Trump Pulls “Developing Country” Trade Privileges from Brazil, 20 Other Countries

RIO DE JANEIRO, BRAZIL – Aiming principally to affect China economically, US President Donald Trump announced on Monday, February 10th, a measure that could adversely affect Brazil’s economic interests.

According to UOL columnist Jamil Chade, Brazil and some 20 other countries have now been removed from the list of “developing countries” as defined by the Organisation for Economic Co-operation and Development (OECD). This removal will now allow Trump to apply trade sanctions against products from countries, such as China, India and Brazil, in the same way as products from OECD members.

Bolsonaro is said to have agreed to Trump’s measure during a meeting held last year, but was unaware that this decision could increase taxation on Brazilian products. In exchange, the US would support Brazil’s accession to full membership in the OECD, commonly known as the “rich countries’ club”.

The note from the White House justifying the reclassification of these countries by removing their protected “developing” status, says that G20 membership is incompatible with that status.

“The G20 is a forum for international economic cooperation, which includes major economies and representatives of major international institutions, such as the World Bank and the International Monetary Fund,” says the White House note. “Membership in the G20 suggests that a country is developed,” it adds.

In addition to BRICS members Brazil, China, India and South Africa, all of which are “developing” countries under OECD rules but are also G20 members, the reclassification would also affect Brazil’s neighbor Argentina.

The main benefits that developing countries enjoy in international trade disputes is immunity from trade sanctions, as they need more time to develop their economies through trade practices, such as subsidies, that are deemed unfair if practiced by developing countries.

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