Another Unilateral Decision by Trump, Another Blow to the Multilateral Trading System

Another Unilateral Decision by Trump, Another Blow to the Multilateral Trading System
President Donald Trump points to the media as he arrives at the White House in Washington, Feb. 29, 2020 (AP photo by Carolyn Kaster).

The status of developing countries under international trade rules has long been a divisive issue. The World Trade Organization does not explicitly define what “developing” means, leaving members to determine for themselves where they fall. Even countries that have become relatively rich or are major export powers have been loath to give up the preferential access to foreign markets—or “special and differential treatment”—that developing country status entails. After decades of negotiation, the practical impact of special and differential treatment is less than it once was. But it is nevertheless a major irritant for developed country members of the WTO. And the United States under President Donald Trump seems determined to do something about it—even at the expense of the system as a whole.

Last year, the White House removed India and Turkey from Washington’s Generalized System of Preferences program, which provides duty-free access to the American market for designated products from eligible developing countries. It is currently reviewing the eligibility of eight more countries. Under a special waiver of international rules against trade discrimination, developed countries adopted programs in the 1970s to provide preferential access to developing countries to encourage greater integration and economic growth. But the preference-providing countries determine the eligibility conditions unilaterally, and the Trump administration is within its rights to withdraw such benefits. Still, while Turkey is a relatively developed, upper-middle-income country, India is much poorer, with a third of its citizens still living in poverty in 2018.

Another recent decision is of greater systemic concern, however. After a U.S. proposal outlining explicit criteria for developing country status gained little traction at the WTO last year, the administration acted unilaterally. The U.S. Trade Representative’s office last month issued a regulation reducing the number of developing countries that will receive special and differential treatment in its investigations into potentially illegal subsidy programs. Unlike trade preference programs, the rules governing these investigations were multilaterally agreed, and the action is yet another blow to the rules-based, multilateral trading system—from the country that once led that system.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review