China, India, and other countries have lost their “developing countries” status after the Trump Administration updated its Countervailing Duty Law on Feb. 10.
President Trump has voiced his concerns about countries like China—which have large developed economies—declaring themselves “developing countries” under World Trade Organization (WTO) rules and hurting U.S. industries through unfair export subsidies.
The Administration’s update overrides WTO laws and sets U.S. standards for what qualifies as developing and least-developed countries. The original trading rule dated back over 20 years and was updated because it is now “obsolete,” according to the Federal Register.
WTO members with these designations are given special rights, like the ability to subsidize exports, according to its website. The WTO doesn’t have a definition for “developed” or “developing” countries, but any country can declare itself one.
Last year, President Trump said on Twitter that the “WTO is BROKEN when the world’s richest countries claim to be developing countries to avoid WTO rules and get special treatment.”
The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!
— Donald J. Trump (@realDonaldTrump) July 26, 2019
The United States Trade Representative stated that it used per capita gross national income data from the World Bank to designate developing and least-developed nations. It also used trade data from the Trade Data Monitor.