalized system of
preferences was launched pursuant to this objective, which shall be discussed further in the
paper.

WTO’S LATEST DOHA CONFERENCE

2 United Nations, The 2030 Agenda and the Sustainable Development Goals: An opportunity for Latin America and
the Caribbean (LC/G.2681-P/Rev.3), Santiago, 2018.
The Doha round of tariffs3 was initiated in 2001 by WTO in Doha, Qatar with the aim to bring
transformational reforms in international trading system, specifically concerning developing
countries. This round of Ministerial conference was indeed one of its own kinds. The reasons
were threefold; firstly, all member nations participated in the conference. Secondly, decisions
had to be reached through consensus i.e. it was supposed to be signed by all member nations and
thirdly, there was requirement of complete unanimity, there would be no accord unless every
member agreed the deal.4 The round witnessed the participation of 157 member nations and
discussions centered around on 21 subjects that would be part of the Work Program.

The ministerial meeting was convened to aid developing countries in their economic
development. Its main goal was to eliminate agricultural subsidies in developed countries,
allowing them to export food to underdeveloped countries. In exchange, developing countries
would enable developed-country services to join their markets, particularly banking. This would
lead to opening up of new markets for the service sectors of rich countries while also
modernizing current emerging markets.

Therefore, the Doha Round which is also known as Doha Development Agenda (DDA) aimed to
work towards the enhancement of developing and lesser developing nations through various
instruments and policies. The round witnessed discussions on 21 subjects that will be part of the
Work Program. Some of them are discussed below.

1. Agriculture- WTO Agriculture Agreement acknowledges that the long-term objective of

large incremental reductions in agricultural support and protection is a work in progress.
It went on to say that agriculture talks should resume in the year 2000. Therefore, at this
conference, the agriculture talks became part of the "single undertaking”. The member
agreed that special and differential treatment for developing nations in agriculture should
be a component of all aspects of the discussions and must be reflected in the concessions,
pledges, and norms to be negotiated. This would allow developing countries to focus
effectively on their development priorities, such as food security and rural development.

3 World Trade Organisation (WTO), Ministerial Declaration of 14 th Nov 2001, WTO Doc. WT/MIN(01)/DEC/1, 41
ILM 746 (2002).
4 Kimberly Amadeo, ‘Doha Rounds of Trade Talks’ (the balance, 24th December 2020)
<https://www.thebalance.com/what-is-the-doha-round-of-trade-talks-3306365> accessed on 23rd November 2021.
 Furthermore, at Ministerial conference at Bali, Indonesia in 20135, ministers agreed on
number of issues including but not limited to public stockholding in relation to food
security, more transparency related to tariff rates, reducing export subsidies, etc.
Moreover, at 2015 WTO Nairobi Ministerial Conference 6, the organization took a historic
move by eradicating agricultural export subsidies, helping to level the playing field for
farmers all across the world, particularly those in LDC’s who are unable to compete with
wealthier countries with access to abundant resources..

2. Services- It was agreed among the members that the discussions on trade in services
would be conducted keeping in the objective of fostering the economic growth and
development of all trading member partners including developing and LDC’s. 

3. Non-agricultural products –The negotiations were aimed to reduce or as eliminate tariffs

particularly on non food imports7. In addition, in accordance with the relevant rules of
GATT 19948, these discussions fully considered the specific needs and interests of
developing and LDC’s members.

4. Technical Assistance- The requirements of developing and LDCs for more technical
assistance and capacity building in the area of non agricultural products, including policy
analysis and development was recognized. The goal was to help them better assess the
implications of increased multilateral cooperation for their development plans and goals,
as well as human and institutional development. For this purpose, it was agreed that
WTO will work in collaboration with other international organizations, including
UNCTAD, and through suitable regional and bilateral channels, to provide improved and
sufficiently resourced assistance to cater their needs.

5. Financial Assistance- It was agreed that special development, financial and trade
requirements of developing as well as LDC’s would be considered as an integral part of

5 Ministerial Declaration (7th December 2013) WTO Doc. (WT/MIN(13)/DEC) <

https://www.wto.org/english/thewto_e/minist_e/mc9_e/mc9_e.htm>.
6 Ministerial Declaration (15th -19th December 2015) WTO Doc. (WT/MIN(15)/DEC)<
https://www.wto.org/english/thewto_e/minist_e/mc10_e/mc10_e.htm> .
7 Ministerial Declaration (14th November 2001) WTO Doc. WT/MIN (01)/DEC/1, 41 ILM 746 (2002) .

8 GATT 1947, Article XXXVI.

 any work framework, which would enable member nations to shoulder their obligations
and commitments considering their own needs/circumstances. 

6. The Committee on Trade and Environment was directed to pay special attention to the
impact of environmental measures on market access, particularly in relation to
developing countries and LDC’s and how elimination/reduction of trade restrictions
would be beneficial for economy as well as environment. Furthermore, the member
nations attempted to coordinate with other agreements in such a way that natural
resources can be protected.

7. The member countries agreed to examine the relationship between trade, finance and debt
in a Working Group under the General Council's aegis, as well as any possible solutions
that could be taken within the WTO's mandate and competence to improve the
multilateral trading system's capacity to contribute to a long-term solution to the problem
of external indebtedness of developing and LDC’s. In order to increase the flow of
technology to developing nations, it was agreed to examine the relationship between
trade and technology transfer, as well as any possible proposals that may be made within
the WTO's mandate to help developing countries become more technologically
competent.

8. Special and differential treatment- Various WTO agreements embodies special

provisions which provide special rights to developing member countries and treat them
more favorably. These include provisions like longer durations for implementing
agreements in their country, measures to enhance trading opportunities, protecting the
trade interest of developing countries, assistance provided to developing countries so that
they can build their infrastructure to undertake WTO work, etc.  In Doha Declaration, the
ministers agreed that these provisions that provide for special and differential treatment to
developing nations should be revisited in order to improve them so that they are more
precise, effective and operative.

It is pertinent to note that the Doha Round of negotiations to date hasn’t reached to an outcome.
This is due to the fact that member countries were unable to reach an agreement on trade
discussions due to fact that there were significant disagreements between affluent and non
affluent member nations.

PRINCIPLE OF MOST FAVOURED NATION

Because WTO agreements are legal documents that encompass a wide variety of activities, they
are complex and lenghthy. Agriculture, government procurement, textiles and clothes,
intellectual property finance, telecommunications, industrial standards and product safety, food
sanitation rules and much more are among the topics that are dealt. However, there are a few
simple, fundamental concepts that appear in all of these documents. The multilateral trade
system is built on these principles. The most-favored-nation principle, or trade without
discrimination, is one such principle.

Though the term suggests special treatment, however, it means treating other people equally.
According to this principle, if a member nation grants some special favor to a particular nation
then it has to do the same for all other WTO members. If a member nation provides favors to one
trading partner, it must treat all other WTO members in the same way so that they all remain
"most favored."

The significance of the principle can be determined by its usage in the various articles of
agreements such as article19 of the GATT, which governs goods trade, article 210 of GATS and
the Article 411 of TRIPS, though the principle is dealt differently in each agreement. It must be
taken into account that these three accords cover the WTO’s primary trading areas.

However, there are few exceptions to the principle. For example developed countries can grant
preferential access to their markets to developing or LDC’s. Alternatively, a government can
raise barriers against things that are considered to be illegal or unfair to its citizens. Countries are
also allowed to discriminate in services under special conditions. But it is important to take into
account that these agreements only permit these exceptions under specific circumstances.

9 General Agreement on Tariffs and Trade 1947, Article I.

10 General Agreement on Trade in Services, Article II.
11 Agreement on Trade-Related Aspects of Intellectual Property Rights, Article IV.
WTO agreements enclose various provisions granting developing and LDC’s special rights or
which is known as “special and differential treatment”. These clauses allow developed countries
to treat developing countries preferentially compared to other WTO parties. There are various
provisions that protect the interest of developing member nations, provide them flexibility while
using various economic and commercial policy instruments, allowing longer transitory periods as
well as providing any kind of technical assistance to them.

The GATT, which deals with trade in goods, has a separate Article 12 on Trade and Development
that covers the provisions on the idea of ‘non-reciprocity’ in trade discussions between
developed and developing countries. According to this provision, “when developed countries
grant trade concessions to developing countries they should not expect the developing countries
to make matching offers in return”.13 Moreover, certain articles of GATS14 also allow developing
and LCD’s to restrict trade in services if there are any serious difficulties in Balance of
Payments. TRIPS Agreement15 also provides LDC’s with longer time duration to implement
provisions of this agreement. Moreover, according to Anti-Dumping Agreement16 when
assessing the application of anti-dumping measures, developed country parties shall give special
consideration to the specific situation of developing nations. The Agreement further states that
before applying anti-dumping duties, constructive remedies offered by the Agreement must be
investigated if they might influence the essential interests of developing countries.

GENERALISED SYSTEM OF PREFERENCES (GSP)

Another exception to WTO’s principle of Most Favored Nation (MFN), which provides for non-
discriminatory treatment to all member nations, is the Generalized System of Preferences
(GSP).17  It is a non-contractual, autonomous, commercial policy instrument directed towards

12 GATT, Article XXXVI.

13 ibid 12.
14 GATS, Article XII(1).
15 TRIPS, Article 66.
16 GATT, Article VI.
17 Raphael Cunha, Norma Breda dos Santos, Rogério de Souza Farias, 'Generalized System of Preferences in
General Agreement on Tariffs and Trade/World Trade Organization: History and Current Issues', (2005), 39, Journal
of World Trade, Issue 4, pp. 637-670, https://kluwerlawonline.com/journalarticle/Journal+of+World+Trade/39.4/
TRAD2005039.
development. It was established in order for industrialized countries to give tariff concessions to
goods manufactured in developing nations.

It was the first United Nations Conference on Trade and Development (UNCTAD) that was held
in Geneva in 1964 that suggested introduction of a system of preferential tariff rates by
developed countries favoring imports from LCD’s. However, in March 1968 the principles were
formally accepted during the 2nd UNCTAD Conference held in New Delhi. This was one of a
package of global trade measures instituted to promote the development process in less
developed countries. The proposal, which came to be known as the GSP asked the developed
countries to eliminate or reduce tariffs on many manufactured imports from LCD’s. All
developed countries that had agreed to provide preferential treatment to less developed countries
under this proposal introduced their GSP schemes, thus assuring either free entry or reduced
tariff rates on products exported from less developed countries. However, the full tariff rate
continued to apply to imports from other countries. Countries which grant GSP are Australia,
Armenia, Norway, Belarus, Iceland, Canada, Kazakhstan, the European Union, Turkey, Japan,
the United Kingdom, New Zealand, Switzerland, the Russian Federation, and the United States
of America.18 This preferred treatment is, however, subject to specific quantitative restrictions
and is only valid for ten years after the preference-granting countries have established it.

The recommendation to adopt such a scheme was made in order to help developing countries
increase their export profits, promote industrialization, and accelerate their economic growth
rates. The purpose has been to provide developing nations with a more preferential tariff than
developed countries, allowing for easier access to the developed market for their commodities..
For example, GSP entails lower MFN tariff or duty-free treatment of qualified products exported
by developing countries like India, such as India, to the developed countries, such as
Member States of the European Union. 

Benefits of GSP also extend to assisting the beneficiary countries to expand and diversify their
trade with the developed countries. This assures that all countries are on the same footing.
Moreover, it helps to generate employment in the economy. Imports produce tens of thousands

18 United Nations Conference on Trade And Development (21 st Sept 2018) UNCLAD/ITCD/TSB/Misc.62/Rev.7 <
https://unctad.org/webflyer/gsp-list-beneficiaries>.
of employment in the developed world as they move from the docks to consumers, farmers, and
manufacturers. It aids in the promotion of healthy competition, which lowers the costs of
imported inputs required by businesses to produce goods. Above all, GSP promotes global
principles by assisting beneficiary nations in providing worker rights, protecting intellectual
property rights, and promoting the rule of law.

CONCLUSION

The contribution made by WTO towards the development of developing countries is undeniably
huge. Developing countries comprise a majority of the member nations and therefore, their
development is of utmost priority. This is evident from various work programs initiated by
WTO. To ensure that all the member nations are at equal footing, the Generalized System of
Preference was introduced to promote the growth developing nations by providing them
favorable access and reduced tariffs.

Also, at the Ministerial Conference that took place in Doha, Qatar in 2001, the member countries
vowed to continue working to guarantee that developing countries, particularly the LCD’s, and
ensure that they have a fair share of global trade growth consistent with their economic
development needs. Unfortunately, Doha rounds eventually resulted in a failure 19. Had the Doha
rounds been successful, it would have boosted the economic viability of developing countries as
well as decreased government spending on subsidies in developed nations. Due to the agreement
being dragged on for years for many reasons, the WTO member began entering into bilateral
agreements instead of multilateral agreements which would safeguard the interests of developing
countries. One such reason of the failure was use of “single undertaking” method to reach a
settlement. At the start of the Rounds, WTO had around 134 members which made it perhaps an
impossible undertaking.20 Therefore, it becomes crucial for WTO to come with a proposal with
different approach. Although, WTO has left no stone unturned to bring developing nations and
LCD’s at par with developed nations, there is indeed a long way to go.

 
19 Peter Fry, ‘Why the Doha rounds failed’ (endPoverty, 9 th Nov 2021 ) < https://www.endpoverty.org/blog/why-
the-doha-rounds-failed> accessed on 23rd November 2021.
20 Borrmann, Axel; Borrmann, Christine; Stegger, Manfred (1979) : The impact of the Generalized System of
Preferences on imports, Intereconomics, ISSN 0020-5346, Verlag Weltarchiv, Hamburg, Vol. 14, Iss. 5, pp. 221-
225, <http://dx.doi.org/10.1007/BF02924564> accessed on 23rd November 2021.
BIBLIOGRAPHY-

PRIMARY SOURCES

1. WTO Agriculture Agreement, Article 20.

2. General Agreement on Tariffs and Trade 1947, Article XXXVI.
3. General Agreement on Tariffs and Trade 1947, Article I.
4. General Agreement on Trade in Services, Article II.
5. The Agreement on Trade- Related Aspects of Intellectual Rights, Article IV.
6. General Agreement on Tariff and Trade, Article VI.

SECONDARY SOURCES

1. United Nations, The 2030 Agenda and the Sustainable Development Goals: An
opportunity for Latin America and the Caribbean (LC/G.2681-P/Rev.3), Santiago, 2018.
2. World Trade Organisation, Ministerial Declaration of 14th November 2001, WTO Doc.
WT/MIN(01)/DEC/1, 41 ILM 746 (2002).
3. Christina Majaski ‘General Agreement on Tariffs and Trade (GATT)’ (Investopedia, 11 th
May’ 2021) < https://www.investopedia.com/terms/g/gatt.asp> last accessed on 23rd
November 2021.
4. Ministerial Declaration (7th December 2013) WTO Doc. (WT/MIN(13)/DEC) <
https://www.wto.org/english/thewto_e/minist_e/mc9_e/mc9_e.htm> .
5. Ministerial Declaration (15th -19th December 2015) WTO Doc. (WT/MIN(15)/DEC)<
https://www.wto.org/english/thewto_e/minist_e/mc10_e/mc10_e.htm> .
6. Ministerial Declaration (14th November 2001) WTO Doc. WT/MIN (01)/DEC/1, 41 ILM
746 (2002).
7. United Nations Conference on Trade And Development (21 st Sept 2018)
UNCLAD/ITCD/TSB/Misc.62/Rev.7<https://unctad.org/webflyer/gsp-list-beneficiaries>.
8. Borrmann, Axel; Borrmann, Christine; Stegger, Manfred (1979) : The impact of the
Generalized System of Preferences on imports, Intereconomics, ISSN 0020-5346, Verlag
 Weltarchiv, Hamburg, Vol. 14, Iss. 5, pp. 221-225,
<http://dx.doi.org/10.1007/BF02924564> accessed on 23rd November 2021.
9. Peter Fry, ‘Why the Doha rounds failed’ (endPoverty, 9 th Nov 2021) <
https://www.endpoverty.org/blog/why-the-doha-rounds-failed> accessed on 23rd
November 2021.
10. Kimberly Amadeo, ‘Doha Rounds of Trade Talks’ (the balance, 24th December 2020)
<https://www.thebalance.com/what-is-the-doha-round-of-trade-talks-3306365> accessed
on 23rd November 2021.
11. Raphael Cunha, Norma Breda dos Santos, Rogério de Souza Farias, 'Generalized System
of Preferences in General Agreement on Tariffs and Trade/World Trade Organization:
History and Current Issues', (2005), 39, Journal of World Trade, Issue 4, pp. 637-670, <
https://kluwerlawonline.com/journalarticle/Journal+of+World+Trade/39.4/
TRAD2005039>.