Developing Country Tag at WTO

The World Trade Organization recently provided the “developing country” tag. This couldn’t be accepted by several countries.

About the tag at WTO

The organization has officially not created any definitions for “Developed” or “developing “countries. However, when a tag is provided other countries can challenge the offering. Though, WTO has not provided the definition, two – third of its members claim themselves as developing countries. As the members can themselves declare them as developing, China has taken advantage to declare itself as developing. With this, China is trying to widen its dominance in the world trade.

Why is China after the “Developing” Tag?

The WTO offers several privileges to a developing country. The S&DT provisions in WTO agreements offer special rights to the developing country. S&DT is Special and Differential Treatment provisions. These provisions allow members to treat them favorably. Low tariff, exemption from import duty, free trade, etc. The developing tags provide lenient target to the countries. China has recently been claiming that it is the world biggest developing economy.

India on the issue

The per capita income of the Chinese in 2020 was 10,435 USD. On the other hand, the per capita income of India was 1,928 USD. India has questioned the Chinese stand based on World Bank Definition of a developing country.

World Bank on Developing countries

The World Bank classifies the countries into four groups based on the per capita income of the countries. Here are the types based on the per capita income:

  • Lower Income Countries: 1,0256 USD or less
  • Lower middle-income countries: 1.026 USD and 3,995 USD
  • Upper Middle-income countries: 3,996 USD and 12,375 USD
  • High Income Countries: Greater than 12,375 USD

Other countries

US, Australia and European countries are opposing

Why are countries opposing Chinese developing status?

The countries have called China “Unfair”. Some of Chinese unfair practices include data restrictions, referential treatment for state enterprises and inadequate enforcement of intellectual property rights. Also, China is currently the world second largest economy. It accounted for one – fourth of the global GDP in 2021.

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