Deadline missed, Seoul mulls its WTO status

Home > Business > Economy

print dictionary print

Deadline missed, Seoul mulls its WTO status

The Korean government will decide whether to maintain its “developing country” status at the World Trade Organization (WTO) by the end of this month as pressure mounts with the passing of a deadline set by U.S. President Donald Trump.

Responding to lawmakers at the National Assembly on Wednesday, Minister of Economy and Finance Hong Nam-ki said the government will finalize its position on its claimed status at the WTO at a ministerial-level meeting this month that will either wrap up or escalate the dispute with the United States.

Trump protested in July that some advanced economies were receiving unfair benefits from claiming that status at the WTO, telling his trade representative to act if “substantial progress” in terms of changes wasn’t made in 90 days, or by Wednesday.

While Trump’s complaint was largely with China, Korea has become a major target as it is the only country that claims the status and meets all four criteria of a developed country as defined by the United States.

With the passing of Trump’s deadline, Hong expressed urgency for a decision, adding that Korea should brace for fallout if it ends up maintaining the status.

“If another decision different from U.S. expectations is made, we will have to endure the resulting measures,” said Hong.

Trade Minister Yoo Myung-hee met with U.S. Trade Representative Robert Lighthizer and National Economic Council Director Larry Kudlow in Washington on Tuesday and explained that the Korean government needs more time due to the sensitivity of anything affecting Korea’s agricultural sector.

Much of the opposition to a change to the claimed status revolves around the impact on farmers. Because of its claimed status, Korea is allowed by the WTO to give subsidies to farmers that amount to 1.49 trillion won ($1.27 billion) a year.

A government meeting with agriculture groups to discuss the matter on Tuesday failed to proceed beyond opening remarks after protests from farmers and farming organizations.

Senior officials have called for calm, saying that a change in Korea’s status wouldn’t lead to any immediate changes.

Hong has previously explained that giving up the status would not impact any of the current benefits afforded through the WTO as they are subject to change only in future negotiations.

Agriculture Minister Kim Hyeon-soo acknowledged during his confirmation hearing in August that it would be difficult for Korea to maintain the status.

Farmers are still wary of losing the distinction.

The National Agricultural Cooperative Federation, commonly known as Nonghyup, expressed opposition to Korea giving up the status earlier this month.

“If the government gives up the developing country status […] there will likely be great losses through deep cuts to tariffs and subsidies if the next WTO trade negotiations progress and reach a deal,” said the organization in a statement.

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.

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)