Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
China has announced it will no longer seek Special and Differential Treatment (SDT) benefits in future World Trade Organization (WTO) negotiations, a move hailed by the global body as a significant step towards a fairer trading system. Premier Li Qiang made the announcement on Tuesday, with a senior Chinese diplomat in Geneva clarifying on Wednesday that Beijing would still identify itself as a developing country despite forgoing these trade advantages.
China’s Decision and WTO Reaction
The WTO’s Director General, Ngozi Okonjo-Iweala, described China’s decision as a “pivotal moment” for the organization, underscoring Beijing’s commitment to a more balanced and equitable global trading system. This development comes as WTO members consider comprehensive reforms to revitalize the body, which has faced challenges including tariffs imposed by the Trump administration.
SDT benefits traditionally allow developing countries greater flexibility, such as higher tariffs or subsidies, to protect nascent industries. However, with China’s emergence as the world’s second-largest economy, several trade partners, notably the United States, have argued that these benefits are no longer appropriate for Beijing.
Implications for Global Trade and U.S. Relations
The United States has long contended that reform of the global trading system is unattainable unless major developing economies relinquish these preferential treatments. Keith Rockwell, a trade analyst at the Hinrich Foundation and former WTO communications director, suggested that China’s move could improve its relationship with Washington, addressing a longstanding U.S. grievance.
Li Yihong, a senior delegate at China’s mission to the WTO in Geneva, emphasized that forgoing SDT benefits demonstrates China’s commitment to supporting the multilateral trading system. She clarified that this decision does not alter China’s status as a developing country within the WTO framework or in any other context, asserting that China remains a key member of the global South.
Future of WTO Reforms
Xiankun Lu, a former senior trade diplomat of China, commented that Beijing’s decision would “put an end to the current debate about the rebalance of rights and obligations among major players of the WTO, at least for China.” He added that the onus is now on other major players to demonstrate their responsibility and commitment to the system and its reform.
