Korea to give up developing country status

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Korea to give up developing country status

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Minister of Economy and Finance Hong Nam-ki, center, announces that Korea will no longer seek "developing country" benefits at the World Trade Organization at the Central Government Complex in Seoul on Friday. [MINISTRY OF ECONOMY AND FINANCE]

Korea will no longer seek “developing country” benefits at the World Trade Organization (WTO) after months of pressure from the United States.

“Considering [Korea’s] economic stature, it is difficult to continue to be recognized as a developing country,” said Minister of Economy and Finance Hong Nam-ki during a senior government meeting at the Central Government Complex in Seoul. “[We] have decided not to seek developing country benefits in future WTO negotiations.”

The announcement effectively removes Korea from the list of countries that claim the status at the WTO, which it had maintained since joining the trade body in 1995.

Korea also joins a string of countries that have recently made similar announcements such as Singapore, Brazil and Taiwan.

The government had mulled over the status since U.S. President Donald Trump complained in July that advanced economies were receiving unfair advantages at the WTO.

While the complaint targeted China, Korea meets all four criteria of a developed country as defined by the United States.

The government faced heavy opposition from the agriculture sector over the move. The claimed status allows the government to give benefits to farmers such as 1.49 trillion won ($1.27 billion) in subsidies a year.

The announcement will not lead to any immediate changes to current benefits as they are only subject to change in future WTO negotiations, according to Hong, who clarified that Korea will not outright give up the status but instead no longer seek its corresponding benefits.

The Finance Minister explained that further postponing the decision would not have helped Korea’s position at the WTO.

“There was great concern that the decision being delayed would result in losing both the country’s stature and bargaining power.”

Korea had faced pressure from countries to give up the status since joining the Organisation for Economic Cooperation and Development in 1996.

BY CHAE YUN-HWAN [chae.yunhwan@joongang.co.kr]

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