USA seeks proper definition of 'developing country', raises finger at India, China

The Trump administration is seeking a proper definition of a "developing country" by the WTO, alleging that major emerging economies like India, China, Brazil and South Africa are availing several concessions under this category.

While Least Developed Countries (LDCs) are defined in the World Trade Organisation (WTO) using the UN criteria, there are no WTO criteria for what designates a "developing country", the Trump administration said in its trade policy agenda and annual report sent to Congress yesterday.

"Any country may 'self-declare' itself as a developing country, thus entitling it to all 'special and differential' treatment afforded to developing countries under the WTO Agreements, as well as any new flexibilities afforded to developing countries under current or forthcoming negotiations," it said.

"In practice, this means that more advanced developing countries like Brazil, China, India and South Africa receive the same flexibilities as Sub-Saharan African and South Asian non-LDCs, despite their very significant impact in the global economy," the report said. It is a challenge to find balance in the application of existing obligations and the development of new commitments when countries that some institutions categorise as high- or high-middle income countries expect to receive the same flexibilities as low- or low-middle income countries, said the report prepared by the US Trade Representatives (USTR).

"To remain a viable institution that can fulfil all facets of its work, the WTO must find a means of achieving trade liberalisation between Ministerial Conferences, must adapt to address the challenges faced by traders today, and must ensure that the flexibilities a country may avail itself of are commensurate to that country's role in the global economy," the report said. In its report, the Trump administration said the ability of any country to self-declare "developing country" status to avail itself of flexibilities under the WTO agreements ultimately undermines the predictability of the WTO rules and diminishes the certainty of negotiated outcomes under new liberalisation agreements.

If the WTO is to reclaim its credibility as a vibrant negotiating and implementing forum, countries must take advantage of every opportunity to advance work and seize results as they present themselves."In looking ahead to the period before the twelfth Ministerial Conference in 2019, the US seeks to work with other WTO Members to begin the process of identifying opportunities to achieve accomplishments, even if incremental ones, and avoid buying into the predictable, and often risky, formula of leaving everything to a package of results for Ministerial action.

"Whether the issue is agriculture or digital economy, the WTO will impress capitals and stakeholders most by simply doing rather than posturing for the next Ministerial Conference," it added.