The GATT/WTO’s Special and Differential Treatment of Developing Countries

By Ben Zissimos (University of Exeter Business School)

Special and differential treatment (SDT) is effectively a set of exemptions from MFN extended to developing country members of the General Agreement on Tariffs and Trade (GATT)/World Trade Organization (WTO).[1]  (MFN (most favored nation) treatment is the principle that any terms agreed between two parties to a trade agreement will automatically be extended to all others, and is a central pillar of the GATT/WTO).  SDT has two components: an access component, whereby developing countries are granted access to developed country markets, and a ‘right to protect’ component, whereby they do not have to reciprocate market access concessions that the developed countries make.  The intellectual underpinnings of SDT were: (i) that under the Gold Standard poor countries would tend to suffer from balance of payments problems that could be remedied through protection; (ii) the Prebisch-Singer thesis that developing countries would face secular decline in their terms of trade, which could be remedied by preferential access to developed country markets; and (iii) by the logic of infant industry protection, whereby fledgling industries need an initial period of protection to grow in a secure domestic market, before eventually competing abroad.  Ironically, there was no SDT during the 1950s-60s when the research community was broadly sympathetic to the idea that development can benefit from protectionism.  SDT measures were formally adopted mainly in the Tokyo Round that took place in the 1970s, right around the time that the research community was beginning to argue that development should be supported by outward-looking trade regimes to enhance economic efficiency.[2]

As a result of this history, there is an awkward mismatch between what mainstream economics would prescribe, an outward oriented development strategy, and the protectionism that is allowed for under SDT.  According to one mainstream view, a trade agreement enables countries to escape from a terms-of-trade driven prisoner’s dilemma, whereby they have a collective incentive to liberalize trade to maximize efficiency globally but an individual incentive to adopt protection in order to improve their terms of trade.  Accordingly, the benefits to a trade agreement are based on the exchange of balanced concessions.  So developing countries are currently hurt by high protection of agriculture in developed countries because, under SDT, developing countries have not come to the table offering balanced concessions of their own.  Under this view, developing countries should eschew SDT.  A second view holds that the purpose of a trade agreement is to enable governments to tie their hands against protectionist interests in their own countries.  In line with this view, many developing countries have cited commitment to openness against protectionist interests at home as the main reason why they wanted to become members of the WTO.  Here again, the aim would seem to be to eschew the kinds of protectionist measures allowed by SDT.  So a basic recommendation from mainstream economic research would be that while trade agreements under the WTO have a role to play in economic development, SDT may in fact be inimical to the development process.[3]

Several recent papers have called into question key elements of the arguments on which the above basic recommendation rests.  For example, a key implication of the terms-of-trade motivation for a trade agreement is that, if developing countries do not make any concessions of their own while developed countries do, the terms of trade will adjust to ensure that trade flows will not change at all for developing countries.  Consequently they cannot gain from any market access concessions that developed countries make.  Yet careful econometric research has found evidence (though not yet fully conclusive) that developing country exports have increased significantly for trade agreements involving SDT.  However, it is not yet clear what the basis is for this increase.  Has the surge in exports facilitated scale gains that could underpin an export-led growth strategy?  Or has it only allowed exporters to collect rents as the terms of trade adjust?[4]  A different line of research suggests that under the commitment-based motivation for a trade agreement, liberalization by a developing country must be delayed relative to a developed country if it is to be incentive compatible.  This would provide motivation for the use of SDT measures as support for phased liberalization by developing countries, akin to how they were used in the Uruguay Round, rather than using them as the basis for an outright exemption from liberalization.[5]  There appears to be a significant opportunity both to further our understanding of the effects of SDT in past trade agreements and to assess the role that it should play (if any) in future development strategies.


Bagwell, K., C.P. Bown, and R.W. Staiger, (2016); “Is the WTO passé?” Journal of Economic Literature 54 (4): 1125-1231. [Working paper version]

Bagwell, K., and R.W. Staiger, (2014) “Can the Doha Round be a Development Round? Setting a Place at the Table.” Published in R.C. Feenstra and A.M. Taylor (eds.), Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, NBER, University of Chicago Press, 2014, 91-124. [Working paper version]

Conconi, P., and C. Perroni, (2012); “Conditional versus Unconditional Trade Concessions for Developing Countries.” Canadian Journal of Economics 45, 613-631. [Working paper version]

Conconi, P., and C. Perroni, (2015); “Special and Differential Treatment of Developing Countries in the WTO.” World Trade Review 14, 67-86. [Working paper version]

Gil-Pareja, S., R. Llorca-Vivero, and J.A. Martínez-Serrano (2014); “Do Nonreciprocal Preferential Trade Agreements Increase Beneficiaries’ Exports?” Journal of Development Economics 107, 291-304.

Little, I.M.D., T. Scitovsky, and M. Scott, (1970); Industry and Trade in some Developing Countries: A Comparative Study, London: Oxford University Press, for the Organization of Economic Cooperation and Development.

Ornelas, E., (2016); “Special and Differential Treatment for Developing Countries.” Chapter 7 in K. Bagwell & R. W. Staiger (eds.), Handbook of Commercial Policy, Elsevier/North Holland, Volume 1B:  369-432. [Working paper version]

Whalley, J., (1999); “Special and Differential Treatment in the Millennium Round.” World Economy, 22(8): 1065-1093. [Working paper version]

[1] This piece summarizes background research for a book that I am editing, titled The WTO and Economic Development.

[2] Whalley (1999) provides an excellent historical discussion of the origins of SDT, together with details of each of the relevant GATT Articles in which it is codified and when each was introduced.  He also provides a detailed discussion of the intellectual underpinnings. Little, Scitovsky and Scott (1970) were particularly influential in turning the tide toward outward oriented development strategies.

[3] See Bagwell, Bown and Staiger (2016) for a comprehensive review of the literature on the purpose of trade agreements under the GATT/WTO.  Bagwell and Staiger (2014) argue that, by the terms-of-trade motive, developing countries cannot benefit (nor loose) from multilateral trade agreements if they fail to make concessions under SDT because the volume of their trade does not change.

[4] See Gil-Pareja, Llorca-Vivero and Martinez-Serrano (2014) and the references therein for details.  See Ornelas (2016) for an excellent overview of the theoretical and econometric literature on SDT.

[5] See Conconi and Perroni (2012, 2015) for specific details, as well as the discussion by Ornelas (2016).

Research Assistant, Institute of Economics, University of Hohenheim

The Chair of Environmental Economics, Regulatory and Consumer Policy at the Institute of Economics of the University of Hohenheim in Stuttgart / Germany invites applications for a position as a

Research Assistant

at the earliest possible date.  Term: 2 years (extension possible conditional on performance).

Your tasks:

  • Supporting the teaching of the chair in all Bachelor and Master courses (tutorials, exercise courses etc.)
  • Advising students writing Master’s theses, Bachelor’s theses, seminar papers etc.
  • Participation in the chair’s research activities (environmental valuation surveys and field experiments in Germany, Asian countries and Cuba)


  • Accredited Master’s degree in Economics (grade: good or better)
  • Sound theoretical knowledge, especially in Microeconomics
  • Basic knowledge in Environmental and Resource Economics
  • Good knowledge in Econometric Methods
  • Good command of the English language

We offer:

  • Opportunity to pursue your PhD with individual and intensive supervision
  • Salary: TV-L E13 (100 %)
  • A wide and varied range of different tasks in teaching and research in an international and interdisciplinary context

Women are particularly invited to submit their applications. Applications of disabled persons with a comparable qualification will be considered as priority. Please send your application as soon as possible, but not later than July 31, 2017, to Prof. Dr. Michael Ahlheim, Universität Hohenheim (520F), 70593 Stuttgart, E-Mail: . Your application should contain a letter of motivation, CV, transcripts of your university certificates and a 2-page summary of your Master’s thesis.

URL for Further Information

Postdoctoral Researcher (full-time) in Environmental Economics

Application Deadline: Jul 30, 2017

The Kiel Institute for the World Economy (IfW) seeks a qualified candidate to serve as

Postdoctoral Researcher (full-time)
in Environmental Economics

on a three year project in its research area “The Environment and Natural Resources”. Research activities in the research area focus on the allocation of environmental and natural resources. The research area analyses the interconnectedness of factors influencing this process by evaluating international and national aspects of environmental policy measures.

The project “VirtualWaterValues – Multi-scale Monitoring of Global Water Resources and Options for an Efficient and Sustainable Use” ( aims at generating information to support progress in achieving water-related goals of the Agenda 2030. The project is funded by the German Federal Ministry of Education and Research within the research program “GROW – Global Resources Water” over a period of 3 years. As part of the team, the candidate will work in close collaboration with hydrologists, geographers, agricultural economists, environmental economists, computer scientists, and climate modelers of the IfW and six other research institutions in an inter- and transdisciplinary research project.

Working environment

The successful candidate will be part of a project team with several post-doctoral researchers and PhD-students. At the IfW, the successful candidate will join the research area “The Environment and Natural Resources”. Being internationally renowned in research and policy consulting, the Kiel Institute for the World Economy provides excellent support to potential candidates who are interested in developing their career in research and policy consulting.

Job description

Main tasks of this position include the further development the CGE model DART-BIO (Dynamic Applied Regional Trade) towards the explicit integration of water into the DART-BIO model, conducting the conceptual development of linking spatial water data with and integrating those into a numerical economic model, but also to interact with project partners and stakeholders over the course of the project.


We are looking for a candidate for the postdoctoral position who meets the following conditions:

  • She/he holds (or is close to completing) a doctorate degree in economics or a related field and has an excellent academic record.
  • The position’s primary focus will be on the application of the DART model. Thus, interest and experience in numerical modelling (using e.g. GAMS or MATLAB) is required. Knowledge of CGE modelling is of advantage.
  • Candidates should be interested in research on natural resource allocation. Prior knowledge of water allocation issues is an advantage.
  • The working language is English; excellent English skills are therefore required. Some knowledge of German would be useful, but is not essential.

The preferable contract period is three years (expected start October 1, 2017), it however depends on the individual qualification time according to (WissZeitVG § 2 Abs. 1 S. 2 and S. 3). The salary will be based on the German public sector pay scale at grade EG 14 TV L. The position is full-time, however part-time employment is possible.

The IfW is an equal opportunity employer and works individually with its staff to establish flexible working time schemes that allow staff members to maintain a good work-family balance and to parent their children optimally ( We are committed to employing persons with recognized disabilities and will therefore give them preference over persons without disabilities if they are equally qualified.

Please submit your application online by July 30, 2017, using your family name as the file name and the ID “ViWa_Postdoc_01”

Please include a letter of interest, your CV, transcripts of your academic record, an academic writing sample, and two letters of recommendation. Letters of reference may also be e-mailed under separate cover to .

For information on the position in environmental economics, please contact Dr. Ruth Delzeit:  or Franziska Schünemann . Please visit our homepage at:

PhD Position in Mathematical Game Theory: On New Voting and Election Rules

The chair of Macroeconomics: Innovation and Policy is recruiting a new Ph.D. student. The research project in mathematical game theory involves the study of new voting and election rules.

Our chair is part of the Center of Economic Research, which belongs to the Department of Management, Technology and Economics (D-MTEC) at ETH Zurich. Our main focus is on theoretical and conceptual research. Further information about the chair’s work is provided on our Website. We strongly recommend to have a close look at our current projects on democracy.

The successful applicant should hold a master’s degree in economics, mathematics, physics or related areas and have graduated with grades in the top five percent of his/her class (e.g. applicants from Swiss universities are expected to have achieved a GPA of at least 5.25). A solid background in microeconomics or mathematics and an interest in mechanism design are key requirements. Moreover, we expect fluency in English and very good writing skills, in particular.

The appointment is a 100% doctoral assistant position and it consists of three areas. Firstly, it includes the writing of a dissertation under the supervision of Professor Hans Gersbach and other members of the chair. The thesis is to be completed within three to four years. Secondly, we expect you to participate in the day-to-day activities of the chair. The salary will be in accordance with the regulations of ETH Zurich. Finally, you are required to complete the Economics Doctoral Programme at D-MTEC.

Applicants must submit the following documents:

  • A short application letter
  • A curriculum vitae
  • High school and university transcripts with a description of the grading system
  • Contact information of two referees or reference letters, if available.

Starting date: as soon as possible.

For further information about the position, contact Ewelina Laskowska at  or Martin Tischhauser at .

Please submit your application online by using the following link: and address your application to ETH Zurich, Ueli Lott, Human Resources, 8092 Zürich. The application window is open until July 21th 2017. We encourage you to apply at your earliest convenience. Incoming applications will be evaluated in chronological order.

URL for Online Application:

Opening: Senior Researcher Position – Irstea, Clermont-Ferrand, France

Irstea (National Research Institute in Science and Technology for Agriculture and the Environment) is seeking a senior researcher in economics to play a leading role in academic and applied research developed in UMR (Research Unit) Territoires which comes from joining CERAMAC (: and UMR Métafort ( in Clermont-Ferrand, France.

Research interest and expertise include regional development and the environment (bioeconomics), public policy evaluation, territorial equality and fragility, sustainable development policies, institutional approaches in the fields of economics.

Applicants should hold or be close to completing a habilitation for supervising research and/or have a post-doctoral experience of at least seven years with a proven record of high level research.

The position is a three-year contract with an extension option on a permanent position (selection on a competitive basis).

The salary is to be negotiated on the basis of previous experience. Fluency in English would be appreciated (and if possible in French).

Recruitment between June 2017 and November, 2017

For more details about the procedure, contact and send a CV:

Dr. Dominique Vollet
Head of UMR Territoires
+ 33-(0)4-73-44-06-59

Contacts are expected by the end of May 2017.

Application deadline: until position is filled.

Call for Papers: 2nd International Conference on Political Economy of Democracy and Dictatorship

Date and Location

15 – 17 March, 2018

University of Münster, Germany


Keynote Speakers

Timur Kuran, Duke University

Uwe Sunde, LMU Munich


Conference Description

The conference addresses the origin and prospects of democracy and dictatorship, policy control and governance structures in comparative political systems and transition processes from dictatorship to democracy and vice versa.

Bringing together scholars interested in interdisciplinary work on comparative political systems is our focus.

We welcome theoretical as well as empirical papers by both economists and other social scientists with an interdisciplinary background. In particular, papers may cover topics such as:

•   Institutional change and prosperity

•   Violence and political stability

•   Constitutional history of democracy

•   Political economy of revolutions

•   Political accountability in autocracies

•   Culture, religion, and political institutions


Scientific Board

Thomas Apolte, University of Münster, Germany

Mario Ferrero, University of Eastern Piedmont, Italy

Mario Gilli, Bicocca University Milan, Italy

Yuan Li, University of Duisburg-Essen, Germany


Deadlines and Submissions

Abstract submissions:  September 1, 2017

Notification: October 1, 2017

Full paper submission deadline: January 31, 2018

Registration open: October 1, 2017 to December 31, 2017


Registration Fees

Before December 1, 2017:

Senior researchers:  100€

PhD students:  75€


From December 1, 2017:

Senior researchers:  140€

PhD students:  100€

Note: The registration fee covers catering during the coffee breaks as well as the receptions/dinner.


Conference Contact Information

The Chair of Political Economy

Scharnhorststr. 100

48151 Münster, Germany


8th Bolivian Conference on Development Economics

The 8th Bolivian Conference on Development Economics (BCDE8) will take place in Cochabamba, Bolivia, on Thursday October 26 and Friday October 27, 2017. The conference is jointly organized by the Institute for Advanced Development Studies (INESAD), the Society of Bolivian Economists (SEBOL), Universidad Privada Boliviana (UPB), and the Bolivian Academy of Economic Science (ABCE).

The conference brings together local and international scholars for the exchange of ideas and discussion of recent results within theoretical and applied development economics research. We encourage young researchers to submit papers on all topics within the field of development economics. The conference keynote speakers are: Sara Farley (Global Knowledge Initiative) and Carlos Végh (World Bank).

Paper submissions

Deadline: is Friday August 11, 2017. Please submit your papers here:

All submitted papers will be reviewed prior to acceptance for presentation. The review process will finish by Friday September 1, 2017, and the organizers will notify applicants of the outcome by email. A program with details of all scheduled presentations will be posted at the Conference’s web site:

Travel and accommodation

All participants must cover their own travel and accommodation costs, but the organizers have arranged for preferential rates at hotels in Cochabamba. Information about the city and logistics is available at

travel stipend of up to 700 USD will be offered to some of the successful applicants residing outside Bolivia, based on the quality of their submissions. Applicants interested in being considered for one of these stipends should send an email to Ricardo Nogales () after submitting their papers.

Program committee

  • Ricardo Nogales (Universidad Privada Boliviana)
  • Marcelo Cardona (University of Copenhagen)
  • Pablo Cuba Borda (Federal Reserve Board)
  • Pablo Selaya (University of Copenhagen)
  • Mauricio Tejada (ILADES – Universidad Alberto Hurtado)