Korea mulls WTO ‘developing nation’ statusSEJONG - The Trade Ministry expressed urgency over the decision to either maintain or give up Korea’s “developing country” status at the World Trade Organization (WTO) amid increasing pressure from the United States.
A senior trade official said Wednesday that a looming deadline given by the United States could force Korea to finally make a decision on a status that has remained unchanged despite rapid economic growth for decades.
“Our country is at a point to make a decision,” said the high-ranking official during a briefing at Sejong Government Complex. “The dispute could become one between Korea and the United States.”
U.S. President Donald Trump complained in July about the developing country status enjoyed by some advanced economies, requesting changes by late October. “Developing country” status at the WTO allows benefits such as allowing more government subsidies for industries.
While Trump’s complaint was targeted at China, Korea falls under all four criteria of a developed country as defined by the United States. It is a member of the Organisation for Economic Cooperation and Development (OECD), a member of the Group of 20, is designated a “high income” country by the World Bank and accounts for over 0.5 percent of global trade.
Korea designates itself as a developing country at the WTO, which allows it to give 1.49 trillion won ($1.23 billion) in subsidies to farmers every year.
According to the Trade Ministry official, discussions within the government have recently picked up on the issue, including at the Ministry of Agriculture, Food and Rural Affairs, which oversees the subsidies to farmers.
No decision has been made on a potential change to the status.
The trade official explained that even if Korea gives up the status, it wouldn’t impact any of its existing benefits. They are subject to change through future negotiations at the WTO.
“The current benefits are provided through [established] agreements,” said the official. “They cannot be simply given up.”
The move could still hurt Korea, according to experts.
“Giving up the developing country status itself is not a problem,” said Ku Ki-bo, a professor of global commerce at Soongsil University. “However, this would place Korea at a disadvantageous position in future negotiations.”
The U.S. pressure has already led to changes of designations by WTO members.
This year, Taiwan and Brazil said they will no longer seek benefits given to developing countries, while the United Arab Emirates and Singapore have made similar announcements.
BY CHAE YUN-HWAN [email@example.com]