Rich and developed

Muna Al-Fuzai

US President Donald Trump has asked the World Trade Organization (WTO) to change the status of some members of the organization because they are classified as developing countries although they are rich, threatening unilateral action if this does not happen. These countries are Kuwait, Brunei, China, Hong Kong, Macao, Mexico, Qatar, Singapore South Korea, Turkey and UAE.

Trump sent a special note to the United States’ representative to urge the amendment to prevent developing countries from the benefits which they obtain because of the rules of the organization. The American decision aims to deprive these countries of the facilities that are being provided by WTO to developing countries commercially and economically.
I think this is important for all the concerned countries, but this does not mean that it will affect negatively and directly on Kuwait, because we are an oil state and the Kuwaiti economy is based on the export and sale of oil. The industrial sector, being the largest beneficiary of these facilities, does not contribute more than 4 percent to the economy. Most of the facilities provided to developing countries of the WTO are directed to the industrial sector in order to help them increase exports. I think we should focus on developing industries and raising their competitiveness in light of the opening up of global markets and possible changes.

One of the benefits to Kuwait as an oil-exporting developing country and a member of the World Trade Organization is the elimination of customs and non-tariff restrictions on exports. And because of the special nature of oil and its products in international trade as an imported commodity and a factor of production inputs, importing countries are not subject to customs duties, even if they are relatively low, while exporting countries have imposed self-restraint on their production to maintain prices within the framework of OPEC.

The US president said if the WTO did not make substantial progress in reforming this sector within 90 days, it would stop its dealings with those countries as developing countries, adding that the United States will not support any of these countries.

In accordance with resolution no. 206 of 1994, the Council of Ministers authorized the Ministry of Commerce and Industry to follow up the implementation of Kuwait’s agreements with the World Trade Organization. Therefore, the Ministry of Commerce and Industry follows up the subject through its embassy in Geneva for any possible effects of the agreements signed by Kuwait as a member of the WTO and the extent of their impact on the flow of trade from Kuwait and the rest of the world in the event of changing Kuwait’s status from a developing country to an advanced country. Especially since the US president has called for reforms within 90 days, and this is a short period of time.
However, some local press reports have reported possible effects on some items of the ‘New Kuwait 2035 vision’ development plan that may be based on facilities from WTO. I think the US’ message to the organization should not have an impact on the role of the World Trade Organization on the Arab business community, the importance of linking the World Trade Organization with Arab conventions and to strengthen Arab capabilities in world trade and reforms of trade policies, especially since Kuwait adopts the principle of free economy and its adoption of the trade freedom policy advocated by the organization and developing it with the private sector.

I think there is no specific standard on what makes a country progressive and developing, but there are measurable factors such as GDP per capita. Still, Kuwait is among the Third World countries and faces important challenges and needs cooperation with the WTO. Kuwait is progressing rapidly in many fields with the development of education and it might take time to improve its industrial wealth. But this does not preclude the organization’s support and cooperation, especially within the scope of policies to upgrade from a developing nation to an advanced one.

By Muna Al-Fuzai