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Chicago Journal of International Law

Abstract

An issue that has plagued the GATT/WTO system since its inception has been the question of how to handle the needs of both developed and developing countries in one coherent system. As developing countries make up approximately 75 percent of WTO membership, this is a very real concern for the future of the WTO. Accepting that developed countries have an obligation to support developing countries as they seek to develop, WTO members, in 1979, enacted the Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries (the "Enabling Clause"). The Enabling Clause suspends the GATT's general most favored nation ("MFN") rule and allows developed country members to give differential and more favorable treatment to developing countries. The mechanism for this treatment is the Generalized System of Preferences ("GSP"), under which developed countries offer non-reciprocal preferential treatment to products originating in developing countries. The GSP program is voluntary for developed countries, who also determine which countries receive preferences and to what extent those preferences are granted... This Development will trace a short history of the Enabling Clause and the successes and failures associated with attempts to use the Clause to further other goals. It will then analyze the arguments put forth by India and the EC regarding the conditional preferences and will recommend that the Dispute Settlement Panel find in favor of India and reject the conditioning of GSP provisions on non-trade-related standards. Finally, this Development will address the possible future of the Enabling Clause as a mechanism for establishing developing country treatment of such goals as higher labor standards, environmental protection, and prevention of drug trafficking. [CONT]

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