Trade, Development and Power Shifts: The Conflict over Special and Differential Treatment at the WTO

The multilateral trading system is in crisis. The question of how emerging economic powers, such as China and India, should be classified and treated under global trade rules has become an acute source of conflict at the World Trade Organization (WTO). While the emerging powers insist that they should be entitled to special and differential treatment (SDT) based on their status as developing countries, established powers such as the US and EU complain vociferously about the prospect of extending special treatment to their emerging challengers. With the debate over SDT dominated by the established and emerging powers, the interests of other developing countries have received comparatively little attention. Drawing on the cases of agriculture and fisheries – two areas of international trade that are of particular importance to the developing world – I show that extending SDT to emerging economies is increasingly problematic for global development. In these areas, many emerging economies are now among the world’s largest subsidizers, and the harmful effects of their policies are felt most keenly by other developing countries. Granting SDT to exempt emerging economy subsidizers from WTO disciplines would therefore undermine efforts to use global trade rules to promote global development, as well as to protect the environment.