Korea to Shed Developing Nation Perks in Win for Trump

(Bloomberg) --

South Korea is abandoning its developing-nation privileges at the World Trade Organization following allegations by the Trump administration that some countries were taking advantage of the status.

President Donald Trump in July named South Korea in a list of countries claiming the status even though they were among the world’s richest nations. South Korea has mainly used the self-declared status to protect its agricultural sector. Korea imposes a tariff of more than 500% on rice imports.

“It’s difficult to be recognized 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.”

The Finance Ministry said in a separate statement that South Korea is not giving up privileges it has already secured as a developing nation and that the decision only affects future WTO talks. South Korea will also continue to honor WTO-endorsed agreements previously signed among developing nations, it said.

South Korea’s announcement on Friday will likely add to pressure on China to drop the status. 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 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 countries 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, 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.

To contact the reporter on this story: Sam Kim in Seoul at skim609@bloomberg.net

To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Paul Jackson, James Mayger

©2019 Bloomberg L.P.