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TWN Info
Service on WTO and Trade Issues (Aug20/11) Geneva, 12 Aug (D. Ravi Kanth) – The Trump administration appears to have asked the World Trade Organization to terminate China’s self-designation as a developing country for availing special and differential treatment (S&DT) in the current and future trade negotiations. At his White House press briefing on 10 August, President Trump said that “we are putting in and we’ve already put in a request that China should no longer be declared a developing nation and have advantages over the US.” “And I told them a year ago and I told them two years ago and we have put in very powerfully that they should not have advantages over other countries, frankly, and they are not gonna have any more advantages,” Trump claimed, according to a report in the Washington Trade Daily on 11 August. However, it is not clear when the US request was actually placed before the WTO’s outgoing director-general Roberto Azevedo, who steps down from office on 31 August. Further, the Trump administration’s latest pronouncements appear to be part of a new communication to Azevedo, or that Trump may be merely repeating the US proposal on differentiation among developing countries for availing special and differential treatment. Trump said China’s claim for availing S&DT at the WTO is “very unfair”, telling reporters at the White House briefing that “this is a developing nation? I don’t think so.” “I don’t think for purposes of what we’re talking about it should be,” he said. Against the backdrop of escalating tensions between the US and China following the US ban on Chinese social apps TikTok and Wechat, it remains to be seen how the S&DT issue will pan out in the coming days. Significantly, the US and China are holding a virtual meeting on 15 August to assess the implementation of phase one of the US-China trade agreement. While the US Trade Representative (USTR) Robert Lighthizer and the White House National Economic Council Director Larry Kudlow maintain that everything is going well with phase one of the agreement, President Trump continues to berate China on almost all issues. Speaking at the WTO’s General Council (GC) meeting on 22 July on the US proposal for differentiation among developing countries for availing S&DT, China’s trade envoy Ambassador Zhang Xiangchen had quoted the former US President Thomas Jefferson to argue that “there is nothing more unequal than the equal treatment of unequal people.” “When this truth applies in the context of the WTO, it means that, in an international organization with developed and developing members, “non-reciprocity” is a means and a principle to realize equity,” Ambassador Xiangchen emphasized. The Chinese trade envoy had said that developing countries have similar histories and status quos, pointing out that “they have been oppressed and bullied for a long time in history, and painfully stood still and lagged behind for another long time after getting independence.” Moreover, the developing countries are still “in the state of catching up, for another long and difficult time,” the Chinese envoy suggested. “Asking a large number of developing members to accept the same rules with developed members will only lead the WTO to lose its equity,” Ambassador Xiangchen had said. He argued that half of China’s population “barely earns $5 each day, which of course makes us a developing country.” More importantly, “there is an indivisible relationship between developing country status and special and differential treatment: as long as a country is a developing one, regardless of size, naturally the country faces various constraints and limitations, and thus it is inevitable that the country will claim special and differential treatment in some areas,” the Chinese envoy said. Ambassador Xiangchen said that China and India “have a large number of subsistence farmers, and they are very disadvantageous and vulnerable to compete with developed countries’ large-scale and subsidized commercial farmers, not mentioning the fact that China has not at all enjoyed full special and differential treatment under the current Agreement on Agriculture.” Referring to the tens of billions of dollars of farm subsidies provided to farmers in the US, the EU, Japan, Norway, and Switzerland among others, China said the current attempt by the US to force differentiation among developing countries for securing their legitimate and treaty-embedded S&DT will further erode “our special and differential treatment right, while developed countries rejecting reducing their subsidies, is not fair.” Ambassador Xiangchen rejected the US proposal on differentiation on grounds that “special and differential treatment is our institutional right, which we will not give up.” China, he said, would not take benefits everywhere and is ready to “assume more responsibilities and make greater contributions in the WTO.” He admitted that China is not in the same position as Benin or Liberia, but asserted that China “can’t agree that others deprive us of the special and differential treatment right up-front.” “The pragmatic solution on special and differential treatment is to respect the current practice of self-designation and respect the institutional right of developing members, and at the same time to encourage those in the position to make greater contributions to the best of their capabilities,” the Chinese envoy said. Meanwhile, the South Korean trade minister Yoo Myung-hee, who is one of the eight candidates vying for the WTO’s top job to replace DG Azevedo, said that there is a “pragmatic way” to resolve the S&DT issue at the WTO. The other seven candidates in the DG race are Mr Jesus Seade Kuri from Mexico; Ms Ngozi Okonjo-Iweala from Nigeria; Mr Abdulhameed Mamdouh from Egypt; Mr Tudor Ulianovschi from Moldova; Ms Amina C Mohamed from Kenya; Mr Mohammad Maziad Al-Tuwaijri from Saudi Arabia; and Mr Liam Fox from the United Kingdom. During her visit to Washington DC on 11 August, Ms Myung-hee said that S&DT is an “embedded principle” with three-fourths of WTO members declaring as developing countries, suggesting that it is too difficult to accept the US proposal on differentiation. However, there is a solution to the raging controversy on S&DT in which for those developing countries that are able to take on more commitments in a specific negotiation must do so, she said.
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