The name is absent

23

rules that allow for special and differential treatment (SDT). However, the mostly time limited
exemptions with usually modestly longer times for least developed countries have appeared unrealistic for
many countries.

It has generally been feasible for many countries, especially those long established as nations and
with central bureaucracies capable of supporting a functioning market economy, to conform to the
common rules, if given sufficient time to draft new domestic laws, revise administrative procedures and
train staff. However, for numerous others, mostly small and poor countries without long histories as
independent states and with weak central bureaucracies, or extremely small states whose size gives rise to
large administrative diseconomies, implementation of some of the rules has confronted them with tasks
that are both administratively and financially onerous and often rank low in their list of domestic
priorities. Finger and Schuler (2000) have pointed out, for instance, that to conform to the WTO
prescribed method of customs valuation, countries must first have in place an effective and modernized
customs administration, and that is often not the case. An extensive overhaul of the existing customs
administration thus becomes a prerequisite of conforming to the WTO rules.

In our view, realism demands a franker recognition by WTO members that there are a number of
countries whose state institutions or economic size do not equip them to undertake fully all the
obligations of the multilateral trading system. And it is equally only realistic to acknowledge that the
development of the needed range of institutions will often take, not years, but decades. Hoekman,
Michalopoulos, and Winters (2004) have proposed that the countries qualifying for exemption should be
composed of those that meet certain broad criteria like per capita income, institutional capacity, or
economic scale; it would include all the least developed countries together with some other poor countries
penalized by small size. These countries are capable of complying with core rules relating to MFN
treatment, tariff binding obligations, the eschewal of quantitative restrictions, dispute settlement
procedures, and trade-remedy measures. But any demand that they comply with all rules dissociates rule-
making from reality.

An objection to the view just expressed is that it would be politically difficult in the setting of a

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