South Korea has no plan to give up developing-nation status: agriculture minister

Kim Hyeon-soo (Yonhap)

Sejong: South Korea’s new agriculture minister has ruled out the possibility of abandoning the country’s special and differential treatment under the World Trade Organization regime, despite growing U.S. pressure to reform the global trade body.

In a recent brief comment to Yonhap News Agency, Kim Hyeon-soo said that South Korea has no plan to give up developing country status, underscoring the country’s efforts to keep the status intact, mainly to protect its sensitive agriculture industry, especially rice.

Currently, Asia’s fourth-largest economy imposes a 513 percent tariff on imported rice. Government data showed 54 percent of the 1 million South Korean farming households grow rice, a staple food for Koreans.

His comments came as U.S. President Donald Trump is pushing to overhaul the rules of the Geneva-based trade body to make sure that self-declared developing countries do not take advantage of the benefits that come with the status.

The United States has proposed that the WTO strips countries of developing country status if they meet certain criteria — being members of Group of 20 advanced economies; being members of the Organization for Economic Cooperation and Development (OECD); being high-income countries as classified by the World Bank; and taking up at least 0.5 percent of total global trade.

Trump also said if no substantial progress is made in overhauling the WTO rules by mid-October, the U.S. will no longer treat as a developing country any WTO member Washington says is not one.

In July, Trump named South Korea, Mexico and Turkey as countries claiming developing-country status even though they are members of both the G20 and the OECD, a group of 36 mostly rich nations.

South Korea meets all four of the criteria, a development that could undermine its efforts to maintain its status.

Meanwhile, some South Korean trade officials questioned the need to keep the status, claiming there are no substantial benefits.

A senior trade official voiced concern that South Korea may find itself pitted against the U.S. if it sticks to the status at a time when the U.S. is pressing to stop China — the world’s second-largest economy — from taking advantage of the privileges of being a developing country.

An agriculture ministry official handling the issue said there would be no immediate damage if South Korea gave up the status, but she said there could be possible harm in future negotiations at the WTO if Seoul is not classified as a developing country.

“South Korea’s agricultural subsidies won’t be affected even if Seoul decides to forgo the status,” the official of the Ministry of Agriculture, Food and Rural Affairs said.

South Korea paid 8.2 trillion won (US$6.87 billion) in agricultural subsidies to farmers out of the 11.49 trillion won available in 2015, the latest year for which statistics are available.

South Korea’s total agricultural subsidies largely depend on the value of agricultural output in a given year and the ceiling hovers around 11.49 trillion won.

The South Korean government has launched internal consultations to decide whether to keep the status.

YONHAP