- When China joined the World Trade Organisation in 2001, its accession agreement contained several conditions to give the country time to liberalise its economy.
- Under article 15 (a) (ii), WTO members who refuse to grant China market economy status were allowed to choose the methodology for calculating the reference price used in anti-dumping investigations.
- This article expired on 11 December 2016. Certain WTO members must now revise their anti-dumping strategies. This is notably the case for the European Union, which has built up close trade ties with China over the past fifteen years.
China joined the World Trade Organisation (WTO) in December 2001 to benefit from the trade agreements negotiated with WTO members. Its accession agreement nonetheless contained certain measures to give the country time to liberalise its economy.
WTO members that refuse to grant China market economy status were allowed to choose the methodology for calculating the reference price used in anti-dumping cases. Dumping occurs when a company exports a product at a lower price than its normal value, i.e. the price used “in the normal course of trade, for a like product destined to be consumed in the exporting country”1.
Article 15 (a) (ii) of China’s WTO accession protocol gave WTO members this possibility. It stipulates that “The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product.”
This article expired on 11 December 2016. Yet the simple expiration of this condition does not mean that WTO member countries must grant China market economy status if they have not already done so. Nonetheless, these countries must review their anti-dumping defence strategies. This is notably the case for the European Union (EU), which has built up close commercial ties with China over the past fifteen years (nearly 20% of merchandise imports in 2015, see chart). Indeed, their commercial relations have been the source of numerous lawsuits. China alone accounts for nearly 58 of the 74 European anti-dumping measures currently in effect.
To read the entire report Please click on the pdf File Below
by Catherine STEPHAN