UN: "Developed Countries Undermine Developing Nations by Flooding Subsidies"

Rebecca Greenspan, UNCTAD Secretary-General
Criticizes US and EU Subsidy Policies
"Developing Countries Lack Fiscal Capacity to Provide Subsidies"

Criticism has been raised that developed countries are engaging in a 'ladder kicking away' by using subsidy-centered industrial and climate policies to hinder the development of developing countries.

According to major foreign media on the 25th (local time), Rebecca Grynspan, Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), said in a recent interview, "Developed countries have more financial leeway to provide subsidies," and "Many trade rules prohibit policies that developing countries can use."

Secretary-General Grynspan pointed out that developing countries currently face two problems: market closures due to rapid technological changes and new barriers from developed countries. She particularly highlighted the resurgence of industrial policies spreading in developed countries such as the United States, the European Union (EU), and Japan under a protectionist stance as a major issue. In fact, the United States provides $369 billion in subsidies and tax benefits for electric vehicles through the Inflation Reduction Act (IRA). The EU is also providing subsidies to promote the development of semiconductors, critical minerals, and green technologies.

She criticized, "The revival of industrial policies in developed countries can negatively affect the competitiveness of developing countries," adding, "Developing countries tend to view these policies as protectionism. They lack the financial capacity to provide subsidies and must pursue limited policies related to trade, tariffs, and taxes." This points to the argument that such policies by developed countries hinder the growth of developing countries based on free trade.

She also argued that climate policies like the EU's Carbon Border Adjustment Mechanism (CBAM) impose significant costs on developing countries. CBAM is a system that charges importers for excess carbon emissions when imported goods emit more carbon than the same products produced within the EU.

Secretary-General Grynspan emphasized, "CBAM, which taxes other carbon-intensive imports such as steel and cement, is also very unfair," explaining, "Because it imposes the same carbon price on developing countries as on the EU."

Accordingly, she predicted that it will be increasingly difficult to find remarkable development cases like the 'Miracle on the Han River' in developing countries.

Secretary-General Grynspan assessed, "The international trade system for the poorest countries that drove the development of countries like Korea and Costa Rica no longer works."

This content was produced with the assistance of AI translation services.