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Non-discrimination and Conditionality in Trade Preferences for Developing Countries: an analysis of the EC-Tariff Preferences case

Stenström, Sofia LU (2011) JURM01 20102
Department of Law
Abstract
One of the current challenges within the field of international trade law is how to meet the special needs of developing countries and how to a greater extent include these countries in the world trading system. This thesis examines a particular set of exception rules that exist on behalf of developing countries. Developing countries are, in accordance with WTO law, granted different tariff preferences, often through so-called GSP programmes. When observing how developed countries design these GSP programmes, there seem to be a tendency to favour particular beneficiaries and to combine trade preferences with various conditions.

Since it is questionable whether these observed designs are consistent with WTO law, this thesis investigates;... (More)
One of the current challenges within the field of international trade law is how to meet the special needs of developing countries and how to a greater extent include these countries in the world trading system. This thesis examines a particular set of exception rules that exist on behalf of developing countries. Developing countries are, in accordance with WTO law, granted different tariff preferences, often through so-called GSP programmes. When observing how developed countries design these GSP programmes, there seem to be a tendency to favour particular beneficiaries and to combine trade preferences with various conditions.

Since it is questionable whether these observed designs are consistent with WTO law, this thesis investigates; (1) the scope of the principle of non-discrimination, and (2) the limits of conditionality, in the context of trade preferences for developing countries. This study focuses on the GSP scheme of the EU and offers mainly an analysis of a well-known WTO case, the EC-Tariff Preferences case, which interestingly illustrates the concepts of non-discrimination and conditionality in the context of tariff preferences.

After analyzing the EC-Tariff Preferences case, this thesis concludes that developed countries are allowed to differentiate between developing countries as long as all similarly-situated beneficiaries are treated identically. Further, to fulfil the principle of non-discrimination, developed countries must: (1) base differentiation on needs that are related to “development, financial or trade” according to an objective standard, and (2) ascertain a sufficient nexus between the preferential treatment and the need, in order for the former to effectively improve the latter. Moreover, the limits of using conditionality are not entirely clear. However, the EC-Tariff Preferences case seems to indicate that conditionality in trade preferences is allowed. The conditions must nevertheless fulfil the requirements of the principle of non-discrimination. It also seems like positive conditionality has a greater chance at surviving WTO scrutiny than negative conditionality. (Less)
Abstract (Swedish)
En av de stora utmaningarna inom den internationella handelsrätten idag är hur man ska kunna förbättra situationen för utvecklingsländer inom den internationella handeln. Denna uppsats belyser specifika undantagsregler, inom WTO-rätten, som har till ändamål att öka utvecklingsländers möjligheter att delta i den internationella handeln. Industriländer tilldelar utvecklingsländer, i enlighet med WTO-rätten, olika handelspreferenser, ofta under s.k. GSP-system. Vid en närmare anblick verkar det finnas en tendens hos industriländer att utforma sina GSP-system på sådant sätt att vissa utvecklingsländer favoriseras samt att preferenserna kombineras med olika typer av villkor.

Eftersom det är diskutabelt huruvida sådana utformningar är i... (More)
En av de stora utmaningarna inom den internationella handelsrätten idag är hur man ska kunna förbättra situationen för utvecklingsländer inom den internationella handeln. Denna uppsats belyser specifika undantagsregler, inom WTO-rätten, som har till ändamål att öka utvecklingsländers möjligheter att delta i den internationella handeln. Industriländer tilldelar utvecklingsländer, i enlighet med WTO-rätten, olika handelspreferenser, ofta under s.k. GSP-system. Vid en närmare anblick verkar det finnas en tendens hos industriländer att utforma sina GSP-system på sådant sätt att vissa utvecklingsländer favoriseras samt att preferenserna kombineras med olika typer av villkor.

Eftersom det är diskutabelt huruvida sådana utformningar är i enlighet med WTO-rätten, ämnar denna uppsats att reda ut: (1) omfattningen av principen för icke-diskriminering, och (2) det lagliga utrymmet för industriländer att använda konditionalitet, vad gäller handelspreferenser till utvecklingsländer. Uppsatsen har ett utpräglat fokus på EU och dess preferenssystem och bidrar huvudsakligen med en ingående analys av WTO-rättsfallet EC-Tariff Preferences som just behandlar uppsatsens två frågor.

Efter att ha analyserat EC-Tariff Preferences kan följande slutsats dras. Industriländer har möjlighet att särskilja mellan olika utvecklingsländer när de beviljar handelspreferenser, så länge alla utvecklingsländer som befinner sig i likvärdig situation behandlas lika. För att industriländer vidare ska uppfylla principen för icke-diskriminering krävs att de: (1) baserar särskiljningen mellan utvecklingsländer utifrån behov som är relaterade till ”utveckling, ekonomi eller handel” enligt en objektiv standard, samt (2) säkerställa ett tillräckligt samband mellan handelspreferenserna och behovet, som visar att det förstnämnda effektivt kan förbättra situationen i utvecklingslandet. Vad gäller konditionalitet i GSP-system är dess lagliga utrymme fortfarande något oklart. EC-Tariff Preferences tycks dock indikera att användandet av konditionalitet skulle vara tillåtet enligt WTO-rätten så länge principen för icke-diskriminering är uppfylld. Det verkar även som att positiv konditionalitet har större chans att överleva en WTO-granskning än negativ konditionalitet. (Less)
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author
Stenström, Sofia LU
supervisor
organization
course
JURM01 20102
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
international trade law, utrikeshandelsrätt, WTO
language
English
id
1788755
date added to LUP
2011-03-02 15:34:57
date last changed
2011-03-02 15:34:57
@misc{1788755,
  abstract     = {One of the current challenges within the field of international trade law is how to meet the special needs of developing countries and how to a greater extent include these countries in the world trading system. This thesis examines a particular set of exception rules that exist on behalf of developing countries. Developing countries are, in accordance with WTO law, granted different tariff preferences, often through so-called GSP programmes. When observing how developed countries design these GSP programmes, there seem to be a tendency to favour particular beneficiaries and to combine trade preferences with various conditions.

Since it is questionable whether these observed designs are consistent with WTO law, this thesis investigates; (1) the scope of the principle of non-discrimination, and (2) the limits of conditionality, in the context of trade preferences for developing countries. This study focuses on the GSP scheme of the EU and offers mainly an analysis of a well-known WTO case, the EC-Tariff Preferences case, which interestingly illustrates the concepts of non-discrimination and conditionality in the context of tariff preferences.

After analyzing the EC-Tariff Preferences case, this thesis concludes that developed countries are allowed to differentiate between developing countries as long as all similarly-situated beneficiaries are treated identically. Further, to fulfil the principle of non-discrimination, developed countries must: (1) base differentiation on needs that are related to “development, financial or trade” according to an objective standard, and (2) ascertain a sufficient nexus between the preferential treatment and the need, in order for the former to effectively improve the latter. Moreover, the limits of using conditionality are not entirely clear. However, the EC-Tariff Preferences case seems to indicate that conditionality in trade preferences is allowed. The conditions must nevertheless fulfil the requirements of the principle of non-discrimination. It also seems like positive conditionality has a greater chance at surviving WTO scrutiny than negative conditionality.},
  author       = {Stenström, Sofia},
  keyword      = {international trade law,utrikeshandelsrätt,WTO},
  language     = {eng},
  note         = {Student Paper},
  title        = {Non-discrimination and Conditionality in Trade Preferences for Developing Countries: an analysis of the EC-Tariff Preferences case},
  year         = {2011},
}