WASHINGTON, July 27 (NNN-AGENCIES) — United States President Donald Trump threatened to withdraw recognition of the special “developing country” status of relatively rich countries – including Singapore and China – at the World Trade Organization unless changes are made to the body’s rules.
Trump, in a memo released by the White House, directed the United States Trade Representative (USTR) to stop treating such countries as developing countries for the purpose of WTO membership if “substantial progress” toward reform had not been made within 90 days.
“The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!,” Trump said on Twitter after the White House issued the memo.
The statement notes that seven of the 10 wealthiest economies in the world claim developing country status.
“Seven out of the 10 wealthiest economies in the world as measured by Gross Domestic Product per capita on a purchasing-power parity basis – Brunei, Hong Kong, Kuwait, Macao, Qatar, Singapore, and the United Arab Emirates – currently claim developing-country status,” it said.
“Mexico, South Korea, and Turkey – members of both the G20 and the Organization for Economic Cooperation and Development (OECD) – also claim this status.
Trump’s order directs the USTR office to “use all available means to secure changes at the WTO”, with the cooperation of other countries where possible.
It is unclear how the measure would change US policy but it likely would open the door to even more retaliatory tariffs against China and other countries.
“When the wealthiest economies claim developing country status, they harm not only other developed economies but also economies that truly require special and differential treatment,” the statement said, and that “cannot continue to go unchecked”.
Developing country status in the WTO allows governments longer timelines for implementing free trade commitments, as well as the ability to protect some domestic industry and maintain subsidies.
The Trump administration has long complained that WTO rules are unfair to the US, and has nearly throttled key WTO proceedings by refusing to name new members of the appellate body for the dispute settlement system.
In fact, the US has won the majority of complaints it has file with the WTO.
And other governments, including the European Union, share concerns about China’s status in the WTO, refusing to recognise China as a market economy by the end of 2016.
The Trump administration also has rolled out new complaints against China using domestic trade rules almost weekly, covering a host of goods as varied as steel, industrial chemicals and rubber bands, imposing tariffs of 200 per cent and more.
US Trade Representative Robert Lighthizer has long viewed WTO rules as unable to rein in China’s trade practices and in March, USTR said the United States would not allow itself to be held to a “straitjacket” of WTO obligations to which it never agreed.
If the Trump administration moves forward with steps outlined in the memo to stop treating certain countries as developing economies, it would likely be another move toward essentially ignoring some WTO rules.
“The United States has never accepted China’s claim to developing-country status, and virtually every current economic indicator belies China’s claim,” it said, noting China’s gross domestic product was the second largest in the world, behind only the United States.
“China and too many other countries have continued to style themselves as developing countries, allowing them to enjoy the benefits that come with that status and seek weaker commitments than those made by other WTO Members,” it said. — NNN-AGENCIES
