Presidential Memorandum: Reforming Developing-Country Status in the World Trade Organization

On July 31, 2019, President Donald J. Trump published in the Federal Register (84 FR 37555) Reforming Developing-Country Status in the World Trade Organization, stating:

"When the wealthiest economies claim developing-country status, they harm not only other developed economies but also economies that truly require special and differential treatment. Such disregard for adherence to WTO rules, including the likely disregard of any future rules, cannot continue to go unchecked.

China most dramatically illustrates the point. Since joining the WTO in 2001, China has continued to insist that it is a developing country and thus has the right to avail itself of flexibilities under any new WTO rules. The United States has never accepted China’s claim to developing-country status, and virtually every current economic indicator belies China’s claim. After years of explosive growth, China has the second largest Gross Domestic Product in the world, behind only the United States. China accounts for nearly 13 percent of total global exports of goods, while its global share of such exports jumped five-fold between 1995 and 2017. It has been the largest global exporter of goods each year since 2009. Further, China’s preeminent status in exports is not limited to goods from low-wage manufacturing sectors. China currently ranks first in the world for exports of hightechnology products, with such exports alone increasing by 3,800 percent between 1995 and 2016.

Some "developing" countries, such as Bangladesh, Cambodia, China, and India are major exporters of textiles and apparel.

Developing country status in the WTO brings certain rights. There are for example provisions in some WTO Agreements which provide developing countries with longer transition periods before they are required to fully implement the agreement and developing countries can receive technical assistance. About two thirds of the WTO’s around 164 members are developing countries.

Some measures concerning developing countries in the WTO agreements include:

• extra time for developing countries to fulfil their commitments (in many of the WTO agreements)
• provisions designed to increase developing countries’ trading opportunities through greater market access (e.g. in textiles, services, technical barriers to trade)
• provisions requiring WTO members to safeguard the interests of developing countries when adopting some domestic or international measures (e.g. in anti-dumping, safeguards, technical barriers to trade)
• provisions for various means of helping developing countries (e.g. to deal with commitments on animal and plant health standards, technical standards, and in strengthening their domestic telecommunications sectors).

There are no WTO definitions of “developed” or “developing” countries. Developing countries in the WTO are designated on the basis of self-selection.