International Affairs

India, China no longer 'Developing Nations' -US President Donald Trump

In News Recently, US President Donald Trump asserted that India and China are no longer a developing nation. He claimed that they are “taking advantage” of the tag from the World Trade Organization (WTO) and warned that he will not let it happen anymore. Where the US President made the statement? The statement comes from the US President at an address to a gathering at the Shell Pennsylvania Petrochemicals Complex where he was supposed to speak on America’s Energy Dominance and Manufacturing Revival. But the President went through a range of topics including a jibe on his next year’s potential election opponent. Trump’s statement regarding India and China The President threatened to leave the WTO if the need arises. He expressed hope that the WTO will treat the US fairly and was of the view that China and India are no longer growing but have grown and can be in the list of developed nations. He was of the view that India and China have taken advantage of the developing nation tag for years now which has adversely affected the US. Trump’s America First Policy President Trump vigorously supports his America First Policy and has been a critic of India for levying “tremendously high” duties on U.S. products and has termed India as “tariff king”. The US and China are currently engaged in a trade war after Trump imposed high tariffs on Chinese goods while China retaliating against the same. Earlier Move taken by Trump administration on WTO In July 2019, Trump asked the World Trade Organisation to define how it designates developing-country status. A move that supposedly targets India, Turkey, and China getting lenient treatment under WTO trade rules. In a memorandum, Trump had empowered the U.S. Trade Representative to start taking punitive actions if any advanced economies are inappropriately taking benefits of the WTO loopholes. The WTO The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. The WTO has many roles: it operates a global system of trade rules, it acts as a forum for negotiating trade agreements, it settles trade disputes between its members and it supports the needs of developing countries. The primary purpose of the WTO is to open trade for the benefit of all. The WTO officially commenced on 1 January 1995 under the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948. Classification- Matter of Choice There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether they are “developed” or “developing” countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries. Least Developed Countries are designated by the UN. China and India’s position Earlier this year-China, India, South Africa, and Venezuela have opposed a US proposal to reform the “special and differential treatment” given to developing nations. The four have already submitted a paper to the WTO saying that the self-classification of developing member status has been long-standing practice and best serves the WTO’s objectives. The joint letter also claims that many WTO rules have actually favored the US and other developed countries, in the areas of agricultural support, textile quotas and intellectual property rights protection.
Sources: WTO website, PTI, https://www.scmp.com/economy/china-economy/article/3004873/china-refuses-give-developing-country-status-wto-despite-us



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