What does the ‘developing countries’ classification mean?

The office of the United States Trade Representative (USTR) maintains a list of countries that it classifies as ‘developing’, ‘developed’, and ‘least-developed’ for trade purposes. Countries categorized as ‘developing’ receive preferential trade benefits in export of certain goods to the U.S. The Generalized System of Preferences (GSP), a trade preference programme of the United States launched in 1976, provides opportunities for ‘developing’ countries to ‘use trade to grow their economies out o poverty’. That is, the GSP is a preferential tariff system, extended by developed countries to developing countries, that allows zero or concessional tariff on imports from developing countries into the U.S. The rule comes under the purview of the World Trade Organisation. Other developed countries such as the EU and Japan also offer the GSP.

 

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