Opinion

Bridging the Divide between Developed and Developing Countries in WTO Negotiations

Photo Credit: REUTERS/Amit Dave

by Anabel González , Peterson Institute for International Economics.

The Trump administration, in another sign of its tough approach to trade, moved in March to exclude India and Turkey from a program that has long granted the two countries preferential duty-free access to US markets. India, said the president, was being punished for failing to provide “equitable and reasonable access” to its markets for US goods. The administration’s action came after Brazil and Australia lodged parallel claims that India’s sugar subsidy regime has depressed world prices. Earlier this year, the World Trade Organization (WTO) took a similar step, ruling against China’s rice and wheat subsidies.

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These actions underscore an important issue, bringing the role of larger developing countries in the trading system to the front burner. Developing countries’ exports have grown to represent almost half of total world exports, with the largest 15 developing economies accounting for some three-quarters of that share (table 1). When the players—advanced or emerging—are large, their actions can have sizeable economic effects in international markets. There is thus a strong rationale to have them play by the same rules.

Table 1 Merchandise exports by selected countries and groups and share in total world exports
Country Merchandise exports(billions of US dollars) Percent increase in merchandise exports in 2017 from 2000 Share in total world exports (percent)
2000 2017 2010 2017
China 249.2 2,263.4 808.2% 3.9% 12.8%
South Korea 172.3 573.7 233.0% 2.7% 3.2%
Hong Kong 202.7 550.3 171.5% 3.1% 3.1%
Mexico 166.4 409.4 146.1% 2.6% 2.3%
Singapore 137.8 373.2 170.8% 2.1% 2.1%
United Arab Emirates 49.8 313.5 529.1% 0.8% 1.8%
India 42.4 299.2 605.9% 0.7% 1.7%
Thailand 69.0 236.6 243.1% 1.1% 1.3%
Saudi Arabia 77.6 218.4 181.5% 1.2% 1.2%
Malaysia 98.2 217.8 121.8% 1.5% 1.2%
Brazil 55.1 217.8 295.1% 0.9% 1.2%
Vietnam 14.5 214.3 1379.8% 0.2% 1.2%
Indonesia 65.4 168.6 157.7% 1.0% 1.0%
Turkey 27.8 157.0 465.2% 0.4% 0.9%
South Africa 30.0 88.8 196.3% 0.5% 0.5%
Developing economies 2,240.8 8,460.6 277.6% 34.7% 47.8%
European Union 2,457.1 5,900.6 140.1% 38.1% 33.3%
Japan 479.2 698.1 45.7% 7.4% 3.9%
United States 781.9 1,546.3 97.8% 12.1% 8.7%
Developed economies 4,215.4 9,246.1 119.3% 65.3% 52.2%
World 6,456.2 17,706.7 174.3% 100.0% 100.0%
Source: World Trade Organization, http://data.wto.org.
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