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South Korean Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki (center) announces South Korea’s decision to not defend the country’s developing status in agriculture under the World Trade Organization at the Central Government Complex in Seoul on Oct. 25. (Yonhap News)

The South Korean government has decided not to defend its status as a “developing country” in the area of agriculture during World Trade Organization (WTO) renegotiations. But it remains to be seen when South Korean agriculture is likely to suffer an actual blow in terms of reduced tariffs on imported agricultural products. For that reason, observers are describing Seoul’s move as a strategic decision prioritizing diplomatic and trade issues with the US, including high tariff rates on automobiles and negotiations on the two sides’ shares of defense costs. But it has also triggered a major outcry from farmers, who are now warning of a campaign to “force out” the administration.

Speaking with reporters after presiding over an Oct. 25 meeting of external economy-related ministers at the Central Government Complex in Seoul’s Jongno District, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said, “We have decided not to argue for benefits as a developing country if WTO negotiations occur in the future.”

At the same time, Hong said negotiations would be “approached in a flexible manner to allow maximum protections for sensitive South Korean agricultural items such as rice.” South Korea has enjoyed preferential treatment since opting for “developing country” status in the area of agriculture at the time of the WTO’s launch in 1995, with high tariffs imposed on imported agricultural products and subsidies provided to domestic agriculture.

But the administration explained that South Korea is finding it increasingly untenable to argue that status amid discussions of preferential treatment for developing countries as a major area for WTA reforms, with countries like Singapore, Brazil and Taiwan also making the decision to relinquish developing country benefits going forward.

“The likelihood of South Korea being granted benefits as a developing country [by other member countries] in future negotiations is close to zero,” Hong explained. But while the government’s decision means it will not be arguing developing country status in future negotiations, its current status as a developing country will remain in place until new negotiations are concluded by the WTO.

The direct factor behind the decision lay in remarks made in July by US President Donald Trump. In a presidential memorandum to the US Trade Representative (USTR), Trump called for the exploration of all means to prevent relatively developed countries from receiving benefits associated with “developing” status. He also declared that the US itself would not be treating those countries as “developing” unless progress was made within 90 days. While the message mainly targeted China, South Korea was also cited in the memorandum as one of the countries reaping benefits. Accordingly, the South Korean government was put in the position of having to respond by the Oct. 23 deadline.

The US and other countries have also been calling for reforms to the WTO system, including benefits associated with developing country status. The pressure led to the adoption of a joint statement by South Korea and other member countries in support of reform measures at an International Monetary Fund (IMF) annual meeting on Oct. 19.

But with WTO decisions based on unanimous agreement by member countries, changes to the system appear unlikely if China, India, and other countries with differing interests refuse to support them in the late stages of negotiation. The Doha Development Agenda (DDA) round of WTO negotiations was launched in 2001 to replace the earlier Uruguay Round agreement, but related discussions have been at a standstill for over a decade since 2008.

Under the circumstances, Seoul appears to have prioritized diplomatic and trade-related matters with the US.

“We could end up in an awkward situation with the US if it latches on to the ‘developing country status’ issue in its conflicts with us over whether to apply Section 232 of its Trade Expansion Act [restricting important of foreign products and assigning high tariff rates in cases deemed threatening to national security] or what adjustments are made to defense cost-sharing,” said Seo Jin-gyo, a senior research fellow at the Korea Institute for International Economic Policy.

Alongside its announcement that day, the administration also shared plans for improving agricultural competitiveness, including a “public interest model” of direct payment system. But members of the group Joint Action by Farmers to Preserve Developing Country Status in the WTO held a rally in front of the Central Government Complex the same day in which it warned of a “judgment” in next year’s general election and a campaign to force out the administration.

“Farming has been driven to the brink,” members claimed.

By Lee Kyung-mi, staff reporter, Ahn Kwan-ok, Gwangju correspondent