Thune offers resolution denouncing China’s so-called ‘developing nation’ status at WTO

A bipartisan resolution offered on May 9 by U.S. Sen. John Thune (R-SD) supports the reform of specific rules at the World Trade Organization (WTO) to protect against globally competitive countries, like China, self-designating as a developing country in order to gain unfair trade advantages.

“Meaningful reforms at the WTO need to be made, and reserving special treatment for truly developing countries would be a good start,” said Sen. Thune.

Senate Resolution (S.Res.) 202, which Sen. Thune sponsored alongside original cosponsor U.S. Sen. Angus King (I-ME), would express the sense of the U.S. Senate that the United States must continue to demonstrate leadership to achieve significant reforms to the rules of the WTO in order to promote the advancement of truly developing countries, according to the text of the resolution.

Currently, developing countries under the WTO may receive special and differential treatment, which includes weaker market access commitments and extended time frames for implementing agreements, according to a summary provided by Sen. Thune’s staff.

Since the WTO does not define “developed” or “developing,” its member countries self-declare their development status. And when China entered the WTO in 2001, its true development status at the time was different than it is now, the summary says, noting that the World Bank categorizes China as an upper-middle-income country.

At the same time, China provides both foreign direct investment and billions of dollars for cross-border infrastructure through the Belt and Road Initiative and other global geo-economic projects, according to the summary.

“China, which has the world’s second-largest economy after the United States, should not be able to self-designate as a developing country to gain unfair trade advantages, especially as the Chinese Communist Party takes advantage of actual developing countries through the predatory lending of the Belt and Road Initiative,” Sen. Thune said. “This designation intentionally misidentifies China’s economic stature, undermines countries that are truly developing, and erodes trust in the rules-based trading system.”

Sen. King called China’s self-designation as a developing nation “a ridiculous economic fraud.”

“This preposterous self-designation is yet another example of China abusing well-intended economic guidelines at the expense of American businesses and the rest of the world,” he said. “The World Trade Organization must change their rules to stop China from receiving special treatment that it doesn’t deserve.”