SEOUL (BLOOMBERG) - South Korea is abandoning its developing-nation privileges at the World Trade Organisation (WTO) following allegations by the Trump administration that some countries were taking advantage of the status.
United States President Donald Trump in July named South Korea in a list of territories claiming the status even though they were among the world’s richest economies. South Korea has mainly used the self-declared status to protect its agricultural sector, imposing a tariff of more than 500 per cent on rice imports.
“It’s difficult to be recognised any longer as a developing nation in international society considering our economic status,” South Korea’s Finance Minister Hong Nam-ki said at a nationally televised address.
“The government will do everything it can to provide maximum protection in sensitive agricultural areas such as rice in future WTO negotiations.”
South Korea’s announcement on Friday will likely add to pressure on China to drop the status. Mr Trump has repeatedly called for the world’s second-biggest economy to give up the privileges granted by the WTO.
“This is a win for Trump pressuring China,” said Prof Cheong In-kyo, a professor of international trade at South Korea’s Inha University. “China now has one fewer reason to hold on to its developing-nation status.”
The WTO allows economies that claim the status to enjoy longer transition periods for implementing trade deals and protection against emergency import restrictions by developed nations.
Warning of unilateral action in July, Mr Trump named China, Brunei, Hong Kong, Kuwait, Macau, Qatar, Singapore, the United Arab Emirates, Mexico, Turkey and South Korea as those unworthy of the status. Singapore has since said it would not seek privileges granted by the status in negotiations.