Subscribe
E-Paper
 |
| Deputy Prime Minister Hong Nam-ki announces Korea will not retain its developing country status in its future WTO negotiations during a press conference at the Government Complex in Seoul, Friday. Yonhap |
By Nam Hyun-woo
Korea will "not seek" to retain its developing country status in future World Trade Organization (WTO) negotiations to more effectively protect the interests of its automotive and other manufacturing industries, Deputy Prime Minister Hong Nam-ki said Friday.
The decision, which will result in the nation importing more rice and other agricultural products, is expected to help the nation secure its negotiating power in future talks with the United States including an exemption for Korean cars from the U.S. move to impose up to 25 percent tariffs on imported vehicles.
However, abandoning its developing country status will invite strong protest from farmers as they remain skeptical over the government's explanation that there will be no immediate fallout on the domestic agricultural industry.
During a press conference at the Government Complex in Seoul, Hong said the government "will not seek differential treatment given to developing countries" in future WTO negotiations.
Hong stressed that the government is not "foregoing" WTO developing country status, but will not seek differential treatments in future negotiations.
"Singapore, Brazil and other countries having similar sized economies with that of Korea have already declared they will not seek developing country status in future negotiations," Hong said.
"There is a slim chance of Korea being recognized as a developing country in the future even if we postpone the decision, and a further delay in our decision could undermine its negotiating power."
Successive governments have retained Korea's developing country status since the WTO was founded in 1995. In 1996, when Korea joined the OECD, the country gave up differential treatments in most fields, but has been keeping the status in the fields of agriculture and climate change to protect the domestic agriculture industry.
The tactic, however, faced a new challenge, as three months ago U.S. President Donald Trump demanded Korea and other countries give up their developing country status and resultant differential treatments. Trump has threatened that the U.S. will no longer treat any WTO member as a developing country that Washington doesn't believe is one.
Hong said there will be no immediate and direct impact on the domestic agriculture industry, because a change in tariff rules for agriculture requires an agreement at the Doha Development Agenda (DDA), talks of which have been stalemated since 2008.
"The DDA negotiations have been stalling for a long period of time and it is expected to take longer to reach an agreement over the agenda, given previous cases," Hong said.
 |
| Members of farmers associations stage a protest in front of the Government Complex in Seoul, Friday, denouncing the government's decision to give up its developing country status in its future WTO negotiations. Yonhap |
However, farmers are staging a strong opposition, saying the government will have to cut subsidies to domestic farmers following the decision, and the U.S. will heighten its pressure on Korea to open its agricultural sector.
"When the government gives up the developing country status, it has to cut amber box subsidies by 50 percent," the Korean Peasants League said in a statement announced during a rally in front of the government complex.
An amber box, also known as the aggregate measure of support, is a WTO term referring to to-be-reduced domestic measures to support prices, or subsidies related directly to production quantities. Developing countries under the WTO have been demanding subsidies, preferences and other protective measures to protect their small vulnerable economies and more time to adjust.
Korea is providing up to 1.49 trillion won ($1.27 billion) in annual direct subsidies to the agricultural industry, and those subsidies fall into the amber box category. The government said it will come up with a different type of subsidies to bypass the WTO regulation.
"Also, there will be additional losses because the U.S. will demand further opening of the Korean agricultural industry," the Korean Peasants League said, adding its member associations will stage strong protests to denounce the government's decision.
