US seeks new group for China, India at WTO

NEW DELHI: At the World Trade Organisation ( WTO) headquarters in Geneva, there have been voices — largely from the US — suggesting that a new category of countries be created apart from the three main groups — developed, developing and least developed countries.

It has been suggested that the new group should comprise the rapidly growing economies, such as China and India, which have gained considerable mass in recent years. Although there has not been an explicit demand to create a new group of emerging countries, there have been discussions behind closed doors that have raised eyebrows in the Capital.

After all, this move has the potential to change the way global talks have taken place in the past and the impact may be felt beyond trade. "It has strategic implications that go beyond just WTO. If the demand finds merit then other negotiations, including the climate talks, may be impacted," said a source based in Geneva.

At the WTO, it would push China, India and others, which fall into the same category of advanced developing countries, to go for sharper duty cuts and adjust their rules related to, say, trade facilitation, more quickly than developing countries.

Economists, however, believe that the demand may be a little premature given that there is huge disparity between the developed countries and those in the second group, such as China and India.

"Size of China's economy is same as US, but China's per capita income is 22per cent of the US per capita income because China has four-and-half times more people. It makes Chinese per capita income like where US income was in late 1920s or mid-1930s," former US treasury secretary Larry Summers had pointed out in a recent interview to TOI. Currently, Chinese per cacapita income is around 14per cent of the US level.

India fares even worse. It's per capita GDP is less than half of Indonesia's level and around one-fifth of China's. In fact, on several human development indicators, India can be compared with the poorest countries.

But the noise has certainly made the government wake up and take note. "We will certainly say no to differentiated treatment, where you want to differentiate between developing countries with high and low growth rates... India may have avery high growth rate but the development indicators are not well spread," commerce and industry minister Nirmala Sitharaman said, pointing out that even basic infrastructure is missing in some parts of the country.