Context: Recently, US President has accused China of taking advantage of the US through the World Trade Organisation (WTO), saying that if China is considered a 'developing country', the US should be called one too.
Implication of this move

• China became a WTO member in 2001. By 2011, China became the second-largest economy in GDP terms, the first largest merchandise exporter, the fourth largest commercial services exporter and the first destination for inward FDI among developing countries.
• So if China is forced to take on the duties of a developed country and forego the benefits of a developing country, the West could soon ask other developing countries that are ahead of China (at least in per capita terms) to do the same.

Demands by developed countries

• For sometime now, developed countries, mainly the US, have been asking the WTO to end the benefits being given to developing countries.
• Nearly two-thirds of the members of the World Trade Organization (WTO) have been able to avail themselves of special treatment and to take on weaker commitments under the WTO framework by designating themselves as developing countries.

How does WTO classify developed and developing countries?

• The WTO doesn’t define countries as ‘developing’ or ‘developed’. Member nations themselves are required to declare which category they fall under.
• However, these declarations can be challenged by other member nations.
• Over two-thirds of WTO’s 164 member countries are developing countries.

Advantages of a ‘developing country’ status

• Some WTO agreements give developing countries special benefits and rights, which are referred to as “special and differential treatment provisions”.
• These provisions include a longer time period for implementing agreements and commitments or measures to increase trading opportunities for developing countries.
• Essentially, under these agreements, developed countries may treat developing countries more favourably than other WTO members.
• However, a country that announces itself as ‘developing’ does not automatically benefit from unilateral preference schemes.

WTO norms for recognition of Developed, Developing and LDCs

• Under the WTO system, generally, countries are designated as developed, developing, and least developed countries (LDCs).
• The uneven level of development between developed and developing countries in the WTO is a well-recognised fact.
• Article XVIII of the General Agreement on Tariffs and Trade (GATT)recognises that attaining the objectives of this agreement would require facilitating the progressive development of those countries that can only support low levels of development and are at the early stages of development.
• Accordingly, countries self-designate themselves as ‘developing country’ to take advantage of provisions like Article XVIII of GATT and other special and differential treatment (S&DT) provisions in the WTO agreements.
• These provisions are aimed at increasing trade opportunities for developing countries, ensuring longer transitional periods to comply with WTO obligations, and affording technical assistance to countries, among other things.

About Special and differential treatment Provisions

• Longer time periods for implementing Agreements and commitments,
• Measures to increase trading opportunities for developing countries,
• Provisions requiring all WTO members to safeguard the trade interests of developing countries,
• Support to help developing countries build the capacity to carry out WTO work, handle disputes, and implement technical standards, and Provisions related to least-developed country (LDC) Members.
• The concept of non-reciprocal preferential treatment for developing countries that when developed countries grant trade concessions to developing countries, they should not expect the developing countries to make matching offers in return.