Viw Magazine

Men's Weekly

.

  • Written by Henry Gao, Associate Professor of Law, Singapore Management University
President Trump and Australia's Prime Minister Scott Morrison insist it matters whether China is classified as "developed" or "developing" in the World Trade Organisation matters. It may not. Shutterstock

Whether China is a “developing” or a “developed” country for the purposes of the World Trade Organisation matters a lot to the US president.

President Donald Trump ignited a new front in the US-China trade war in July by tweeting that the world’s richest nations were masquerading as developing countries to get special treatment.

They were “cheating”, according to Trump.

He directed the US Trade Representative to “use all available means to secure changes” at the WTO.

Then Australia joined in. While in the United States, Prime Minister Scott Morrison referred to China as a “newly developed economy”, and backed Trump, saying that “obviously, as nations progress and develop then the obligations and how the rules apply to them also shift”.

China is digging in. It hasn’t resiled from a statement by its commerce ministry spokesman Gao Feng in April:

China’s position on WTO reform has been very clear. China is the largest developing country in the world.

But what’s at stake? In practical terms, almost nothing. Trump and Morrison are demanding something that would give them little.

What does “developing” even mean?

In the WTO, developing countries are entitled to “special and differential treatment” set out in 155 rules.

However, none of those rules define what a “developing country” is.

Instead, each member is able to “self-designate”, subject to challenges from other members.

Being recognised as a developing country was one of the three key principles China insisted on when negotiating to join the WTO in 2001.

It faced resistance. Several members cited “the significant size, rapid growth and transitional nature of the Chinese economy”.

In response the WTO took what it called a “pragmatic approach,” meaning that China got hardly any of the special treatment that would normally be accorded to a developing country.


Read more: Vital Signs. Blame Trump, not China for the looming trade and currency war


For example, under the Uruguay Round of tariff reductions that applied to developing countries already in the WTO, China would have only needed to cut its average industrial tariff from 42.7% to 31.4%. Instead, it agreed to cut it to 9.5%.

Similarly, it agreed to cut its agricultural tariff from 54% to 15.1%, instead of the 37.9% that would have been required had it already been in the WTO. These put its commitments on par with those of developed rather than developing countries.

On some issues, China’s commitments far exceeded those of even developed countries. For example, it agreed to eliminate all export subsidies on agricultural products, an obligation that developed countries were only able to accept 14 years later.

It also undertook to eliminate all export taxes, which are still allowed under WTO rules and still widely used by many governments.

Many of China’s WTO commitments were imposed only on it or modified the general rules to either impose heavier obligations on it or confer less rights on it.

Contrary to popular belief, China has received hardly any of the benefits that accrue to developing countries when it became a WTO Member, other than the ability to use the title “developing country”.

It’s more about identity than benefits

After its accession, China acted as a member of the developing country group and pushed hard for its interests. In 2003 it joined India and Brazil in pushing developed countries to reform their agricultural trade policies while retaining flexibility for developing countries, a push that has yet to achieve success.

In the meantime, it enjoys little preferential treatment for itself, partly because it has eschewed special benefits, partly because most of the transition benefits that were available to it have expired, partly because some of the provisions available to it are essentially voluntary on the part of the country offering them, and partly because many of the benefits available to developing countries are not available to developing countries with large export shares.


Read more: Barley is not a random choice – here's the real reason China is taking on Australia over dumping


At times it has actively forgone important benefits, such as by not invoking its right to receive technical assistance under WTO’s Trade Facilitation Agreement.

However, on some other issues, the sheer size of China has made it difficult to accommodate China’s claim for developing country treatment. One example is the negotiation on fisheries subsides, which would not be able to move without substantial commitments from China, which operates one of the largest subsidies in the world.

Identity matters to China

In its position paper on WTO Reform, China says it “will never agree to be deprived of its entitlement to special and differential treatment as a developing member”.

At the same time, it says it “is willing to take up commitments commensurate with its level of development and economic capability”.

It remains far less developed than traditionally developed countries. In purchasing power terms, its standard of living is about one-third of that in the United States.

Although not practically important in terms of its obligations under the WTO, its developing country status is useful to it in other ways, giving it the opportunity to gain meaningful advantages in other international organisations such as the Universal Postal Union.

It costs the rest of the world little to accommodate China’s wish to be described as a developing country. If Trump and Morrison got what they wanted, they would find little had changed.

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

Authors: Henry Gao, Associate Professor of Law, Singapore Management University

Read more http://theconversation.com/myth-busted-chinas-status-as-a-developing-country-gives-it-few-benefits-in-the-world-trade-organisation-124602

How to Build a Simple Summer Wardrobe That Works Anywhere

Image source: Dekota SwimI swear — I packed for three days in Byron and ended up wearing the same outfit on repeat. A linen shirt, my Broo...

SMSF Loan Experts: Unlocking Property Investment Through Self-Managed Super Funds

SMSF has become an increasingly popular strategy for Australians looking to grow their retirement savings while maintaining greater contro...

Sliding Screen Door: A Practical Addition to Modern Homes

Modern homes are designed to bring comfort, functionality, and a connection with the outdoors. A sliding screen door perfectly embodies al...

A Step-by-Step Guide to the Melbourne Conveyancing Process

Buying or selling property can feel overwhelming without understanding how the legal side works. That’s where conveyancing in Melbourne ...

Sydney’s Best Moving Services: How to Pick the Right One for You

Moving to a new home or office is one of the most significant tasks that require time, planning, and the right professionals to make the pro...

7 Benefits of Hiring Professional Moving Companies for Your Next Relocation

Relocating to a new home or office is a major life event that can be both exciting and stressful. While some people attempt to handle the mo...

Shopify Web Developer: Crafting High-Performance Online Stores for Business Success

In today’s competitive eCommerce landscape, businesses need more than a standard website to attract and retain customers. They need an o...

Essential Sailing Knots and When to Use Them

Learning to tie essential sailing knots is one of the most valuable skills any sailor can master. Whether you’re an experienced skipper ...

Common Myths About Automatic Gates—Busted

Automatic gates have become a staple of modern home and business security, offering both convenience and peace of mind. Yet despite their ...

Affordable and High-Quality Plantation Shutters for Every Home

Plantation shutters are a classic window treatment known for their wide horizontal slats that can be adjusted to control light, privacy, and...

Comprehensive Guide on Water Quality in Central Coast: Ensuring Safe and Healthy Water Supply

Unlock secrets to safe & healthy water with our comprehensive guide on water quality in the Central Coast! Protect your health now! Wat...

Smart Cleaning Product Choices for Australian Businesses: A Guide for Office Managers

Smart cleaning choices help keep Australian offices healthy. This means selecting safe, effective, and budget-friendly supplies. First, matc...

Designing Reusable CTA Components for Multi-Channel Experiences

Another key piece to digital marketing are calls-to-action. They transform engagement into measurable outcomes clicks, sign-ups, purchases...

Delivering Responsive UX Through Dynamic Content Rendering

User expectations have shifted overnight. Audiences no longer accept static, templated experiences. Instead, they want digital engagement ...

Why Shade Structures in Melbourne Are Essential for Comfort & UV Protection

Introduction Melbourne’s climate is famously unpredictable, but when the sun shines, it often brings with it high levels of ultraviolet...

Choosing the Right Water Tanks Melbourne for Your Home or Business

Rising water bills, unpredictable rainfall, and the need to reduce reliance on the mains supply have encouraged many residents and busines...

Elevating Interiors with Hybrid Timber Flooring

Flooring is one of the most important elements of interior design, setting the foundation for the overall look, comfort, and functionality...

Why Visiting a Dentist Regularly is Essential for Oral Health

Good oral health is more than just having a bright smile—it plays an important role in overall well-being. Regular visits to a dentist ...

How Construction Law Firms in Melbourne Safeguard Complex Projects

Introduction From multi-storey developments to infrastructure upgrades, construction in Melbourne is thriving. Yet each project carries l...

The Ultimate Guide to Home Security Camera Laws in Australia

Security cameras are now one of the most common ways Australians protect their homes, families, and businesses. But before you install a C...