Graduation and Reciprocity

The collective ‘differential and more favourable’ (DMF) treatment of developing countries was conceded by developed countries2 during the 1960s and 1970s, broadly on the ground that the less-developed countries could not compete on equal terms with the more- developed. In the circumstances of the 1960s, this concession did not impose substantial actual or perceived costs (economic or political) on the developed countries. The current Uruguay Round of GATT negotiations takes place, however, against the backcloth of significantly changed world economic conditions and corresponding changes in attitudes. The leading developing countries are now a significant force in world trade.3 Whereas the developed countries might have welcomed avoiding the further lowering of trade barriers against labour-intensive manufactured exports from developing countries in the 1950s and 1960s in return for conceding DMF, they (and the US in particular4) now perceive economic and political costs associated with tariff preferences for and restricted access to the markets of the newly industrialising countries in particular. Hence the developed countries, and especially the US, are pressing for developing countries in general to participate more fully and equally in the GATT framework, and for the more advanced NICs in particular to ‘graduate’ to equality of treatment with developed countries.