The US president Donald Trump has upped the ante on the special and differential status enjoyed by large developing countries such as China and India under WTO rules by asking his trade representative to take necessary action.

Donald Trump on Friday night tweeted: "The WTO is BROKEN when the world’s RICHEST countries claim to be developing countries to avoid WTO rules and get special treatment. NO more!!! Today I directed the U.S. Trade Representative to take action so that countries stop CHEATING the system at the expense of the USA!"

Following Trump's directive, U.S. Trade Representative Robert Lighthizer issued a statement:

“For far too long, wealthy countries have abused the WTO by exempting themselves from its rules through the use of special and differential treatment. This unfairness disadvantages Americans who play by the rules, undermines negotiations at the WTO, and creates an unlevel playing field. I applaud the President’s leadership in demanding fairness and accountability at the WTO, and I look forward to implementing the President’s directive."

It is not immediately clear what action the US can take unilaterally as decisions at WTO are on consensus basis and most developing countries have vehemently opposed the idea proposed by the US. The US is however set to paralyse the apex adjudicating body at the WTO-the appellate tribunal--by not allowing appointment of new judges to the body.

In a paper submitted to the WTO in February this year, India, China, South Africa and Venezuela said self-declaration of developing member status had been a long-standing practice and best serves the WTO objectives. The paper said the persistence of the enormous development divide between the developing and developed members of the WTO is reflected on a wide range of indicators such as levels of economic development, GDP per capita, poverty levels, levels of under-nourishment, production and employment in the agriculture sector, among others.

The joint statement of the informal WTO ministerial organised in Delhi in February said special and differential treatment is one of the main defining features of the multilateral trading system and is essential to integrating developing members into global trade. "Special and differential treatment provisions are rights of developing members that must be preserved and strengthened in both current and future WTO agreements, with priority attention to outstanding LDC issues," the joint statement read.

The US has already submitted a proposal at the WTO stating that as several developing countries such as China and India have made significant strides in development, countries that are members of G20 or Organisation for Economic Co-operation and Development, as well as those classified by the World Bank as a high income country or those with 0.5% share in world merchandise trade should not get S&D benefits in trade negotiations.

The US wants countries like China and India to give up their “developing country" status given their rapid economic progress.

Trump also removed India from the list of developing country WTO Members exempt from application of the safeguard measures on certain crystalline silicon photovoltaic (CSPV) products and large residential washers while withdrawing the duty free benefits to Indian exporters under the Generalized System of Preferences.

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019," Trump said last month in his proclamation.

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