More than meets the eye in ROK ceding developing economy status

A large number of farmers in the Republic of Korea took to the streets of Seoul on Wednesday, protesting the government's recent decision to give up its developing country status at the World Trade Organization in future trade negotiations and thus lose the benefits accruing out of it. The protesters were worried that the decision would eventually lead to a drastic cut in state agriculture subsidies and tariffs.

The ROK gave up its developing country status on Oct 25 along with the special and differential treatment that comes with it as part of the WTO reform proposed by the United States in late July. This means that, under pressure from Washington, Seoul has decided to compromise the interests of its agriculture sector and farmers in exchange for some advantages in the auto and other manufacturing sectors. Perhaps the ROK hopes to increase its bargaining power in the trade negotiations with the US.

In terms of per capita income and the human development index - which takes life expectancy, education and living standards into consideration - the ROK's development level has risen significantly since it joined the WTO in 1995. The ROK has entered the ranks of developed countries because, for instance, its per capita income increased to $30,600 in 2018 from $11,600 in 1995 when it identified itself as a developing country. According to the World Bank, countries with per capita income of more than $12,235 are considered high-income countries.