US to WTO: China Isn't a Developing Country

♠ Posted by Emmanuel in , at 4/09/2019 10:44:00 AM
If Trump had his way, the WTO would have far fewer "developing countries." (China wouldn't be one, of course.)
There's an interesting fight going on at the WTO on the classification of developing countries as, well, developing countries. The Trump administration--never a fan of multilateral organizations like the WTO to begin with--wants fewer countries to be classified as such. At present, about two-third of WTO member countries have this status, and together with it, special and differential treatment (SD&T). SD&T allows preferences for developing countries that developed countries do not have such as a longer time frame for meeting WTO commitments or subsidizing their agricultural industries. From America's point of view [or is that Trump's?], this abuse has gone on for far too long.

On the other hand, China wants to keep this designation despite becoming the world's second-largest economy. From the South China Morning Post:
China will refuse to give up the “special and differential treatment” it enjoys as a developing nation at the World Trade Organisation, in a rebuke to a US proposal that would pare back the privileges China and other nations enjoy on trade. China is categorised as a developing country at the Geneva-based institution, which affords it “special and differential treatment”. This enables China to provide subsidies in agriculture and set higher barriers to market entry than more developed economies.

The dispute reflects a fundamental divide within the WTO that has threatened the future of the global multilateral trading system. The United States has long complained that too many WTO members – about two-thirds – define themselves as developing countries to take advantage of the terms the status permits them to trade under.
Allowing WTO members to classify themselves as developing countries to avail of SD&T is the latest American grievance against the WTO:
China, India, South Africa and Venezuela have opposed a US proposal to reform the “special and differential treatment”, published earlier this year. The four have already submitted a paper to the WTO saying that the self-classification of developing member status has been a long-standing practice and best serves the WTO’s objectives.

The joint letter also claims that many WTO rules have actually favoured the US and other developed countries, in the areas of agricultural support, textile quotas and intellectual property rights protection.
Unless other wealthy countries jion with the United States it's hard to see how the US gets traction on this issue in the medium term.