"Korea Still Considers Itself a Developing Country"... U.S. Demands Rigorous WTO Reform

Policy Reform Proposal Becomes More Concrete Than in December
Core Focus: Rules for Developing Countries and the MFN Principle
No Explicit Mention in Report, but Measures Seen as Targeting China

The United States has introduced a more detailed and robust World Trade Organization (WTO) reform proposal compared to December last year. The main focus is on adjusting the rules for developing countries and the Most-Favored-Nation (MFN) principle, measures that are widely interpreted as being aimed primarily at China.

Jamison Greer, United States Trade Representative (USTR). Photo by Reuters Yonhap News

On March 23 (local time), ahead of the ministerial conference scheduled for March 26–29 in Yaoundé, the capital of Cameroon, the United States Trade Representative (USTR) released a WTO reform report. This report was prepared based on the draft that raised issues last December, and it presents specific policy directions.

The report states, "The current international trading system overseen by the WTO can no longer be defended or sustained." It argues that the existing structure, which simply divides countries into developed and developing, no longer reflects reality. It also asserts that it is unfair for countries with significant economic power to retain developing country status.

Call for Objective Criteria in SDT Application

The report points out that the current method, which allows member states to self-declare developing country status, undermines the negotiation function of the WTO. It calls for the introduction of objective criteria to determine eligibility for Special and Differential Treatment (SDT). The report also argues that incentives for member countries that faithfully fulfill notification obligations should be strengthened.

The report notes, "Brazil, Singapore, Korea, and Costa Rica have declared that they will not seek SDT in WTO negotiations, yet they still consider themselves as developing countries." It also remarks, "China's announcement that it will not request SDT in 2025 appears to respond to calls for reform on the surface, but there are doubts about its actual implementation."

Previously, in 2019, Korea, under the Moon Jae-in administration, decided to maintain its developing country status in WTO negotiations but not claim preferential treatment, amid pressure from the first Trump Administration. This decision came after President Donald Trump publicly pressured Korea and 11 other countries, stating, "The WTO's criteria for developing countries must be changed so that they can no longer receive preferential benefits."

In addition, the USTR is seeking a review of the MFN principle, which calls for "treating all member countries equally." The report states, "It is necessary to review whether the MFN principle actually promotes fair competition or simply entrenches existing structures." It further emphasizes that "the relationship between MFN and reciprocity should be redefined, and MFN application should be adjusted based on conditions such as market openness." In essence, the suggestion is that member states should be able to adjust tariffs more flexibly, depending on their trading partners.

Aimed at China... 'Chronic Trade Surplus Comes at the Expense of Others'

Exterior of the WTO headquarters located in Geneva, Switzerland. Photo by AFP Yonhap News

This reform proposal is seen as being directed at China. While the report does not explicitly name "China," it quotes USTR representative Jamison Greer's remarks from January, stating, "Under normal trading conditions, there would be no chronic surplus or persistent imbalances." At that time, Greer criticized, "If a country consistently posts a global trade surplus, it is very strong evidence that the country is seeking economic growth at the expense of its trading partners."

The U.S. conservative media outlet Newsmax reported, "Although China was not directly mentioned, the USTR, quoting Greer's speech, stated that some countries are structuring their economies so that exports consistently exceed imports in order to pursue growth at the expense of others."

The United States is expected to demand strong reforms at the upcoming ministerial conference based on these points. Upon releasing the report, Greer stated, "As the international trade system is shifting towards reciprocity and balance, the WTO needs change to maintain a meaningful role," adding, "The United States is leading proposals through this report to stimulate discussions on reform."

Meanwhile, this ministerial conference is being held at a critical juncture for the multilateral trade system, which is being challenged by the spread of protectionism, global supply chain restructuring, and intensifying geopolitical conflicts. The event is expected to be a watershed moment for the WTO system.

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