US Critical of Self-Designation of Developing Country Status at WTO
The continuing ability of advanced economies like South Korea and Israel, and export powerhouses like China to call themselves developing countries in the World Trade Organization is hobbling negotiations, the U.S. delegation argued in a 45-page communication it distributed Jan. 16. "The WTO remains stuck in a simplistic and clearly outdated construct of 'North-South' division, developed and developing countries," the U.S. wrote. "The perpetuation of this construct has severely damaged the negotiating arm of the WTO by making every negotiation a negotiation about setting high standards for a few, and allowing vast flexibilities or exemptions for the many."
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The U.S. also pointed to Turkey, Thailand and Colombia as countries whose Human Development Index has now exceeded the world average. It noted that Colombia is in the process of joining the Organization for Economic Cooperation and Development -- a group of largely developed nations that also includes Turkey and Mexico. "If membership in the OECD is a proxy for developed country status, then for those countries that seek membership -- a form of 'self-declaring' -- there seems to be no reason to allow those same countries to be able to 'self-declare' as developing at the WTO," the U.S. wrote. Chile, another OECD member, is still considered a "developing country" at the WTO, but is widely thought to have crossed the line to developed country, albeit at the bottom of income levels in that club.
"Members cannot find mutually agreeable trade-offs or build coalitions when significant players use self-declared development status to avoid making meaningful offers, " the U.S. wrote. "Self-declaration and its first-order consequence -- an inability to differentiate among Members -- puts the WTO on a path to failed negotiations. It is also a path to institutional irrelevance...."