Trump threatens not to recognize China's special status at WTO

Jul 27, 2019: President Donald Trump on Friday threatened to withdraw recognition of the special "developing nation" status of China and other relatively rich countries at the World Trade Organization unless changes are made to the body's rules.

The salvo fell the week before top US trade officials are due to return to China to rekindle trade talks that acrimoniously collapsed in May.

"The WTO is BROKEN when the world's RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!," Trump said on Twitter.

In a memo to Robert Lighthizer, the US trade representative, Trump said the global trade body uses "an outdated dichotomy between developed and developing countries that has allowed some WTO members to gain unfair advantages."

Without "substantial progress" to reform WTO rules within 90 days, Washington will no longer treat as a developing country any WTO member "improperly declaring itself a developing country and inappropriately seeking the benefit of flexibilities in WTO rules and negotiations," the statement said.

It was another unilateral attack on the multilateral trade body, which was created to settle disputes and prevent all-out trade wars but which Trump has repeatedly criticized the WTO since taking office.

Trump's order directs Lighthizer's office to "use all available means to secure changes at the WTO," with the cooperation of other countries where possible.

Lighthizer applauded the move.

"This unfairness disadvantages Americans who play by the rules, undermines negotiations at the WTO and creates an unlevel playing field," he said in a statement.

While Trump's statement points to multiple countries that benefit from the developing nation designation, it focuses mostly on China.

The statement notes that seven of the 10 wealthiest economies in the world claim developing country status, as do Mexico, South Korea, and Turkey, which are members of the Group of 20 leading economies.

It is unclear how the measure would change US policy in practice though it likely could open the door to even more retaliatory tariffs against Beijing.

AFP/APP