hankyoreh

A coalition of six farmer groups holds a press conference denouncing US pressure to change South Korea’s agricultural status as a developing country under the WTO in front of the South Jeolla Provincial Office on Oct. 21. (provided by the Korean Peasants League)

In order to ease trade pressure from the US, the South Korean government has reportedly settled on the plan of abandoning developing country status in the area of agriculture under the World Trade Organization (WTO). This plan could be finalized as early as Oct. 25, during a meeting of government ministers responsible for foreign trade. While the government has stressed that forfeiting developing country status would not immediately lead to changes in tariffs or subsidies, farmers assert that the country’s agricultural foundation is being undermined.

Sources from the Ministry of Economy and Finance, the Ministry of Trade, Industry and Energy, and the Ministry of Agriculture, Food and Rural Affairs told the Hankyoreh on Oct. 21 that the government will be holding a meeting of ministers related to foreign trade before the end of the month to make a decision about giving up developing country status.

Sources say that the meeting will likely be held on Oct. 25, following the parliamentary audit of the Ministry of Economy and Finance on Oct. 23-24. Trade Minister Yoo Myung-hee left for the US on Monday, where she will be discussing related issues with the US trade representative before returning to South Korea on Oct. 24.

This past July, US President Donald Trump raised the issue of prosperous countries such as South Korea having developing country status under the WTO. If measures were not taken within 90 days, Trump said, the US would stop treating the countries in question as developing countries.

On Sept. 20, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki announced that South Korea would reconsider its status. “This is a time to ask fundamental questions about whether we can maintain our developing country privileges going forward,” Hong said.

Since the WTO was launched in 1995, South Korea has claimed developing country status in the area of agriculture. That grants the country the privileges of imposing high tariffs on imported agricultural goods and paying subsidies to domestic farmers.

The government holds that abandoning developing country status would only have symbolic significance and would not cause any real harm to domestic agriculture or farmers for the time being.

Negotiations in the Doha Development Agenda, including the area of agriculture, began in 2001 with the goal of replacing the Uruguay Round (concluded in 1995), but disagreements between developed and developing countries brought the negotiations to a halt in 2008. They have remained on pause for more than a decade with almost no chance of seeing a breakthrough in the near future.

Since a conclusion in the agriculture negotiations remains a distant prospect, abandoning developing country status doesn’t mean that limits on rice tariffs and agricultural subsidies will immediately be adjusted to the levels of developed countries.

Even though the US is pushing for 35 countries, including South Korea, to lose their status as developing countries, Seoul believes there’s little chance of a new round of negotiations beginning anytime soon.

“American support faces Chinese and Indian opposition; even if negotiations are initiated, a final agreement could be elusive. There’s major uncertainty in several respects,” said an official from the Ministry of Agriculture, Food and Rural Affairs.

Down the road, however, South Korea will have to prepare for changes that the next round of negotiations will bring to its agricultural foundation. If limits on tariffs and subsidies are brought in line with developed country status through such negotiations, South Korea’s agricultural sector will inevitably take a hit.

“A public-purpose direct payment system, in which farmers receive subsidies that aren’t tied to specific products or direct production, is a method allowed by the WTO. If the WTO’s cap on total subsidies decreases before we’ve made the necessary preparations, we might find ourselves unable to provide subsidies to farmers any more. We need to push forward the transition to a public-purpose direct payment system,” said Kim Tae-hun, a senior analyst with the Korea Rural Economic Institute.

Six farming groups — including the Gwangju and South Jeolla chapter of the Korean Peasants’ League and the Gwangju and South Jeolla office of the National Rice Producers’ Association — held a press conference in front of the South Jeolla Provincial Office on Monday. “For the government to abandon developing country status would mean abandoning its sovereignty over trade and driving agriculture off a cliff,” the farmer coalition said.

“They say we’re a developed country in terms of agriculture, but the reality is that we aren’t seeing any improvements. Korea only produces 24% of its own food, farmers’ income has remained stagnant for 20 years, and there’s a 60% gap in income between urban and rural areas. The government needs to sit down with farmers to develop countermeasures.”

First Vice Economy and Finance Minister Kim Yong-beom is planning to canvass the opinions of farming groups during a conference on Oct. 22.

By Lee Kyung-mi and Choi Ye-rin, staff reporters, Ahn Kwan-ok, Gwangju correspondent

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