Read The Times Australia

Daily Bulletin

Myth busted: China’s status as a developing country gives it few benefits in the World Trade Organisation

  • Written by: Henry Gao, Associate Professor of Law, Singapore Management University

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.

Myth busted: China’s status as a developing country gives it few benefits in the World Trade Organisation 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.

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

Business News

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

When Should You Speak to a Lawyer About a Legal Issue?

Legal issues can begin with a simple question, then become harder to manage once formal steps are involved. Many people wait until a matter feels urgent before seeking guidance, even though earlier ...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Choosing an ELISA Format That Matches Your Target

A colorimetric ELISA ends with a plate that has developed color, and the instinct is to read more ...

Why Accurate Measurements Matter When Ordering Flatpack Cabinets

Ordering flatpack cabinets can make a renovation or storage project more manageable, but the proce...

How Long Does Interstate Freight Take in Australia?

If you have ever arranged for stock, equipment or materials to travel from one Australian state to a...

How AEC Firms Can Scale Faster Without Sacrificing Project Quality

Growth presents a fundamental dilemma for architecture, engineering, and construction firms: expan...

What Makes an Aesthetic Clinic Worth Going Back To?

Trying an aesthetic clinic for the first time can feel like a bit of a gamble. You can read review...

Elevate Your Morning Routine with Cafe-Style Coffee at Home with the Right Coffee Machine

There's something magical about that first sip of coffee in the morning. It’s more than just a bev...

Top Garment Steamers for Busy Professionals in Australia

The gap between garment steamers built for a quick touch-up and ones built to keep pace with a wor...

Correct Sleeping Posture to Minimize Back Strain

Most people don’t pay much attention to how they sleep until they start waking up with a stiff bac...

Why Product Longevity Matters for Sustainable Australian Buildings

Sustainability in building design is often associated with recycled materials, renewable resources a...