By Emre Aytekin and Emir Yildirim
BERLIN (AA) — China will give up the benefits from the World Trade Organization (WTO) special and differential treatment (SDT) provisions, which it had obtained due to its developing country status.
Chinese Premier Li Qiang, on the sidelines of the UN General Assembly in New York, said that China will no longer seek SDT in existing and upcoming WTO agreements, according to the Chinese state-run news agency Xinhua.
"This is a culmination of many years of hard work and I want to applaud China’s leadership on this issue," WTO Director-General Ngozi Okonjo-Iweala said in a post on US social media company X, hailing it as “major news key to WTO reform.”
China defined itself as a developing country while boasting the world’s second-largest economy, which allowed it the right to benefit from SDT by placing higher customs tariffs and using subsidies.
The US claimed that the SDT system provided unfair advantages to developing countries, suggesting that no significant reform to the WTO could come to the fore as long as countries like China and other major economies benefit from SDT.
China was first unclear on relinquishing its developing country status or simply waiving its privileges.
The Chinese Commerce Ministry said the country’s developing status will remain, but related benefits, such as longer periods to implement WTO rules, will no longer apply, while the waiver can be revoked at any point.
China’s move came in as a signal to the rest of the Global South, which the country deems itself to be the de facto representative of.
China’s decision to withdraw from SDT benefits came after months of trade tensions with the US.
Meanwhile, the WTO is reportedly facing increasing challenges due to its failure to reform itself with evolving global economic and trade conditions amid trade wars, while the call for reform from within the organization is on the rise.