SA can’t be both an under-developed country and part of the G20, the US says in a trade rules update
- The United States has dropped South Africa from a list of developing countries, for the purpose of trade calculations.
- The administration of Donald Trump has been looking for ways to reduce the number of countries that get preferential trade treatment, under rules designed to aid poorer countries via trade.
- South Africa is a developing country based on its economic performance, the US says – but loses that status because it is also a member of the powerful G20.
- For more stories go to the Business Insider South Africa homepage.
South Africa may be a developing country when measured by data such as gross national income per person, the government of the United States says – but not when you consider its membership of the powerful G20.
The Office of the United States Trade Representative (USTR) this week published a revised list of countries it considers developing, or least-developed, for the purpose of some calculations on trade duties. It no longer includes South Africa among those.
Also read on Fin24 | US revokes WTO subsidy preferences for South Africa & some other countries
By one standard economic measure, that of per capita gross income, SA qualifies as developing, the USTR says in its formal notice of the update published in the US Federal Register. But it is also a member of the G20, alongside Argentina, Brazil, India, Indonesia.
"The G20 is a preeminent forum for international economic cooperation, which brings together major economies and representatives of large international institutions such as the World Bank and International Monetary Fund," the USTR notice reads.
"Given the global economic significance of the G20, and the collective economic weight of its membership (which accounts for large shares of global economic output and trade), G20 membership indicates that a country is developed."
In considering its designations, the USTR "did not consider social development indicators such as infant mortality rates, adult illiteracy rates, and life expectancy at birth", it said.
The change means that South Africa is immediately ineligible for one type of preferential treatment over "developed" countries, in calculations around countervailing duties.
Under World Trade Organiation (WTO) rules, countervailing duty investigations are limited to cases where countries subsidise products or industries to an extent of at least 2% their value. For developing countries, that limit is set to half that, at 1%, making them less likely to attract trade-war-style measures from big importers such as the USA.
All South Africa's neighbouring countries still appear on the USTR's list of least-developed, or developing, countries.
Categorised as least-developed are:
While the "developing" designation applies to:
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