DEVELOPING COUNTRY STATUS
News : Alleging that China had taken advantage of the US through the World Trade Organisation (WTO), President Donald Trump Friday said that if Beijing was considered a developing country, the US should be called one too. He reiterated that the rules of the organisation were unfair to the US.
How does WTO classify developed and developing countries?
- The WTO doesn’t define countries as ‘developing’ or ‘developed’.
- Member nations themselves are required to declare which category they fall under.
- However, these declarations can be challenged by other member nations.
- Over two-thirds of WTO’s 164 member countries are developing countries.
Advantages of a ‘developing country’ status
- Some WTO agreements give developing countries special benefits and rights, which are referred to as “special and differential treatment provisions”.
- These provisions include a longer time period for implementing agreements and commitments or measures to increase trading opportunities for developing countries.
- Essentially, under these agreements, developed countries may treat developing countries more favourably than other WTO members.
- However, a country that announces itself as ‘developing’ does not automatically benefit from unilateral preference schemes.
Should China still be classified as a developing nation?
- China became a WTO member in 2001, the organisation’s 143rd.
- As per a WTO document noting its performance from the time of accession to the organisation till 2011, China became the second-largest economy in GDP terms, the first largest merchandise exporter, the fourth largest commercial services exporter and the first destination for inward FDI among developing countries.
- So, should it still be called ‘developing’? WTO answers this question by quoting the former director of South Centre, Martin Khor who said the following, “So if China is forced to take on the duties of a developed country and forego the benefits of a developing country, the West could soon ask other developing countries that are ahead of China (at least in per capita terms) to do the same.
Meanwhile, China has maintained that it will not give up its rights as a developing country.