Ahead of his proposed visit to India in February, US President Donald Trump on Wednesday said India and China have taken “tremendous advantage” because of their developing country status and that he would hold discussions with World Trade Organisation (WTO) chief for reforming the global trade body.
“We have dispute running with the WTO for quite a while because our country has not been treated fairly. China is viewed as a developing nation, India is viewed as a developing nation, we are not viewed as a developing nation. As far as we are concerned, we are a developing nation too. But they get tremendous advantages by the fact that they are considered developing and we are not. They shouldn’t be, but if they are, we are,” Trump said addressing media at the World Economic Forum in Davos.
WTO chief Roberto Azevedo by his side, Trump said he will soon hold discussions with Azevedo to bring in dramatic changes in the trade body. “We are talking about a whole new structure about the deal. The WTO has been very unfair to the US for many years. Without it, China wouldn’t be China. China would not be where they are right now. That is the vehicle that they used. Roberto and I have a tremendous relationship and we are going to do something. I think it would be very dramatic. He will be coming with a lot of his representatives to Washington sometime next week or the week after and we will start working on it,” Trump said.
Speaking from the same forum, Azevedo said if the WTO is to deliver and perform its role in today’s global economy, it has to be updated. “It has to be changed, it has to be reformed. This is an agenda that is squarely before members. I don’t think anybody in Geneva misses the point. I think they understand that the system has not been functioning properly in many areas. That’s something that we are trying to address. This is something we are serious about,” he added.
Trump in the past also has targeted the special and differential status enjoyed by large developing countries such as China and India under WTO rules, asking his trade representative to take necessary action.
“For far too long, wealthy countries have abused the WTO by exempting themselves from its rules through the use of special and differential treatment. This unfairness disadvantaged Americans who play by the rules undermines negotiations at the WTO, and creates an unlevel playing field,” US Trade Representative Robert Lighthizer said in a statement in July last year.
The US has since blocked the appointment of a judge to the appellate body, the apex dispute settlement body in the WTO, leaving it dysfunctional.
The US wants countries like China and India to give up their “developing country” status given their rapid economic progress. The US has already submitted a proposal at the WTO stating that as several developing countries such as China and India have made significant strides in development, countries that are members of G20 or Organisation for Economic Co-operation and Development, as well as those classified by the World Bank as a high-income country or those with 0.5% share in world merchandise trade should not get S&D benefits in trade negotiations. Trump also removed India from the list of developing country WTO Members exempt from the application of the safeguard measures on certain crystalline silicon photovoltaic (CSPV) products and large residential washers while withdrawing the duty-free benefits to Indian exporters under the Generalized System of Preferences.
In a paper submitted to the WTO in February this year, India, China, South Africa, and Venezuela said self-declaration of developing member status had been long-standing practice and best serves the WTO objectives. The paper said the persistence of the enormous development divide between the developing and developed members of the WTO is reflected on a wide range of indicators such as levels of economic development, GDP per capita, poverty levels, levels of under-nourishment, production and employment in the agriculture sector, among others.