Your paper explores how the norms of “differential treatment” for developing countries have evolved in the World Trade Organization (WTO) and Generalized Systems of Preference (GSPs) schemes. Why is it important to examine these changes over time and look beyond the WTO to see how other venues shape global trade norms?
Differential treatment has long been an important principle in global trade, as it gives countries in a disadvantaged position (generally, developing countries) preferential market access and certain flexibilities that other states are not granted. These norms were an attempt to address major global trade inequities in the wake of Western colonialism. Since they emerged within a specific historical context, we believe that one must also look at the particular set of (new) circumstances to understand the changing of these norms.
As we argue in our paper, nearly all research on differential treatment in matters of trade has focused on the WTO. While this is understandable given the WTO’s centrality in global trade governance, this singular focus also betrays a surprising gap in the academic literature: Generalized Systems of Preference schemes – which also engage directly with differential treatment in trade – are systematically overlooked.
Analysing GSP schemes is not only an avenue to explore the global governance of trade beyond the WTO’s institutional framework, but also to compare how different actors (the US, the EU, Japan, among others) understand and deal with differential treatment unilaterally. Even if there is a shared understanding that inequalities between economies exist, our research demonstrates that there are major differences between how states assess which countries count as ‘developing’ and which do not (in both multilateral and unilateral settings).
Your research suggests that the WTO has resisted changing its stance on differential treatment, while major economies’ GSPs have adapted to new economic realities. What are the underlying reasons for these differing approaches?
A major reason for this different approach lies in the decision-making dynamics within the WTO as compared to within unilateral GSP schemes. In the WTO, decisions are made by consensus: every one of the 166 member states has one vote. With over two-thirds of the seats, developing countries are well represented. Unsurprisingly, many of them have resisted changes in the institutionalisation of differential treatment.
Conversely, major economies that offer developing states differential treatment via GSP do so unilaterally and voluntarily. The US, EU, and others can revoke or amend the preference schemes at any time, without requiring consent from the developing countries that benefit from the improved market access. While this does not mean that unilateral GSP schemes are constantly changing (Japan’s scheme, for example, has remained fairly stable), they are much more flexible than the WTO’s rules on differential treatment. As trade relations have become more politicised and are increasingly linked to trade-related areas like climate change and questions of inclusivity, the EU, the US, and others have aligned their schemes with shifting domestic preferences.
What are the implications of your research for the EU's trade policy-making?
Our research shows that, over time, the EU has indeed wielded this flexibility to unilaterally modify its GSPs for developing countries. In 2005, for example, it introduced the “GSP Plus” scheme, which made accessing the top tier within the GSP schema (getting the EU’s most favourable market access) conditional upon the ratification of 27 sustainable development and good governance conventions. In bodies where developing countries participate in the decision-making processes (as is the case in the WTO), however, similar changes aimed to limit access to better market opportunities are often blocked.
As the EU continues to prioritise sustainability-related objectives in its trade relations – within GSP and beyond – our research suggests it will have to navigate carefully. The EU is walking a tightrope between the original purpose of GSP schemes (serving the interests of developing countries and creating opportunities for those in a disadvantaged position) and its aims to incorporate sustainability objectives into GSP and free trade agreements. As the EU’s GSP becomes more restrictive over time, developing countries are unlikely to embrace these climate modifications and additional requirements.
Granting preferential treatment has become a tool within major powers’ toolbox to vie for global allies.
Simultaneously, the EU rightly seeks to adopt a consistent approach to the objectives it pursues in its trade relations. Striking the right balance between updating the GSP scheme in line with its foreign policy goals and preserving its core aim of fostering economic development for those in a disadvantaged position will be crucial for the EU. This is particularly important at a time when other major economies in the non-Western world (notably China) have also begun offering preferential market access to developing countries (currently limited to the category of “Least Developed Countries”) – without global governance or sustainability conditions.
In June 2025, for example, China announced a significant expansion of its preferential trade policy, planning to grant zero-tariff access to the Chinese market for all 53 African states with which China maintains diplomatic relations. In an increasingly geopoliticised environment, then, granting preferential treatment has also become a tool within major powers’ toolbox to vie for global allies.
This blog post is based on the author's recent article, Developing Countries in Global Trade Governance: Comparing Norms on Inequality in the WTO and GSP Schemes.
Clara Weinhardt is an Assistant Professor in International Relations at Maastricht University and Non-Resident Fellow at the Global Public Policy Institute in Berlin. She is also the Deputy Coordinator of the ENSURED project. Deborah Barros Leal Farias is a Senior Lecturer at UNSW Sydney's School of Social Sciences, where she teaches Politics and International Relations.
Photo: Marcelo Moreira / Pexel (CC BY-SA 2.0)
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