The Trump administration is changing a key exemption to America’s trade-remedy laws to make it easier to penalize about two dozen so-called developing countries including China, India and South Africa.
The U.S. on Monday narrowed its internal list of developing and least-developed countries in order to reduce the threshold for triggering a U.S. investigation into whether nations are harming U.S. industries with unfairly subsidized exports, according to a U.S. Trade Representative notice.
In doing so, the U.S. eliminated its special preferences for a list of self-declared developing countries. Among them: Albania; Argentina; Armenia; Brazil; Bulgaria; China; Colombia; Costa Rica; Georgia; Hong Kong; India; Indonesia; Kazakhstan; the Kyrgyz Republic; Malaysia; Moldova; Montenegro; North Macedonia; Romania; Singapore; South Africa; South Korea; Thailand; Ukraine; and Vietnam.
The notice said the change was necessary because America’s previous guidance — which dates to 1998 — is obsolete.
The development marks a noteworthy departure from two decades of American trade policy regarding developing nations. The change could result in more stringent penalties for some of the world’s top exporters.
The move also reflects President Donald Trump’s frustration that large economies like China and India are permitted to receive preferential trade benefits as developing nations at the World Trade Organization.
During his visit to Davos, Switzerland, last month Trump said the WTO hasn’t treated America fairly.
“China is viewed as a developing nation. India is viewed as a developing nation. We’re not viewed as a developing nation. As far as I’m concerned, we’re a developing nation, too.”
The goal of the WTO’s special preferences for developing nations is to help poorer countries reduce poverty, generate jobs and integrate themselves into the global trading system.
The Trump administration has sought to end special preferences for nations that fall under certain categories, like those that are classified as high-income nations by the World Bank.
Several of the de-listed countries in the USTR notice have already agreed to relinquish their developing-country rights in future trade negotiations, including Brazil, Singapore and South Korea.