SEOUL -- South Korea said Friday it will give up its developing country status in the World Trade Organization, surrendering to U.S. President Donald Trump, who has insisted that the "rich" country not receive special tariff and subsidy protections.
Hong Nam-ki, South Korea's finance minister, said the country will no longer seek developing country treatment in any future WTO deal. Hong said this is conditional on South Korea being able to continue protecting its sensitive agriculture sector under existing WTO agreements.
"I think this decision will [give] significant momentum for the future of our agricultural industry," Hong told reporters at a news conference. "We will strengthen our policy to improve competitiveness in the agricultural sector."
The announcement came three months after Trump lambasted South Korea and other countries clinging to developing country status. The U.S. president said the status flies in the face of South Korea's membership in the G-20 and Organization for Economic Cooperation and Development. Most OECD members are considered developed.
In future WTO agreements, South Korea will no longer be able to shield its farmers from global competition via tariffs and subsidies.
The country's farmers currently benefit from high tariffs that South Korea slaps on imported crops, notably rice and garlic, or take advantage of government subsidies.
Hong Nam-ki, South Korea's Deputy Prime Minister and Minister of Economy and Finance (Photo courtesy of South Korean Ministry of Economy and Finance)
Farmers' associations as well as lawmakers who represent them opposed the decision, saying it will only invite more pressure from Washington, which wants to open the country's agricultural market.
"We can keep our national interest by protecting trade authority and food authority," the National Farmers' Association said in a statement. "If we give up our trade authority, the U.S. will demand the opening of South Korea's agricultural market more clearly."
Independent Rep. Kim Jong-hoe demanded that the government scrap the plan, saying that ditching the status sacrifices farmers to protect corporations.
South Korea, Asia's fourth-largest economy, has maintained developing country status since the WTO's creation in 1995, mainly to guard its agricultural industry.
Hong, the finance minister, said the government will make every effort to protect the country's farm sector and compensate farmers if they are harmed by any new WTO agreement.
"We will do our best to secure stable budgets for the public subsidies," Hong said. "We submitted to raise this to 2.2 trillion won ($1.9 billion) in 2020 from 1.4 trillion won in 2019."
