WTO hails Chinese decision to forgo developing country benefits

The World Trade Organization hailed a decision by China to forgo trade benefits from its status as a developing country, which the global body said would help make the trading system fairer and more balanced.

China's Premier Li Qiang announced on Tuesday that Beijing will no longer request so-called Special and Differential Treatment (SDT) benefits, which arise from its developing country status, in WTO negotiations on future deals.

Giving further details, a senior Chinese diplomat at WTO headquarters in Geneva said on Wednesday that China would continue to call itself a developing country, despite no longer seeking the SDT benefits.

WTO trade rules allow developing countries more leeway to use higher tariffs or subsidies to protect their industries.

MOVE ADDRESSES 'LONGSTANDING U.S. COMPLAINT'

But with China having long since become the world's second largest economy, some trade partners, especially the United States, have said this is unfair. Washington has said reform of the global trading system is impossible unless big developing countries give up those benefits.

"This is a pivotal moment for the WTO. China's decision reflects a commitment to a more balanced and equitable global trading system," WTO Director General Ngozi Okonjo-Iweala said in a statement.

WTO members are weighing sweeping reforms to revitalise the global trade body, which has been challenged by a wave of tariffs imposed by the Trump administration.

Keith Rockwell, a trade analyst at the Hinrich Foundation and former WTO communications director, told Reuters China's move could help its relations with Washington.

"It's certainly been a longstanding U.S. complaint, and if they are able to move off that, that is something that would be, I would think, very helpful," he said.

CHINA 'WILL ALWAYS BE A DEVELOPING COUNTRY'

Li Yihong, senior delegate at China's mission to the WTO in Geneva, told a news conference that the decision to forgo the SDT benefits showed China's "commitment to supporting the multilateral trading system".

"This does not involve any change to China's status as a developing country and in the WTO as a developing member, whether within the WTO framework or in any other context," she said. "China remains a key member of the global south and will always be a developing country."

Xiankun Lu, former senior trade diplomat of China, told Reuters the Chinese move would "put an end to the current debate about the rebalance of rights and obligations among major players of the WTO, at least for China."

"Now the ball is in the court of other major players to demonstrate their responsibility and commitment to the system and its reform," he added.