6.5

Threshold impact analysis and progressive trade regulation

Progressive trade regulation involves addressing existing policy anomalies in the global trading system where the same set of rules are applicable to varying levels of development and competitiveness. The solution lies in framing rules in a manner that accounts for different levels of social and economic development as a matter inherent to the rule itself. We suggest doing this using an implicit threshold approach, which consists in identifying measurable economic criteria that define access to special and differential treatment (S&D) on a provision-specific basis.

Building on the analyses undertaken by the Commonwealth Secretariat and the World Bank (1999), Stevens (2002), Keck & Low (2004) and Cottier (2006), the proposed analysis would identify data, indices, and methods necessary to address a range of sector- and provision-specific S&D issues. The approach would involve selecting relevant S&D provisions and identifying a set of likely measures of country competitiveness across sectors and then deriving country comparisons across these sectors on the basis of observed trade patterns, market shares, and level indicators. The resulting matrix of country classifications by WTO provision, sectors and indicators would provide the basis for country classifications according to provision-specific areas of progressive regulation. On the basis of the availability, quality and verifiability of the data needed for the selected indicators, we would then be able to assess the practicability of these indicators to inform an ex-ante, provision-specific classification of countries from a technical perspective.