The United States Trade Representative (USTR) has eliminated the developing nation status of nine previously qualifying countries in a move to address unfair trading, especially in the steel industry. The countries include Argentina, Brazil, Hong Kong, India, Indonesia, Thailand, Singapore, South Korea, and Vietnam. The 1998 designation allowed for special preferences for investigating countervailing duty (CVD) and is now considered obsolete for these countries. 

 

The USTR clarified that for the purposes of US CVD law, countries with a share of 0.5pc or more of world trade were considered to be developed countries. The direction to remove the developing nation status for these countries was given by the Trump administration in July 2019 and came into effect on Monday. The removal of this status will limit benefits in global trade and could require increasing commitments in World Trade Organization deals. 

 

For countries such as Indonesia and India, certain steel products are now subject to CVD after their removal from the developing nation list. 
 

Developing countries can also receive Generalized System of Preference (GSP) benefits. Whether these countries will continue with GSP benefits is unclear. The GSP program is provided unilaterally by the US to promote growth in developing countries. The change in designation seems to point to the need for more direct one-on-one treaty negotiations by these nations.

 

The US is India’s largest export market. President Trump is visiting India this week and terms of a new deal including the potential concession because of GSP of almost $240mn per exported goods worth $6.5bn to the US is likely to be on the table for discussions. 

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