22 BEIJING REVIEW MARCH 12, 2020 http://www.bjreview.com
WORLD
A
notice issued by the Office of the U.S.
Trade Representative (USTR) in the
Federal Register on February 10 revised
the list of developing and least developed
economies in the countervailing duty (CVD) law.
Since the revision didn’t include China, some
may conclude that the U.S. now considers
China a developed country. But is this really the
case?
The list designates members of the World
Trade Organization (WTO) that are entitled to
special treatment for purposes of countervailing
measures. The change is the first since it was
published in 1998. Thus, according to the list,
the U.S. Department of Commerce will not treat
China as a developing country in its handling of
anti-subsidy cases.
Criteria used
The WTO Agreement on Subsidies and
Countervailing Measures was adopted to disci-
pline the use of subsidies. Under the agreement,
members can seek remedies against export
subsidies through the WTO dispute settlement
mechanism and also impose countervailing du-
ties according to their own procedures. The two
measures can be applied simultaneously but
not repeatedly.
The U.S. Congress amended the CVD law in
1994 to deal with issues related to export subsi-
dies by WTO members. Congress also granted
the USTR the power to identify the list of devel-
oping and least developed economies among
the WTO members whose imports are treated
preferentially.
U.S. Trade Representative Robert
Lighthizer announced that the future list will
no longer be published in forms of rules, but
will be notified when changes are needed.
This reform will reduce the administrative
cost of adjusting the list and turn it into
another tool for the U.S. to pressure trading
partners during negotiations.
On the new list, 36 WTO members are
defined as developing economies, while the
former list had 42 entries. Since 1998, both
the WTO membership and trade volume
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squeezed the number of economies that can
enjoy special treatment considerably.
According to the notice, the USTR de-
termined the list based on per-capita gross
national income (GNI), share of world trade
and other factors. It substituted GNI for GDP
used in the 1998 rule, separating high-income
economies from those with lower per-capita
GNI. This means that only WTO members with a
per-capita GNI below $12,375 will be eligible for
special treatment.In addition, the USTR said it considers 0.5
percent to be a more appropriate indicator of
a significant share of world trade rather than
2 percent, adding that according to the most
recent data available from 2018, relatively few
economies account for such a large share of
world trade, and those that do include many of
the wealthiest economies.
On the previous list, both EU and
Organisation for Economic Co-operation and
Development (OECD) members were excluded
from developing economies, but now, the
USTR has extended the exclusion to all OECD
members and applicants, as well as Colombia
and Costa Rica. With the expansion of the EU,
Romania and Bulgaria which joined in 2007
are no longer qualified to remain on the list.
All Group of 20 (G20) members have been ex-
cluded because of their significant impact onA List as a Weapon
The U.S. modifies its trade list to restrict more developing economies
By Zhou Mi
The author is a
research fellow with
the Chinese Academy
of International
Trade and Economic
Cooperation