What is special and differential treatment at ALADI?
Special and differential treatment within the framework of ALADI is an integral part of Partial Scope Agreement No. 38 between Mexico and Paraguay.
Article 22 contains an MFN clause applicable within ALADI that aims to prevent the erosion of preferences based on special and differential treatment within the framework of the Association.
The members of ALADI are classified into three categories:
- Relatively less economically developed countries (PMDER).
- Countries of intermediate development.
- Other Member States.
Mexico belongs to the latter category, as do Argentina and Brazil; Paraguay, the Plurinational State of Bolivia and Ecuador are PMDER; and all other members of ALADI are considered intermediate developing countries.
Consequently, if Mexico grants preferences to an ALADI member state belonging to the intermediate development categories or to other States and said preferential treatment is equal to or better than that granted to Paraguay, the preference granted to Paraguay will be adjusted accordingly to preserve its effectiveness.
In practice, the negotiations will start and conclude, respectively, within 30 and 60 days after the claim of the affected party (Paraguay), according to a WTO report.
ALADI
Special and differential treatment may be reestablished, indistinctly, agreeing on a different margin of preference or, in the event of disagreement, on the basis of any other element of the Agreement.
If any of the parties grants preferences to an ALADI member state of the same development category as the beneficiary of the preference, negotiations will be held to extend this treatment to the beneficiary party in accordance with the provisions on special and differential treatment. within the framework of ALADI.
If an understanding is not reached in the negotiations mentioned in paragraphs 4.18-4.19 above, the parties will proceed to review this Agreement in accordance with the terms of Article 24. 4.21.
The provisions of Article 22 were applied in 1980 on the occasion of the multilateral assessment provided for in Resolution 1 of the ALALC Council of Ministers, which resulted in several partial scope agreements, such as the Agreement between Mexico and Paraguay.
Likewise, these provisions also apply with respect to the preferences granted after this multilateral assessment.
These provisions have not been invoked after that date.
