At WTO, China a ‘developing’ country
China’s status as a developing country in the WTO has become a controversial issue. This is because China is getting benefits reserved for developing countries in line with WTO norms.
China is an upper middle income country.
Additionally, China is accused of using unfair trade practices. For example preferential treatment and data restrictions with the enterprises of their country etc.
Therefore, many countries have urged China to either deny the benefits available to developing countries or to classify itself as a developing country.
Developing countries in the World Trade Organization:
- The WTO has not defined “developed” and “developing” countries. Member countries declare themselves whether they are developed countries or developing countries.
- However, if a member decides to use the provisions available to developing countries, other member states can object to it.
Benefits of claiming as a developing country:
- Developing countries have special rights through special and differential treatment provisions.
- The WTO agreements set more liberal targets for developing countries. Also, they are given more time to achieve certain goals. This allows other countries to have preferential treatment, such as the Generalized System of Preferences (GSP).
- GSP is a non-reciprocal preferential tariff system. It provides exemption from the Most Favored Nation principle of the WTO.
Least Developed Countries (LDCs) in the World Trade Organization
The World Trade Organization recognizes LDCs through a classification based on criteria set by the United Nations. These criteria are reviewed every three years.
The determination of LDC is currently based on three criteria:
- Gross National Income (GNI) per capita, human Resources and economic vulnerability to external shocks.
- Concerns have also been expressed over the recent grant of LDC status to Bangladesh. However, Bangladesh has overtaken India in terms of GDP per capita.
Source – The Hindu