US House Bill to Remove China's 'Developing Country' Status Unlikely to Succeed
23:25 GMT 30.03.2023 (Updated: 23:26 GMT 30.03.2023)
© AFP 2023 / WANG ZHAO
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MOSCOW (Sputnik) - The US House bill to challenge China's "developing country" status is a sign of national insecurity and political showboating which is unlikely to succeed and deprive Beijing of the benefits it has under global trade rules, due to a lack of consensus on the issue within the World Trade Organization (WTO), experts told Sputnik.
Earlier this week, the US House of Representatives unanimously passed the PRC (People's Republic of China) Is Not a Developing Country Act. The legislation, introduced by Republican and Democrat representatives, Young Kim and Gerry Connolly, aims to direct the US secretary of state to oppose labeling or treating China as a "developing country" in any international organization or agreement to which Washington is a party.
In recent years, the US has been actively accusing China of misusing the "developing country" designation in relation to itself, as this allows the Asian country to gain certain advantages under global trade rules despite already being sufficiently advanced economically, as claimed by critics. Beijing, for its part, rejects such accusations, claiming in a 2021 white paper that "China is the largest developing country in the world."
"This [step by the US House] clearly signifies a loss of US national self-confidence. Rather than engage China in a genuine competition, the goal seems to be to sabotage the latter's growth. It's pathetic," Marshall Auerback, a research associate at the Levy Economics Institute of Bard College, said.
One of the challenges with the US efforts to counteract China is that the WTO does not have a clear definition of what constitutes "developing" and "developed" countries, meaning that nations decide for themselves to which group they belong. In 2019, then-US President Donald Trump signed a memorandum which stated that Washington would aim to change the WTO's approach to "developing country" status.
However, such an undertaking would require a consensus among WTO members that does not currently exist, Gary Clyde Hufbauer, a nonresident senior fellow with the Washington-based Peterson Institute for International Economics and former US Treasury official, told Sputnik.
"The immediate focus of the House bill is the WTO. It would be difficult to change China's status in the WTO without China's consent. I believe 'developing country' status is self-designated by a country, and not subject to a decision by the General Council or the Dispute Settlement Body. It would require a consensus decision by WTO members to adopt a standard for designating 'developing country' status. No such consensus is in sight," Hufbauer explained.
Mark Dallas, professor of political science and Asian studies at Union College, also said that the US lawmakers' initiative was unlikely to go very far as it was "largely a domestic politics strategy, rather than a true foreign economic policy strategy." The expert suggested that the Republicans, who now control the lower chamber of the US Congress, were trying to push a harder line on China to differentiate themselves from US President Joe Biden's administration on the issue and, thus, attract the attention of the electorate.
"I do expect more unilateral export controls and sanctions from the Biden administration. However, similar to prior export controls, these will be very narrow and very targeted at cutting-edge technologies or particular Chinese entities. This means that they are not really broad 'economy-wide' policies intent on constraining the entire Chinese economy," Dallas said, adding that he did not believe that the Biden administration would try to weaken the global trading system.
